DALLAS, Aug. 25 /PRNewswire-FirstCall/ -- ACE Cash Express, Inc.
(NASDAQ:AACE) announced record fiscal 2005 net income of $27.4
million and record earnings per share of $1.98, compared to fiscal
2004 net income of $17.1 million and $1.49 per share. As previously
disclosed, fiscal 2005 results include a one-time after-tax charge
of approximately $0.6 million, or $0.04 per diluted share, related
to a cumulative change to the Company's lease accounting practices
in the third quarter of the year. Additionally, fiscal 2004 results
included a one-time after-tax charge of $2.9 million or $0.25 per
diluted share, related to the early extinguishment of debt
following the Company's secondary offering of common stock in April
2004. Excluding these one-time charges, ACE's fiscal 2005 net
income and earnings per share increased 40 percent and 16 percent,
respectively, over fiscal 2004. During fiscal 2005, ACE's total
revenue increased 9 percent to a record $268.6 million from $246.7
million in the prior year period. "We are pleased with our fiscal
2005 performance. Growth in comparable store loan fees, gains in
bill payment and debit card revenue and the addition of stores
drove performance this year," said Jay B. Shipowitz, President and
Chief Executive Officer. "We remain focused on enhancing our
product offerings in our continuing effort to bring convenient and
quality services to our customers." Among the Company's
accomplishments during fiscal 2005 were: * The total ACE store
network, including franchised stores, had a record 40.2 million
customer visits and processed approximately $10.3 billion in
transactions. * ACE company-owned stores cashed 13.3 million
checks, with a face value of approximately $5.3 billion, resulting
in check-cashing fees of $131.6 million, up 2 percent from $129.2
million in fiscal 2004. * ACE company-owned stores processed over
2.1 million loan transactions, disbursing over $640 million in loan
proceeds and generating interest income and fees of $91.8 million.
Comparable store loan fees in company-owned stores increased 12.7
percent over the prior year. * ACE company-owned stores processed
over 8.7 million bill payment and debit card transactions,
producing a bill-payment revenue increase of 19 percent, to $20.3
million, from $17.0 million in the prior year period. * ACE
company-owned stores sold over 172,000 prepaid debit cards in
fiscal 2005, an increase of 29 percent over the prior year. * Store
gross margin improved to 35.5 percent of revenue in fiscal 2005,
compared to 34.3 percent in the previous year period. * Net income
exceeded 10 percent of revenue, the highest in ACE's history.
During fiscal 2005, the Company opened 60 newly constructed ACE
Cash Express stores, opened 20 ACE Cash Advance stores, acquired 74
stores, sold six stores to ACE franchisees and closed 32
company-owned stores. ACE franchisees also opened 48 stores. At the
end of the fiscal year, ACE had a network of 1,371 stores,
consisting of 1,142 company-owned stores and 229 franchised stores.
