First Cash Financial Services, Inc. (Nasdaq:FCFS) today announced
record-setting revenue, net income and earnings per share for the
three months ended June 30, 2011. Diluted earnings per share from
continuing operations for the second quarter were $0.48, an
increase of 45% over the prior year. The Company continued to post
strong growth in revenue, operating margins and profits based on
the strength of pawn operations in both the U.S. and Mexico and
updated its earnings per share guidance to a range of $2.16 to
$2.20, increasing the lower end of the range by $0.04 per share. In
addition, the Company raised its previously estimated range of
70 to 80 store additions for fiscal 2011 to an updated forecast of
80 to 85 new locations.
Earnings Highlights
- Diluted earnings per share from continuing operations were
$0.48 for the quarter, an increase of 45%, compared to $0.33 in the
second quarter of 2010.
- Net income from continuing operations in the second quarter was
$15.2 million, which increased 48% over the prior-year
quarter.
- Year-to-date earnings per share from continuing operations
increased 47% for the six months ended June 30, 2011, to $0.97, as
compared to the prior year. Net income from continuing operations
for the six-month period increased 53% and for the trailing twelve
months increased 48% to $62.1 million.
- Total diluted earnings per share, including income from
discontinued operations, were $0.48 for the second quarter of 2011
and $1.18 year-to-date. Earnings per share from discontinued
operations were $0.21 year-to-date, related primarily to the first
quarter gain on the sale of the Company's payday lending stores in
Illinois.
Revenue Highlights
- Consolidated second quarter revenue increased by 27% over last
year, totaling $121 million. Year-to-date revenue also increased
27%, while revenue for the trailing twelve months totaled $475
million, a 23% increase over the prior year.
- Same-store revenue increased by 17% for both the second quarter
and year-to-date periods. By country, same-store sales increased in
the current quarter by 26% in Mexico and 7% in the United States,
due to the continued maturation of newer stores in Mexico and
strong same-store results in mature U.S. pawn stores.
- On a geographic basis, the Company's revenue continues to be
diversified, with 57% of second quarter revenue being generated in
Mexico and 43% derived from domestic operations. Revenue from the
Mexico operations increased by 37% over the prior-year quarter,
reflecting strong same-store sales growth and the addition of 69
new stores in the past twelve months. U.S. pawn revenues increased
by 19% in the second quarter, also the result of strong same-store
revenue growth and contributions from 23 new pawn stores added
since the same time last year.
- On a product-line basis, second quarter merchandise sales
increased by 30% over the prior year and comprised 64% of total
revenues. The store-front retail component of merchandise
sales improved by 34% overall for the quarter, led by 44% growth of
retail sales in Mexico. Wholesale jewelry scrap revenues
during the second quarter were up 19% in total. Pawn fees
increased 30% for the quarter, reflecting store growth and
continued consumer demand for pawns in both the U.S. and
Mexico.
Key Profitability Metrics
- The Company's net operating margin (pre-tax income) for the
trailing twelve months ended June 30, 2011 was 20%, compared to 17%
for the comparable prior-year period. This is a record
operating margin for the Company for any twelve month period and
reflects strong same-store revenue growth coupled with further
leveraging of operating expenses.
- Store-level operating profit margins were also at record
levels, achieving 30% for the trailing twelve months ended June 30,
2011, compared to 28% in the prior trailing twelve month
period.
- The Company's return on equity for the trailing twelve months
was 21%, while its return on assets was 18%. This compares to
returns of 19% and 15% in the respective prior-year periods.
- Pawn loans, which yield future pawn fees and inventory for
merchandise sales, increased by 31% year-over-year. Growth of
pawn loans in Mexico was particularly strong at 39% over the prior
year, while U.S. pawns increased 22%. The rates of growth
accelerated sequentially over the comparable growth rates in both
markets at the end of the first quarter of 2011.
- The gross margin on retail merchandise sales was 40% for the
quarter and year-to-date periods, while the margin on wholesale
scrap jewelry was 30% for the quarter and 32%
year-to-date. The comparative prior-year retail margins were
42% for the quarter and year-to-date periods, while scrap margins
were 33% for the prior-year quarter and year-to-date
periods. The change in retail margins related primarily to the
increased mix of hard good inventories, compared to jewelry, in
Mexico, which typically carry lower margins than retail
jewelry.
