FirstCash, Inc. (the “Company”) (Nasdaq: FCFS), the leading
international operator of over 2,800 retail pawn stores in the U.S.
and Latin America, today announced operating results for the three
and nine month periods ended September 30, 2021, and the
completion of a U.S. pawn acquisition. In addition, the Board of
Directors declared a $0.30 per share quarterly cash dividend to be
paid in November 2021.
Mr. Rick Wessel, chief executive officer,
stated, “Revenue and earnings momentum continued to accelerate in
the third quarter, driven by 29% growth in pawn receivables over
this time last year and the continued strength of retail operations
in both the U.S. and Latin America. Resulting store-level profit
before taxes increased 37% in the third quarter compared to last
year. We are well positioned entering the fourth quarter, with
expectations of further growth in pawn demand coupled with fresh,
well-stocked merchandise inventories to support holiday retail
sales.
“FirstCash also continues to invest in growth
opportunities and provide shareholder returns utilizing its strong
balance sheet and cash flows. We are pleased to announce an
18-store acquisition of U.S. pawn stores in the Gulf Coast region
which gives us a total of 96 store additions in the U.S. and Latin
America this year. In addition to the quarterly cash dividends paid
to our shareholders, we have repurchased 688,000 shares of stock
year-to-date.”
This release contains adjusted earnings
measures, which exclude certain extraordinary and/or non-cash
expenses, which are non-GAAP financial measures. Please refer to
the descriptions and reconciliations to GAAP of these and other
non-GAAP financial measures at the end of this release.
|
|
Three Months Ended September 30, |
|
|
As Reported (GAAP) |
|
Adjusted (Non-GAAP) |
In thousands, except per share
amounts |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenue |
|
$ |
399,674 |
|
|
$ |
359,890 |
|
|
$ |
399,674 |
|
|
$ |
359,890 |
|
Net income |
|
$ |
33,396 |
|
|
$ |
15,062 |
|
|
$ |
34,041 |
|
|
$ |
24,453 |
|
Diluted earnings per
share |
|
$ |
0.82 |
|
|
$ |
0.36 |
|
|
$ |
0.84 |
|
|
$ |
0.59 |
|
EBITDA (non-GAAP measure) |
|
$ |
63,331 |
|
|
$ |
34,174 |
|
|
$ |
64,217 |
|
|
$ |
46,333 |
|
Weighted-average diluted
shares |
|
40,516 |
|
|
41,536 |
|
|
40,516 |
|
|
41,536 |
|
|
|
Nine Months Ended September 30, |
|
|
As Reported (GAAP) |
|
Adjusted (Non-GAAP) |
In thousands, except per share
amounts |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenue |
|
$ |
1,197,191 |
|
|
$ |
1,239,126 |
|
|
$ |
1,197,191 |
|
|
$ |
1,239,126 |
|
Net income |
|
$ |
95,538 |
|
|
$ |
73,853 |
|
|
$ |
98,007 |
|
|
$ |
90,620 |
|
Diluted earnings per
share |
|
$ |
2.34 |
|
|
$ |
1.77 |
|
|
$ |
2.40 |
|
|
$ |
2.17 |
|
EBITDA (non-GAAP measure) |
|
$ |
184,072 |
|
|
$ |
152,760 |
|
|
$ |
187,342 |
|
|
$ |
174,869 |
|
Weighted-average diluted
shares |
|
40,789 |
|
|
41,691 |
|
|
40,789 |
|
|
41,691 |
|
Consolidated Earnings
Highlights
- Diluted earnings
per share for the third quarter increased 128% on a GAAP basis and
increased 42% on an adjusted non-GAAP basis compared to the
prior-year quarter. Year-to-date diluted earnings per share
increased 32% on a GAAP basis and increased 11% on an adjusted
non-GAAP basis compared to the prior year. Prior-year GAAP results
include expenses associated with the favorable refinancing of the
Company’s senior notes in the third quarter of 2020.
- EBITDA and Adjusted
EBITDA (non-GAAP measures) for the third quarter increased 85% and
39%, respectively, compared to the prior-year quarter. For the
year-to-date nine month period, EBITDA increased 20% while adjusted
EBITDA increased 7% compared to the same period last year.
- Operating results
in the third quarter reflect increased earning asset levels from a
year ago and continued growth in revenues and profitability in both
the U.S. and Latin America segments versus the prior-year period.
- Consolidated pawn
loans outstanding at quarter end increased 29% over the prior year
while retail merchandise inventories increased 51% compared to last
year.
- Total pawn fees,
which typically lag the growth in pawn receivables, increased 22%
in the third quarter compared to the prior-year quarter, while
retail sales increased 14%.
- Store operating
expenses increased a modest 5% in the third quarter on a larger
store base compared to last year, reflecting continued expense
discipline.
Acquisitions and Store Opening
Highlights
- On October 18,
2021, the Company acquired a chain of 18 pawn stores in the U.S.
Gulf Coast region with locations in southwest Florida, Alabama,
Mississippi and Louisiana. FirstCash now has a total of 87 stores
in the growing Florida market and the acquisition added the
Company’s first two locations in Mississippi. Including this
acquisition, a total of 46 U.S. stores have been acquired this year
for an aggregate purchase price of approximately $77 million.
- A total of 14 de
novo locations were opened during the third quarter, all of which
were located in Mexico. Year-to-date, 50 stores have been opened,
of which 49 are located in Latin America.
- Including the
18-store U.S. acquisition in October, the Company now operates
2,826 stores, with 1,739 stores located in Latin America and 1,087
stores in the U.S. The Latin American locations include 1,651
stores in Mexico, 60 stores in Guatemala, 15 stores in Colombia and
13 stores in El Salvador.
U.S. Pawn Operations
- Pawn receivables
were up 29% at September 30, 2021 compared to the prior year, while
same-store pawn receivables increased 23%, reflecting the
continuing recovery in pawn balances from 2020 levels. Resulting
pawn fees, which typically lag pawn receivables growth, were up 16%
for the third quarter and 11% on a same-store basis, as compared to
the prior-year quarter.
- Retail merchandise
sales for the third quarter of 2021 were up 10% compared to the
prior-year quarter. On a same store-basis, retail sales increased
6% compared to the prior-year quarter.
- Retail margins
remained near record levels at 44%, which continued to reflect
consumer demand for fresh and readily available retail products
across all merchandise categories.
- Inventories
increased 45% on a year-over-year basis versus the prior year’s
depleted levels and are approaching normalized, pre-COVID
levels.
- Annualized
inventory turnover remained strong at 2.9 times for the trailing
twelve months ended September 30, 2021. Inventories aged greater
than one year as of September 30, 2021 declined further to only 1%
of total inventories, which further contributed to the strength of
retail margins.
- Store operating
expenses increased 1% in total but decreased 3% on a same-store
basis compared to the prior-year quarter, reflecting the continued
expense optimization from reduced staffing levels and other
operating efficiency initiatives.
- Pre-tax operating
income for the U.S. segment increased 39% for the third quarter
compared to the prior-year quarter. The resulting segment pre-tax
operating margin was 21% for the third quarter of 2021, a
significant improvement over the 16% margin for the prior-year
quarter.
Note: Certain growth rates in “Latin America
Pawn Operations” below are calculated on a constant currency basis,
a non-GAAP financial measure defined at the end of this release.
The average Mexican peso to U.S. dollar exchange rate for the three
month period ended September 30, 2021 was 20.0 pesos / dollar,
a favorable change of 10% versus the comparable prior-year period,
and for the nine month period ended September 30, 2021 was
20.1 pesos / dollar, a favorable change of 8% versus the prior-year
period.
Latin America Pawn
Operations
-
Pawn receivables at September 30, 2021 increased 30% on U.S. dollar
basis compared to the prior year and 18% on a constant currency
basis. On a same-store basis, pawn receivables increased 29% on a
U.S. dollar basis and 17% on a constant currency basis compared to
the prior year.
-
Pawn fees increased 34% in the third quarter, or 22% on a constant
currency basis, as compared to the prior-year quarter. On a
same-store basis, pawn fees increased 33% on a U.S. dollar basis
and 21% on a constant currency basis compared to the prior-year
quarter.
