EDMONTON, Dec. 31, 2012 /CNW/ - The Cash Store Australia Holdings Inc. ("Cash Store Australia" or the "Company" or "We") (TSXV: AUC) today announced results for the three months ended September 30, 2012.
The decline in revenue continued in the first quarter as a result of the Company's decision to cease brokering loans from March 17, 2012 to April 14, 2012. Also during this period the sale of a key income producing product was put on hold until a complete review of its key features is undertaken. As a result of this action taken by the Company, a significant number of customers went elsewhere for their financial servicing needs and have not yet returned to our branches. A concentrated and continuing effort is in place to realign ourselves with these customers.
To counteract the effect of the ensuing periods of the reduction in revenue, we reduced our branch operating expenses by $1.7 million in the first quarter compared to the same period last year. New loan products will be introduced in the very near future that we anticipate will attract new customers and a significant portion of our lost customer base. We will continue to monitor the performance of our existing branch base and merge or close those branches that do not meet our performance criteria. We closed four branches in the first quarter of fiscal 2013 and ten in the fourth quarter of fiscal 2012. Wherever possible we merged the operations of closed branches with other branches in the immediate vicinity.
The decisions taken by the Company were made to ensure that we were in full compliance with all state and federal regulatory authorities due to changes in regulations. Our changes included revisions to loan contracts, strengthening disclosure polices and tightening lending criteria.
The Company has made significant improvements over the quarter ended June 30, 2012. Even though revenue decreased by $335,000, expenses at the branch and regional manager level decreased by $2 million. Corporate expenses remained flat quarter over quarter. The net loss for the quarter improved to $2.9 million from $5.3 million for the quarter ended June 30, 2012.
We expect revenue for the quarter ended December 31, 2012 to be in the range of $2.0 to $2.1 million. Coupled with further cost reductions, we expect the loss to be reduced to $1.9 to $2.1 million.
Highlights for the first quarter:
- Revenue of $1.8 million compared to $4.7 million for the same quarter last year.
- Net loss of ($2.9 million) compared to a net loss of ($1.5 million) in the first quarter of fiscal 2012.
- Branch operating and regional expenses reduced by $1.7 million in this quarter compared to the same quarter last year.
- Diluted loss per share of ($0.18) compared to a net loss per share of ($0.09) in the same quarter last year.
- Negative EBITDA of ($2.8 million) compared to negative EBITDA of ($1.0 million) in the same quarter last year.
About Cash Store Australia
Cash Store Australia is the only small sum short term advance broker in Australia publicly traded on the TSX Venture Exchange (TSXV:AUC). Cash Store Australia operates 67 branches in the States of Victoria, Queensland, Tasmania, Northern Territory, and New South Wales Australia under the banner "The Cash Store".
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:
For further information on Cash Store Australia, please contact:
Bill Johnson, Chief Financial Officer
(780) 732-5695; e-mail: [email protected]