Financials for the fiscal yeared ended June 2011 were just emailed to stockholders, although they are not yet posted on the web site as of yet. Email also has proxy materials, shareholder's meeting info and a letter from management.
On the positive side management highlighted the recent CPFH transactions (subsequent to June 2011 so not reflected in the financials). Management also views recent acquisitions as a positive. We see continued growth at Pawnmart with revenues up almost 10% for the fiscal year and continued growth in pawn loans. Management says they have expanded gold & coin expertise as a result of the acquisition.
On the negative side they had a 700k loss for the fiscal year as operating income was flat despite 10% revenue growth. Interest expense was up due to the acquisitions. Cash was down to about 500K as of June 2011, but this doesn't include the subsequent cash received from the CPFH transactions. There is still a "going concern" warning from the auditors based on losses and tight liquidity as of June 2011, although I think we should see improvement on both fronts in the quarters ahead.
The results were somewhat of a disappointment as I was hoping to see operating earnings improve along with the higher revenues. This was a weak economic period and I'm looking forward to seeing the Dec financials when they come out which should reflect the CPFH transactions, a slightly better economy, strong seasonal sales and hopefully an earnings contribution from the acquisitions.
I agree with management's strategy to monetize CPFH and expand Pawn Mart. The bonds come due in 2014 and they have some more cash from the CPFH transactions for immediate liquidity concerns. The bottom line is that they have 2 years to bring this up to profitability and then sell or refinance (hopefully at lower rates than what they are paying now). Diluted share count is still at 3 mil for a market cap of about 300k for a company with 33mil in trailing revenues. Plenty of leverage if they can pull off a turnaround, but still some major work to get to profitability based on the June 2011 fiscal year results. The acquisitions may improve profitability for the next couple of years ahead, but they seem to have been a setback in terms of moving towards profitability for the June 2011 fiscal year.