-
Retail merchandise sales for the third quarter increased 22%, or
11% on a constant currency basis, compared to the prior-year
quarter. Same-store retail sales increased 21% on a U.S. dollar
basis and 10% on a constant currency basis compared to the
prior-year quarter.
-
Retail margins remained solid at 36% in the third quarter, while
the annualized inventory turnover was strong at 4.2 times for the
trailing twelve months ended September 30, 2021. Inventories aged
greater than one year as of September 30, 2021 declined further to
1% of total inventories.
- Store operating
expenses increased 15% on a U.S. dollar basis but only 6% on a
constant currency basis while same-store operating expenses
increased 14%, or 5% on a constant currency basis, compared to the
prior-year quarter. Store operating expenses in the prior-year
quarter were lower than normal in part due to temporary store
closures and restrictions on retail operations in most Latin
American markets due to the pandemic.
- Segment pre-tax
operating income for the third quarter of 2021 increased 34% (23%
on a constant currency basis) over the prior-year quarter. The
resulting segment pre-tax operating margin increased to 21% for the
third quarter of 2021 (also 21% on a constant currency basis)
compared to 19% in the prior-year quarter.
Liquidity and Shareholder Returns
- During the third
quarter, the Company utilized its operating cash flows and
borrowing capacity to fund $79 million in the growth of earning
assets (pawn receivables and inventory) and $20 million for capital
expenditures and purchases of store real estate. For the nine month
year-to-date period, the Company has funded $96 million in earning
asset growth and $70 million in capital expenditures, which
includes $38 million in real estate purchases for 30 of its
existing pawn locations.
- The Board of
Directors declared a $0.30 per share fourth quarter cash dividend
on common shares outstanding, which will be paid on
November 30, 2021 to stockholders of record as of
November 15, 2021. This represents an annualized dividend of
$1.20 per share. Any future dividends are subject to approval by
the Company’s Board of Directors.
- The Company repurchased 152,000
shares of common stock during the third quarter at an aggregate
cost of $12 million and an average cost per share of $76.43. For
the nine months ended September 30, 2021, the Company repurchased
688,000 shares of common stock at an aggregate cost of $50 million
and an average cost per share of $72.10. The Company has $72
million remaining under its current share repurchase authorization.
Future share repurchases are subject to expected liquidity,
acquisition opportunities, debt covenant restrictions and other
relevant factors.
2021 Outlook
Given the continued uncertainties related to
COVID-19 and the associated government assistance programs enacted
in response, the Company is not providing 2021 earnings guidance.
However, the following factors are expected to impact operating
trends throughout the remainder of 2021:
- Although pawn
lending demand continues to recover, beginning same-store pawn
balances entering the fourth quarter are down approximately 13% in
the U.S. compared to pre-pandemic levels at the beginning of the
fourth quarter of 2019. In Latin America, same-store pawn loans at
the beginning of the fourth quarter are 8% below the same date in
2019.
- While inventories
continue to normalize to pre-pandemic levels, same-store inventory
levels in both the U.S. and Latin America are still down 9%
and 19%, respectively, as of September 30, 2021 compared to the
same date in 2019.
- For the full year
of 2021, the effective income tax rate under current tax codes in
the U.S. and Latin America is expected to range from 25.5% to 26.5%
compared to 25.8% in 2020.
- Through September,
the Company has opened 50 new stores and continues to expect up to
60 new store additions for the full year 2021.
Additional Commentary and
Analysis
Mr. Wessel provided additional insights on the
Company’s third quarter and year-to-date operating results. “The
long-term resilience of FirstCash’s pawn operations is evident
in our third quarter results, as we saw significant recovery
in earning assets and revenues over last year coupled with
continued strength of retail margins and improved operating
efficiencies.
“In the U.S. operating segment, pawn receivables
continue to rebound from the impact of the pandemic and consumer
stimulus programs with minimal impact from the federal advance
child tax credit payments that began in July. Pawn receivables at
the end of the third quarter were up 29% over the prior year and
grew 19% over just the last three months. More importantly, pawn
origination activity appears to be fully recovered, with
same-store pawn loan originations over the past four weeks up 3%
over the same pre-pandemic period in 2019 and same-store total
customer funding (pawn loan originations plus buys) up 7% over the
same period in 2019.
“U.S. retail merchandise sales also remained
strong, with margins that continue to be at or near record levels.
The resulting pre-tax U.S. segment contribution for the third
quarter increased 39% over the third quarter of 2020 and we are
near pre-pandemic levels with substantially higher operating
margins.
“We believe operating results in the Latin
American segment for the third quarter were slightly impacted in
certain markets due to operating restrictions and lower traffic
counts, which we attribute to the concerns over the Delta variant
of COVID-19. Despite these challenges, earning assets (pawn
receivables and merchandise inventories) at the end of September
were up 29% over the prior year on a constant currency basis.
Resulting revenue growth and continued expense control measures
drove a 34% increase in segment pre-tax income on a U.S. dollar
basis and a 23% increase on a constant currency basis.
“Retail inventories in both the U.S. and Latin
America, which are primarily sourced locally from our customers,
continue normalizing to pre-COVID levels and have not been impacted
by supply chain disruptions experienced by many other traditional
retailers. Our current retail inventories are extremely fresh, with
only 1% aged over a year, and we believe we are well positioned as
we enter the key holiday shopping season.
“With the announced acquisition of 18 additional
U.S. stores, the Company has now added a total of 69 U.S. stores
over the past twelve months. We also continue to add new stores in
Latin America, with 60 openings in three countries over the past
twelve months. Limited strategic consolidation and relocation of
certain stores continues in Mexico in locations with close
geographic proximity due to the significant acquisition activities
over the past several years. We believe that by doing this, we can
improve our location, maintain our customers and operate more
efficiently.
“We remain committed to the growth of FirstCash
and delivering long-term shareholder returns. Given the Company’s
ability to serve customers across economic cycles and with the
continued strength of its balance sheet and cash flows, we are
confident in our ability to achieve these objectives,” concluded
Mr. Wessel.
About FirstCash
FirstCash is the leading international operator
of pawn stores with over 2,800 retail pawn locations and 16,000
employees in 25 U.S. states, the District of Columbia and four
countries in Latin America including Mexico, Guatemala, Colombia
and El Salvador. FirstCash focuses on serving cash and credit
constrained consumers through its retail pawn locations, which buy
and sell a wide variety of jewelry, electronics, tools, appliances,
sporting goods, musical instruments and other merchandise, and make
small consumer pawn loans secured by pledged personal property.
FirstCash is a component company in both the
Standard & Poor’s MidCap 400 Index® and the
Russell 2000 Index®. FirstCash’s common stock
(ticker symbol “FCFS”) is traded on the Nasdaq,
the creator of the world’s first electronic stock market. For
additional information regarding FirstCash and the services it
provides, visit FirstCash’s website located at
http://www.firstcash.com.
Forward-Looking Information
This release contains forward-looking statements
about the business, financial condition and prospects of FirstCash,
Inc. and its wholly owned subsidiaries (together, 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 “outlook,” “believes,”
“projects,” “expects,” “may,” “estimates,” “should,” “plans,”
“targets,” “intends,” “could,” “would,” “anticipates,” “potential,”
“confident,” “optimistic,” or the negative thereof, or other
variations thereon, or comparable terminology, or by discussions of
strategy, objectives, estimates, guidance, expectations and future
plans. Forward-looking statements can also be identified by the
fact 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.
While the Company believes the expectations
reflected in forward-looking statements are reasonable, there can
be no assurances such expectations will prove to be accurate.
Security holders are cautioned such forward-looking statements
involve risks and uncertainties. Certain factors may cause results
to differ materially from those anticipated by the forward-looking
statements made in this release. Such factors may include, without
limitation, the risks, uncertainties and regulatory developments:
(1) related to the COVID-19 pandemic, including the unknown
duration and severity of the COVID-19 pandemic, and the impact of
governmental responses that have been, and may in the future be,
imposed in response to the pandemic, and (2) discussed and
described in the Company’s most recent Annual Report on Form 10-K
filed with the Securities and Exchange Commission (the “SEC”),
including the risks described in Part 1, Item 1A, “Risk Factors”
thereof, and in the other reports filed subsequently by the Company
with the SEC. Many of these risks and uncertainties are beyond the
ability of the Company to control, nor can the Company predict, in
many cases, all of the risks and uncertainties that could cause its
actual results to differ materially from those indicated by the
forward-looking statements. The forward-looking statements
contained in this release speak only as of the date of this
release, 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, except as required by law.
