UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 17, 2007
First Cash Financial Services, Inc.
(Exact name of registrant as specified in its charter)
|
Delaware |
0-19133 |
75-2237318 |
||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
|
690 East Lamar Blvd., Suite 400, Arlington, Texas |
76011 |
|||
| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (817) 460-3947
________________________________________________________________________________
(Former name or former address, if changed since last report)
| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | ||
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| [ ] | Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12) | |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Item 2.02. Results of Operations and Financial Condition.
First Cash Financial Services, Inc. has issued a press release announcing its financial results for the three and nine month periods ended September 30, 2007. The Company's press release dated October 17, 2007 announcing the results is attached hereto as Exhibit 99.1 and is incorporated by reference in its entirety into this Item 2.02.
The information provided in this Item 2.02 shall not be deemed "filed" for purposes of the Securities Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by the specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits:
99.1
Press Release dated October 17, 2007 announcing the Company's financial results for the three and nine month periods ended September 30, 2007.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
First Cash Financial Services, Inc.
(Registrant) |
||
|
October 17, 2007
(Date) |
/s/ R. DOUGLAS ORR
R. Douglas Orr Chief Accounting Officer |
| Exhibit Index | ||
| 99.1 | Press release dated October 17, 2007 | |
EXHIBIT 99.1
First Cash Reports Third Quarter Net Income Increase of 31%
Same-Store Sales Increase 14%
ARLINGTON, Texas, Oct. 17, 2007 (PRIME NEWSWIRE) -- First Cash Financial Services, Inc. (Nasdaq:FCFS) today announced record-setting revenue, net income and earnings per share for the three months ended September 30, 2007. This marked First Cash's 27th consecutive quarter of double-digit growth in earnings per share.
Earnings
* Diluted earnings per share for the third quarter of 2007 were
$0.32, a 28% increase compared to diluted earnings per share of
$0.25 in the third quarter of 2006.
* For the nine months ended September 30, 2007, diluted earnings
per share were $0.89, an increase of 33% over earnings per share
of $0.67 for the same nine-month period in 2006.
* Diluted earnings per share for the trailing twelve months ended
September 30, 2007 were $1.19, an increase of 32% over $0.90 for
the trailing twelve months ended September 30, 2006.
* Net income for the third quarter of 2007 increased by 31% to
$10.4 million, compared to third quarter 2006 net income of
$7.9 million. Year-to-date net income was $29.5 million, compared
to $22.1 million for the first nine months of 2006, which
represents an increase of 34%.
Revenues
* Consolidated revenue for the third quarter of 2007 increased by
51%, totaling $105 million compared to $69 million in the
comparative 2006 period. Year-to-date revenue was $288 million,
up from $182 million for the comparative prior-year period, which
represents a 59% increase.
* Same-store revenue increased 14% in the Company's pawn and short-
term loan stores for the third quarter of 2007 over the
comparable prior-year period, while year-to-date same-store
revenue increased 10%.
* Retail sales in the Company's pawn stores grew by 22% for the
quarter, while pawn service charge revenue increased by 19% for
the quarter compared to the prior-year period. Short-term loan
service charge revenue increased 6% in the third quarter over the
prior-year period.
* The Company recorded third quarter revenue of $30 million from
Auto Master, a buy-here/pay-here automotive retailer acquired in
August 2006. Of this total, $13 million was generated by the
seven new dealerships opened since November 2006. Auto Master's
unaudited proforma revenue totaled $14 million for the full third
quarter of 2006.
New Locations
* A total of 15 new retail locations were opened during the third
quarter of 2007, reflecting a combination of pawn stores, short-
term loan stores and Auto Master buy-here/pay-here dealerships.
The Company has opened 58 stores year-to-date.
* The Company operated 460 locations as of September 30, 2007,
a 16% increase over the 398 units open at September 30, 2006. In
addition, the Company operates 39 convenience store kiosks
through a joint venture.
Operating Metrics
* The Company's return on stockholders' equity increased to 19% for
the trailing twelve months ended September 30, 2007, compared to
18% for the comparable prior-year period.
