News Article

Cash Store Financial achieves record annual revenue of $150.5 million and record net income of $14.6 million

8/26/2009 12:00:00 AM

EDMONTON, Aug. 26 /CNW/ - The Cash Store Financial Services Inc. ("Cash Store Financial") today announced fourth quarter and year-end results for the period ended June 30, 2009.

Fourth Quarter Highlights (table of results at end of release)

• Record quarterly revenue of $39.7 million, up 15% from $34.5 million for the same period last year.
• Income, excluding class action settlement costs of $5.0 million, up 44% to $4.6 million from $3.2 million for the fourth quarter last year. Inclusive of class action costs, net income was $1.2 million, compared to $3.2 million last year.
• Diluted earnings per share excluding class action settlement costs up 69% to $0.27 per share from $0.16 per share in the fourth quarter last year. Inclusive of class action costs, diluted earnings per share was $0.07 per share.
• Adjusted EBITA up 18% to $9.0 million (before non-recurring items), compared to $7.6 million for the same period last year.
• Branch operating income was a record $14.8 million, up 27%, compared to $11.8 million for the same quarter last year.
• Same branch revenues for the locations opened since the beginning of fourth quarter of fiscal 2008 increased 12% to $99,800 from $89,100 for the same quarter last year.

Year ended June 30, 2009 highlights

• Record annual revenue of $150.5 million, up 15% from $130.8 million the prior year.
• Income, excluding class action settlement costs of $6.9 million, up 55% to $19.4 million from $12.5 million in the prior year. Inclusive of class action costs, net income increased 17% to $14.6 million, compared to $12.5 million in the prior year.
• Diluted earnings per share excluding class action settlement costs up 74% to $1.08 per share from $0.62 for fiscal 2008. Inclusive of class action costs, diluted earning per share increased to $0.81 per share.
• Adjusted EBITA up 35% to $35.6 million (before non-recurring items), compared to $26.3 million in the prior year.
• Branch operating income was a record $54.6 million, up 37% from $39.8 million for the same period last year.
• Same branch revenues for the locations open since the beginning of the first quarter of fiscal 2008 increased 11% to $392,800 from $354,900 for the same period last year.
• Branch count up 40 net new branches to 424 from 384 at fiscal year-end 2008. - Repurchase of 2.7 million shares pursuant to issuer bids at an average price of $5.96 per share repurchased for a total cost of $16.1 million.

Mr. Gordon Reykdal, Chairman and CEO commented, "We achieved record net income of $14.6 million, an improvement of 17% over the previous year. Excluding provisions for the settlement of class-action law suits in Ontario and British Columbia we achieved net income of $19.4 million, an improvement of 56% over the previous year's net income of $12.5 million. We believe that the settlement of these suits removes a significant uncertainty in our company. The settlement of these class action suits frees senior management's time to concentrate on strategic initiatives. We also anticipate a reduction in professional and other related fees associated with managing these suits."

Mr. Reykdal further commented: "The fourth quarter of fiscal 2009 was exceptional, with continued improvements across the Company. Record levels were achieved in revenue, branch operating income and net income. Despite the recent correction in the economy, overall performance has improved steadily on a year-over-year basis. For the quarter we again achieved a marked increase in same branch revenues, and improved contributions to earnings from our ancillary products. Our continued concentration on the training and development of our associates has resulted in improved branch operating income. The maturation of our branch network, in combination with steadily improving associate retention within our regional and branch manager group, is expected to fuel further gains in subsequent periods."

Mr. Reykdal concluded, "Several provinces continue working on a process to establish consumer protection measures for the industry, inclusive of rate caps on payday loans and bans on rollovers. Cash Store Financial has been a leader in advancing needed consumer protection measures and we are fully confident that a regulated environment will have a significant positive impact on our earnings over the long-term. We anticipate that most provinces will have provided full clarity on rate caps by the close of calendar 2009. With our strong cash position we have a solid platform from which to drive our aggressive expansion."

About Cash Store Financial

Cash Store Financial is the only payday advance broker in Canada publicly traded on the Toronto Stock Exchange (TSX: CSF). Cash Store Financial operates more than 424 branches across Canada under the banners: The Cash Store and Instaloans.

The Cash Store and Instaloans act as brokers to facilitate payday advance 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, and other ancillary products.

Cash Store Financial employs more than 1,600 associates and is headquartered in Edmonton, Alberta.

Summary Financial Information

This News Release contains "forward-looking information" within the meaning of applicable Canadian and United States securities legislation. Forward-looking information includes, but is not limited to, information with respect to our objectives, strategies, operations and financial results, competition as well initiatives to grow revenue or reduce retention payments. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "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 statements in connection with the Cash Store Financials goals and strategic priorities, introduction of products, share repurchase initiatives and branch openings. 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 in our Annual Information Form ("AIF") dated August 26, 2009 under the heading "Risk Factors". All material assumptions used in making forward-looking statements 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 Canadian economy. Although we believes 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 statements, 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 statements, 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.

For further information: on Cash Store Financial, please contact: Gordon J. Reykdal, Chairman and Chief Executive Officer, (780) 408-5118

or

Nancy L. Bland, Chief Financial Officer, (780) 732-5683

or

 Michael J.L. Thompson, Senior Vice President & Corporate Secretary, (780) 408-5595