FIRSTCASH,
INC.CONSOLIDATED STATEMENTS OF
INCOME(unaudited, in thousands, except per share
amounts)
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenue: |
|
|
|
|
|
|
|
|
Retail merchandise sales |
|
$ |
268,726 |
|
|
$ |
234,982 |
|
|
$ |
806,335 |
|
|
$ |
819,011 |
|
Pawn loan fees |
|
121,365 |
|
|
99,570 |
|
|
346,796 |
|
|
343,675 |
|
Wholesale scrap jewelry sales |
|
9,583 |
|
|
25,281 |
|
|
44,060 |
|
|
74,437 |
|
Consumer loan and credit services fees |
|
— |
|
|
57 |
|
|
— |
|
|
2,003 |
|
Total revenue |
|
399,674 |
|
|
359,890 |
|
|
1,197,191 |
|
|
1,239,126 |
|
|
|
|
|
|
|
|
|
|
Cost of revenue: |
|
|
|
|
|
|
|
|
Cost of retail merchandise sold |
|
158,057 |
|
|
137,230 |
|
|
468,634 |
|
|
493,436 |
|
Cost of wholesale scrap jewelry sold |
|
8,528 |
|
|
19,818 |
|
|
37,657 |
|
|
61,022 |
|
Consumer loan and credit services loss provision |
|
— |
|
|
104 |
|
|
— |
|
|
(480 |
) |
Total cost of revenue |
|
166,585 |
|
|
157,152 |
|
|
506,291 |
|
|
553,978 |
|
|
|
|
|
|
|
|
|
|
Net revenue |
|
233,089 |
|
|
202,738 |
|
|
690,900 |
|
|
685,148 |
|
|
|
|
|
|
|
|
|
|
Expenses and other
income: |
|
|
|
|
|
|
|
|
Store operating expenses |
|
138,619 |
|
|
132,061 |
|
|
415,071 |
|
|
426,612 |
|
Administrative expenses |
|
30,208 |
|
|
24,354 |
|
|
88,605 |
|
|
85,642 |
|
Depreciation and amortization |
|
11,217 |
|
|
10,426 |
|
|
32,731 |
|
|
31,424 |
|
Interest expense |
|
7,961 |
|
|
6,561 |
|
|
22,389 |
|
|
21,953 |
|
Interest income |
|
(143 |
) |
|
(499 |
) |
|
(420 |
) |
|
(1,209 |
) |
Merger and acquisition expenses |
|
12 |
|
|
7 |
|
|
1,264 |
|
|
209 |
|
Loss (gain) on foreign exchange |
|
558 |
|
|
(432 |
) |
|
248 |
|
|
1,639 |
|
Write-off of certain Cash America merger related lease
intangibles |
|
361 |
|
|
837 |
|
|
1,640 |
|
|
4,649 |
|
Loss on extinguishment of debt |
|
— |
|
|
11,737 |
|
|
— |
|
|
11,737 |
|
Impairment of certain other assets |
|
— |
|
|
— |
|
|
— |
|
|
1,900 |
|
Total expenses and other income |
|
188,793 |
|
|
185,052 |
|
|
561,528 |
|
|
584,556 |
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
44,296 |
|
|
17,686 |
|
|
129,372 |
|
|
100,592 |
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
10,900 |
|
|
2,624 |
|
|
33,834 |
|
|
26,739 |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
33,396 |
|
|
$ |
15,062 |
|
|
$ |
95,538 |
|
|
$ |
73,853 |
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.83 |
|
|
$ |
0.36 |
|
|
$ |
2.34 |
|
|
$ |
1.78 |
|
Diluted |
|
$ |
0.82 |
|
|
$ |
0.36 |
|
|
$ |
2.34 |
|
|
$ |
1.77 |
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
40,453 |
|
|
41,440 |
|
|
40,745 |
|
|
41,597 |
|
Diluted |
|
40,516 |
|
|
41,536 |
|
|
40,789 |
|
|
41,691 |
|
|
|
|
|
|
|
|
|
|
Dividends declared per common
share |
|
$ |
0.30 |
|
|
$ |
0.27 |
|
|
$ |
0.87 |
|
|
$ |
0.81 |
|
Certain amounts in the consolidated statements
of income for the nine months ended September 30, 2020 have
been reclassified in order to conform to the 2021 presentation.
FIRSTCASH,
INC.CONSOLIDATED BALANCE
SHEETS(unaudited, in thousands)
|
|
September 30, |
|
December 31, |
|
|
2021 |
|
2020 |
|
2020 |
ASSETS |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
49,907 |
|
|
$ |
78,844 |
|
|
$ |
65,850 |
|
Fees and service charges
receivable |
|
43,492 |
|
|
36,423 |
|
|
41,110 |
|
Pawn loans |
|
348,993 |
|
|
270,619 |
|
|
308,231 |
|
Inventories |
|
254,260 |
|
|
168,664 |
|
|
190,352 |
|
Income taxes receivable |
|
4,791 |
|
|
7,534 |
|
|
9,634 |
|
Prepaid expenses and other
current assets |
|
10,002 |
|
|
10,647 |
|
|
9,388 |
|
Total current assets |
|
711,445 |
|
|
572,731 |
|
|
624,565 |
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
411,042 |
|
|
341,827 |
|
|
373,667 |
|
Operating lease right of use
asset |
|
300,040 |
|
|
289,175 |
|
|
298,957 |
|
Goodwill |
|
1,014,052 |
|
|
932,329 |
|
|
977,381 |
|
Intangible assets, net |
|
83,019 |
|
|
83,837 |
|
|
83,651 |
|
Other assets |
|
8,413 |
|
|
9,087 |
|
|
9,818 |
|
Deferred tax assets |
|
5,472 |
|
|
6,509 |
|
|
4,158 |
|
Total assets |
|
$ |
2,533,483 |
|
|
$ |
2,235,495 |
|
|
$ |
2,372,197 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Accounts payable and accrued
liabilities |
|
$ |
87,629 |
|
|
$ |
79,979 |
|
|
$ |
81,917 |
|
Customer deposits |
|
46,702 |
|
|
36,189 |
|
|
34,719 |
|
Income taxes payable |
|
522 |
|
|
183 |
|
|
1,148 |
|
Lease liability, current |
|
89,502 |
|
|
84,970 |
|
|
88,622 |
|
Total current liabilities |
|
224,355 |
|
|
201,321 |
|
|
206,406 |
|
|
|
|
|
|
|
|
Revolving unsecured credit
facilities |
|
246,000 |
|
|
40,000 |
|
|
123,000 |
|
Senior unsecured notes |
|
493,499 |
|
|
492,775 |
|
|
492,916 |
|
Deferred tax liabilities |
|
78,191 |
|
|
69,261 |
|
|
71,173 |
|
Lease liability,
non-current |
|
197,618 |
|
|
188,212 |
|
|
194,887 |
|
Total liabilities |
|
1,239,663 |
|
|
991,569 |
|
|
1,088,382 |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Common stock |
|
493 |
|
|
493 |
|
|
493 |
|
Additional paid-in capital |
|
1,222,432 |
|
|
1,226,512 |
|
|
1,221,788 |
|
Retained earnings |
|
849,438 |
|
|
767,683 |
|
|
789,303 |
|
Accumulated other comprehensive loss |
|
(125,761 |
) |
|
(164,877 |
) |
|
(118,432 |
) |
Common stock held in treasury, at cost |
|
(652,782 |
) |
|
(585,885 |
) |
|
(609,337 |
) |
Total stockholders’ equity |
|
1,293,820 |
|
|
1,243,926 |
|
|
1,283,815 |
|
Total liabilities and stockholders’ equity |
|
$ |
2,533,483 |
|
|
$ |
2,235,495 |
|
|
$ |
2,372,197 |
|
FIRSTCASH, INC.OPERATING
INFORMATION(UNAUDITED)
The Company’s reportable segments are as
follows:
- U.S.
operations
- Latin America operations - includes
operations in Mexico, Guatemala, Colombia and El Salvador
The Company provides revenues, cost of revenues,
store operating expenses, pre-tax operating income and earning
assets by segment. Store operating expenses include salary and
benefit expense of store-level employees, occupancy costs, bank
charges, security, insurance, utilities, supplies and other costs
incurred by the stores.
