|By PR Newswire||
|December 28, 2012 09:21 PM EST||
Company issues audited full-year financial statements for the 12 months ended September 30, 2012; Company files amended unaudited consolidated financial statements for the periods ended March 31, 2012 and June 30, 2012
EDMONTON, Dec. 28, 2012 /PRNewswire/ - The Cash Store Financial Services Inc. ("Cash Store Financial") (TSX: CSF; NYSE: CSFS) today announced results for the three and 12 months ended, September 30, 2012. The following financial results are expressed in Canadian dollars.
Highlights for the three months ended September 30, 2012 (a table of results can be found at the end of this news release):
- Adjusted EBITDA of $11.2 million, up from $7.0 million in the third quarter and consistent with $11.2 million in the same quarter last year.
- Quarterly loan volume of $207.2 million, up 3.7% from $199.9 million in the third quarter, and up 2.7% from $201.7 million in the same quarter last year.
- Revenue of $50.8 million, up 4.4% sequentially compared to the $48.7 million in the third fiscal quarter and up 7.7% compared to the $47.2 million in the fourth fiscal quarter of last year.
- Quarterly branch average loan volume of $387,000 up 7.2% sequentially from $361,000 in the third quarter and up 2.7% from $344,000 million in the same quarter as last year.
- Quarterly branch average revenue of $95,000 up 8% from $88,000 in the third quarter and up 17.3% from $81,000 in the same quarter as last year.
- Diluted earnings per share of $0.02 per share, down from $0.12 per share for the same quarter last year.
Gordon J. Reykdal, Chairman and CEO commented on the year-end: "We ended fiscal 2012 on a strong note, reporting solid quarterly revenue and a return to positive net income, and The Cash Store Financial Services is positioned for a strong 2013. During Q2 of 2012, the Company initiated a number of efficiency initiatives to improve overall performance, including the acquisition of our loan portfolio and an ongoing effort to eliminate underperforming branches. We have effectively executed upon those initiatives, improving the Company's profitability profile and setting the stage for a return to growth during fiscal 2013. Despite having consolidated more than 60 branches from our Canadian operations, loan volume has grown since the second quarter, as have total revenues. Adjusted EBITDA for the quarter was $11.2 million, up on a sequential basis from $7.0 million in the third quarter, and consistent with the fourth quarter of last year."
"This positive momentum continued into the first quarter of fiscal 2013," added Mr. Reykdal.
Highlights for the 12 months ended September 30, 2012 (a table of results can be found at the end of this news release):
- Adjusted EBITDA of $30.0 million compared to $48.9 million for the twelve months ended September 30, 2011.
- Loan volume of $797.7 million compared to $821.4 million for the twelve months ended September 30, 2011.
- Total revenue of $187.4 million compared to $189.9 million for the twelve months ended September 30, 2011.
- Diluted earnings (loss) per share of ($2.47), down from $0.51 per share for the twelve months ended September 30, 2011.
Pursuant to the press release issued December 10, 2012, the Company also filed amended interim unaudited consolidated financial statements for the periods ended March 31, 2012 and June 30, 2012.
Mr. Craig Warnock, Cash Store Financial Services' CFO, added, "the restatement was a result of the fact that the Company subsequently determined that approximately $36.8 million of the total consideration paid to acquire the portfolio of loans represented a premium paid on acquisition, and has also increased loan loss provisions, and adjusted its financial statements accordingly. Due to the restatement we anticipate a tax benefit of approximately $13.1 million." For further details regarding the restatement, reference should be made to the Company's press release issued December 10, 2012.
Fourth Quarter Financial Detail
Fourth quarter loan volume was $207.2 million, the highest level since the first quarter of fiscal 2011. This was an increase of 3.7% sequentially compared to $199.9 million for the third fiscal quarter of 2012 and an increase of 2.7% compared to the $201.7 million reported in the fourth fiscal quarter last year. Total revenue was $50.8 million, an increase of 4.4% sequentially compared to the $48.7 million in the third fiscal quarter and up 7.7% compared to the $47.2 million in the fourth fiscal quarter of last year. The year over year increase in revenue can be partly attributed to expanded UK operations and the recorded interest portion of loan fee revenue in the Regulated Provinces. Before the Company's acquisition of the loan portfolio, that interest went to third-party lenders.
