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



    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

    Thousands of dollars, except
     for per share amounts and
     branch figures                  Three Months Ended  Twelve Months Ended

    Consolidated results              June 30   June 30   June 30   June 30
                                        2009      2008      2009      2008
    -------------------------------------------------------------------------
                       No. of branches   424       384       424       384
    Revenue
      Brokerage                       $ 39,700  $ 34,490  $150,253  $130,567
      Corporate                             31        52       252       232
    -------------------------------------------------------------------------
                                        39,731    34,542   150,505   130,799
    Branch expenses                     20,299    18,634    77,881    70,852
    Retention payments                   4,600     4,229    17,988    20,111
    -------------------------------------------------------------------------
    Branch operating income             14,832    11,679    54,636    39,836
    -------------------------------------------------------------------------

    Regional expenses                    2,333     1,985     8,218     7,440
    Corporate expenses                   5,038     3,525    16,656    11,182
    Other amortization                     527       244     1,333       822
    Income from continuing operations
     before income taxes, class action
     settlement and discontinued
     operations                          6,934     5,925    28,429    20,392
    Class action settlement              5,000         -     6,910         -
    Income from continuing operations    1,232     3,190    14,647    12,522
    Loss from discontinued operations        -         -         -    (1,716)
    EBITA                                3,891     7,614    28,583    26,271
    -------------------------------------------------------------------------
    Net income and comprehensive
     income                           $  1,232  $  3,190  $ 14,647  $ 10,806
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average number of shares
     outstanding - basic                16,929    19,652    17,958    20,124
    Basic earnings per share
      Income from continuing
       operations                     $   0.07  $   0.16  $   0.82  $   0.62
      Loss from discontinued
       operations                            -         -         -     (0.08)
      Net income and comprehensive
       income                             0.07      0.16      0.82      0.54
    Diluted earnings per share
      Income from continuing
       operations                         0.07      0.16      0.81      0.62
      Loss from discontinued operations      -         -         -     (0.09)
      Net income and comprehensive
       income                         $   0.07  $   0.16  $   0.81   $  0.53
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Consolidated Balance Sheet
     Information
    Working capital                   $  9,667  $ 16,740  $  9,667  $ 16,740
    Total assets                        83,796    81,787    83,796    81,787
    Total long-term liabilities          2,959     1,800     2,959     1,800
    Total liabilities                   17,944    10,585    17,944    10,585
    Shareholders' equity              $ 65,852  $ 71,202  $ 65,852  $ 71,202
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    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:

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

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The Cash Store Financial Services Inc.

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