The Cash Store Australia Holdings Inc. reports results for the three and six months ended December 31, 2012

EDMONTON, Feb. 27, 2013 /CNW/ - The Cash Store Australia Holdings Inc. ("Cash Store Australia" or the "Company") (TSXV: AUC) today announced results for the three and six months ended December 31, 2012.

The decline in revenue continued in the second 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.  This review has now been completed.  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 do business with Cash Store Australia. The Company plans to introduce new loan products on March 1, 2013 and a newly designed insurance product shortly thereafter.  These product offerings are expected to help draw former customers back to Cash Store Australia's branches. The new products extend the loan term, increase the amount loaned and increase the number of payments required to repay the loan amount.

To partially counteract the effect of the ensuing periods of the reduction in revenue, the Company reduced branch operating expenses by $1.1 million in the second quarter and by $1.8 million for the six months ended December 31, 2012 compared to the same periods last year. The Company will continue to monitor the performance of its existing branch base, merge or close those branches that do not meet its performance criteria and closely manage creditor relationships to ensure access to capital is maintained.

The Company made significant improvements in the quarter ended December 31, 2012 over the quarter ended September 30, 2012. The net loss for the quarter ended December 31, 2012 improved to $2.1 million from $2.9 million for the quarter ended September 30, 2012. The Company also made significant improvements in the six months ended December 31, 2012 over the six months ended June 30, 2012. The net loss for the six months ended December 31, 2012 improved to $5.0 million from $8.4 million for the six months ended June 30, 2012.

Highlights for the second quarter:

• Revenue of $2.1 million compared to $5.0 million for the same quarter last year.
  
  
• Net loss of ($2.1 million) compared to a net loss of ($1.5 million) in the second quarter of fiscal 2012.
  
  
• Branch operating expenses reduced by $1.1 million in this quarter compared to the same quarter last year.
  
  
• Diluted loss per share of ($0.13) compared to a diluted loss per share of ($0.09) in the same quarter last year.
  
  
• Negative Adjusted EBITDA of ($1.8 million) compared to negative Adjusted EBITDA of ($1.1 million) in the same quarter last year.

Highlights for the six months ended December 31, 2012:

• Revenue of $3.9 million compared to $9.7 million for the same period last year.
  
  
• Net loss of ($5.0 million) compared to a net loss of ($3.0 million) in the six months ended December 31, 2011.
  
  
• Branch operating expenses reduced by $1.8 million in this period compared to the same period last year.
  
  
• Diluted loss per share of ($0.31) compared to a diluted loss per share of ($0.18) in the same six month period last year.
  
  
• Negative Adjusted EBITDA of ($4.6 million) compared to negative Adjusted EBITDA of ($2.1 million) in the same six month period 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".

Summary Financial Information

				Three Months Ended				Six Months Ended
Consolidated results				December 31		December 31		December 31		December 31
(presented in Canadian dollars)				2012		2011		2012		2011
No. of branches				67		81		67		81
Revenue
	Brokerage		$	2,008,298	$	4,476,714	$	3,672,715	$	8,641,387
	Other income			103,272		493,275		205,636		1,024,432
Total Revenue				2,111,570		4,969,989		3,878,351		9,665,819
Branch Expenses
	Salaries and benefits			1,563,155		2,424,900		3,196,370		4,791,895
	Retention payments			96,967		1,249,920		564,487		2,296,813
	Rent			554,545		652,180		1,118,452		1,297,082
	Selling, general, and administrative			345,714		510,474		658,662		1,015,735
	Advertising and promotion			173,447		165,252		402,695		272,972
	Depreciation of property and equipment			49,007		153,312		99,377		323,408
				2,782,835		5,156,038		6,040,043		9,997,905
Branch Operating Income (Loss)				(671,265)		(186,049)		(2,161,692)		(332,086)
	Regional expenses			212,669		398,803		400,083		742,459
	Corporate expenses			1,122,265		785,961		2,221,982		1,458,417
	Other depreciation and amortization			8,039		12,002		16,508		27,678
	Impairment of property and equipment			98,087		148,797		111,985		449,592
	Restructuring costs			(52,271)		-		(45,428)		-
	Interest expense			90,148		-		140,048		-
	Foreign exchange loss (gain)			(15,766)		(49,104)		32,822		12,039
	EBITDA*			(1,987,242)		(1,317,194)		(4,783,759)		(2,671,186)
	Adjusted EBITDA*			(1,846,660)		(1,103,413)		(4,586,255)		(2,094,958)
Net loss			$	(2,134,436)	$	(1,482,508)	$	(5,039,692)	$	(3,022,271)
Weighted average number of shares
	outstanding - basic			16,425,981		16,425,981		16,425,981		16,425,981
Basic and Diluted loss per share
	Net loss		$	(0.13)	$	(0.09)	$	(0.31)	$	(0.18)
Consolidated Balance Sheet Information
Working capital			$	(20,039,973)	$	(8,140,567)	$	(20,039,973)	$	(8,140,567)
Total assets				2,231,440		3,517,981		2,231,440		3,517,981
Total long-term liabilities				80,181		177,188		80,181		177,188
Total liabilities				21,667,192		9,743,258		21,667,192		9,743,258
Shareholders' equity			$	(19,435,752)	$	(6,225,277)	$	(19,435,752)	$	(6,225,277)
* EBITDA - earnings before interest, income taxes, depreciation of property and equipment and amortization of intangible assets.  Adjusted EBITDA - earnings before interest, income taxes, depreciation of property and equipment and amortization of intangible assets, stock-based compensation and impairment of property and equipment.

 

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 small sum short term 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:

Bill Johnson, Chief Financial Officer
[phone]; e-mail: [email protected]