Branch operating income (BOI) was $17.2 million, a $4.8 million increase compared to the $12.4 million in the third fiscal quarter and a $3.3 million increase compared to the $13.9 million for the same quarter in the prior year. BOI margin was 33.9% in Q4-2012 compared to 29.4% in Q4-2011 and 25.5% in Q3-2012, indicating improved operating efficiency.
Net income for the quarter was $392,000, a sequential increase of $3.8 million compared to Q3-2012 and a decrease of $1.6 million from $2.0 million for the same quarter last year. Adjusted EBITDA was $11.2 million, a sequential increase of $4.2 million compared to $7.0 million for the third quarter of fiscal 2012 and consistent with the $11.2 million in the fourth quarter of fiscal 2011.
Full-Year Fiscal 2012 Financial Detail
Full-year loan volume was $797.7 million, down 3.0% from $821.4 million in FY2011. Total revenue was $187.4 million, a decrease of 1.3% compared to the $189.9 million last year.
Branch operating income (BOI) was $43.2 million, a decrease of $11.8 million, compared to $55.0 million in the prior year. BOI margin was 23.1% for fiscal 2012, compared to 29.0% in fiscal 2011, as the Company's efficiency and cost-reduction initiatives began in the second quarter of fiscal 2012 and were not fully deployed until the end of the fiscal year. These results also reflect expenses related to the transition of on-balance sheet lending in addition to branch consolidations.
For FY2012 the Company recorded a net loss of $43.1 million, down from net income of $9.0 million in FY2011. Included in the net loss were $44.8 million of charges, comprised mainly of a $36.8 million premium to acquire the loan portfolio, a $3.0 million addition to the UK loan loss provision, $1.6 million in branch closure costs and $3.4 million of impairment to property and equipment. These charges combined with higher corporate and regional expenses caused EBITDA to decrease to negative $30.8 million from $24.5 million in FY2011. Adjusted EBITDA decreased from $48.9 million to $30.0 million.
Balance Sheet and Liquidity
Cash balances remained steady, $19.1 million as at September 30, 2012, compared to $19.3 million at the end of FY2011. During FY2012 the Company raised $117.1 million, net of issuance costs, by issuing senior secured notes. These funds were used to acquire the portfolio of consumer loans from third-party lenders in the Regulated Provinces and for general corporate purposes. Cash provided by operating activities was $12.3 million, down from $14.0 million in FY2011. Increases to non-cash expenses including depreciation and amortization, loan loss provision, and impairment of property and equipment were offset by an increase in consumer loans receivable and a decrease in accounts payable and accrued liabilities in FY2012.
First Quarter and Fiscal 2013 Outlook
"Our recent strategic shift to direct lending, the efforts we have made to improve efficiency and increase profitability, along with our ongoing investment in the UK market, provide us with a powerful platform for continued growth," Mr. Reykdal added. "Fiscal 2012 was a year of tremendous transition and we emerged a stronger company. Looking to the future, fiscal 2013 is a year for renewed optimism."
Subsequent to September 30, 2012, the Company's Audit Committee was made aware of written communications that contained questions about the acquisition of the consumer loan portfolio from third-party lenders in late January 2012 and included allegations regarding the existence of undisclosed related party transactions in connection with the acquisition. In response to this allegation and following some preliminary fact-finding performed by Company's internal auditor, legal counsel to a Special Committee of the Board has retained an independent accounting firm to conduct a special investigation. As of the release date of these financial statements, the scope of the investigation has been determined by the independent accounting firm and the Special Committee. However, the investigation has not yet commenced and the findings, if any, are not yet known. The investigation may have an impact on the accounting for the loan acquisition transaction and/or on the accounting for, and disclosure of, any related party transactions; however, the Company does not believe that the outcome of the special investigation will impact the current accounting and disclosure in these financial statements.