- Aged inventories, defined as items held in inventory for more
than a year, represented less than 2% of total
inventories at June 30, 2011, and was consistent with the prior
year. Inventory turns were approximately 3.8 times over the
past twelve months.
New Store Openings & Acquisitions
- A total of 22 pawn stores were added during the second quarter
of 2011, bringing the year-to-date total to 48 additions. Over the
past twelve months, a total of 92 stores have been opened or
acquired. As of June 30, 2011, the Company operated a total of
646 stores, of which 536 were pawn stores.
- Pawn store openings in the second quarter included 19 de novo
stores in Mexico, while year-to-date, a total of 37 Mexico stores
have been added. As of June 30, 2011, First Cash had 423
stores in Mexico, of which 370 are large format, full-service
stores. The Company has increased the number of large format
pawn stores in Mexico by 21% over the past twelve months.
- The Company increased its U.S. pawn locations by three stores
in the second quarter of 2011 and by eleven stores
year-to-date. There are now 121 large format pawn stores in
the U.S., representing a 25% increase over the comparable store
count one year ago.
Financial Position & Liquidity
- EBITDA from continuing operations for the trailing twelve
months increased 37% over the comparable prior-year period,
totaling $107 million. The EBITDA margin was 22% for the
trailing twelve months, compared to 20% for the prior-year
period. EBITDA is defined in the detailed reconciliation of
this non-GAAP financial measure provided elsewhere in this
release.
- Free cash flow for the trailing twelve months was $24.0
million. During this period, the Company utilized operating
cash flows to invest $25.9 million in capital expenditures,
repurchased $22.4 million of Company stock, grew net customer loans
by $18.8 million, increased inventories by $19.8 million, reduced
debt by $7.6 million and paid $9.6 million for pawn store
acquisitions.
- Under the Company's current common stock buyback authorization,
588,000 shares of its common stock were repurchased through June
30, (primarily in the second quarter) at an aggregate cost of $22.4
million and an average price per share of $38.08. At June 30, a
total of 771,000 shares remain available for repurchase under the
current authorization.
- Cash balances increased to $68 million at June 30, 2011,
compared to $46 million last year. The Company had no amounts
outstanding on its $25 million unsecured revolving credit facility
and only $1.6 million of other interest-bearing debt is currently
outstanding.
- On a year-over-year basis, total shareholder equity increased
by 34% and total assets increased by 31%. The ratio of total
liabilities to stockholders' equity was 0.2 to
1.
2011 Outlook
- In March 2011, the Company increased its fiscal 2011 guidance
for diluted earnings per share from continuing operations by $0.15
to a range of $2.12 to $2.20 per share; the Company
is updating this guidance to a range of $2.16 to $2.20, which
is a $0.04 increase to the lower end of the range. The
guidance represents 31% to 33% projected earnings growth over 2010
earnings of $1.65 per share.
- With the addition of 48 stores in the first half of 2011, the
Company is on target to exceed its previous projection of 70 to 80
total store openings in 2011. Accordingly, the Company is
increasing its 2011 estimate for store additions to be in a range
of 80 to 85 stores, of which approximately 70 are projected to be
in Mexico. At the top end of the 2011 estimate, this
represents a 21% increase in total store openings over 2010. All of
the anticipated 2011 store openings will be pawn stores.
- The majority of 2011 revenues will be derived from pawn
operations, with only 9% to 10% of revenues expected to be from
U.S. consumer loan and credit services operations.
Commentary & Analysis
Mr. Rick Wessel, First Cash's Chief Executive Officer, commented
on the Company's second quarter results, "We are very pleased with
our second quarter operating results as demonstrated by both the
record revenue and earnings growth. As we begin the third
quarter, the Company continues to see strength from its existing
pawn operations, coupled with expectations for future revenue and
earnings growth from its significant pipeline of new store
additions in 2011."
"During the second quarter, the growth in retail sales and pawn
loans continued to reflect strong consumer traffic patterns in the
Company's pawn stores. First Cash believes that it is
well-positioned, in an uncertain economic environment, as a
deep-value retailer of quality jewelry, consumer electronics and
tools, especially in Mexico. In addition, the Company
continues to see demand for micro consumer credit products across
all major markets."
