Form 8-K Filing

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

July 18, 2012
(Date of Report - Date of Earliest Event Reported)

First Cash Financial Services, Inc.
(Exact name of registrant as specified in its charter)


Delaware
(State or other jurisdiction of incorporation)

0-19133
 
75-2237318
(Commission File Number)   (IRS Employer Identification No.)



690 East Lamar Blvd., Suite 400, Arlington, Texas
 
76011
(Address of principal executive offices)   (Zip Code)

(817) 460-3947
Registrant's telephone number, including area code:  


NA
(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 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 month and six month periods ended June 30, 2012. The Company's press release dated July 18, 2012 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 July 18, 2012 announcing the Company's financial results for the three month and six month periods ended June 30, 2012.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: July 18, 2012   First Cash Financial Services, Inc.
             (Registrant)

  /s/   R. DOUGLAS ORR
R. Douglas Orr
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

EXHIBIT INDEX

Exhibit Number


Document

99.1

Press release dated July 18, 2012

First Cash Reports 17% Increase in Second Quarter Earnings Per Share to $0.56; Growth in Pawn Loans and Retail Merchandise Sales Drive Record Earnings

EXHIBIT 99.1

First Cash Reports 17% Increase in Second Quarter Earnings Per Share to $0.56; Growth in Pawn Loans and Retail Merchandise Sales Drive Record Earnings

ARLINGTON, Texas, July 18, 2012 (GLOBE NEWSWIRE) -- 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, 2012.

Earnings Highlights

Revenue Highlights

Pawn Metrics

Profitability and Return Metrics

Acquisitions and New Store Openings

Financial Position & Liquidity

Fiscal 2012 Outlook

Commentary & Analysis  

Mr. Rick Wessel, chief executive officer, commented on the second quarter results, "We are very pleased with our second quarter results, which were driven by strong growth in our core pawn business. We achieved several significant milestones during the quarter as we opened our 750th store, acquired 25 pawn stores in the U.S. and continued our de novo store growth in Mexico. During the quarter, we added operations in four additional states in the U.S. and one additional state in Mexico. We now operate in 24 of the 32 total states in Mexico."

"Customer demand in our full-service pawn stores remains robust. The consolidated 21% growth in pawn service fees was particularly impressive, as was the 22% increase in retail sales. Of particular importance is the 29% growth in pawn fees and the 25% growth in retail sales in Mexico. In addition, both retail margins and inventory turns improved significantly over the prior year, reflecting the continued strength of consumer demand, the quality of our inventory and the training and systems utilized by our sales associates. These results demonstrate the consistency and profitability of our business model across regions and business cycles, both in the U.S. and particularly in Mexico, where our pawn operations are now almost entirely focused on hard good (non-gold) lending and retail sales."

"The Company's strong operating cash flow and balance sheet provide us the ability to fund both organic growth and take advantage of acquisition opportunities as they arise.  During the quarter, we doubled the size of our unsecured bank credit facility to $100 million, providing us with increased flexibility for growth. The significant pawn acquisitions that we completed this year position us well for the future.  While we have invested over $70 million in acquisitions year-to-date and incurred associated non-recurring costs of approximately $0.02 per share, we believe that these acquisitions will become significantly accretive in 2013 and beyond."

"In summary, given our competitive strengths, growth platform and expanding customer base, we are excited about our ability to further grow our store count, revenues, margins and earnings. Our business model, coupled with our strong balance sheet, should position us to drive sustainable long-term growth in 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, currency exchange rates, future share repurchases and the impact thereof, completion of disposition transactions and expected gains from the sale of such operations, earnings from acquisitions, the ability to successfully integrate 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 in the market value of pawn collateral and merchandise inventories, 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 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 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 focus is serving cash and credit constrained consumers through deep value retailing and offering small loans and other financial products. In total, the Company owns and operates 783 stores in twelve U.S. states and 24 states in Mexico. 