About Cash Store Financial
Cash Store Financial is the only lender and broker of short‐term advances and provider of other financial services in Canada that is listed on the Toronto Stock Exchange (TSX: CSF). Cash Store Financial also trades on the New York Stock Exchange (NYSE: CSFS). Cash Store Financial operates 512 branches across Canada under the banners "Cash Store Financial", "Instaloans" and "The Title Store". Cash Store Financial also operates 25 branches in the United Kingdom.
Cash Store Financial and Instaloans primarily act as lenders and brokers to facilitate short-term advances, lines of credit and provide other financial services to income-earning consumers who may not be able to obtain them from traditional banks. Cash Store Financial also provides a private-label debit card (the "Freedom" card) and a prepaid credit card (the "Freedom MasterCard") as well as other financial services, including bank accounts.
Cash Store Financial employs approximately 1,900 associates and is headquartered in Edmonton, Alberta.
Cash Store Financial is a Canadian corporation that is not affiliated with Cottonwood Financial Ltd. or the outlets Cottonwood Financial Ltd. operates in the United States under the name "Cash Store". Cash Store Financial does not do business under the name "Cash Store" in the United States and does not own or provide any consumer lending services in the United States.
This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning United States federal securities legislation, which we refer to herein, collectively, as "forward-looking information". Forward-looking information includes, but is not limited to, information with respect to our objectives, strategies, operations and financial results, competition as well as initiatives to grow revenue or reduce retention payments. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "estimates", "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "forecasts", "intends", "anticipates", or "does not anticipate", or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". In particular this news release contains forward-looking information with respect to our goals and strategic priorities, introduction of products, share repurchase initiatives, branch openings and competition as well as initiatives to grow revenue or reduce retention payments. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Cash Store Financial, to be materially different from those expressed or implied by such forward-looking information, including, but not limited to, changes in economic and political conditions, legislative or regulatory developments, technological developments, third-party arrangements, competition, litigation, risks associated with but not limited to, market conditions, and other factors described under the heading "Risk Factors" in our Annual Information Form, which is on file with Canadian provincial securities regulatory authorities, and in our Annual Report on Form 40-F filed with the U.S. Securities and Exchange Commission. All material assumptions used in providing forward-looking information are based on management's knowledge of current business conditions and expectations of future business conditions and trends, including our knowledge of the current credit, interest rate and liquidity conditions affecting us and the general economic conditions in Canada, the United Kingdom and elsewhere. Although we believe the assumptions used to make such statements are reasonable at this time and have attempted to identify in our continuous disclosure documents important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Certain material factors or assumptions are applied by us in making forward-looking information, include without limitation, factors and assumptions regarding our continued ability to fund our payday loan business, rates of customer defaults, relationships with, and payments to, third party lenders, demand for our products, as well as our operating cost structure and current consumer protection regulations. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. We do not undertake to update any forward-looking information, except in accordance with applicable securities laws.
Selected Annual Information
($000s, except for per share amounts, number of loans and
|Canadian branch count||542||574||511||(11%)|
|UK branch count||2||12||25||108%|
|Number of Loans (000's)||1,805||1,404||1,371|
|Salaries and benefits||62,265||57,576||55,082||(4%)|
|Selling, general and administrative||21,673||17,518||17,770||1%|
|Advertising and promotion||5,535||5,440||4,828||(11%)|