During the first half of 2011, the Company added 48 new pawn
locations, compared to 26 openings in the first six months of last
year. Mr. Wessel noted, "We have demonstrated our ability to
execute a meaningful, pawn-focused growth strategy through de novo
store openings and strategic acquisitions. As a result, we
have increased our large format store count by 22% over the past
twelve months and are exceeding our quarterly store opening targets
thus far in 2011. The significant investment in new stores
continues to be funded through operating cash flows, and we have
increased earnings growth despite the additional expense from the
accelerated store additions. While we estimate that the
increased pace of store openings in 2011 created approximately
$0.02 of additional earnings drag in the first half of 2011, the
increased expense was more than offset by strong earnings in our
existing stores. Most importantly though, we believe that the
expected contributions from the new stores added in 2011 will
further drive revenue and earnings growth in future periods."
Mr. Wessel further commented on the Company's growth strategy,
noting that, "The most significant driver of revenue and earnings
growth for the Company continues to be in Mexico, where First Cash
now has 423 locations and is the clear market leader in the large,
full-service pawn store format. The Company's significant
market position and substantial operating scale provide large and
sustainable competitive advantages. We are committed to
further developing the strategy in Mexico and potentially in
additional markets in Latin America."
The Company's balance sheet and cash flows continue to be
strong. Even with the funding for the significant growth in
pawn loans and store additions, the Company utilized excess cash
flows to repurchase over $22 million of its stock in the first half
of 2011. Mr. Wessel commented, "The share buyback program reflects
our confidence in the long-term future of First Cash. We
believe that repurchasing our shares is a productive use of
operating cash flows and excess balance sheet capacity."
In summary, Mr. Wessel said, "We believe that First Cash remains
well-positioned to deliver continued profitability and earnings
growth. Our business model has proven to be consistent across
business cycles and we believe that demand for our pawn products
will continue to be strong. Our operating cash flows should
continue to support growth through accelerating store expansion and
acquisition activity. In addition, our significantly
under-levered balance sheet provides us tremendous strategic
flexibility and will allow us to generate potential additional
returns for our shareholders. We are optimistic about our
future and remain committed to increasing shareholder value."
Forward-Looking
Information
This release may contain forward-looking statements about the
business, financial condition and prospects of the
Company. Forward-looking statements, as that term is defined
in the Private Securities Litigation Reform Act of 1995, can be
identified by the use of forward-looking terminology such as
"believes," "projects," "expects," "may," "estimates," "should,"
"plans," "targets," "intends," "could," or "anticipates," or the
negative thereof, or other variations thereon, or comparable
terminology, or by discussions of strategy or
objectives. Forward-looking statements can also be identified
by the fact that these statements do not relate strictly to
historical or current matters. Rather, forward-looking
statements relate to anticipated or expected events, activities,
trends or results. Because forward-looking statements relate
to matters that have not yet occurred, these statements are
inherently subject to risks and uncertainties. Forward-looking
statements in this release include, without limitation, the
Company's expectations of earnings per share, earnings growth,
expansion strategies, regulatory exposures, store openings,
liquidity, cash flow, consumer demand for the Company's products
and services, future share repurchases and the impact thereof,
completion of disposition transactions and expected gains from the
sale of such operations, earnings from acquisitions, and other
performance results. These statements are made to provide the
public with management's current assessment of the Company's
business. Although the Company believes that the expectations
reflected in forward-looking statements are reasonable, there can
be no assurances that such expectations will prove to be
accurate. Security holders are cautioned that such
forward-looking statements involve risks and
uncertainties. The forward-looking statements contained in
this release speak only as of the date of this statement, and the
Company expressly disclaims any obligation or undertaking to report
any updates or revisions to any such statement to reflect any
change in the Company's expectations or any change in events,
conditions or circumstances on which any such statement is
based. Certain factors may cause results to differ materially
from those anticipated by some of the statements made in this
release. Such factors are difficult to predict and many are
beyond the control of the Company and may include changes in
regional, national or international economic conditions, changes in
the inflation rate, changes in the unemployment rate, changes in
consumer purchasing, borrowing and repayment behaviors, changes in
credit markets, the ability to renew and/or extend the Company's
existing bank line of credit, credit losses, changes or increases
in competition, the ability to locate, open and staff new stores,
the availability or access to sources of inventory, inclement
weather, the ability to successfully integrate acquisitions, the
ability to hire and retain key management personnel, the ability to
operate with limited regulation as a credit services organization,
new federal, state or local legislative initiatives or governmental
regulations (or changes to existing laws and regulations) affecting
consumer loan businesses, credit services organizations and pawn
businesses (in both the United States and Mexico), changes in
import/export regulations and tariffs or duties, changes in
anti-money laundering regulations, unforeseen litigation, changes
in interest rates, monetary inflation, changes in tax rates or
policies, changes in gold prices, changes in energy prices, cost of
funds, changes in foreign currency exchange rates, future business
decisions, public health issues and other uncertainties. These
and other risks, uncertainties and regulatory developments are
further and more completely described in the Company's 2010 Annual
Report on Form 10-K and updated in subsequent releases on Form
10-Q.