Fiscal Fourth Quarter Results The fiscal fourth quarter 2005 net
income was $6.6 million or $0.48 per diluted share, compared to
fiscal fourth quarter 2004 net income of $2.2 million or $0.16 per
diluted share. Fiscal fourth quarter 2005 results include the
cumulative effect of a reduction in ACE's tax rate for fiscal year
2005 to 39 percent from 40 percent. Fiscal fourth quarter 2004
results included a one-time after-tax charge of $2.9 million or
$0.22 per diluted share related to the early extinguishment of
debt. Excluding the charge in the fiscal fourth quarter of 2004,
ACE's fiscal fourth quarter 2005 net income and earnings per share
increased 30 percent and 24 percent, respectively, over the prior
year period. During the fiscal fourth quarter of 2005, ACE's total
revenue improved 9 percent to $63.4 million versus $58.1 million in
the prior year period, due primarily to a 17 percent increase in
bill payment services and a 15 percent increase in loan fees and
interest. Among ACE's accomplishments during the fiscal fourth
quarter 2005 were: * The total ACE store network, including
franchised stores, had a record 10.1 million customer visits and
processed approximately $2.4 billion in transactions. * ACE
company-owned stores cashed 3.3 million checks, with a face value
in excess of $1.2 billion, resulting in check-cashing fees for the
quarter of $28.9 million, up 3 percent from $28.1 million in the
fourth quarter of fiscal 2004. * ACE company-owned stores processed
over 535,000 loan transactions, disbursing over $165 million in
loan proceeds and generating interest income and fees of $22.9
million. Comparable store loan fees in company-owned stores
increased 7.9 percent over the prior year's fourth quarter. * ACE
company-owned stores processed over 2.1 million bill payment and
debit card transactions producing a bill-payment revenue increase
of 17 percent, to $5.3 million from $4.5 million in the prior year
period. * ACE company-owned stores sold approximately 35,000
prepaid debit cards in the fourth quarter of fiscal 2005, an
increase of 17 percent over the prior year. * Store gross margin
improved to 33.0 percent of revenue in the fourth quarter of fiscal
2005 compared to 31.2 percent in the previous year period. During
the fiscal fourth quarter 2005, the Company opened 29 company-owned
stores, including 11 ACE Cash Advance stores. ACE franchisees also
opened an additional 16 stores during the quarter. "As we begin
fiscal 2006, we remain committed to our mission of understanding
our customers, exceeding their expectations and investing in the
communities we serve," said Jay B. Shipowitz, President and CEO.
"Over the past six months we have managed through a significant
regulatory challenge with the implementation of the revised FDIC
Guidelines for Payday Lending. Through hard work and diligent focus
on finding alternative solutions for our customers, our team has
already introduced two new loan products to our customers in Texas
and one new loan product in both Pennsylvania and Arkansas. In
fiscal 2006, we intend to devote additional resources to continue
our growth through de novo openings, opportunistic acquisitions,
new products and more efficient operations." Fiscal 2006 Business
Guidance * The Company expects to open 50 to 60 ACE Cash Express
stores and 50 to 60 ACE Cash Advance Stores. * The Company expects
to close 20 to 30 stores. * The Company currently estimates
franchisees will open approximately 30 stores in fiscal 2006. * The
Company expects its fiscal 2006 tax rate to be 39 percent. * The
Company will begin expensing stock options in Fiscal 2006 and
expects to record stock option expenses of approximately $1
million. * The Federal Deposit Insurance Corporation's Revised
Guidelines for Payday Lending, which took effect July 1, 2005, will
adversely impact the Company's payday loan business in fiscal 2006.
The Company cannot currently quantify this impact or the benefits
that recently introduced alternative loan products may have on its
revenue and profitability in fiscal 2006. At this time ACE
currently offers its customers the following loan products: *
Short-term consumer loans offered pursuant to state regulation (ACE
Loan) in 20 states and the District of Columbia with an average
term of approximately 14 days; * Short-term consumer loans in
Texas, Arkansas and Pennsylvania offered by Republic Bank of
Kentucky (RBT Loan) with a 14-day term; * Beginning July 1, 2005, a
short-term consumer loan in Texas offered under Texas law (ACE
Texas Loans) with a 32-day term. ACE Texas Loans generate loan fees
and interest for ACE of approximately 25 percent of the loan fees
and interest generated by an RBT Loan. Beginning August 1, 2005,
ACE Texas Loans are only offered to customers that cannot qualify
for either an RBT Loan or an FBD loan; * Beginning August 1, 2005,
installment loans in Texas, Arkansas and Pennsylvania offered by
First Bank of Delaware (FBD Loan) with a 20-week term. An FBD Loan
generates loan fees and interest for ACE of approximately 55
percent to 80 percent of the loan fees and interest generated by an
RBT Loan depending upon the number of days the FBD loan is
outstanding. Customers are only offered an FBD loan if they cannot
qualify for an RBT Loan. * The Company does not presently offer a
loan product in Texas pursuant to the Credit Services Organization
(CSO) business model. ACE has been and continues to be in
consultation with its attorneys, the Texas Attorney General and the
Texas Commissioner of the Office of Consumer Credit regarding the
legality of this loan product offering. ACE continues to evaluate
whether or not it can legally offer this product. The statements
preceded by bullet points above are the Company's outlook or
forecast for the Company's business for the fiscal year ending June
30, 2006. These statements are made only as of August 25, 2005 and
indicate only the expectations of the Company's management as of
that date. These statements supersede any and all previous
statements made by the Company regarding the matters addressed.