* Total pawn receivable balances at September 30, 2007 increased by
17% over the prior year. The increase was comprised of a 30% pawn
receivable increase in the Mexican stores and a 9% increase in
the U.S. stores, which are all fully mature stores. Total short-
term loans, including third-party credit services loans
outstanding, increased by 13% compared to the prior year.
* The quarter and year-to-date gross margins on retail pawn
merchandise sales of 44% were constant compared to 2006. The
quarter-to-date gross margin on wholesale scrap jewelry sales was
31%, compared to the prior-year margin of 35%. The year-to-date
gross margin on wholesale scrap jewelry sales was 33%, which
equaled the prior year.
* Inventory turns in the pawn stores were consistent with prior-
year results at 3.3 turns per year. Auto Master sold 2,720 units
during the quarter, and turned its inventory at a rate of 7.0
times per year.
* The short-term loan credit loss provision for the third quarter
was 32% of fees, compared to 29% for the 2006 third quarter. The
increase was primarily related to higher loss rates in the
Company's newer locations, which are typical until such stores
mature. The Company currently has disproportionately more of its
short-term loan revenue being generated by its newer stores, as
compared to the prior year. Management believes that the provision
will be reduced in future periods as the newer stores mature and the
overall number of newer stores becomes a smaller percentage of the
overall store base.
* Gross margins on retail automotive sales at Auto Master were 58%
during the third quarter of 2007, while the margin net of the
credit loss provision was 23%. The third quarter credit loss
provision of 35% of retail sales reflects Auto Master's
significant growth over the past year, including the effect of
higher loss provision accruals for the seven new dealerships
opened since November 2006. To accommodate its ongoing and future
growth, Auto Master is currently implementing a more centralized
collections process.
Financial Position & Liquidity
* Earnings before interest, taxes, depreciation and amortization
(EBITDA) for the trailing twelve months ended September 30, 2007
totaled $74 million, an increase of 38% over the comparative
prior-year period. The EBITDA margin for the trailing twelve
months ended September 30, 2007 was 20%. A detailed
reconciliation of this non-GAAP financial measure to net income
is provided elsewhere in this release.
* The Company repurchased 823,000 shares of its common stock during
the quarter at an aggregate cost of $18.2 million. The average
repurchase price per share was $22.09. To help finance the share
repurchases and provide additional financial flexibility for
future growth, the Company also increased its bank line of credit
facility from $50 million to $90 million during the quarter, of
which $46.8 million was outstanding at quarter end.
* The ratio of total assets to total liabilities at September 30,
2007 was 4 to 1; the current ratio was 8 to 1.
2007 Outlook
* Although changes in the Company's operating model in Oregon, as
a result of a new state law effective in July 2007, reduced third
quarter net income by approximately $0.01 per share, the Company
is maintaining its current earnings per share guidance for 2007
at an estimated range of $1.25 to $1.30 per share. This represents
an increase of 29% to 34% over 2006 diluted earnings per share.
* The Company continues to project 78 to 85 combined new unit
openings for 2007, an increase of 19% to 21% over the fiscal 2006
count.
Commentary & Analysis
Rick Wessel, Chief Executive Officer, commented on the third quarter results, "We are pleased to again report record operating results, which included 51% revenue growth and 31% growth in net income as compared to the prior-year quarter. Our earnings were in-line with management's expectations, despite market anxiety surrounding the state of the U.S. economy and consumer credit."
Top-line revenue growth was again diversified across multiple product lines and geographic markets. Total revenues in Mexico grew by 40%, while in the U.S., pawn store revenues increased by over 12% and short-term loan store revenues increased by over 9%. In addition, the Company's Auto Master division contributed incremental revenues of almost $24 million as compared to the same quarter last year.
The growth strategy for First Cash continues to be focused on organic expansion driven by new store openings. Mr. Wessel noted, "We continue to identify attractive locations, in both the U.S. and Mexico, where there is strong demand for our retail and consumer finance products. We are excited that two of the new dealerships opened in the third quarter are located in the Dallas/Fort Worth area, which represent the first locations in the Texas market for Auto Master."