|Provision for loan losses||788||2,559||31,003||1112%|
|Depreciation of property and equipment||7,006||6,803||6,843||1%|
|Branch operating income||77,216||55,001||43,217||(21%)|
|Branch closure costs||-||-||1,574|
|Impairment of property and equipment||-||-||3,425|
|Other depreciation and amortization||2,055||2,112||5,973||183%|
|Premium paid to acquire the loan portfolio||-||-||36,820|
|Income before income taxes and class action settlements||40,675||17,873||(56,230)||(415%)|
|Class action settlements||2,915||3,206||-||(100%)|
|Net income (loss) and comprehensive income (loss)||$26,464||$9,042||($43,089)||(589%)|
|Weighted average number of shares outstanding|
|Basic earnings (loss) per share||$1.56||$0.52||($2.47)||(572%)|
|Diluted earnings (loss) per share||$1.51||$0.51||($2.47)||(583%)|
|Consolidated balance sheet information|
|Total long-term liabilities||$9,882||$8,991||$137,375||1428%|
Summary of Quarterly Results
($000s, except for per share amounts
and branch figures)
|# of branches Canada||566||573||574||574||573||569||529||511|
|Salaries and benefits||14,382||14,113||14,591||14,490||14,397||14,824||13,672||12,189|
|Selling, general and administrative||4,194||4,680||4,481||4,156||4,408||4,816||4,416||4,130|
|Advertising and promotion||1,426||1,303||1,313||1,398||1,542||975||1,153||1,158|
|Provision for loan losses||663||654||662||580||668||10,798||10,104||9,433|
|Depreciation of property and equip.||1,660||1,687||1,710||1,744||1,776||1,785||1,675||1,607|
|Branch operating income||13,814||12,478||14,808||13,909||11,780||1,771||12,425||17,241|
|Branch closure costs||-||-||-||-||-||-||908||666|
|Impairment of property and equipment||-||-||-||-||-||3,017||-||408|
|Premium paid to acquire the loan portfolio||-||-||-||-||-||36,820||-||-|
|Other depreciation and amortization||540||548||456||570||583||1,503||1,770||2,117|
Net income (loss) before income taxes
and class action settlements
|Class action settlements||-||-||3,206||-||-||-||-||-|
Net income (loss) and comprehensive
|Basic earnings (loss) per share||$0.20||$0.15||$0.07||$0.12||$0.06||$(2.35)||$(0.20)||$0.02|
|Diluted earnings (loss) per share||$0.19||$0.14||$0.07||$0.12||$0.06||$(2.35)||$(0.20)||$0.02|
|EBITDA and Adjusted EBITDA Reconciliation|
Net income (loss) and
comprehensive income (loss)
|Interest expense and other interest||44||36||34||33||103||2,920||4,383||4,439|
Depreciation of property and
equipment and amortization of
|Class action settlements||$-||$-||$3,206||$-||$-||$-||$-||$-|
|Loan loss provision one-time addition||-||-||-||-||-||3,091||-||-|
Unrealized foreign exchange
|Branch closure costs||-||-||-||-||-||-||908||666|
|Impairment of property and equipment||-||-||-||-||-||3,017||-||408|
Revenue impact related to
transitioning to a direct lending
Premium paid to acquire the loan
Income impact for separately
accounting for the acquired loan
Effective interest component of
SOURCE The Cash Store Financial Services Inc.
Machine Learning helps make complex systems more efficient. By applying advanced Machine Learning techniques such as Cognitive Fingerprinting, wind project operators can utilize these tools to learn from collected data, detect regular patterns, and optimize their own operations. In his session at 18th Cloud Expo, Stuart Gillen, Director of Business Development at SparkCognition, discussed how research has demonstrated the value of Machine Learning in delivering next generation analytics to impr...
Oct. 25, 2016 08:00 AM EDT Reads: 5,733
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
Oct. 25, 2016 07:45 AM EDT Reads: 4,870
Successful digital transformation requires new organizational competencies and capabilities. Research tells us that the biggest impediment to successful transformation is human; consequently, the biggest enabler is a properly skilled and empowered workforce. In the digital age, new individual and collective competencies are required. In his session at 19th Cloud Expo, Bob Newhouse, CEO and founder of Agilitiv, will draw together recent research and lessons learned from emerging and established ...
Oct. 25, 2016 07:45 AM EDT Reads: 1,391
Amazon has gradually rolled out parts of its IoT offerings, but these are just the tip of the iceberg. In addition to optimizing their backend AWS offerings, Amazon is laying the ground work to be a major force in IoT - especially in the connected home and office. In his session at @ThingsExpo, Chris Kocher, founder and managing director of Grey Heron, explained how Amazon is extending its reach to become a major force in IoT by building on its dominant cloud IoT platform, its Dash Button strat...