U.S. Operations Segment Results
The following table details earning assets,
which consist of pawn loans and inventories, as well as other
earning asset metrics of the U.S. operations segment as of
September 30, 2021 as compared to September 30, 2020
(dollars in thousands, except as otherwise noted):
|
As of September 30, |
|
|
|
2021 |
|
2020 |
|
Increase |
U.S. Operations
Segment |
|
|
|
|
|
|
|
|
Earning assets: |
|
|
|
|
|
|
|
|
Pawn loans |
$ |
242,825 |
|
|
$ |
188,819 |
|
|
29 |
% |
|
Inventories |
|
175,047 |
|
|
|
120,397 |
|
|
45 |
% |
|
|
$ |
417,872 |
|
|
$ |
309,216 |
|
|
35 |
% |
|
|
|
|
|
|
|
|
|
|
Average outstanding pawn loan
amount (in ones) |
$ |
208 |
|
|
$ |
188 |
|
|
11 |
% |
|
|
|
|
|
|
|
|
|
|
Composition of pawn
collateral: |
|
|
|
|
|
|
|
|
General merchandise |
36 |
% |
|
34 |
% |
|
|
|
Jewelry |
64 |
% |
|
66 |
% |
|
|
|
|
100 |
% |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Composition of
inventories: |
|
|
|
|
|
|
|
|
General merchandise |
48 |
% |
|
42 |
% |
|
|
|
Jewelry |
52 |
% |
|
58 |
% |
|
|
|
|
100 |
% |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of inventory aged
greater than one year |
1 |
% |
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Inventory turns (trailing
twelve months cost of merchandise sales divided by average
inventories) |
2.9 times |
|
3.2 times |
|
|
|
FIRSTCASH, INC.OPERATING
INFORMATION (CONTINUED)(UNAUDITED)
The following table presents segment pre-tax
operating income and other operating metrics of the U.S. operations
segment for the three months ended September 30, 2021 as
compared to the three months ended September 30, 2020 (dollars
in thousands):
|
Three Months Ended |
|
|
|
|
September 30, |
|
Increase / |
|
2021 |
|
2020 |
|
(Decrease) |
U.S. Operations
Segment |
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
Retail merchandise sales |
$ |
167,257 |
|
|
$ |
151,618 |
|
|
10 |
|
% |
|
Pawn loan fees |
|
76,674 |
|
|
|
66,180 |
|
|
16 |
|
% |
|
Wholesale scrap jewelry sales |
|
4,168 |
|
|
|
12,692 |
|
|
(67 |
) |
% |
|
Consumer loan and credit services fees (1) |
|
— |
|
|
|
57 |
|
|
(100 |
) |
% |
|
Total revenue |
|
248,099 |
|
|
|
230,547 |
|
|
8 |
|
% |
|
|
|
|
|
|
|
|
|
|
Cost of revenue: |
|
|
|
|
|
|
|
|
Cost of retail merchandise sold |
|
93,326 |
|
|
|
84,673 |
|
|
10 |
|
% |
|
Cost of wholesale scrap jewelry sold |
|
3,778 |
|
|
|
10,316 |
|
|
(63 |
) |
% |
|
Consumer loan and credit services loss provision (1) |
|
— |
|
|
|
104 |
|
|
(100 |
) |
% |
|
Total cost of revenue |
|
97,104 |
|
|
|
95,093 |
|
|
2 |
|
% |
|
|
|
|
|
|
|
|
|
|
Net revenue |
|
150,995 |
|
|
|
135,454 |
|
|
11 |
|
% |
|
|
|
|
|
|
|
|
|
|
Segment expenses: |
|
|
|
|
|
|
|
|
Store operating expenses |
|
93,247 |
|
|
|
92,678 |
|
|
1 |
|
% |
|
Depreciation and amortization |
|
5,662 |
|
|
|
5,390 |
|
|
5 |
|
% |
|
Total segment expenses |
|
98,909 |
|
|
|
98,068 |
|
|
1 |
|
% |
|
|
|
|
|
|
|
|
|
|
Segment pre-tax operating
income |
$ |
52,086 |
|
|
$ |
37,386 |
|
|
39 |
|
% |
|
|
|
|
|
|
|
|
|
|
Operating metrics: |
|
|
|
|
|
|
|
|
Retail merchandise sales margin |
44 |
% |
|
44 |
% |
|
|
|
Net revenue margin |
61 |
% |
|
59 |
% |
|
|
|
Segment pre-tax operating margin |
21 |
% |
|
16 |
% |
|
|
|
(1) Effective June 30, 2020, the Company no
longer offers an unsecured consumer loan product in the U.S.
FIRSTCASH, INC.OPERATING
INFORMATION (CONTINUED)(UNAUDITED)
The following table presents segment pre-tax
operating income and other operating metrics of the U.S. operations
segment for the nine months ended September 30, 2021 as
compared to the nine months ended September 30, 2020 (dollars
in thousands):
|
Nine Months Ended |
|
|
|
|
September 30, |
|
Increase / |
|
2021 |
|
2020 |
|
(Decrease) |
U.S. Operations
Segment |
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
Retail merchandise sales |
$ |
530,468 |
|
|
$ |
556,528 |
|
|
|
(5 |
) |
% |
|
Pawn loan fees |
|
220,013 |
|
|
|
235,937 |
|
|
|
(7 |
) |
% |
|
Wholesale scrap jewelry sales |
|
20,217 |
|
|
|
37,727 |
|
|
|
(46 |
) |
% |
|
Consumer loan and credit services fees (1) |
|
— |
|
|
|
2,003 |
|
|
|
(100 |
) |
% |
|
Total revenue |
|
770,698 |
|
|
|
832,195 |
|
|
|
(7 |
) |
% |
|
|
|
|
|
|
|
|
|
|
Cost of revenue: |
|
|
|
|
|
|
|
|
Cost of retail merchandise sold |
|
295,455 |
|
|
|
325,863 |
|
|
|
(9 |
) |
% |
|
Cost of wholesale scrap jewelry sold |
|
16,678 |
|
|
|
32,754 |
|
|
|
(49 |
) |
% |
|
Consumer loan and credit services loss provision (1) |
|
— |
|
|
|
(480 |
) |
|
|
(100 |
) |
% |
|
Total cost of revenue |
|
312,133 |
|
|
|
358,137 |
|
|
|
(13 |
) |
% |
|
|
|
|
|
|
|
|
|
|
Net revenue |
|
458,565 |
|
|
|
474,058 |
|
|
|
(3 |
) |
% |
|
|
|
|
|
|
|
|
|
|
Segment expenses: |
|
|
|
|
|
|
|
|
Store operating expenses |
|
282,068 |
|
|
|
303,686 |
|
|
|
(7 |
) |
% |
|
Depreciation and amortization |
|
16,391 |
|
|
|
16,352 |
|
|
|
— |
|
% |
|
Total segment expenses |
|
298,459 |
|
|
|
320,038 |
|
|
|
(7 |
) |
% |
|
|
|
|
|
|
|
|
|
|
Segment pre-tax operating
income |
$ |
160,106 |
|
|
$ |
154,020 |
|
|
|
4 |
|
% |
|
|
|
|
|
|
|
|
|
|
Operating metrics: |
|
|
|
|
|
|
|
|
Retail merchandise sales margin |
44 |
% |
|
41 |
|
% |
|
|
|
Net revenue margin |
59 |
% |
|
57 |
|
% |
|
|
|
Segment pre-tax operating margin |
21 |
% |
|
19 |
|
% |
|
|
|
(1) Effective June 30, 2020, the Company no
longer offers an unsecured consumer loan product in the U.S.
FIRSTCASH, INC.OPERATING
INFORMATION (CONTINUED)(UNAUDITED)
Latin America Operations Segment
Results
The Company’s management reviews and analyzes
certain operating results in Latin America on a constant currency
basis because the Company believes this better represents the
Company’s underlying business trends. Constant currency results are
non-GAAP financial measures, which exclude the effects of foreign
currency translation and are calculated by translating current-year
results at prior-year average exchange rates. The wholesale scrap
jewelry sales in Latin America are priced and settled in U.S.
dollars, and are not affected by foreign currency translation, as
are a small percentage of the operating and administrative expenses
in Latin America, which are billed and paid in U.S. dollars.