In addition, the Company announced that it is further expanding its industry-leading presence in Mexico with a new store concept known as "CashYa!," which translated, means "Cash Now!" When fully developed, the CashYa! stores will provide a network of attractive and convenient retail locations offering various secured and unsecured short-term consumer loan products and other financial services, such as money transfers, bill payments and currency exchange. Mr. Wessel added, "Over the past year, we have opened 19 CashYa! locations, and while the concept is still in the testing and refinement phase, management is excited about the potential of both the store format and the new product offerings which will complement the Company's existing pawn operations in Mexico."
As noted, the Company repurchased $18.2 million of common stock during the quarter. According to Mr. Wessel, "These repurchases reflect the strength of the Company's balance sheet and management's continued confidence in the growth and success of First Cash. We will continue to evaluate the market for opportunities to increase shareholder value by repurchasing stock."
Mr. Wessel concluded, "We are very pleased with our year-to-date results, and we remain confident in our ability to innovate and grow our key revenue categories. We believe that First Cash is well-positioned to continue its growth in terms of retail units, revenue, profits and shareholder value."
Forward-Looking Information
This release may contain forward-looking statements about the business, financial condition and prospects of First Cash Financial Services, Inc. ("First Cash" or 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," "intends," "could," or "anticipates," or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy. 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 inc lude, without limitation, the Company's expectations of earnings per share, earnings growth, expansion strategies, store and dealership openings, future liquidity, cash flows, credit loss provisions, debt repayments, consumer demand for the Company's products and services, competition, 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, condi tions 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 consumer borrowing and repayment behaviors, changes in credit markets, credit losses, changes or increases in competition, the ability to locate, open and staff new stores and dealerships, the availability or access to sources of inventory, inclement weather, the ability to successfully integrate acquisitions, the ability to retain key management personnel, the ability to operate with limited regulation as a credit services organization in Texas, new legislative initiatives or governmental regulations (or changes to existing laws and regulations) affecting short-term loan/payday advance businesses, credit services organizations, pawn businesses and buy-here/pay-here automotive businesses in both the U.S. and Mexico, unforeseen litigation, changes in interest rates, changes in tax rates or policies, changes in gold prices, changes in energy prices, changes in used-vehicle prices, cost of funds, changes in foreign currency exchange rates, future business decisions, and other uncertainties. These and other risks and uncertainties are further and more completely described in the Company's 2006 Annual Report on Form 10-K (see "Item 1A. Risk Factors") and updated in subsequent quarterly reports on Form 10-Q.
About First Cash
First Cash Financial Services, Inc. is a leading specialty retailer and provider of consumer financial services. Its pawn stores make small loans secured by pledged personal property, retail a wide variety of jewelry, electronics, tools and other merchandise, and in many locations, provide short-term loans and credit services products. The Company's short-term loan locations provide various combinations of short-term loan products, check-cashing, credit services and other financial services products. First Cash also operates automobile dealerships focused on the "buy-here/pay-here" segment of the used-vehicle retail market. In total, the Company owns and operates over 460 stores and buy-here/pay-here dealerships in thirteen U.S. states and ten states in Mexico. 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.
First Cash is a component company in both the Standard & Poors SmallCap 600 Index(r) and the Russell 2000 Index(r). 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.primenewswire.com/newsroom/prs/?pkgid=3365
FIRST CASH FINANCIAL SERVICES, INC.
