Cash America 3Q14 Earnings Call Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Spinoff of ENOVA will happen on Nov 13

“In our regularly scheduled board meeting yesterday the board declared a dividend of approximately 80% of the outstanding shares of Enova International, Inc. to our shareholders of record on November 3, 2014 to be paid via a tax-free distribution on November 13, 2014”

Legacy CSH business will focus on pawn, should significantly reduce regulatory risk

“Our strategic objectives of de-emphasis in our core pawn shops is two-fold. First is to allow our store personnel to devote 100% of their attention to serving our pawn lending and retail customers, who we believe add greater lifetime value to the company, and second to greatly reduce the regulatory risk of our bricks and mortar business model.”

Investment thesis less complicated without ENOVA

“following the spin-off of Enova, the investment thesis regarding Cash America in my opinion becomes much less complicated with far fewer moving parts. We will be, as I said before, returning to our roots in the secured pawn lending business. The remaining Cash America entity will not have the high octane growth opportunities of Enova, but we should be viewed as a strong and stable cash flow business with greatly reduced risk profile.”

This will be the last call for ENOVA CEO

“’m happy to be able to join both Dan and Tom today on the second Cash America earnings call. However as Dan mentioned earlier, it looks like this may also be my last given the progress we have made towards completing the spin-off of Enova from Cash America. Hopefully though next quarter I will be able to speak to you as Enova analysts and shareholders.”

Three successful online lenders

“There are certainly three successful technology companies focused on the online lending space, Enova, OnDeck, and Lending Club. We all appear to be heading towards being public companies in the near future.

Each of us bring something unique to the space. Lending club has popularized a unique funding model. OnDeck has reshaped the small business lending market, and we have used sophisticated analytics and data collection to make superior credit decisions and develop better products.”

ENOVA’s focus on data and analytics

“we believe our focus on data and analytics is particularly sustainable. With our 50% plus data and analytics team, tenures of ever improving models and almost 15 terabytes of customer data, we think we have a sustainable advantage over our competitors.”

US regulation: CFPB will have some new ones, but by law they can’t impose caps

“In the US, while much has been written in speculation of potential CFPB rulemaking later this year, we have no real clarity on when rules might be issued and exactly what they might contain. This is important to note by law of the CFPB doesn’t able to impose pricing restrictions or rate caps, so we don’t have much additional clarity at this time.”

Certainly lower gas prices should help our retail business

“certainly lower gasoline prices should help our retail business.”