About First Cash
First Cash Financial Services, Inc. is a leading international
specialty retailer and provider of consumer financial
services. Its 536 retail pawn locations buy and sell a wide
variety of jewelry, electronics, tools and other merchandise, and
make small customer loans secured by pledged personal
property. The Company's consumer loan locations provide
various combinations of financial services products, including
consumer loans, check cashing, and credit services. In total,
the Company owns and operates 646 stores in eight U.S. states and
22 states in Mexico.
First Cash is a component company in both the Standard
& Poor's SmallCap 600 Index® and the Russell
2000 Index®. First Cash's common stock (ticker symbol
"FCFS") is traded on the Nasdaq Global
Select Market, which has the highest initial listing
standards of any stock exchange in the world based on financial and
liquidity requirements.
The First Cash Financial Services, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=3365
STORE COUNT
ACTIVITY
The following table details store openings and closings for the
three months ended June 30, 2011:
|
Pawn Locations |
Consumer |
|
|
Large |
Small |
Loan |
Total |
|
Format (1) |
Format (2) |
Locations (3) |
Locations |
United States: |
|
|
|
|
Total locations, beginning of
period |
118 |
25 |
80 |
223 |
New locations opened or
acquired |
3 |
-- |
-- |
3 |
Locations closed or
consolidated |
-- |
-- |
(3) |
(3) |
Total locations, end of
period |
121 |
25 |
77 |
223 |
|
|
|
|
|
Mexico: |
|
|
|
|
Total locations, beginning of
period |
351 |
20 |
33 |
404 |
New locations opened or
acquired |
19 |
-- |
-- |
19 |
Total locations, end of
period |
370 |
20 |
33 |
423 |
|
|
|
|
|
Total: |
|
|
|
|
Total locations, beginning of
period |
469 |
45 |
113 |
627 |
New locations opened or
acquired |
22 |
-- |
-- |
22 |
Locations closed or
consolidated |
-- |
-- |
(3) |
(3) |
Total locations, end of
period |
491 |
45 |
110 |
646 |
The following table details store openings and closings for the
six months ended June 30, 2011:
|
Pawn Locations |
Consumer |
|
|
Large |
Small |
Loan |
Total |
|
Format (1) |
Format (2) |
Locations (3) |
Locations |
United States: |
|
|
|
|
Total locations, beginning of
period |
111 |
24 |
91 |
226 |
New locations opened or
acquired |
10 |
1 |
-- |
11 |
Locations closed or
consolidated |
-- |
-- |
(4) |
(4) |
Discontinued consumer loan
operations |
-- |
-- |
(10) |
(10) |
Total locations, end of
period |
121 |
25 |
77 |
223 |
|
|
|
|
|
Mexico: |
|
|
|
|
Total locations, beginning of
period |
333 |
20 |
33 |
386 |
New locations opened or
acquired |
37 |
-- |
-- |
37 |
Total locations, end of
period |
370 |
20 |
33 |
423 |
|
|
|
|
|
Total: |
|
|
|
|
Total locations, beginning of
period |
444 |
44 |
124 |
612 |
New locations opened or
acquired |
47 |
1 |
-- |
48 |
Locations closed or
consolidated |
-- |
-- |
(4) |
(4) |
Discontinued consumer loan
operations |
-- |
-- |
(10) |
(10) |
Total locations, end of
period |
491 |
45 |
110 |
646 |
(1) The large format locations include retail showrooms and
accept a broad array of pawn collateral including jewelry,
electronics, appliances, tools and other consumer hard
goods. At June 30, 2011, 76 of the U.S. large format pawn
stores also offered consumer loans or credit services products.
(2) The small format locations typically have limited
retail operations and accept primarily jewelry and small electronic
items as pawn collateral. At June 30, 2011, all of the Texas
and Mexico small format pawn stores also offered consumer loans or
credit services products.