STORE COUNT ACTIVITY
The following tables detail store openings and closings for the three months and nine months ended September 30, 2007:
Mexico
U.S. Locations Locations
---------------------------- --------
Short-Term
Loan/ Buy-Here/ Pawn/
Check- Pay-Here Short-Term
Pawn Cashing Automotive Loan Total
Stores Stores Dealerships Stores Locations
------ ------ ----------- ------ ---------
Three Months Ended
September 30, 2007
-------------------
Total locations,
beginning of period 94 155 12 187 448
New locations opened -- 3 3 9 15
Locations closed or
consolidated -- (2) -- (1) (3)
------ ------ ------ ------ ------
Total locations, end
of period 94 156 15 195 460
====== ====== ====== ====== ======
Nine Months Ended
September 30, 2007
-------------------
Total locations,
beginning of period 95 145 10 157 407
New locations opened -- 13 5 40 58
Locations closed or
consolidated (1) (2) -- (2) (5)
------ ------ ------ ------ ------
Total locations, end
of period 94 156 15 195 460
====== ====== ====== ====== ======
For the three months and nine months ended September 30, 2007, the Company's 50% owned joint venture, Cash & Go, Ltd., operated a total of 39 kiosks located inside convenience stores in the state of Texas, which are not included in the above charts. During the nine months ending September 30, 2007, the Company closed one Cash & Go, Ltd. kiosk.
FIRST CASH FINANCIAL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------------------
2007 2006 (a) 2007 2006 (a)
---- -------- ---- --------
(unaudited)
(in thousands, except per share amounts)
Revenue:
Merchandise sales $ 67,388 $ 36,988 $ 182,886 $ 95,850
Finance and service
charges 36,585 31,479 101,735 82,685
Other 990 1,005 3,222 3,012
--------- --------- --------- ---------
104,963 69,472 287,843 181,547
--------- --------- --------- ---------
Cost of revenue:
Cost of goods sold 36,027 20,781 97,091 55,314
Credit loss provision 16,034 6,789 37,628 11,328
Other 57 122 269 312
--------- --------- --------- ---------
52,118 27,692 134,988 66,954
--------- --------- --------- ---------
Net revenue 52,845 41,780 152,855 114,593
--------- --------- --------- ---------
Expenses and other income:
Store operating expenses 26,311 21,086 75,365 57,853
Administrative expenses 6,777 6,031 21,545 16,801
Depreciation and
amortization 2,797 2,090 8,054 5,690
Interest expense 778 219 1,487 219
Interest income (18) (141) (56) (691)
--------- --------- --------- ---------
36,645 29,285 106,395 79,872
--------- --------- --------- ---------
Income before income taxes 16,200 12,495 46,460 34,721
Provision for income taxes 5,815 4,560 16,911 12,669
--------- --------- --------- ---------
Net income $ 10,385 $ 7,935 $ 29,549 $ 22,052
========= ========= ========= =========
Net income per share:
Basic $ 0.33 $ 0.26 $ 0.93 $ 0.70
========= ========= ========= =========
Diluted $ 0.32 $ 0.25 $ 0.89 $ 0.67
========= ========= ========= =========
Weighted average shares
outstanding:
Basic 31,637 30,938 31,786 31,514
========= ========= ========= =========
Diluted 32,880 32,283 33,160 32,866
========= ========= ========= =========
(a) On August 25, 2006, the Company acquired Guaranteed Auto Finance,
Inc. and SHAC, Inc. (collectively doing business as "Auto
Master"). Accordingly, the Condensed Consolidated Statements of
Income for the three and nine month periods ending September 30,
2006 do not include the results of Auto Master prior to August
25, 2006.
FIRST CASH FINANCIAL SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30,
-------------------
2007 2006
---- ----
(unaudited)
ASSETS
Cash and cash equivalents $ 11,811 $ 20,789
Finance and service charges receivable 6,769 5,203
Customer receivables, net of allowances 75,652 59,055
Inventories 34,947 27,663
Prepaid expenses and other current assets 10,301 7,026
-------- --------
Total current assets 139,480 119,736
Customer receivables with long-term
maturities, net of allowance 30,090 12,365
Property and equipment, net 42,608 29,119
Goodwill and other intangible assets, net 72,400 72,631
Other 1,384 1,208
-------- --------
Total assets $285,962 $235,059
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of notes payable $ 2,250 $ 2,250
Accounts payable 1,818 2,091
Accrued liabilities 12,793 13,601
-------- --------
Total current liabilities 16,861 17,942
Revolving credit facility 46,800 31,000
Notes payable, net of current portion 5,500 7,750
Deferred income taxes payable 8,059 9,245
-------- --------
Total liabilities 77,220 65,937
Stockholders' equity 208,742 169,122
-------- --------
Total liabilities and stockholders'
equity $285,962 $235,059
======== ========
FIRST CASH FINANCIAL SERVICES, INC.
