The Cash Store Australia Holdings Inc. reports 44% increase in revenue for the second Quarter ended December 31, 2010

EDMONTON, Feb. 10 /CNW/ - The Cash Store Australia Holdings Inc. ("Cash Store Australia") (TSXV:AUC) today announced results for the three and six months ended December 31, 2010.

    <<
    Highlights for second quarter (table of results at end of release)

    -  Revenue up 44.4% to $3.9 million, from $2.7 million for the same
       quarter last year.

    -  Net loss of $1.4 million, compared to net income of $16,000 for the
       same quarter last year.

    -  Branch operating loss was ($252,000) compared to a branch operating
       income of $722,000 for the same quarter last year.

    -  Diluted loss per share of ($0.08) compared to diluted earnings per
       share of $0.00 for same quarter last year.

    -  Same branch revenues for the 37 locations open prior to the beginning
       of the same quarter of fiscal 2010 up 3.1% to $72,900 from $70,700 in
       the second quarter last year.

    -  EBITDA of negative $1.1 million compared to $145,000 in the same
       quarter last year.

    -  Opened 14 new branches in the quarter.

    Highlights for six months ended December 31, 2010

    -  Revenue up 62.2% to $7.3 million, from $4.5 million for the same
       period last year.

    -  Net loss of $2.4 million, compared to a loss of $178,000 for the same
       period last year.

    -  Branch operating income decreased to a loss of ($623,000) from income
       of $1.1 million for the same period last year.

    -  Diluted loss per share of ($0.14) compared to ($0.01) for same period
       last year.

    -  Same branch revenues for the 28 locations open prior to the beginning
       of fiscal 2010 increased by 2.1% to $143,300 from $140,400 for the
       same period last year.

    -  EBITDA of negative $2.0 million down from a positive $59,000 in the
       same period last year.

    -  Opened 33 branches for a total of 77 branches as at December 31, 2010,
       compared to 44 as at December 31, 2009.
    >>

Chief Executive Officer Ed McClelland commented: "The second quarter was a period of solid revenue growth with overall revenue up 44.4% to $3.9 million, from $2.7 million for the same quarter last year. Despite strong revenues, we incurred a net loss of $1.4 million, compared to a profit of $15,000 for the second quarter last year. Revenue and earnings growth has been negatively impacted by the implementation of new state and commonwealth regulations on July 1, 2010. Adjustments to our sales processes to accommodate these regulatory changes had not taken full effect during the quarter. Revenue and earnings will improve over subsequent periods as these initiatives take hold and our newer branches grow toward maturity. 95% of our branches are in the early stages of development and have very strong forward growth potential. We will be slowing down growth for the remainder of the year to allow our branch network to achieve an appropriate level of profitability to fund continued growth."

He concluded: "Demand for our products and services is strong and continues to grow. Despite losses during the quarter, Cash Store Australia has continued to expand its strong national footprint and remains positive about our future earnings potential."

About Cash Store Australia

Cash Store Australia is the only broker of short-term advances and provider of alternative financial services in Australia publicly traded on the TSX Venture Exchange (TSXV:AUC). Cash Store Australia operates 77 payday advance branches in the States of Victoria, Queensland, Tasmania, New South Wales, South Australia and the Northern Territory, Australia under the banner "The Cash Store".

Cash Store Australia acts as a broker to facilitate short-term advances and provide other financial services to income-earning consumers who may not be able to obtain them from traditional financial institutions.

    <<
                           Three Months Ended           Six Months Ended
    -------------------------------------------------------------------------
    Consolidated
     results
    (presented in      December 31   December 31   December 31   December 31
     Canadian dollars)     2010          2009          2010          2009
    -------------------------------------------------------------------------
        No. of branches     77            44            77            44

    Revenue

      Loan fees        $ 3,568,289   $ 2,663,175   $ 6,917,567   $ 4,479,100
      Other income         293,415        32,650       422,273        70,621
    -------------------------------------------------------------------------
                         3,861,704     2,695,825     7,339,840     4,549,721
    Branch expenses

      Salaries and
       benefits          1,958,542       981,961     3,642,208     1,729,747
      Retention
       payments            760,302       259,362     1,733,509       460,898
      Rent                 549,911       280,867     1,002,398       484,230
      Selling, general,
       and administrative  464,255       196,686       845,730       337,433
      Advertising and
       promotion           203,050       172,081       414,066       310,347
      Depreciation of
       property and
       equipment           177,292        83,018       324,787       145,530
    -------------------------------------------------------------------------
                         4,113,352     1,973,975     7,962,698     3,468,185
    -------------------------------------------------------------------------
    Branch Operating
     Income (Loss)        (251,648)      721,850      (622,858)    1,081,536

      Regional expenses    187,087       111,877       360,611       200,169
      Corporate expenses   964,508       580,276     1,689,331     1,015,628
      Other depreciation
       and amortization     16,540         9,746        29,572        19,020
      Foreign exchange
       loss (gain)         (41,376)        4,017      (266,425)       24,301
    Net loss and
     comprehensive
     loss               (1,378,407)       15,934    (2,435,947)     (177,582)
    EBITDA*           (1,124,826)      144,842    (1,963,120)       59,126
    -------------------------------------------------------------------------
    Net income (loss)  $(1,378,407)  $    15,934   $(2,435,947)  $  (177,582)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average
     number of shares
     outstanding
     - basic            16,425,981    16,375,482    16,425,597    16,375,482
    Basic and Diluted
     loss per share
      Net loss         $     (0.08)  $      0.00   $     (0.14)  $     (0.01)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Consolidated
     Balance Sheet
     Information

    Working capital    $(4,274,699)  $  (249,110)  $(4,274,699)  $  (249,110)
    Total assets         5,318,506     2,487,821     5,318,506     2,487,821
    Total long-term
     liabilities           204,754        76,689       204,754        76,689
    Total liabilities    6,522,548     1,341,431     6,522,548     1,341,431
    Shareholders'
     equity (deficit)  $(1,204,042)  $ 1,146,390   $(1,204,042)  $ 1,146,390
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    *EBITDA - earnings before interest, income taxes, stock-based
compensation, depreciation of property and equipment and amortization of
intangible assets.
    >>

Forward Looking Information

This News Release contains "forward-looking" information within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, information with respect to our objectives, strategies, operations and financial results. 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". 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 Australia, to be materially different from those expressed or implied by such forward-looking information. 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. 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 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 pay day 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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE The Cash Store Australia Holdings Inc.

For further information: on Cash Store Australia, please contact: Edward McClelland, Chief Executive Officer, (905) 632-7594, e-mail: ed.mcclelland@cashstore.com.au; Or Nancy Bland, Chief Financial Officer, (780) 732-5683, e-mail: nancy.bland@csfinancial.ca

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The Cash Store Australia Holdings Inc.

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