(3) The U.S. consumer loan locations offer a credit
services product and are all located in Texas. The Mexico
locations offer small, short-term consumer loans. In addition
to stores shown on this chart, First Cash is also an equal partner
in Cash & Go, Ltd., a joint venture, which owns and operates 39
check cashing and financial services kiosks located inside
convenience stores in the state of Texas.
FIRST CASH FINANCIAL SERVICES,
INC. CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (UNAUDITED)
|
Three Months Ended June
30, |
Six Months Ended June
30, |
|
2011 |
2010 |
2011 |
2010 |
|
(in thousands, except per share
amounts) |
Revenue: |
|
|
|
|
Merchandise sales |
$ 77,358 |
$ 59,598 |
$ 155,663 |
$ 120,372 |
Pawn loan fees |
30,564 |
23,518 |
59,536 |
46,340 |
Consumer loan and credit
services fees |
12,410 |
11,694 |
25,634 |
22,426 |
Other revenue |
249 |
203 |
586 |
535 |
Total revenue |
120,581 |
95,013 |
241,419 |
189,673 |
|
|
|
|
|
Cost of revenue: |
|
|
|
|
Cost of goods sold |
48,879 |
36,022 |
97,121 |
73,550 |
Consumer loan and credit
services loss provision |
2,716 |
3,335 |
4,973 |
5,146 |
Other cost of revenue |
52 |
48 |
98 |
82 |
Total cost of revenue |
51,647 |
39,405 |
102,192 |
78,778 |
|
|
|
|
|
Net revenue |
68,934 |
55,608 |
139,227 |
110,895 |
|
|
|
|
|
Expenses and other income: |
|
|
|
|
Store operating expenses |
31,778 |
27,530 |
63,496 |
54,512 |
Administrative expenses |
10,971 |
9,325 |
22,503 |
18,928 |
Depreciation and
amortization |
2,821 |
2,564 |
5,468 |
5,082 |
Interest expense |
40 |
133 |
66 |
273 |
Interest income |
(66) |
(19) |
(165) |
(23) |
Total expenses and other
income |
45,544 |
39,533 |
91,368 |
78,772 |
|
|
|
|
|
Income from continuing operations before
income taxes |
23,390 |
16,075 |
47,859 |
32,123 |
|
|
|
|
|
Provision for income taxes |
8,186 |
5,795 |
16,750 |
11,731 |
|
|
|
|
|
Income from continuing operations |
15,204 |
10,280 |
31,109 |
20,392 |
|
|
|
|
|
Income from discontinued
operations, net of tax |
134 |
1,503 |
6,785 |
3,473 |
Net income |
$ 15,338 |
$ 11,783 |
$ 37,894 |
$ 23,865 |
|
|
|
|
|
Basic income per share: |
|
|
|
|
Income from continuing
operations (basic) |
$ 0.49 |
$ 0.34 |
$ 1.00 |
$ 0.68 |
Income from discontinued
operations (basic) |
-- |
0.05 |
0.21 |
0.11 |
Net income per basic share |
$ 0.49 |
$ 0.39 |
$ 1.21 |
$ 0.79 |
|
|
|
|
|
Diluted income per share: |
|
|
|
|
Income from continuing
operations (diluted) |
$ 0.48 |
$ 0.33 |
$ 0.97 |
$ 0.66 |
Income from discontinued
operations (diluted) |
-- |
0.05 |
0.21 |
0.12 |
Net income per diluted
share |
$ 0.48 |
$ 0.38 |
$ 1.18 |
$ 0.78 |
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
Basic |
31,087 |
30,121 |
31,199 |
30,051 |
Diluted |
31,869 |
30,791 |
31,972 |
30,762 |
FIRST CASH FINANCIAL SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
June 30, |
December 31, |
|
2011 |
2010 |
2010 |
|
(in thousands) |
ASSETS |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ 68,259 |
$ 45,838 |
$ 67,240 |
Pawn loan fees and service charges
receivable |
11,862 |
9,069 |
10,446 |
Pawn loans |
79,654 |
60,964 |
70,488 |
Consumer loans, net |
1,072 |
926 |
995 |
Inventories |
54,636 |
34,871 |
47,406 |
Other current assets |
10,266 |
8,313 |
8,423 |
Total current assets |
225,749 |
159,981 |
204,998 |
|
|
|
|
Property and equipment, net |
69,909 |
51,433 |
58,425 |
Goodwill, net |
72,523 |
62,359 |
68,595 |
Other non-current assets |
3,036 |
2,060 |
2,668 |
Non-current assets of discontinued
operations |
-- |
7,760 |
7,760 |
Total assets |
$ 371,217 |
$ 283,593 |
$ 342,446 |
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
Current portion of notes payable |
$ 479 |
$ 3,057 |
$ 465 |
Accounts payable and accrued liabilities |
29,584 |
24,704 |
27,730 |
Income taxes payable and deferred taxes
payable |
7,417 |
7,568 |
6,427 |
Total current liabilities |
37,480 |
35,329 |
34,622 |
|
|
|
|
Notes payable, net of current portion |
1,143 |
4,008 |
1,386 |
Deferred income tax liabilities |
9,899 |
3,641 |
8,434 |
Total liabilities |
48,522 |
42,978 |
44,442 |
|
|
|
|
Stockholders' equity |
322,695 |
240,615 |
298,004 |
Total liabilities and
stockholders' equity |
$ 371,217 |
$ 283,593 |
$ 342,446 |
FIRST CASH FINANCIAL SERVICES, INC.
