U.S. PAWN REPORTS 1ST-QUARTER REVENUES UP 56 PERCENT, OPERATING EARNINGS RISE 39 PERCENT; COMPANY CAUTIONS YEAR-TO-YEAR NET 'NOT COMPARABLE'
DENVER, Feb. 18 /PRNewswire/ -- U.S. Pawn (NASDAQ: USPN) today announced an increase of 56 percent in revenues with operating earnings increasing 39 percent in the first quarter ended Dec. 31, 1992, compared to the year earlier. The company cautioned investors that the year-to- year net income figures are not comparable. For the first quarter, revenues increased to $1,869,436 from $1,198,901 in the year-ago first quarter. The company said the significant increase in revenues occurred from the start-up of two new stores in this quarter and the maturation of three stores added in fiscal 1992. Sales of merchandise rose 69 percent and pawn service charges rose 45 percent in the quarter. Operating earnings grew to $154,165 in the first quarter from $111,287 a year earlier. Those same five stores generated $36,596 of the increase to operating earnings during the quarter. Concerning net income, Fred A. Baker, chief financial officer, stated, "This quarter, for the first time, U.S. Pawn is subject to Financial Accounting Standards Board Statement of Financial Accounting Standards No. 109 'Accounting for Income in (SFAS 109).' Since this new treatment does not carry back to the prior fiscal year it makes our net income numbers not comparable." "Last year, USPN did not provide for income taxes because of our net operating loss carryforwards, so operating income and net income were the same at $111,287, or one cent a share with a zero tax provision. This year, even though we have net operating loss carryforwards of $704,000 available to use, SFAS 109ter, a 38-percent rate, even though the company will pay little or no federal income taxes this year," stated Baker. "The 38-percent deferred tax rate reduces operating income to a net income of $94,165 or one cent a share. Yet we have used up $154,165 of our NOL. When you consider we do not get the tax benefit from the NOL as in prior years, at the 38-percent tax rate, plus we must deduct a provision at that rate, that in effect means we are being taxed 76 percent. Fortunately, this is the only fiscal year this will happen as we expect our NOL to be used up this year. Therefore, we expect next year's tax provision will be a more accurate measure of reality," said Baker. Weighted average common shares outstanding rose 27 percent to 10,576,288 in the quarter from 9,446,146 in the year-earlier quarter. The increase resulted from the exercise of Class B Warrants during fiscal 1992. "U.S. Pawn had an excellent first quarter, which should not be obscured by SFAS 109 application this year," Baker said. "We worked hard to educate USPN's new employees and to mature the three stores added during fiscal 1992 which should help accelerate the growth of the two Denver-based start-up stores, one added in October and one in December of 1992. "In keeping with USPN's aggressive lending policy, we increased pawn loans 8 percent and increased pawn services charges by 45 percent in the first quarter. This led to a slight decline in our gross profit margin to 19 percent from 21 percent. However, our first-quarter gross profit margin is up 2 percentage points from fiscal 1992. Our forfeiture rate on pawned items declined to 29 percent in the first quarter from 32 percent a year earlier and remains in line with the industry's forfeiture rate," added Baker. USPN's balance sheet remains strong. The company has more than $2.6 million in working capital. Shareholders' equity increased by $85,186 as a result of profits, net of preferred stock dividends. "Looking forward, we are secure in our financial and employee capabilities to grow our 10 stores and look towards adding new stores during fiscal 1993. We will focus on starting up new stores but will also review available acquisitions," said Baker. U.S. Pawn is the largest publicly held pawn shop company located in Colorado. USPN is a secured lender offering small loans on a variety of goods primarily jewelry, electronics, musical instruments, household items, cars and boats. U.S. Pawn may sell an item if a pawn loan forfeits. U.S. PAWN, INC. BALANCE SHEETS HIGHLIGHTS DEC. 31, 1992 Assets Dec. 31, 1992 Sept. 30, 1992 (Unaudited) Cash $181,915 $320,101 Pawn Loans Receivable 2,246,344 2,071,592 Accrued Service Charge 380,971 359,939 Inventory 862,154 846,858 Other 277,945 230,255 Current Assets 3,949,329 3,828,745 Fixed Assets 993,274 872,604 Other 566,780 483,315 Total Assets $5,509,383 $5,184,664 Liabilities and Stockholders' Equity Accrued Expenses $191,071 $168,080 Notes Payable 1,316,288 1,204,244 Other 433,806 329,308 Total Liabilities 1,941,165 1,701,632 Stockholders' Equity 3,568,218 3,483,032 Total Liability & Equity $5,509,383 $5,184,664 STATEMENT OF OPERATIONS (Unaudited) Three Months Ended Dec. 31, 1992 1991 Revenues: Sales $1,006,754 $596,449 Pawn charges 808,264 556,273 Other Income 54,418 46,179 Total Revenue 1,869,436 1,198,901 Cost of sales 810,582 469,423 Gross Profit 1,058,854 729,478 Operations 514,834 267,152 Administration 293,250 276,508 Interest 52,979 43,743 Depreciation and amortization 43,646 30,788 Total cost of sales and expenses 1,715,271 1,087,614 Income Before Income Taxes 154,165 111,287 Income Taxes 60,000 0 Net Income $94,165 $111,287 Earnings Per Share: Net Income 94,165 111,287 Preferred Stock Dividend (8,979) (8,979) Earnings per Common Share $0.01 $0.01 Weighted Average Shares Outstanding 10,576,288 9,446,146 -0- 2/18/93 /CONTACT: Fred Baker, CFO, U.S. Pawn, 1512 Larimer St., Denver, CO 80202, 303-571-4704; or Woody Wallace or Kathy Mattson, 708-564-5610, Mark Perlgut, 212-580-4141, or Earle Brown, 813-796-1452, all of The Investor Relations Company, for U.S. Pawn/ (USPN)
CO: U.S. Pawn ST: Colorado IN: FIN SU: ERN
SM-KE -- DE004 -- 7719 02/18/93 09:09 EST
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|Date:||Feb 18, 1993|
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