Amounts presented on a constant currency basis are denoted as such.
See the “Constant Currency Results” section below for additional
discussion of constant currency results.
The following table provides exchange rates for
the Mexican peso, Guatemalan quetzal and Colombian peso for the
current and prior-year periods:
|
|
September 30, |
|
Favorable / |
|
|
2021 |
|
2020 |
|
(Unfavorable) |
Mexican peso / U.S. dollar
exchange rate: |
|
|
|
|
|
|
|
|
End-of-period |
|
20.3 |
|
22.5 |
|
|
10 |
|
% |
|
Three months ended |
|
20.0 |
|
22.1 |
|
|
10 |
|
% |
|
Nine months ended |
|
20.1 |
|
21.8 |
|
|
8 |
|
% |
|
|
|
|
|
|
|
|
|
|
Guatemalan quetzal / U.S.
dollar exchange rate: |
|
|
|
|
|
|
|
|
End-of-period |
|
7.7 |
|
7.8 |
|
|
1 |
|
% |
|
Three months ended |
|
7.7 |
|
7.7 |
|
|
— |
|
% |
|
Nine months ended |
|
7.7 |
|
7.7 |
|
|
— |
|
% |
|
|
|
|
|
|
|
|
|
|
Colombian peso / U.S. dollar
exchange rate: |
|
|
|
|
|
|
|
|
End-of-period |
|
3,835 |
|
3,879 |
|
|
1 |
|
% |
|
Three months ended |
|
3,844 |
|
3,730 |
|
|
(3 |
) |
% |
|
Nine months ended |
|
3,696 |
|
3,703 |
|
|
— |
|
% |
|
FIRSTCASH, INC.OPERATING
INFORMATION (CONTINUED)(UNAUDITED)
The following table details earning assets,
which consist of pawn loans and inventories, as well as other
earning asset metrics of the Latin America operations segment as of
September 30, 2021 as compared to September 30, 2020
(dollars in thousands, except as otherwise noted):
|
|
|
|
|
|
|
|
|
|
|
Constant Currency Basis |
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
|
As of September 30, |
|
|
|
2021 |
|
Increase |
|
2021 |
|
2020 |
|
Increase |
|
(Non-GAAP) |
|
(Non-GAAP) |
Latin America
Operations Segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pawn loans |
$ |
106,168 |
|
|
$ |
81,800 |
|
|
|
30 |
% |
|
|
$ |
96,443 |
|
|
|
18 |
% |
|
Inventories |
|
79,213 |
|
|
|
48,267 |
|
|
|
64 |
% |
|
|
71,927 |
|
|
|
49 |
% |
|
|
$ |
185,381 |
|
|
$ |
130,067 |
|
|
|
43 |
% |
|
|
$ |
168,370 |
|
|
|
29 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average outstanding pawn loan
amount (in ones) |
$ |
76 |
|
|
$ |
64 |
|
|
|
19 |
% |
|
|
$ |
69 |
|
|
|
8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Composition of pawn
collateral: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General merchandise |
68 |
% |
|
66 |
% |
|
|
|
|
|
|
|
|
|
|
Jewelry |
32 |
% |
|
34 |
% |
|
|
|
|
|
|
|
|
|
|
|
100 |
% |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Composition of
inventories: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General merchandise |
67 |
% |
|
60 |
% |
|
|
|
|
|
|
|
|
|
|
Jewelry |
33 |
% |
|
40 |
% |
|
|
|
|
|
|
|
|
|
|
|
100 |
% |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of inventory aged
greater than one year |
1 |
% |
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory turns (trailing
twelve months cost of merchandise sales divided by average
inventories) |
4.2 times |
|
4.1 times |
|
|
|
|
|
|
|
|
|
|
FIRSTCASH, INC.OPERATING
INFORMATION (CONTINUED)(UNAUDITED)
The following table presents segment pre-tax
operating income and other operating metrics of the Latin America
operations segment for the three months ended September 30,
2021 as compared to the three months ended September 30, 2020
(dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
Constant Currency Basis |
|
|
|
|
|
|
|
|
|
|
|
Three Months |
|
|
|
|
|
|
|
|
|
|
|
|
Ended |
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
September 30, |
|
Increase / |
|
|
September 30, |
|
Increase / |
|
2021 |
|
(Decrease) |
|
|
2021 |
|
|
2020 |
|
(Decrease) |
|
(Non-GAAP) |
|
(Non-GAAP) |
Latin America
Operations Segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail merchandise sales |
|
$ |
101,469 |
|
|
|
$ |
83,364 |
|
|
|
22 |
|
% |
|
|
$ |
92,367 |
|
|
|
11 |
|
% |
|
Pawn loan fees |
|
44,691 |
|
|
|
33,390 |
|
|
|
34 |
|
% |
|
|
40,662 |
|
|
|
22 |
|
% |
|
Wholesale scrap jewelry sales |
|
5,415 |
|
|
|
12,589 |
|
|
|
(57 |
) |
% |
|
|
5,415 |
|
|
|
(57 |
) |
% |
|
Total revenue |
|
151,575 |
|
|
|
129,343 |
|
|
|
17 |
|
% |
|
|
138,444 |
|
|
|
7 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of retail merchandise sold |
|
64,731 |
|
|
|
52,557 |
|
|
|
23 |
|
% |
|
|
58,945 |
|
|
|
12 |
|
% |
|
Cost of wholesale scrap jewelry sold |
|
4,750 |
|
|
|
9,502 |
|
|
|
(50 |
) |
% |
|
|
4,300 |
|
|
|
(55 |
) |
% |
|
Total cost of revenue |
|
69,481 |
|
|
|
62,059 |
|
|
|
12 |
|
% |
|
|
63,245 |
|
|
|
2 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue |
|
82,094 |
|
|
|
67,284 |
|
|
|
22 |
|
% |
|
|
75,199 |
|
|
|
12 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Store operating expenses |
|
45,372 |
|
|
|
39,383 |
|
|
|
15 |
|
% |
|
|
41,555 |
|
|
|
6 |
|
% |
|
Depreciation and amortization |
|
4,591 |
|
|
|
3,903 |
|
|
|
18 |
|
% |
|
|
4,229 |
|
|
|
8 |
|
% |
|
Total segment expenses |
|
49,963 |
|
|
|
43,286 |
|
|
|
15 |
|
% |
|
|
45,784 |
|
|
|
6 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment pre-tax operating
income |
|
$ |
32,131 |
|
|
|
$ |
23,998 |
|
|
|
34 |
|
% |
|
|
$ |
29,415 |
|
|
|
23 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating metrics: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail merchandise sales margin |
36 |
% |
|
37 |
% |
|
|
|
|
36 |
% |
|
|
|
|
Net revenue margin |
54 |
% |
|
52 |
% |
|
|
|
|
54 |
% |
|
|
|
|
Segment pre-tax operating margin |
21 |
% |
|
19 |
% |
|
|
|
|
21 |
% |
|
|
|
|
FIRSTCASH, INC.OPERATING
INFORMATION (CONTINUED)(UNAUDITED)
The following table presents segment pre-tax
operating income and other operating metrics of the Latin America
operations segment for the nine months ended September 30,
2021 as compared to the nine months ended September 30, 2020
(dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
Constant Currency Basis |
|
|
|
|
|
|
|
|
|
|
|
Nine Months |
|
|
|
|
|
|
|
|
|
|
|
|
Ended |
|
|
|
|
|
|
Nine Months Ended |
|
|
|
|
|
September 30, |
|
Increase / |
|
|
September 30, |
|
Increase / |
|
2021 |
|
(Decrease) |
|
|
2021 |
|
|
2020 |
|
(Decrease) |
|
(Non-GAAP) |
|
(Non-GAAP) |
Latin America
Operations Segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail merchandise sales |
|
$ |
275,867 |
|
|
|
$ |
262,483 |
|
|
|
5 |
|
% |
|
|
$ |
256,116 |
|
|
|
(2 |
) |
% |
|
Pawn loan fees |
|
126,783 |
|
|
|
107,738 |
|
|
|
18 |
|
% |
|
|
117,662 |
|
|
|
9 |
|
% |
|
Wholesale scrap jewelry sales |
|
23,843 |
|
|
|
36,710 |
|
|
|
(35 |
) |
% |
|
|
23,843 |
|
|
|
(35 |
) |
% |
|
Total revenue |
|
426,493 |
|
|
|
406,931 |
|
|
|
5 |
|
% |
|
|
397,621 |
|
|
|