OPERATING INFORMATION (UNAUDITED)
The following table details the components of revenue for the
three months ended June 30, 2011, as compared to the three months
ended June 30, 2010 (in thousands). Constant currency results
exclude the effects of foreign currency translation and are
calculated by translating current year results at prior year
average exchange rates, which is more fully described elsewhere in
this release.
|
Three Months Ended |
|
Increase/(Decrease) |
|
June 30, |
|
Constant Currency |
|
2011 |
2010 |
Increase/(Decrease) |
Basis |
United States revenue: |
|
|
|
|
|
Retail merchandise sales |
$ 18,254 |
$ 15,380 |
$ 2,874 |
19 % |
19 % |
Scrap jewelry sales |
9,744 |
8,339 |
1,405 |
17 % |
17 % |
Pawn loan fees |
11,894 |
9,802 |
2,092 |
21 % |
21 % |
Credit services fees |
11,114 |
10,532 |
582 |
6 % |
6 % |
Consumer loan fees |
31 |
27 |
4 |
15 % |
15 % |
Other revenue |
247 |
199 |
48 |
24 % |
24 % |
|
51,284 |
44,279 |
7,005 |
16 % |
16 % |
|
|
|
|
|
|
Mexico revenue: |
|
|
|
|
|
Retail merchandise sales |
37,836 |
26,366 |
11,470 |
44 % |
34 % |
Scrap jewelry sales |
11,524 |
9,513 |
2,011 |
21 % |
21 % |
Pawn loan fees |
18,670 |
13,716 |
4,954 |
36 % |
27 % |
Consumer loan fees |
1,265 |
1,135 |
130 |
11 % |
4 % |
Other revenue |
2 |
4 |
(2) |
-- |
-- |
|
69,297 |
50,734 |
18,563 |
37 % |
29 % |
|
|
|
|
|
|
Total revenue: |
|
|
|
|
|
Retail merchandise sales |
56,090 |
41,746 |
14,344 |
34 % |
28 % |
Scrap jewelry sales |
21,268 |
17,852 |
3,416 |
19 % |
19 % |
Pawn loan fees |
30,564 |
23,518 |
7,046 |
30 % |
25 % |
Credit services fees |
11,114 |
10,532 |
582 |
6 % |
6 % |
Consumer loan fees |
1,296 |
1,162 |
134 |
12 % |
4 % |
Other revenue |
249 |
203 |
46 |
23 % |
23 % |
|
$ 120,581 |
$ 95,013 |
$ 25,568 |
27 % |
23 % |
The following table details the components of revenue for the
six months ended June 30, 2011, as compared to the six months ended
June 30, 2010 (in thousands). Constant currency results
exclude the effects of foreign currency translation and are
calculated by translating current year results at prior year
average exchange rates, which is more fully described elsewhere in
this release.
