EDMONTON - The Cash Store Financial Services Inc. (TSX:CSF) is suspending its quarterly dividend after posting a sharp drop in fourth-quarter net earnings.
The Edmonton-based company issued a release Tuesday in which it noted the decision not to issue a dividend for its fiscal fourth quarter had been announced previously — during an investor conference call on Jan. 2.
The dividend payout for the previous quarter was six cents per share.
"The board of directors reviews the company's dividend distribution policy on a quarterly basis," the company said in the release.
"This review includes evaluating the financial position, profitability, cash flow and other factors that the board of directors considers relevant."
The Cash Store said potential future dividend payouts will be reviewed on a quarterly basis.
Cash Stores shares closed down one cent Tuesday to $3.60 on the Toronto Stock Exchange. The issue's 52-week high is $8.41.
The company released its fourth-quarter and fiscal year-end results in late December and posted net income of $392,000, or two cents per shares for the quarter ended Sept. 30. That was down sharply from $2 million or 12 cents per share for the same period of 2011.
It had posted a $3.4-million loss in the third quarter of 2012.
For the fiscal year ended Sept. 30, the company reported a loss of $43 million, or $2.47 per share, compared with a profit of $9 million or 51 cents per share in the comparable year-earlier period.
Loan volume was $797.7 million for the 12 months ended Sept. 30 compared to $821.4 million for the same period of 2011.
Total revenue for the fiscal 2012 was $187.4 million compared to $189.9 million year over year.
The company called 2012 a year of "tremendous transition" as it shifted focus to direct lending and worked toward improving efficiency and profitability and to eliminate underperforming branches.
The Cash Store reported adjusted EBITDA of $11.2 million for the quarter, flat compared with the same quarter year over year.
EBITDA, or earnings before interest, taxes, depreciation and amortization, is a non-standard accounting term that many companies believe provides a better picture of operations than simple statements of profit and loss.
Cash Store Financial is a lender and broker of short-term advances and other financial services to income earning consumers who may not be able to obtain them from banks and other traditional lenders.
With headquarters in Edmonton, Cash Store operates 511 branches across Canada under the banners Cash Store Financial, Instaloans and The Title Store, along with 25 branches in the United Kingdom. It employs some 2,000 people.