Oct. 25, 2016 06:45 AM EDT Reads: 4,815
@ThingsExpo has been named the Top 5 Most Influential M2M Brand by Onalytica in the ‘Machine to Machine: Top 100 Influencers and Brands.' Onalytica analyzed the online debate on M2M by looking at over 85,000 tweets to provide the most influential individuals and brands that drive the discussion. According to Onalytica the "analysis showed a very engaged community with a lot of interactive tweets. The M2M discussion seems to be more fragmented and driven by some of the major brands present in the...
Oct. 25, 2016 06:15 AM EDT Reads: 11,432
SYS-CON Events announced today that Interface Masters Technologies, a leader in Network Visibility and Uptime Solutions, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Interface Masters Technologies is a leading vendor in the network monitoring and high speed networking markets. Based in the heart of Silicon Valley, Interface Masters' expertise lies in Gigabit, 10 Gigabit and 40 Gigabit Eth...
Oct. 25, 2016 05:45 AM EDT Reads: 3,352
As software becomes more and more complex, we, as software developers, have been splitting up our code into smaller and smaller components. This is also true for the environment in which we run our code: going from bare metal, to VMs to the modern-day Cloud Native world of containers, schedulers and microservices. While we have figured out how to run containerized applications in the cloud using schedulers, we've yet to come up with a good solution to bridge the gap between getting your conta...
Oct. 25, 2016 05:30 AM EDT Reads: 1,518
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will w...
Oct. 25, 2016 05:30 AM EDT Reads: 3,375
DevOps is being widely accepted (if not fully adopted) as essential in enterprise IT. But as Enterprise DevOps gains maturity, expands scope, and increases velocity, the need for data-driven decisions across teams becomes more acute. DevOps teams in any modern business must wrangle the ‘digital exhaust’ from the delivery toolchain, "pervasive" and "cognitive" computing, APIs and services, mobile devices and applications, the Internet of Things, and now even blockchain. In this power panel at @...
Oct. 25, 2016 05:15 AM EDT Reads: 1,997
DevOps theory promotes a culture of continuous improvement built on collaboration, empowerment, systems thinking, and feedback loops. But how do you collaborate effectively across the traditional silos? How can you make decisions without system-wide visibility? How can you see the whole system when it is spread across teams and locations? How do you close feedback loops across teams and activities delivering complex multi-tier, cloud, container, serverless, and/or API-based services?
Oct. 25, 2016 04:45 AM EDT Reads: 1,089
SYS-CON Media announced today that @WebRTCSummit Blog, the largest WebRTC resource in the world, has been launched. @WebRTCSummit Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @WebRTCSummit Blog can be bookmarked ▸ Here @WebRTCSummit conference site can be bookmarked ▸ Here
Oct. 25, 2016 04:30 AM EDT Reads: 9,704
You have great SaaS business app ideas. You want to turn your idea quickly into a functional and engaging proof of concept. You need to be able to modify it to meet customers' needs, and you need to deliver a complete and secure SaaS application. How could you achieve all the above and yet avoid unforeseen IT requirements that add unnecessary cost and complexity? You also want your app to be responsive in any device at any time. In his session at 19th Cloud Expo, Mark Allen, General Manager of...
Oct. 25, 2016 04:15 AM EDT Reads: 953
One of biggest questions about Big Data is “How do we harness all that information for business use quickly and effectively?” Geographic Information Systems (GIS) or spatial technology is about more than making maps, but adding critical context and meaning to data of all types, coming from all different channels – even sensors. In his session at @ThingsExpo, William (Bill) Meehan, director of utility solutions for Esri, will take a closer look at the current state of spatial technology and ar...
Oct. 25, 2016 04:15 AM EDT Reads: 1,740
SYS-CON Events announced today that Streamlyzer will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Streamlyzer is a powerful analytics for video streaming service that enables video streaming providers to monitor and analyze QoE (Quality-of-Experience) from end-user devices in real time.
Oct. 25, 2016 04:15 AM EDT Reads: 1,011
SYS-CON Events announced today that SoftNet Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. SoftNet Solutions specializes in Enterprise Solutions for Hadoop and Big Data. It offers customers the most open, robust, and value-conscious portfolio of solutions, services, and tools for the shortest route to success with Big Data. The unique differentiator is the ability to architect and ...
Oct. 25, 2016 04:00 AM EDT Reads: 966