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Press release from CNW Group

The Cash Store Australia Holdings Inc. reports third quarter results for the period ended March 31, 2012

Friday, May 25, 2012

The Cash Store Australia Holdings Inc. reports third quarter results for the period ended March 31, 201221:14 EDT Friday, May 25, 2012EDMONTON, May 25, 2012 /CNW/ - The Cash Store Australia Holdings Inc. ("Cash Store Australia") (TSXV:AUC) today announced results for the three and nine months ended March 31, 2012.Cash Store Australia has been able to establish a strong market presence in Australia with the development of 81 locations in five states over the past five years.  In the third quarter 2012, the company underwent significant change to adapt to recent regulations and to prepare for pending regulations expected in the next quarter of 2012.  These regulatory changes are expected to come into effect in January 2013."Getting aligned with the current and future regulatory requirements was an imperative the company needed to undergo." CEO Gary Holden said.  "These changes included revisions to its loan contracts, strengthening its disclosure polices and tightening its lending criteria.  During the period of change, we decided to suspend the issuing of new loans from March 17 to April 14 while revisions to procedures and IT systems were implemented."This activity was the main contributor to the financial results for the quarter.  While revenues were up $200,000 or 3.6% over the same quarter last year, net income was reduced by $2.1 million compared to the same period last year.  Contributing to this decrease was a non-cash impairment of property and equipment of $521,000 and branch operating losses relating to the period of loan suspension."Our next challenge is to consolidate our branch operations by closing or merging those branches that are not performing to acceptable levels" CEO Gary Holden said. "These activities will be a major focus in the coming quarter."Highlights for the third quarter (a table of results can be found at the end of this news release):Revenue up 3.6% to $4.2 million, from $4.0 million for the same quarter last year.Net loss of ($3.1 million) up from ($915,000) in the third quarter of last year.Branch operating loss increased to ($1.3 million) from a positive $77,000 for the same quarter of last year.Diluted loss per share of ($0.19) up from ($0.06) in the same quarter last year.Same branch revenues for the 76 locations open since the beginning of the third quarter of fiscal 2011 up 7.0% to $55,400 from $51,800 in the third quarter last year.Negative EBITDA of ($2.4 million) up from ($636,000) in the same quarter last year.Non-cash impairment of property and equipment of $521,000 compared to $43,000 for the same quarter last yearHighlights for the nine months ended March 31, 2012 Revenue up 21.7% to $13.8 million, from $11.4 million for the same period last year.Net loss of ($6.1 million) compared to a loss of ($3.6 million) for the same period last year.Branch operating loss increased to ($1.6 million) from ($582,000) for the same period last year.Diluted loss per share of ($0.37), compared to a diluted loss per share of ($0.22) for the same period last year.Same branch revenues for the 60 locations open since the beginning of the first quarter of fiscal 2011 up 10.1% to $190,400 from $173,000 in the same period last year.Negative EBITDA of ($4.5 million), up from ($2.6 million) in the same period last year.Non-cash impairment of property and equipment of $971,000 compared to $322,000 for the same period last year.About Cash Store AustraliaCash Store Australia is the only payday advance broker in Australia publicly traded on the TSX Venture Exchange (TSXV: AUC). Cash Store Australia operates 81 payday advance branches in the States of Victoria, Queensland, Tasmania, Northern Territory, and New South Wales Australia under the banner "The Cash Store".Cash Store Australia acts as a broker to facilitate payday advance services to income-earning consumers who may not be able to obtain them from traditional financial institutions.Summary Financial Information  Three Months EndedNine Months EndedConsolidated results March 31March 31March 31March 31(presented in Canadian dollars) 2012201120122011 No. of branches81778177      Revenue      Brokerage  $ 3,775,836 $ 3,587,479 $ 12,417,223 $ 10,505,046 Other income 384,465429,4771,408,897851,749  4,160,3014,016,95613,826,12011,356,795Branch Expenses      Salaries and benefits 2,326,6152,086,1167,118,5105,728,324 Retention payments 1,602,582523,5053,899,3952,257,014 Rent 676,163610,0841,973,2451,612,482 Selling, general, and administrative 513,007440,9731,528,7421,286,703 Advertising and promotion 187,051126,347460,023627,446 Depreciation of property and equipment 144,298152,500467,706426,644  5,449,7163,939,52515,447,62111,938,613Branch Operating Income (Loss) (1,289,415)77,431(1,621,501)(581,818)       Regional expenses 364,257173,1921,106,716533,795 Corporate expenses 865,029729,7062,323,4462,344,431 Other depreciation and amortization 12,25514,88539,93343,325 Impairment of property and equipment 520,95743,333970,549322,404 Foreign exchange loss (gain) 36,03031,01948,069(235,406) EBITDA* (2,410,465)(636,487)(4,505,423)(2,599,603)Net loss  $ (3,087,943) $ (914,704) $ (6,110,214) $ (3,590,367)Weighted average number of shares      outstanding - basic 16,425,98116,425,98116,425,98116,425,597Basic and Diluted loss per share      Net loss  $ (0.19) $ (0.06) $ (0.37) $ (0.22)      Consolidated Balance Sheet Information     Working capital  $ (10,545,912) $ (5,176,766) $ (10,545,912) $ (5,176,766)Total assets 3,082,7654,153,3973,082,7654,153,397Total long-term liabilities 160,069216,245160,069216,245Total liabilities 12,304,6906,668,31612,304,6906,668,316Shareholders' equity  $ (9,221,925) $ (2,514,919) $ (9,221,925) $ (2,514,919) * EBITDA - earnings before interest, income taxes, stock-based compensation, depreciation of property and equipment, amortization of intangible assets 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 achieve.  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 pay day 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.For further information: Gary Holden, Chief Executive Officer  (011) 61 (03) 9802-1566; e-mail: gary.holden@cashstore.com.au Or Bill Johnson, Chief Financial Officer (780) 732-5695; e-mail: b.johnson@csfinancial.ca