These statements are "forward-looking statements," cannot be
guaranteed and may prove to be wrong. About ACE Cash Express ACE
Cash Express, Inc. is a leading retailer of financial services,
including check cashing, short-term consumer loans and bill payment
services, and the largest owner, operator and franchisor of check
cashing stores in the United States. As of June 30, 2005, ACE had a
network of 1,371 stores in 37 states and the District of Columbia,
consisting of 1,142 company-owned stores and 229 franchised stores.
ACE focuses on serving consumers, many of whom seek alternatives to
traditional banking relationships in order to gain convenient and
immediate access to check cashing services and short-term consumer
loans. ACE's website is found at http://www.acecashexpress.com/ .
Forward-Looking Statements This release contains certain
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements are
generally identified by the use of words such as "expect,"
"anticipate," "estimate," "believe," "intend," "plan," "target,"
"goal," "should," "would," and terms with similar meanings.
Although ACE believes that the current views and expectations
reflected in these forward-looking statements are reasonable, these
views and expectations, and the related statements, are inherently
subject to risks, uncertainties, and other factors, many of which
are not under ACE's control and may not even be predictable. Any
inaccuracy in the assumptions, as well as those risks,
uncertainties and other factors could cause the actual results to
differ materially from these in the forward-looking statements.
These risks, uncertainties, and factors include, but are not
limited to, matters described in ACE's reports filed with the
Securities and Exchange Commission, such as: * ACE's relationships
with Republic Bank & Trust Company, First Bank of Delaware,
Travelers Express and its affiliates, and its bank lenders; * ACE's
relationships with providers of services or products offered by ACE
or property used in its operations; * federal and state
governmental regulation of check cashing, short- term consumer
lending and related financial services businesses; * any impact on
the loans offered by each of Republic Bank & Trust Company and
First Bank of Delaware at ACE's stores in Texas, Pennsylvania and
Arkansas from the implementation of the revised Guidelines for
Payday Lending announced on March 1, 2005 by the Federal Deposit
Insurance Corporation, which revised Guidelines provide guidance to
banks that engage in payday lending, and include a requirement that
such banks develop procedures to ensure that a payday loan is not
provided to any customer with payday loans outstanding from any
lender for more than 3 months in the previous 12 months; * any
litigation; * theft and employee errors; * the availability of
adequate financing, suitable locations, acquisition opportunities
and experienced management employees to implement ACE's growth
strategy; * increases in interest rates, which would increase ACE's
borrowing costs; * the fragmentation of the check cashing industry
and competition from various other sources, such as banks, savings
and loans, short-term consumer lenders, and other similar financial
services entities, as well as retail businesses that offer services
offered by ACE; * the terms and performance of third-party services
offered at ACE's stores; and * customer demand and response to
services offered at ACE's stores. ACE expressly disclaims any
obligation to update or revise any of these forward-looking
statements, whether because of future events, new information, a
change in ACE's views or expectations, or otherwise. ACE makes no
prediction or statement about the performance of its common stock.