(2 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of retail merchandise sold |
|
173,179 |
|
|
|
167,573 |
|
|
|
3 |
|
% |
|
|
160,821 |
|
|
|
(4 |
) |
% |
|
Cost of wholesale scrap jewelry sold |
|
20,979 |
|
|
|
28,268 |
|
|
|
(26 |
) |
% |
|
|
19,449 |
|
|
|
(31 |
) |
% |
|
Total cost of revenue |
|
194,158 |
|
|
|
195,841 |
|
|
|
(1 |
) |
% |
|
|
180,270 |
|
|
|
(8 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue |
|
232,335 |
|
|
|
211,090 |
|
|
|
10 |
|
% |
|
|
217,351 |
|
|
|
3 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Store operating expenses |
|
133,003 |
|
|
|
122,926 |
|
|
|
8 |
|
% |
|
|
124,080 |
|
|
|
1 |
|
% |
|
Depreciation and amortization |
|
13,388 |
|
|
|
11,568 |
|
|
|
16 |
|
% |
|
|
12,544 |
|
|
|
8 |
|
% |
|
Total segment expenses |
|
146,391 |
|
|
|
134,494 |
|
|
|
9 |
|
% |
|
|
136,624 |
|
|
|
2 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment pre-tax operating
income |
|
$ |
85,944 |
|
|
|
$ |
76,596 |
|
|
|
12 |
|
% |
|
|
$ |
80,727 |
|
|
|
5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating metrics: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail merchandise sales margin |
37 |
% |
|
36 |
% |
|
|
|
|
37 |
% |
|
|
|
|
Net revenue margin |
54 |
% |
|
52 |
% |
|
|
|
|
55 |
% |
|
|
|
|
Segment pre-tax operating margin |
20 |
% |
|
19 |
% |
|
|
|
|
20 |
% |
|
|
|
|
FIRSTCASH, INC.OPERATING
INFORMATION (CONTINUED)(UNAUDITED)
Consolidated Results of Operations
The following table reconciles pre-tax operating
income of the Company’s U.S. operations segment and Latin America
operations segment discussed above to consolidated net income (in
thousands):
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
September 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Consolidated Results
of Operations |
|
|
|
|
|
|
|
Segment pre-tax operating
income: |
|
|
|
|
|
|
|
U.S. operations |
$ |
52,086 |
|
|
$ |
37,386 |
|
|
$ |
160,106 |
|
|
$ |
154,020 |
|
Latin America operations |
32,131 |
|
|
23,998 |
|
|
85,944 |
|
|
76,596 |
|
Consolidated segment pre-tax operating income |
84,217 |
|
|
61,384 |
|
|
246,050 |
|
|
230,616 |
|
|
|
|
|
|
|
|
|
Corporate expenses and other
income: |
|
|
|
|
|
|
|
Administrative expenses |
30,208 |
|
|
24,354 |
|
|
88,605 |
|
|
85,642 |
|
Depreciation and amortization |
964 |
|
|
1,133 |
|
|
2,952 |
|
|
3,504 |
|
Interest expense |
7,961 |
|
|
6,561 |
|
|
22,389 |
|
|
21,953 |
|
Interest income |
(143 |
) |
|
(499 |
) |
|
(420 |
) |
|
(1,209 |
) |
Merger and acquisition expenses |
12 |
|
|
7 |
|
|
1,264 |
|
|
209 |
|
Loss (gain) on foreign exchange |
558 |
|
|
(432 |
) |
|
248 |
|
|
1,639 |
|
Write-off of certain Cash America merger related lease
intangibles |
361 |
|
|
837 |
|
|
1,640 |
|
|
4,649 |
|
Loss on extinguishment of debt |
— |
|
|
11,737 |
|
|
— |
|
|
11,737 |
|
Impairment of certain other assets |
— |
|
|
— |
|
|
— |
|
|
1,900 |
|
Total corporate expenses and other income |
39,921 |
|
|
43,698 |
|
|
116,678 |
|
|
130,024 |
|
|
|
|
|
|
|
|
|
Income before income
taxes |
44,296 |
|
|
17,686 |
|
|
129,372 |
|
|
100,592 |
|
|
|
|
|
|
|
|
|
Provision for income taxes |
10,900 |
|
|
2,624 |
|
|
33,834 |
|
|
26,739 |
|
|
|
|
|
|
|
|
|
Net income |
$ |
33,396 |
|
|
$ |
15,062 |
|
|
$ |
95,538 |
|
|
$ |
73,853 |
|
FIRSTCASH, INC.STORE
COUNT ACTIVITY
The following tables detail store count
activity:
|
|
Three Months Ended September 30, 2021 |
|
|
U.S. |
|
Latin America |
|
|
|
|
Operations Segment |
|
Operations Segment |
|
Total Locations |
Total locations, beginning of period |
|
1,071 |
|
|
1,733 |
|
|
2,804 |
|
New locations opened |
|
— |
|
|
14 |
|
|
14 |
|
Consolidation of existing pawn locations (1) |
|
(2 |
) |
|
(8 |
) |
|
(10 |
) |
Total locations, end of period |
|
1,069 |
|
|
1,739 |
|
|
2,808 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2021 |
|
|
U.S. |
|
Latin America |
|
|
|
|
Operations Segment |
|
Operations Segment |
|
Total Locations |
Total locations, beginning of
period |
|
1,046 |
|
|
1,702 |
|
|
2,748 |
|
New locations opened |
|
1 |
|
|
49 |
|
|
50 |
|
Locations acquired (2) |
|
28 |
|
|
— |
|
|
28 |
|
Consolidation of existing pawn locations (1) |
|
(6 |
) |
|
(12 |
) |
|
(18 |
) |
Total locations, end of period |
|
1,069 |
|
|
1,739 |
|
|
2,808 |
|
(1) |
Store consolidations were primarily acquired locations over the
past five years which have been combined with overlapping stores
and for which the Company expects to maintain a significant portion
of the acquired customer base in the consolidated location. |
|
|
(2) |
Does not include the acquisition
of 18 stores in the U.S. on October 18, 2021. |
FIRSTCASH,
INC.RECONCILIATIONS OF NON-GAAP FINANCIAL
MEASURESTO GAAP FINANCIAL
MEASURES(UNAUDITED)
The Company uses certain financial calculations
such as adjusted net income, adjusted diluted earnings per share,
EBITDA, adjusted EBITDA, free cash flow, adjusted free cash flow
and constant currency results as factors in the measurement and
evaluation of the Company’s operating performance and
period-over-period growth. The Company derives these financial
calculations on the basis of methodologies other than generally
accepted accounting principles (“GAAP”), primarily by excluding
from a comparable GAAP measure certain items the Company does not
consider to be representative of its actual operating performance.
These financial calculations are “non-GAAP financial measures” as
defined under the SEC rules. The Company uses these non-GAAP
financial measures in operating its business because management
believes they are less susceptible to variances in actual operating
performance that can result from the excluded items, other
infrequent charges and currency fluctuations. The Company presents
these financial measures to investors because management believes
they are useful to investors in evaluating the primary factors that
drive the Company’s core operating performance and provide greater
transparency into the Company’s results of operations. However,
items that are excluded and other adjustments and assumptions that
are made in calculating these non-GAAP financial measures are
significant components in understanding and assessing the Company’s
financial performance. These non-GAAP financial measures should be
evaluated in conjunction with, and are not a substitute for, the
Company’s GAAP financial measures. Further, because these non-GAAP
financial measures are not determined in accordance with GAAP and
are thus susceptible to varying calculations, the non-GAAP
financial measures, as presented, may not be comparable to other
similarly titled measures of other companies.