REVENUE, COST OF REVENUE AND NET REVENUE BY PRODUCT LINE
The following tables detail revenue, cost of revenue and net revenue by product line for the three months ended September 30, 2007 and September 30, 2006 (unaudited, amounts in thousands):
Short-Term
Loan/ Buy-Here/
Check- Pay-Here
Pawn Cashing Automotive Total
---------- ---------- ---------- ----------
Three Months Ended
September 30, 2007
-------------------
Revenue:
Merchandise sales:
Retail $ 26,925 $ -- $ 27,863 $ 54,788
Wholesale 12,043 -- 557 12,600
Finance and service
charges 15,372 19,307 1,906 36,585
Other 28 932 30 990
---------- ---------- ---------- ----------
54,368 20,239 30,356 104,963
---------- ---------- ---------- ----------
Cost of revenue:
Cost of goods sold:
Retail 15,057 -- 11,639 26,696
Wholesale 8,269 -- 1,062 9,331
Credit loss provision -- 6,156 9,878 16,034
Other -- 57 -- 57
---------- ---------- ---------- ----------
23,326 6,213 22,579 52,118
---------- ---------- ---------- ----------
Net revenue $ 31,042 $ 14,026 $ 7,777 $ 52,845
========== ========== ========== ==========
Three Months Ended
September 30, 2006
-------------------
Revenue:
Merchandise sales:
Retail $ 22,087 $ -- $ 6,221 $ 28,308
Wholesale 8,533 -- 147 8,680
Finance and service
charges 12,906 18,244 329 31,479
Other 3 976 26 1,005
---------- ---------- ---------- ----------
43,529 19,220 6,723 69,472
---------- ---------- ---------- ----------
Cost of revenue:
Cost of goods sold:
Retail 12,285 -- 2,749 15,034
Wholesale 5,537 -- 210 5,747
Credit loss provision -- 5,237 1,552 6,789
Other -- 122 -- 122
---------- ---------- ---------- ----------
17,822 5,359 4,511 27,692
---------- ---------- ---------- ----------
Net revenue $ 25,707 $ 13,861 $ 2,212 $ 41,780
========== ========== ========== ==========
FIRST CASH FINANCIAL SERVICES, INC.
REVENUE, COST OF REVENUE AND NET REVENUE BY PRODUCT LINE
(CONTINUED)
The following tables detail revenue, cost of revenue and net revenue by product line for the nine months ended September 30, 2007 and September 30, 2006 (unaudited, amounts in thousands):
Short-Term
Loan/ Buy-Here/
Check- Pay-Here
Pawn Cashing Automotive Total
---------- ---------- ---------- ----------
Nine Months Ended
September 30, 2007
-------------------
Revenue:
Merchandise sales:
Retail $ 79,538 $ -- $ 73,765 $ 153,303
Wholesale 27,878 -- 1,705 29,583
Finance and service
charges 42,717 53,969 5,049 101,735
Other 54 3,056 112 3,222
---------- ---------- ---------- ----------
150,187 57,025 80,631 287,843
---------- ---------- ---------- ----------
Cost of revenue:
Cost of goods sold:
Retail 44,649 -- 30,947 75,596
Wholesale 18,796 -- 2,699 21,495
Credit loss provision -- 13,672 23,956 37,628
Other -- 269 -- 269
---------- ---------- ---------- ----------
63,445 13,941 57,602 134,988
---------- ---------- ---------- ----------
Net revenue $ 86,742 $ 43,084 $ 23,029 $ 152,855
========== ========== ========== ==========
Nine Months Ended
September 30, 2006
-------------------
Revenue:
Merchandise sales:
Retail $ 65,858 $ -- $ 6,221 $ 72,079
Wholesale 23,624 -- 147 23,771
Finance and service
charges 35,306 47,050 329 82,685
Other 13 2,973 26 3,012
---------- ---------- ---------- ----------
124,801 50,023 6,723 181,547
---------- ---------- ---------- ----------
Cost of revenue:
Cost of goods sold:
Retail 36,634 -- 2,749 39,383
Wholesale 15,721 -- 210 15,931
Credit loss provision -- 9,776 1,552 11,328
Other -- 312 -- 312
---------- ---------- ---------- ----------
52,355 10,088 4,511 66,954
---------- ---------- ---------- ----------
Net revenue $ 72,446 $ 39,935 $ 2,212 $ 114,593
========== ========== ========== ==========
FIRST CASH FINANCIAL SERVICES, INC.