ACE CASH EXPRESS, INC. AND SUBSIDIARIES INTERIM UNAUDITED
CONSOLIDATED STATEMENTS OF EARNINGS (in thousands, except per share
amounts) Three Months Ended Year Ended June 30, June 30, 2005 2004
2005 2004 Revenues $63,412 $58,098 $268,649 $246,659 Store
expenses: Salaries and benefits 17,146 13,722 65,293 59,593
Occupancy 9,029 7,801 34,768 30,563 Provision for loan losses and
doubtful accounts 6,335 5,562 27,090 24,235 Depreciation 1,482
2,348 7,684 7,563 Other 8,483 10,534 38,398 40,066 Total store
expenses 42,475 39,967 173,233 162,020 Gross margin 20,937 18,131
95,416 84,639 Region expenses 5,836 4,995 22,971 19,251
Headquarters expenses 4,204 3,727 19,245 18,681 Franchise expenses
318 297 1,227 1,196 Other depreciation and amortization 852 827
3,094 3,893 Interest expense, net 665 1,401 4,880 10,231 Loss on
early extinguishment of debt --- 4,858 --- 4,858 Other (income)
expense, net (1,186) (1,566) (864) (1,893) Income before income
taxes 10,248 3,592 44,863 28,422 Provision for income taxes 3,651
1,439 17,497 11,370 Net income $6,597 $2,153 $27,366 $17,052
Earnings per share: Basic $0.49 $0.17 $2.06 $1.55 Diluted $0.48
$0.16 $1.98 $1.49 Weighted average number of common shares
outstanding: Basic 13,421 12,660 13,275 11,009 Diluted 13,796
13,110 13,821 11,477 ACE CASH EXPRESS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (in thousands, except share and per
share amounts) June 30, June 30, 2005 2004(A) (unaudited)
(restated) ASSETS Current Assets Cash and cash equivalents $109,430
$123,041 Accounts receivable, net 3,969 5,555 Loans receivable, net
20,787 17,047 Prepaid expenses, inventories and other current
assets 13,685 10,658 Total Current Assets 147,871 156,301
Noncurrent Assets Property and equipment, net 37,657 27,336
Covenants not to compete, net 1,668 1,067 Goodwill, net 98,702
81,719 Other assets 6,723 3,839 Total Assets $292,621 $270,262
LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Revolving
advances $43,300 $60,000 Accounts payable, accrued liabilities and
other current liabilities 36,117 32,711 Money orders payable 4,867
4,495 Total Current Liabilities 84,284 97,206 Noncurrent
Liabilities Deferred income tax 4,302 3,134 Deferred revenue 3,271
3,907 Other liabilities 4,079 3,411 Total Liabilities 95,936
107,658 Commitments and Contingencies Shareholders' Equity
Preferred stock, $1 par value, 1,000,000 shares authorized, none
issued and outstanding --- --- Common stock, $.01 par value,
50,000,000 shares authorized, 13,912,045 and 13,518,737 shares
issued and 13,700,645 and 13,307,337 shares outstanding,
respectively 137 133 Additional paid-in capital 103,544 95,941
Retained earnings 98,836 71,470 Accumulated comprehensive loss (56)
(170) Treasury stock, at cost, 211,400 shares (2,707) (2,707)
Unearned compensation - restricted stock (3,069) (2,063) Total
Shareholders' Equity 196,685 162,604 Total Liabilities and
Shareholders' Equity $292,621 $270,262 (A) The June 30, 2004
property and equipment, net, deferred income tax, other liabilities
and retained earnings balances have been adjusted to reflect the
previously announced corrections to ACE's lease accounting
practices. ACE CASH EXPRESS, INC. AND SUBSIDIARIES SUPPLEMENTAL
STATISTICAL DATA (unaudited) Three Months Ended June 30, Year Ended
June 30, 2005 2004 2005 2004 2003 Company Operating and Statistical
Data: Company-owned stores in operation: Beginning of period 1,118
988 1,026 968 1,003 Acquired --- 26 74 34 2 Opened 29 21 80 53 14
Sold (3) --- (6) (5) (23) Closed (2) (9) (32) (24) (28) End of
period 1,142 1,026 1,142 1,026 968 Franchised stores in operation:
Beginning of period 213 219 204 200 184 Opened 16 2 48 32 26
Acquired by ACE --- (5) (22) (13) (2) Closed/Sold --- (12) (1) (15)
(8) End of period 229 204 229 204 200 Total store network 1,371
1,230 1,371 1,230 1,168 Percentage increase (decrease) in