First Cash was named by Fortune Magazine as one of America's 100 fastest growing companies for 2011. First Cash is also 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 for the three months ended June 30, 2012: 

  Pawn Locations Consumer  
  Large Small Loan Total
  Format (1) Format (2) Locations (3) Locations
United States:        
Total locations, beginning of period  137  27  72  236
New locations opened  2  --   --   2
Locations acquired  25  --   --   25
Total locations, end of period  164  27  72  263
         
Mexico:        
Total locations, beginning of period  443  19  34  496
New locations opened  22  --   --   22
Locations acquired  --   --   --   -- 
Total locations, end of period  465  19  34  518
         
Total:        
Total locations, beginning of period  580  46  106  732
New locations opened  24  --   --   24
Locations acquired  25  --   --   25
Total locations, end of period  629  46  106  781
 
(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, 2012, 109 of the U.S. large format pawn stores also offered consumer loans or credit services products, which includes the 24 locations acquired from Mister Money. 
(2) The small format locations typically have limited retail operations and primarily accept jewelry and small electronic items as pawn collateral. At June 30, 2012, all of the Texas and Mexico small format pawn stores also offered consumer loans or credit services products.
(3) The Company's U.S. free-standing, small format 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 38 check cashing and financial services kiosks located inside convenience stores in the state of Texas.

The following table details store openings for the six months ended June 30, 2012:

  Pawn Locations Consumer  
  Large Small Loan Total
  Format (1) Format (2) Locations (3) Locations
United States:        
Total locations, beginning of period  132  25  74  231
New locations opened  4  --   --   4
Locations acquired  28  --   --   28
Store format conversions  --   2  (2)  -- 
Total locations, end of period  164  27  72  263
         
Mexico:        
Total locations, beginning of period  394  19  34  447
New locations opened  42  --   --   42
Locations acquired  29  --   --   29
Total locations, end of period  465  19  34  518
         
Total:        
Total locations, beginning of period  526  44  108  678
New locations opened  46  --   --   46
Locations acquired  57  --   --   57
Store format conversions  --   2  (2)  -- 
Total locations, end of period  629  46  106  781
 
(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, 2012, 109 of the U.S. large format pawn stores also offered consumer loans or credit services products, which includes the 24 locations acquired from Mister Money.
(2) The small format locations typically have limited retail operations and primarily accept jewelry and small electronic items as pawn collateral. At June 30, 2012, all of the Texas and Mexico small format pawn stores also offered consumer loans or credit services products.
(3) The Company's U.S. free-standing, small format 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 38 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 Six Months Ended
  June 30, June 30,
  2012 2011 2012 2011
  (in thousands, except per share amounts)
Revenue:        
Merchandise sales  $ 86,307  $ 77,358  $ 173,213  $ 155,663
Pawn loan fees  33,932  30,564  68,844  59,536
Consumer loan and credit services fees  12,304  12,410  25,291  25,634
Other revenue  235  249  546  586
Total revenue  132,778  120,581  267,894  241,419
         
Cost of revenue:        
Cost of goods sold  54,579  48,879  108,894  97,121
Consumer loan and credit services loss provision  3,093  2,716  5,481  4,973
Other cost of revenue  33  52  53  98
Total cost of revenue  57,705  51,647  114,428  102,192
         
Net revenue  75,073  68,934  153,466  139,227
         
Expenses and other income:        
Store operating expenses  35,240  31,778  71,559  63,496
Administrative expenses  11,612  10,971  23,918  22,503
Depreciation and amortization  3,119  2,821  6,155  5,468
Interest expense  176  40  253  66
Interest income  (36)  (66)  (117)  (165)
Total expenses and other income  50,111  45,544  101,768  91,368
         
Income from continuing operations before income taxes  24,962  23,390  51,698  47,859
         
Provision for income taxes  8,613  8,186  17,837  16,750
         
Income from continuing operations  16,349  15,204  33,861  31,109
         
Income from discontinued operations, net of tax (1)  --   134  --  6,785
Net income  $ 16,349  $ 15,338  $ 33,861  $ 37,894
         
Basic income per share:        
Income from continuing operations (basic)  $ 0.57  $ 0.49  $ 1.16  $ 1.00
Income from discontinued operations (basic)  --  --   --   0.21
Net income per basic share  $ 0.57  $ 0.49  $ 1.16  $ 1.21
         
Diluted income per share:        
Income from continuing operations (diluted)  $ 0.56  $ 0.48  $ 1.13  $ 0.97
Income from discontinued operations (diluted)  --   --   --   0.21
Net income per diluted share  $ 0.56  $ 0.48  $ 1.13  $ 1.18
         
Weighted average shares outstanding:        
Basic  28,658  31,087  29,119  31,199
Diluted  29,404  31,869  29,878  31,972
         
(1) Represents non-recurring gain on the sale of the discontinued Illinois consumer loan stores in March 2011.  
 