SELECTED ASSETS BY PRODUCT LINE
The following table details selected assets by product line as of September 30, 2007 and September 30, 2006 (unaudited, amounts in thousands):
Short-Term
Loan/ Buy-Here/
Check- Pay-Here
Pawn Cashing Automotive Total
---------- ---------- ---------- ----------
September 30, 2007
------------------
Customer receivables,
with current and long-
term maturities $ 40,650 $ 8,126 $ 73,403 $ 122,179
CSO loans held by
independent third-
party lender (a) -- 12,416 -- 12,416
Allowances for doubtful
accounts -- (871) (16,121) (16,992)
---------- ---------- ---------- ----------
$ 40,650 $ 19,671 $ 57,282 $ 117,603
========== ========== ========== ==========
Inventories $ 27,460 $ -- $ 7,487 $ 34,947
========== ========== ========== ==========
September 30, 2006
------------------
Customer receivables,
with current and long-
term maturities $ 34,699 $ 6,698 $ 39,686 $ 81,083
CSO loans held by
independent third-
party lender (a) -- 11,457 -- 11,457
Allowances for doubtful
accounts -- (729) (9,424) (10,153)
---------- ---------- ---------- ----------
$ 34,699 $ 17,426 $ 30,262 $ 82,387
========== ========== ========== ==========
Inventories $ 24,912 $ -- $ 2,751 $ 27,663
========== ========== ========== ==========
(a) CSO loans outstanding are comprised of the principal portion of
active CSO loans outstanding from an independent third-party
lender, which are not included on the Company's balance sheet.
FIRST CASH FINANCIAL SERVICES, INC.
UNAUDITED NON-GAAP FINANCIAL INFORMATION -- EBITDA
EBITDA is commonly used by investors to assess a company's leverage capacity, liquidity and financial performance. EBITDA is not considered a measure of financial performance under U.S. generally accepted accounting principles ("GAAP"), and the items excluded from EBITDA are significant components in understanding and assessing the Company's financial performance. Since EBITDA is not a measure determined in accordance with GAAP and is thus susceptible to varying calculations, EBITDA, as presented, may not be comparable to other similarly titled measures of other companies. EBITDA should not be considered as an alternative to net income, cash flows provided by or used in operating, investing or financing activities or other financial statement data presented in the Company's consolidated financial statements as an indicator of financial performance or liquidity. Non-GAAP measures should be evaluated in conjunction with, and are not a substitute for, GAAP financial measures. The following table provides a reco nciliation of net income to EBITDA (unaudited, amounts in thousands):
Trailing Twelve Months Ended
September 30,
-----------------------
2007 2006
---- ----
Net income $ 39,241 $ 29,773
Adjustments:
Income taxes 22,098 16,812
Depreciation and amortization 10,405 7,299
Interest expense 2,184 219
Interest income (92) (791)
--------- ---------
Earnings before interest, income taxes,
depreciation and amortization $ 73,836 $ 53,312
========= =========
EBITDA margin calculated as follows:
Total revenue $ 376,018 $ 241,688
Earnings before interest, income
taxes, depreciation and amortization 73,836 53,312
--------- ---------
EBITDA as a percent of revenue 20% 22%
========= =========
CONTACT: First Cash Financial Services, Inc.
Rick Wessel, Vice Chairman and Chief Executive Officer
Doug Orr, Executive Vice President and Chief Financial
Officer
(817) 505-3199
investorrelations@firstcash.com
www.firstcash.com