comparable store revenues from prior period: (A) Total revenue 1.4%
7.3% 3.1% 5.0% 1.9% Check fees including tax check fees (4.5%) 1.4%
(3.8%) 4.1% 5.4% Loan fees and interest 7.9% 22.3% 12.7% 7.8%
(4.4%) Cash Flow Data: (in thousands) Purchases of property and
equipment, net $7,191 $4,089 $18,951 $7,439 $4,721 Store
acquisition costs: Property and equipment --- 391 958 511 50
Intangible assets 26 6,081 18,428 6,403 673 Check Cashing Data:
Face amount of checks cashed (in millions) $1,208 $1,123 $5,277
$5,103 $5,040 Face amount of average check 363 355 396 388 383
Average fee per check 8.79 8.90 9.98 9.91 9.65 Fees as a percentage
of average check 2.42% 2.51% 2.52% 2.55% 2.52% Number of checks
cashed (in thousands) 3,326 3,160 13,325 13,151 13,148 Check
Collections Data: Face amount of returned checks (in thousands)
$7,075 $5,897 $26,914 $21,705 $24,087 Collections (in thousands)
6,192 3,708 20,951 13,947 16,935 Net write-offs (in thousands) $883
$2,189 $5,963 $7,758 $7,152 Collections as a percentage of returned
checks 87.5% 62.9% 77.8% 64.3% 70.3% Net write-offs as a percentage
of revenues 1.4% 3.8% 2.2% 3.1% 3.1% Net write-offs as a percentage
of the face amount of checks cashed 0.07% 0.19% 0.11% 0.15% 0.14%
ACE CASH EXPRESS, INC. AND SUBSIDIARIES SUPPLEMENTAL STATISTICAL
DATA, continued (unaudited) (in thousands, except averages and
percents) Three Months Ended June 30, Year Ended June 30, 2005 2004
2005 2004 2003 Combined Short-Term Consumer Loans Operating Data:
Volume - new loans and refinances $165,474 $137,163 $640,356
$527,723 $484,026 Average advance $293 $278 $290 $278 $274 Average
finance charge $46.25 $43.66 $45.87 $43.71 $44.55 Number of loan
transactions - new loans and refinances 536 495 2,139 1,909 1,798
Matured loan volume $149,638 $129,334 $613,380 $516,741 $488,940
Loan fees and interest $22,855 $19,835 $91,793 $77,029 $70,806 Loan
loss provision $6,290 $5,532 $26,941 $24,280 $22,293 Gross margin
on loans 72.5% 72.1% 70.7% 68.5% 68.5% Loan loss provision as a
percent of matured loan volume 4.2% 4.3% 4.4% 4.7% 4.6% Loans
Processed for Republic Bank: (B) Volume - new loans and refinances
$46,254 $39,977 $184,646 $159,692 $63,897 Average advance $319 $299
$319 $296 $302 Average finance charge $56.32 $52.61 $56.30 $52.11
$53.35 Number of loan transactions - new loans and refinances 145
134 578 541 211 Matured loan volume $43,796 $37,601 $181,153
$157,018 $56,040 Loan fees and interest $6,892 $5,954 $27,880
$24,036 $9,037 Provision for loan losses payable to Republic Bank
$2,041 $1,493 $8,686 $7,390 $2,932 ACE Loans Operating Data: (C)
Volume - new loans and refinances $119,220 $97,186 $455,710
$368,031 $420,129 Average advance $281 $268 $277 $269 $268 Average
finance charge $41.73 $39.27 $41.17 $39.40 $42.71 Number of loan
transactions - new loans and refinances 391 361 1,561 1,368 1,587
Matured loan volume $105,842 $91,733 $432,227 $359,723 $432,900
Loan fees and interest $15,963 $13,881 $63,913 $52,993 $61,769 Loan
loss provision $4,249 $4,039 $18,255 $16,890 $19,361 Gross loans
receivable $31,790 $27,663 $31,790 $27,663 $21,734 Less: Allowance
for losses 11,003 10,616 11,003 10,616 8,734 Loans receivable, net
of allowance $20,787 $17,047 $20,787 $17,047 $13,000 Allowance for
losses on loans receivable: Beginning of period $12,073 $10,657
$10,616 $8,734 $12,213 Provision for loan losses 4,249 4,039 18,255
16,890 19,361 Charge-offs (5,319) (4,080) (17,868) (15,008)
(22,840) End of period $11,003 $10,616 $11,003 $10,616 $8,734
Allowance as a percent of gross loans receivable 34.6% 38.3% 34.6%
38.3% 40.2% (A) Calculated based on changes in revenue for all
company-owned stores open during the period and open for at least
13 months. (B) Republic Bank Loans are short-term consumer loans
made by Republic Bank & Trust Company at our company-owned
stores in Arkansas, Pennsylvania and Texas since January 1, 2003.
