PAGE 5 LEVEL 1 - 9 OF 136 STORIES San Antonio Business Journal April 9, 1993 SECTION: Vol 7; No 12; Sec 1; pg 1 LENGTH: 902 words HEADLINE: Express Cash to merge with Fort Worth chain BYLINE: Sanford Nowlin DATELINE: San Antonio; TX; US BODY: San Antonio-based Express Cash International Corp. has agreed to merge with a subsidiary of Fort Worth-based Cash America International Inc., turning ownership of its 18 pawnshops over to that company. If the merger goes through, Express Cash International will become a wholly owned subsidiary of Cash America, its stores will become Cash America stores, and it will shut down its 20-employee corporate office here. "This is all dependent on approval by our shareholders," says Howard Craft, vice president of finance and chief financial officer for Express Cash. "But from our standpoint, they're paying a good value for our profitable stores." The acquisition will give Cash America the largest market share in San Antonio. The Fort Worth firm already has eight local stores, and will take over operation of Express Cash's 12 Express Pawn shops upon completion of the merger. With 225 pawnshops in eight states, Cash America is the nation's largest pawnshop chain. The company also has 26 stores in England and Scotland. Express Cash and Cash America are two of the five publicly traded pawnshop companies in the United States. Express Cash is the fourth-largest publicly traded pawnshop chain. Under terms of the agreement, Express Cash shareholders will receive Cash America common stock in exchange for their shares in Express Cash. Officials at Cash America say an exchange rate of Cash America stock to Express Cash stock has not yet been established. The maximum amount of stock to be received by Express Cash shareholders equates to approximately $ 7.37 million, subject to possible downward adjustments based on levels of assets and liabilities at closing. Officials at the two companies say an exchange rate for the stock will be determined upon completion of the deal. There are 1,356,667 shares of Express Cash common stock outstanding. PAGE 6 San Antonio Business Journal, April 9, 1993 "Essentially, the agreement is that we'll assume their debt, then exchange the stock," says Bill White, vice president of public relations for Cash America. "What they're receiving is stock in a New York Stock Exchange-traded company with a very solid financial base That's not a bad exchange." The largest shareholders in Express Cash are President and Chief Executive Officer Charles Barrett Jr., who holds 31 percent of the firm's stock, and Chairman Stanley Rosenberg, who owns 4 percent. Craft says he doubts Cash America will shut down any of the Express Pawn shops or drastically change their day-to-day operation. "Their mode of operation and ours are remarkably similar," says Craft. "So, for our employees the biggest difference they'll see is having to change into new (uniform) shirts." According to industry experts, both chains are pioneers of a trend in the pawn industry. Over the last several years, pawnshop chains have expanded rapidly because of the availability of financing and their use of modern retail techniques to edge out or buy out the mom-and-pop stores that comprise the majority of the industry. According to one analyst, Express Cash was riding a solid trend, but was probably forced to consider a merger because it was having trouble sustaining its growth. "Express Cash seemed like a solid company that easily would have survived," says Dennis Van Zelfden, an analyst with Rauscher Pierce Refsnes Inc. in Dallas that follows the pawnshop industry. "Unfortunately, they couldn't attract enough capital to continue their growth." Van Zelfden says the firm's size and other factors may have prevented it from securing better financing. "They're a small company and at this time, investors are going after larger, more established companies," Van Zelfden says. "Plus, as with the rest of the pawn industry, there's still an image problem. There are still people out there that don't think pawnshops are a good investment." Craft, however, says the firm's ability or inability to grow had nothing to do with its decision to merge with Cash America. "I'd say (his assessment) is stretching it," says Craft. "The basic principal at work is that we were offered a good price." The planned merger with Express Cash is one in a long line of mergers and acquisitions for Cash America. The firm has built up its pawnshop empire through aggressive store openings and acquisitions, Van Zelfden says. The chain's recent major acquisitions include the purchase of Waco-based Big State Pawn's 46 stores, the 12-store Metroplex-based Uncle Joe's chain and PAGE 7 San Antonio Business Journal, April 9, 1993 England's 26-store Harvey & Thompson chain. "We've done some fairly good-sized acquisitions," says White. "And we also tend to acquire a lot of single-store operations. Our growth has been about 50 percent of each." For the year ended Jan. 31, 1993, Express Cash posted a net loss of $ 234,174, or 17 cents per share, on revenues of $ 11.1 million in that year. For the previous year, the firm posted a net income of $ 54,342, or 4 cents per share on revenues of $ 7.1 million. Cash America posted net income of $ 13 million, or 45 cents per share, on revenues of $ 185.7 million for its fiscal year ended Dec. 31, 1992. That compares to net income of $ 10.5 million, or 37 cents per share, on revenues of $ 138 million for the previous fiscal year. Cash America's stock, which trades on the New York Stock Exchange under the symbol "PWN," closed April 1 at $ 8.625. Express Cash's stock trades on the NASDAQ Small-Cap Market under the symbol "XPRS." GRAPHIC: Photo SUBJECT: Retailing industry; Acquisitions & mergers; Expansion; Stockholders; Southwest GEOGRAPHIC: Southwest Region; San Antonio; TX; US COMPANY: Express Cash International; DUNS: 19-628-0408; SIC: 5999; TICKER: XPRS Cash America International Inc; SIC: 6719;5932 LOAD-DATE-MDC: May 6, 1993 PAGE 8 LEVEL 1 - 26 OF 136 STORIES