While acquisitions are an important part of the
Company’s overall strategy, the Company has adjusted the applicable
financial calculations to exclude merger and acquisition expenses
to allow more accurate comparisons of the financial results to
prior periods. In addition, the Company does not consider these
merger and acquisition expenses to be related to the organic
operations of the acquired businesses or its continuing operations
and such expenses are generally not relevant to assessing or
estimating the long-term performance of the acquired businesses.
Merger and acquisition expenses include incremental costs directly
associated with merger and acquisition activities, including
professional fees, legal expenses, severance, retention and other
employee-related costs, contract breakage costs and costs related
to the consolidation of technology systems and corporate
facilities, among others.
The Company has certain leases in Mexico which
are denominated in U.S. dollars. The lease liability of these U.S.
dollar denominated leases, which is considered a monetary
liability, is remeasured into Mexican pesos using current period
exchange rates resulting in the recognition of foreign currency
exchange gains or losses. The Company has adjusted the applicable
financial measures to exclude these remeasurement gains or losses
because they are non-cash, non-operating items that could create
volatility in the Company’s consolidated results of operations due
to the magnitude of the end of period lease liability being
remeasured and to improve comparability of current periods
presented with prior periods.
In conjunction with the Cash America merger in
2016, the Company recorded certain lease intangibles related to
above or below market lease liabilities of Cash America which are
included in the operating lease right of use asset on the
consolidated balance sheets. As the Company continues to
opportunistically purchase real estate from landlords at certain
Cash America stores, the associated lease intangible, if any, is
written-off and gain or loss is recognized. The Company has
adjusted the applicable financial measures to exclude these gains
or losses given the variability in size and timing of these
transactions and because they are non-cash, non-operating gains or
losses. The Company believes this improves comparability of
operating results for current periods presented with prior
periods.
FIRSTCASH,
INC.RECONCILIATIONS OF NON-GAAP FINANCIAL
MEASURESTO GAAP FINANCIAL MEASURES
(CONTINUED)(UNAUDITED)
Adjusted Net Income and Adjusted Diluted
Earnings Per Share
Management believes the presentation of adjusted
net income and adjusted diluted earnings per share provides
investors with greater transparency and provides a more complete
understanding of the Company’s financial performance and prospects
for the future by excluding items that management believes are
non-operating in nature and not representative of the Company’s
core operating performance of its continuing operations. In
addition, management believes the adjustments shown below are
useful to investors in order to allow them to compare the Company’s
financial results for the current periods presented with the prior
periods presented.
The following table provides a reconciliation
between net income and diluted earnings per share calculated in
accordance with GAAP to adjusted net income and adjusted diluted
earnings per share, which are shown net of tax (in thousands,
except per share amounts):
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
In Thousands |
|
Per Share |
|
In Thousands |
|
Per Share |
|
In Thousands |
|
Per Share |
|
In Thousands |
|
Per Share |
Net income and diluted earnings per share, as reported |
$ |
33,396 |
|
|
$ |
0.82 |
|
|
$ |
15,062 |
|
|
$ |
0.36 |
|
|
$ |
95,538 |
|
|
$ |
2.34 |
|
|
$ |
73,853 |
|
|
$ |
1.77 |
|
Adjustments, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger and acquisition expenses |
8 |
|
|
— |
|
|
5 |
|
|
— |
|
|
950 |
|
|
0.02 |
|
|
151 |
|
|
— |
|
Non-cash foreign currency loss (gain) related to lease
liability |
359 |
|
|
0.01 |
|
|
(308 |
) |
|
(0.01 |
) |
|
256 |
|
|
0.01 |
|
|
2,453 |
|
|
0.06 |
|
Non-cash write-off of certain Cash America merger related lease
intangibles |
278 |
|
|
0.01 |
|
|
644 |
|
|
0.02 |
|
|
1,263 |
|
|
0.03 |
|
|
3,579 |
|
|
0.09 |
|
Loss on extinguishment of debt |
— |
|
|
— |
|
|
9,037 |
|
|
0.22 |
|
|
— |
|
|
— |
|
|
9,037 |
|
|
0.22 |
|
Non-cash impairment of certain other assets (1) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,463 |
|
|
0.03 |
|
Consumer lending wind-down costs and asset impairments |
— |
|
|
— |
|
|
13 |
|
|
— |
|
|
— |
|
|
— |
|
|
84 |
|
|
— |
|
Adjusted net income and
diluted earnings per share |
$ |
34,041 |
|
|
$ |
0.84 |
|
|
$ |
24,453 |
|
|
$ |
0.59 |
|
|
$ |
98,007 |
|
|
$ |
2.40 |
|
|
$ |
90,620 |
|
|
$ |
2.17 |
|
(1) Impairment related to a non-operating asset
in which the Company determined that an other than temporary
impairment existed as of March 31, 2020.
FIRSTCASH,
INC.RECONCILIATIONS OF NON-GAAP FINANCIAL
MEASURESTO GAAP FINANCIAL MEASURES
(CONTINUED)(UNAUDITED)
The following tables provide a reconciliation of
the gross amounts, the impact of income taxes and the net amounts
for the adjustments included in the table above (in thousands):
|
Three Months Ended September 30, |
|
2021 |
|
2020 |
|
Pre-tax |
|
Tax |
|
After-tax |
|
Pre-tax |
|
Tax |
|
After-tax |
Merger and acquisition expenses |
$ |
12 |
|
|
$ |
4 |
|
|
$ |
8 |
|
|
$ |
7 |
|
|
$ |
2 |
|
|
$ |
5 |
|
Non-cash foreign currency loss
(gain) related to lease liability |
513 |
|
|
154 |
|
|
359 |
|
|
(439 |
) |
|
(131 |
) |
|
(308 |
) |
Non-cash write-off of certain
Cash America merger related lease intangibles |
361 |
|
|
83 |
|
|
278 |
|
|
837 |
|
|
193 |
|
|
644 |
|
Loss on extinguishment of
debt |
— |
|
|
— |
|
|
— |
|
|
11,737 |
|
|
2,700 |
|
|
9,037 |
|
Consumer lending wind-down
costs and asset impairments |
— |
|
|
— |
|
|
— |
|
|
17 |
|
|
4 |
|
|
13 |
|
Total adjustments |
$ |
886 |
|
|
$ |
241 |
|
|
$ |
645 |
|
|
$ |
12,159 |
|
|
$ |
2,768 |
|
|
$ |
9,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
2021 |
|
2020 |
|
Pre-tax |
|
Tax |
|
After-tax |
|
Pre-tax |
|
Tax |
|
After-tax |
Merger and acquisition
expenses |
$ |
1,264 |
|
|
$ |
314 |
|
|
$ |
950 |
|
|
$ |
209 |
|
|
$ |
58 |
|
|
$ |
151 |
|
Non-cash foreign currency loss
related to lease liability |
366 |
|
|
110 |
|
|
256 |
|
|
3,505 |
|
|
1,052 |
|
|
2,453 |
|
Non-cash write-off of certain
Cash America merger related lease intangibles |
1,640 |
|
|
377 |
|
|
1,263 |
|
|
4,649 |
|
|
1,070 |
|
|
3,579 |
|
Loss on extinguishment of
debt |
— |
|
|
— |
|
|
— |
|
|
11,737 |
|
|
2,700 |
|
|
9,037 |
|
Non-cash impairment of certain
other assets |
— |
|
|
— |
|
|
— |
|
|
1,900 |
|
|
437 |
|
|
1,463 |
|
Consumer lending wind-down
costs and asset impairments |
— |
|
|
— |
|
|
— |
|
|
109 |
|
|
25 |
|
|
84 |
|
Total adjustments |
$ |
3,270 |
|
|
$ |
801 |
|
|
$ |
2,469 |
|
|
$ |
22,109 |
|
|
$ |
5,342 |
|
|
$ |
16,767 |
|
FIRSTCASH,
INC.RECONCILIATIONS OF NON-GAAP FINANCIAL
MEASURESTO GAAP FINANCIAL MEASURES
(CONTINUED)(UNAUDITED)
Earnings Before Interest, Taxes, Depreciation and
Amortization (EBITDA) and Adjusted EBITDA
The Company defines EBITDA as net income before
income taxes, depreciation and amortization, interest expense and
interest income and adjusted EBITDA as EBITDA adjusted for certain
items as listed below that management considers to be non-operating
in nature and not representative of its actual operating