 
FIRST CASH FINANCIAL SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
       
  June 30, December 31,
  2012 2011 2011
  (in thousands)
ASSETS      
       
Cash and cash equivalents  $ 29,793  $ 68,259  $ 70,296
Pawn loan fees and service charges receivable  13,159  11,862  10,842
Pawn loans  88,298  79,654  73,287
Consumer loans, net  2,035  1,072  858
Inventories  52,978  54,636  44,412
Other current assets  2,841  10,266  10,783
Total current assets  189,104  225,749  210,478
       
Property and equipment, net  83,577  69,909  73,451
Goodwill, net  127,603  72,523  70,395
Other non-current assets  4,948  3,036  2,772
Total assets  $ 405,232  $ 371,217  $ 357,096
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
       
Current portion of notes payable  $ 1,605  $ 479  $ -- 
Accounts payable and accrued liabilities  30,126  29,584  25,629
Income taxes payable and deferred taxes payable  440  7,417  9,776
Total current liabilities  32,171  37,480  35,405
       
Revolving unsecured credit facility  71,600  --   -- 
Notes payable, net of current portion  2,641  1,143  -- 
Deferred income tax liabilities  8,362  9,899  6,319
Total liabilities  114,774  48,522  41,724
       
Stockholders' equity      
Preferred stock  --   --   -- 
Common stock  383  383  383
Additional paid-in capital  148,474  147,204  147,649
Retained earnings  367,384  293,635  333,523
Accumulated other comprehensive income (loss) from cumulative foreign currency translation adjustments  (11,788)  1,285  (13,463)
Common stock held in treasury, at cost  (213,995)  (119,812)  (152,720)
Total stockholders' equity  290,458  322,695  315,372
Total liabilities and stockholders' equity  $ 405,232  $ 371,217  $ 357,096

 

FIRST CASH FINANCIAL SERVICES, INC.
OPERATING INFORMATION
(UNAUDITED)


The following table details the components of revenue for the three months ended June 30, 2012, as compared to the three months ended June 30, 2011 (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
  2012 2011 Increase/(Decrease) Basis
United States revenue:          
Retail merchandise sales  $ 21,200  $ 18,254  $ 2,946 16 % 16 %
Scrap jewelry sales  11,745  9,744  2,001 21 % 21 %
Pawn loan fees  13,108  11,894  1,214 10 % 10 %
Credit services fees  11,208  11,114  94 1 % 1 %
Consumer loan fees  147  31  116 374 % 374 %
Other revenue  235  247  (12) (5)% (5)%
   57,643  51,284  6,359 12 % 12 %
           
Mexico revenue:          
Retail merchandise sales  41,061  37,836  3,225 9 % 25 %
Scrap jewelry sales  12,301  11,524  777 7 % 7 %
Pawn loan fees  20,824  18,670  2,154 12 % 29 %
Consumer loan fees  949  1,265  (316) (25)% (13)%
Other revenue  --   2  (2) (100)% (100)%
   75,135  69,297  5,838 8 % 22 %
           
Total revenue:          
Retail merchandise sales  62,261  56,090  6,171 11 % 22 %
Scrap jewelry sales  24,046  21,268  2,778 13 % 13 %
Pawn loan fees  33,932  30,564  3,368 11 % 21 %
Credit services fees  11,208  11,114  94 1 % 1 %
Consumer loan fees  1,096  1,296  (200) (15)% (4)%
Other revenue  235  249  (14) (6)% (6)%
   $ 132,778  $ 120,581  $ 12,197 10 % 18 %

 

FIRST CASH FINANCIAL SERVICES, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)