|
Six Months Ended |
|
Increase/(Decrease) |
|
June 30, |
|
Constant Currency |
|
2011 |
2010 |
Increase/(Decrease) |
Basis |
United States revenue: |
|
|
|
|
|
Retail merchandise sales |
$ 39,182 |
$ 33,838 |
$ 5,344 |
16 % |
16 % |
Scrap jewelry sales |
24,326 |
18,405 |
5,921 |
32 % |
32 % |
Pawn loan fees |
24,401 |
20,574 |
3,827 |
19 % |
19 % |
Credit services fees |
23,037 |
20,093 |
2,944 |
15 % |
15 % |
Consumer loan fees |
127 |
138 |
(11) |
(8)% |
(8)% |
Other revenue |
584 |
524 |
60 |
11 % |
11 % |
|
111,657 |
93,572 |
18,085 |
19 % |
19 % |
|
|
|
|
|
|
Mexico revenue: |
|
|
|
|
|
Retail merchandise sales |
71,263 |
48,676 |
22,587 |
46 % |
38 % |
Scrap jewelry sales |
20,892 |
19,453 |
1,439 |
7 % |
7 % |
Pawn loan fees |
35,135 |
25,766 |
9,369 |
36 % |
28 % |
Consumer loan fees |
2,470 |
2,195 |
275 |
13 % |
6 % |
Other revenue |
2 |
11 |
(9) |
-- |
-- |
|
129,762 |
96,101 |
33,661 |
35 % |
28 % |
|
|
|
|
|
|
Total revenue: |
|
|
|
|
|
Retail merchandise sales |
110,445 |
82,514 |
27,931 |
34 % |
29 % |
Scrap jewelry sales |
45,218 |
37,858 |
7,360 |
19 % |
19 % |
Pawn loan fees |
59,536 |
46,340 |
13,196 |
28 % |
24 % |
Credit services fees |
23,037 |
20,093 |
2,944 |
15 % |
15 % |
Consumer loan fees |
2,597 |
2,333 |
264 |
11 % |
5 % |
Other revenue |
586 |
535 |
51 |
10 % |
10 % |
|
$ 241,419 |
$ 189,673 |
$ 51,746 |
27 % |
24 % |
The following table details customer loans and inventories held
by the Company and active CSO credit extensions from an independent
third-party lender as of June 30, 2011, as compared to June 30,
2010 (in thousands). Constant currency results exclude the effects
of foreign currency translation and are calculated by translating
current year balances at the prior year end-of-period exchange
rate, which is more fully described elsewhere in this
release.
|
Balance at |
|
Increase |
|
June 30, |
|
Constant Currency |
|
2011 |
2010 |
Increase |
Basis |
United States: |
|
|
|
|
|
Pawn loans |
$ 36,383 |
$ 29,939 |
$ 6,444 |
22 % |
22 % |
CSO credit extensions held by
independent third-party (1) |
12,167 |
11,775 |
392 |
3 % |
3 % |
Other |
46 |
35 |
11 |
31 % |
31 % |
|
48,596 |
41,749 |
6,847 |
16 % |
16 % |
|
|
|
|
|
|
Mexico: |
|
|
|
|
|
Pawn loans |
43,271 |
31,025 |
12,246 |
39 % |
28 % |
Other |
1,026 |
891 |
135 |
15 % |
6 % |
|
44,297 |
31,916 |
12,381 |
39 % |
27 % |
|
|
|
|
|
|
Total: |
|
|
|
|
|
Pawn loans |
79,654 |
60,964 |
18,690 |
31 % |
25 % |
CSO credit extensions held by
independent third-party (1) |
12,167 |
11,775 |
392 |
3 % |
3 % |
Other |
1,072 |
926 |
146 |
16 % |
7 % |
|
$ 92,893 |
$ 73,665 |
$ 19,228 |
26 % |
21 % |
|
|
|
|
|
|
|
|
|
|
|
|
Pawn inventories: |
|
|
|
|
|
U.S. pawn inventories |
$ 20,030 |
$ 14,735 |
$ 5,295 |
36 % |
36 % |
Mexico pawn inventories |
34,606 |
20,136 |
14,470 |
72 % |
58 % |
|
$ 54,636 |
$ 34,871 |
$ 19,765 |
57 % |
48 % |
(1) CSO amounts are comprised of the principal portion of
active CSO extensions of credit by an independent third-party
lender, which are not included on the Company's balance sheet, net
of the Company's estimated fair value of its liability under the
letters of credit guaranteeing the loans.