(C) Operating data for ACE loans include short-term consumer loans
made by Goleta National Bank at our company-owned stores until we
discontinued offering Goleta loans on December 31, 2002. ACE CASH
EXPRESS, INC. AND SUBSIDIARIES UNAUDITED REVENUE ANALYSIS Three
Months Ended June 30, Year Ended June 30, 2005 2004 2005 2004 2003
(dollars in thousands) (dollars in thousands) Check cashing fees
$27,747 $26,653 $111,284 $108,439 $104,175 Loan fees and interest
22,855 19,835 91,793 77,029 70,806 Tax check fees 1,171 1,476
20,335 20,755 21,528 Bill payment services 5,255 4,474 20,266
16,960 13,507 Money transfer services 3,158 2,826 11,868 11,136
10,898 Money order fees 1,666 1,558 6,875 6,330 6,960 Franchise
revenues 815 594 3,180 2,773 2,346 Other fees 745 682 3,048 3,237
4,069 Total revenue $63,412 $58,098 $268,649 $246,659 $234,289
Three Months Ended June 30, Year Ended June 30, 2005 2004 2005 2004
2003 (percentage of revenues) (percentage of revenues) Check
cashing fees 43.8% 45.9% 41.4% 44.0% 44.5% Loan fees and interest
36.0 34.1 34.2 31.2 30.2 Tax check fees 1.8 2.5 7.6 8.4 9.2 Bill
payment services 8.3 7.7 7.5 6.9 5.8 Money transfer services 5.0
4.9 4.4 4.5 4.6 Money order fees 2.6 2.7 2.6 2.6 3.0 Franchise
revenues 1.3 1.0 1.2 1.1 1.0 Other fees 1.2 1.2 1.1 1.3 1.7 Total
revenue 100.0% 100.0% 100.0% 100.0% 100.0% CONFERENCE CALL August
25, 2005 5 p.m. EDT An investor conference call will be held today,
August 25, 2005 at 5 p.m. EDT, regarding the release of ACE Cash
Express, Inc.'s fiscal 2005, fourth quarter and year-end earnings.
The Company invites you to participate in the conference call by
dialing (800) 442-9701. The confirmation code to access the call is
8037455. Jay B. Shipowitz, President and Chief Executive Officer
and William S. McCalmont, Executive Vice President and Chief
Financial Officer, will present the fourth quarter and year-end
review. For your convenience, the conference call will be replayed
in its entirety beginning at approximately 6 p.m. EDT on August
25th through 7 p.m. EDT on September 12th. If you wish to listen to
a replay of this conference call, dial (800) 642-1687, provide your
name and use confirmation number 8037455. If you have questions
regarding this conference call, please contact Darla Ashby at (972)
550-5037. DATASOURCE: ACE Cash Express, Inc. CONTACT: William S.
McCalmont, Executive Vice President & CFO, +1-972-753-2314, or
, or Douglas Lindsay, Vice President of Finance, +1-972-753-2342,
or , both of ACE Cash Express, Inc. Web site:
http://www.acecashexpress.com/
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