The following table details the components of revenue for the six months ended June 30, 2012, as compared to the six months ended June 30, 2011 (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
  2012 2011 Increase/(Decrease) Basis
United States revenue:          
Retail merchandise sales  $ 46,262  $ 39,182  $ 7,080 18 % 18 %
Scrap jewelry sales  26,781  24,326  2,455 10 % 10 %
Pawn loan fees  27,647  24,401  3,246 13 % 13 %
Credit services fees  23,163  23,037  126 1 % 1 %
Consumer loan fees  178  127  51 40 % 40 %
Other revenue  546  584  (38) (7)% (7)%
   124,577  111,657  12,920 12 % 12 %
           
Mexico revenue:          
Retail merchandise sales  78,643  71,263  7,380 10 % 23 %
Scrap jewelry sales  21,527  20,892  635 3 % 3 %
Pawn loan fees  41,197  35,135  6,062 17 % 31 %
Consumer loan fees  1,950  2,470  (520) (21)% (12)%
Other revenue  --  2  (2) (100)% (100)%
   143,317  129,762  13,555 10 % 21 %
           
Total revenue:          
Retail merchandise sales  124,905  110,445  14,460 13 % 21 %
Scrap jewelry sales  48,308  45,218  3,090 7 % 7 %
Pawn loan fees  68,844  59,536  9,308 16 % 24 %
Credit services fees  23,163  23,037  126 1 % 1 %
Consumer loan fees  2,128  2,597  (469) (18)% (9)%
Other revenue  546  586  (40) (7)% (7)%
   $ 267,894  $ 241,419  $ 26,475 11 % 17 %

 

FIRST CASH FINANCIAL SERVICES, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)

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, 2012, as compared to June 30, 2011 (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/(Decrease)
  June 30,     Constant Currency
  2012 2011 Increase/(Decrease) Basis
United States:          
Pawn loans  $ 42,596  $ 36,383  $ 6,213 17 % 17 %
CSO credit extensions held by independent third-party (1)  13,462  12,167  1,295 11 % 11 %
Other consumer loans  1,242  46  1,196 2,600 % 2,600 %
   57,300  48,596  8,704 18 % 18 %
           
Mexico:          
Pawn loans  45,702  43,271  2,431 6 % 22 %
Other consumer loans  793  1,026  (233) (23)% (10)%
   46,495  44,297  2,198 5 % 22 %
           
Total:          
Pawn loans  88,298  79,654  8,644 11 % 20 %
CSO credit extensions held by independent third-party (1)  13,462  12,167  1,295 11 % 11 %
Other consumer loans  2,035  1,072  963 90 % 102 %
   $ 103,795  $ 92,893  $ 10,902 12 % 20 %
           
           
Pawn inventories:          
U.S. pawn inventories  $ 24,415  $ 20,030  $ 4,385 22 % 22 %
Mexico pawn inventories  28,563  34,606  (6,043) (17)% (4)%
   $ 52,978  $ 54,636  $ (1,658) (3)% 5 %
 
(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,
  2012 2011
     
Income from continuing operations  $ 73,617  $ 62,091
Adjustments:    
Income taxes  38,425  33,687
Depreciation and amortization  11,701  10,837
Interest expense  322  184
Interest income  (230)  (239)
Earnings from continuing operations before interest, taxes, depreciation and amortization  $ 123,835  $ 106,560
     
EBITDA margin calculated as follows:    
Total revenue from continuing operations  $ 547,777  $ 475,008
Earnings from continuing operations before interest, taxes, depreciation and amortization  123,835  106,560
EBITDA as a percentage of revenue 23% 22%

 

FIRST CASH FINANCIAL SERVICES, INC.
UNAUDITED NON-GAAP FINANCIAL INFORMATION (CONTINUED)

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,
  2012 2011
Cash flow from operating activities, including discontinued operations  $ 84,693  $ 75,938
Cash flow from investing activities:    
Pawn and consumer loans  (5,620)  (26,156)
Purchases of property and equipment  (23,720)  (25,872)
Free cash flow  $ 55,353  $ 23,910

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, 2011) of 11.8 to 1 was used, compared to the current end of period (June 30, 2012) exchange rate of 13.7 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, 2011 was 11.7 to 1, compared to the current-quarter rate of 13.5 to 1. The average exchange rate for the prior-year six-month period ended June 30, 2011 was 11.9 to 1, compared to the current year-to-date rate of 13.3 to 1.   

CONTACT: Gar Jackson
         Phone: (949) 873-2789
         Email: gar@irsense.com

         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