FIRST CASH FINANCIAL SERVICES,
INC. UNAUDITED NON-GAAP FINANCIAL
INFORMATION
The Company uses certain financial calculations, such as free
cash flow, EBITDA and constant currency results, which are not
considered measures of financial performance under U.S. generally
accepted accounting principles ("GAAP"). Items excluded from
the calculation of free cash flow, EBITDA and constant
currency results are significant components in understanding and
assessing the Company's financial performance. Since free
cash flow, EBITDA and constant currency results are not measures
determined in accordance with GAAP and are thus susceptible to
varying calculations, free cash flow, EBITDA and constant currency
results, as presented, may not be comparable to other similarly
titled measures of other companies. Free cash flow, EBITDA and
constant currency results should not be considered as alternatives
to net income, cash flow provided by or used in operating,
investing or financing activities or other financial statement data
presented in the Company's consolidated financial statements as
indicators of financial performance or liquidity. Non-GAAP
measures should be evaluated in conjunction with, and are not a
substitute for, GAAP financial measures.
Earnings Before Interest, Taxes, Depreciation and
Amortization
EBITDA is commonly used by investors to assess a company's
leverage capacity, liquidity and financial performance. The
following table provides a reconciliation of income from continuing
operations to EBITDA (in thousands):
|
Trailing Twelve Months
Ended June 30, |
|
2011 |
2010 |
|
|
|
Income from continuing operations |
$ 62,091 |
$ 41,995 |
Adjustments: |
|
|
Income taxes |
33,687 |
24,878 |
Depreciation and
amortization |
10,837 |
10,262 |
Interest expense |
184 |
610 |
Interest income |
(239) |
(33) |
Earnings from continuing operations before
interest, taxes, depreciation and amortization |
$ 106,560 |
$ 77,712 |
|
|
|
EBITDA margin calculated as follows: |
|
|
Total revenue from continuing
operations |
$ 475,008 |
$ 387,367 |
Earnings from continuing
operations before interest, taxes, depreciation and
amortization |
106,560 |
77,712 |
EBITDA as a percent of
revenue |
22% |
20% |
Free Cash Flow
For purposes of its internal liquidity assessments, the Company
considers free cash flow, which is defined as cash flow from the
operating activities of continuing and discontinued operations
reduced by purchases of property and equipment and net cash outflow
from pawn and consumer loans. Free cash flow is commonly used
by investors as a measure of cash generated by business operations
that will be used to repay scheduled debt maturities and can be
used to invest in future growth through new business development
activities or acquisitions, repurchase stock, or repay debt
obligations prior to their maturities. These metrics can also
be used to evaluate the Company's ability to generate cash flow
from business operations and the impact that this cash flow has on
the Company's liquidity. The following table reconciles "net
cash flow from operating activities" to "free cash flow" (in
thousands):
|
Trailing Twelve Months
Ended June 30, |
|
2011 |
2010 |
Cash flow from operating activities,
including discontinued operations |
$ 75,938 |
$ 82,243 |
Cash flow from investing activities: |
|
|
Pawn and consumer loans |
(26,156) |
(11,424) |
Purchases of property and
equipment |
(25,872) |
(15,347) |
Free cash flow |
$ 23,910 |
$ 55,472 |
Constant Currency
Certain performance metrics discussed in this release are
presented on a "constant currency" basis, which may be considered a
non-GAAP financial measurement of financial performance under
GAAP. The Company's management uses constant currency results
to evaluate operating results of certain business operations in
Mexico, which are transacted primarily in Mexican pesos. Pawn
scrap jewelry in Mexico is sold in U.S. dollars and, accordingly,
does not require a constant currency adjustment. Constant
currency results reported herein are calculated by translating
certain balance sheet and income statement items denominated in
Mexican pesos using the exchange rate from the prior-year
comparable period, as opposed to the current comparable period, in
order to exclude the effects of foreign currency rate fluctuations
for purposes of evaluating period-over-period comparisons. For
balance sheet items, the closing exchange rate at the end of the
applicable prior-year period (June 30, 2010) of 12.8 to 1 was used,
compared to the current end of period (June 30, 2011) exchange rate
of 11.8 to 1. For income statement items, the average closing
daily exchange rate for the appropriate period was used. The
average exchange rate for the prior-year quarter ended June 30,
2010 was 12.6 to 1, compared to the current-quarter rate of 11.7 to
1. The average exchange rate for the prior-year six-month
period ended June 30, 2010 was 12.7 to 1, compared to the current
year-to-date rate of 11.9 to 1.
CONTACT: Rick Wessel, Chairman and Chief Executive Officer
Doug Orr, Executive Vice President and Chief Financial Officer
Phone: (817) 505-3199
Email: investorrelations@firstcash.com
Website: www.firstcash.com
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