performance. The Company believes EBITDA and adjusted EBITDA are
commonly used by investors to assess a company’s financial
performance, and adjusted EBITDA is used as a starting point in the
calculation of the consolidated total debt ratio as defined in the
Company’s senior unsecured notes. The following table provides a
reconciliation of net income to EBITDA and adjusted EBITDA (dollars
in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trailing Twelve |
|
|
Three Months Ended |
|
Nine Months Ended |
|
Months Ended |
|
|
September 30, |
|
September 30, |
|
September 30, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Net income |
|
$ |
33,396 |
|
|
$ |
15,062 |
|
|
$ |
95,538 |
|
|
$ |
73,853 |
|
|
$ |
128,264 |
|
|
|
$ |
128,007 |
|
|
Income taxes |
|
|
10,900 |
|
|
|
2,624 |
|
|
|
33,834 |
|
|
|
26,739 |
|
|
|
44,215 |
|
|
|
|
44,103 |
|
|
Depreciation and amortization |
|
|
11,217 |
|
|
|
10,426 |
|
|
|
32,731 |
|
|
|
31,424 |
|
|
|
43,412 |
|
|
|
|
42,270 |
|
|
Interest expense |
|
|
7,961 |
|
|
|
6,561 |
|
|
|
22,389 |
|
|
|
21,953 |
|
|
|
29,780 |
|
|
|
|
30,148 |
|
|
Interest income |
|
|
(143 |
) |
|
|
(499 |
) |
|
|
(420 |
) |
|
|
(1,209 |
) |
|
|
(751 |
) |
|
|
|
(1,476 |
) |
|
EBITDA |
|
|
63,331 |
|
|
|
34,174 |
|
|
|
184,072 |
|
|
|
152,760 |
|
|
|
244,920 |
|
|
|
|
243,052 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger and acquisition expenses |
|
|
12 |
|
|
|
7 |
|
|
|
1,264 |
|
|
|
209 |
|
|
|
2,371 |
|
|
|
|
465 |
|
|
Non-cash foreign currency loss (gain) related to lease
liability |
|
|
513 |
|
|
|
(439 |
) |
|
|
366 |
|
|
|
3,505 |
|
|
|
(1,890 |
) |
|
|
|
2,621 |
|
|
Non-cash write-off of certain Cash America merger related lease
intangibles |
|
|
361 |
|
|
|
837 |
|
|
|
1,640 |
|
|
|
4,649 |
|
|
|
4,046 |
|
|
|
|
4,649 |
|
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
11,737 |
|
|
|
— |
|
|
|
11,737 |
|
|
|
— |
|
|
|
|
11,737 |
|
|
Non-cash impairment of certain other assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,900 |
|
|
|
— |
|
|
|
|
1,900 |
|
|
Consumer lending wind-down costs and asset impairments |
|
|
— |
|
|
|
17 |
|
|
|
— |
|
|
|
109 |
|
|
|
— |
|
|
|
|
268 |
|
|
Adjusted EBITDA |
|
$ |
64,217 |
|
|
$ |
46,333 |
|
|
$ |
187,342 |
|
|
$ |
174,869 |
|
|
$ |
249,447 |
|
|
|
$ |
264,692 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt ratio
calculation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt (outstanding principal) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
746,000 |
|
|
|
$ |
540,000 |
|
|
Less: cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(49,907 |
) |
|
|
|
(78,844 |
) |
|
Net debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
696,093 |
|
|
|
$ |
461,156 |
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
249,447 |
|
|
|
$ |
264,692 |
|
|
Net debt ratio (net debt
divided by adjusted EBITDA) |
|
|
|
|
|
|
|
|
|
|
|
|
|
2.8 |
|
:1 |
|
1.7 |
|
:1 |
FIRSTCASH,
INC.RECONCILIATIONS OF NON-GAAP FINANCIAL
MEASURESTO GAAP FINANCIAL MEASURES
(CONTINUED)(UNAUDITED)
Free Cash Flow and Adjusted Free Cash Flow
For purposes of its internal liquidity
assessments, the Company considers free cash flow and adjusted free
cash flow. The Company defines free cash flow as cash flow from
operating activities less purchases of furniture, fixtures,
equipment and improvements and net fundings/repayments of loan
receivables, which are considered to be operating in nature by the
Company but are included in cash flow from investing activities.
Adjusted free cash flow is defined as free cash flow adjusted for
merger and acquisition expenses paid that management considers to
be non-operating in nature.
Free cash flow and adjusted free cash flow are
commonly used by investors as an additional measure of cash
generated by business operations that may be used to repay
scheduled debt maturities and debt service or, following payment of
such debt obligations and other non-discretionary items, may be
available to invest in future growth through new business
development activities or acquisitions, repurchase stock, pay cash
dividends 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. However, free cash
flow and adjusted free cash flow have limitations as analytical
tools and should not be considered in isolation or as a substitute
for cash flow from operating activities or other income statement
data prepared in accordance with GAAP. The following table
reconciles cash flow from operating activities to free cash flow
and adjusted free cash flow (in thousands):
|
|
|
|
|
|
|
|
|
|
Trailing Twelve |
|
|
Three Months Ended |
|
Nine Months Ended |
|
Months Ended |
|
|
September 30, |
|
September 30, |
|
September 30, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Cash flow from operating activities |
|
$ |
24,101 |
|
|
$ |
34,067 |
|
|
$ |
137,850 |
|
|
$ |
177,366 |
|
|
$ |
182,748 |
|
|
$ |
245,138 |
|
Cash flow from certain
investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Loan receivables, net (1) |
|
(62,145 |
) |
|
(32,349 |
) |
|
(70,637 |
) |
|
145,930 |
|
|
(109,559 |
) |
|
183,334 |
|
Purchases of furniture, fixtures, equipment and improvements |
|
(10,583 |
) |
|
(7,377 |
) |
|
(31,608 |
) |
|
(27,853 |
) |
|
(41,298 |
) |
|
(39,060 |
) |
Free cash flow |
|
(48,627 |
) |
|
(5,659 |
) |
|
35,605 |
|
|
295,443 |
|
|
31,891 |
|
|
389,412 |
|
Merger and acquisition expenses paid, net of tax benefit |
|
8 |
|
|
5 |
|
|
950 |
|
|
151 |
|
|
1,790 |
|
|
330 |
|
Adjusted free cash flow |
|
$ |
(48,619 |
) |
|
$ |
(5,654 |
) |
|
$ |
36,555 |
|
|
$ |
295,594 |
|
|
$ |
33,681 |
|
|
$ |
389,742 |
|
(1) Includes the funding of new loans net of
cash repayments and recovery of principal through the sale of
inventories acquired from forfeiture of pawn collateral.
FIRSTCASH,
INC.RECONCILIATIONS OF NON-GAAP FINANCIAL
MEASURESTO GAAP FINANCIAL MEASURES
(CONTINUED)(UNAUDITED)
Constant Currency Results
The Company’s reporting currency is the U.S.
dollar. However, certain performance metrics discussed in this
release are presented on a “constant currency” basis, which is
considered a non-GAAP financial measure. The Company’s management
uses constant currency results to evaluate operating results of
business operations in Latin America, which are primarily
transacted in local currencies.
The Company believes constant currency results
provide valuable supplemental information regarding the underlying
performance of its business operations in Latin America, consistent
with how the Company’s management evaluates such performance and
operating results. Constant currency results reported herein are
calculated by translating certain balance sheet and income
statement items denominated in local currencies 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. Business operations in Mexico,
Guatemala and Colombia are transacted in Mexican pesos, Guatemalan
quetzales and Colombian pesos. The Company also has operations in
El Salvador where the reporting and functional currency is the U.S.
dollar. See the Latin America operations segment tables elsewhere
in this release for an additional reconciliation of certain
constant currency amounts to as reported GAAP amounts.
For further information, please contact: |
Gar Jackson |
Global IR Group |
Phone: |
(817)
886-6998 |
Email: |
gar@globalirgroup.com |
|
|
Doug Orr, Executive Vice President and Chief
Financial Officer |
Phone: |
(817) 258-2650 |
Email: |
investorrelations@firstcash.com |
Website: |
investors.firstcash.com |
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