SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                                  FORM 10-K

 (Mark One)
   [ x ]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934

              For the year ended December 31, 2001, or

   [   ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934

              For the transition period from __________ to ___________
              Commission file number 0-19133

                     FIRST CASH FINANCIAL SERVICES, INC.
            ------------------------------------------------------
            (Exact name of registrant as specified in its charter)


              Delaware                                75-2237318
   -------------------------------         ---------------------------------
   (state or other jurisdiction of         (IRS Employer Identification No.)
   incorporation or organization)

     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

         Securities registered pursuant to Section 12(b) of the Act:

                                     None

         Securities registered pursuant to Section 12(g) of the Act:
                    Common Stock, par value $.01 per share


      Indicate by check mark whether the registrant (1) has filed all reports
 required to be filed by Section 13  or 15(d) of the Securities Exchange  Act
 of 1934 during the preceding 12 months (or for such shorter period that  the
 registrant was required to file such  reports), and (2) has been subject  to
 such filing requirements for the past 90 days.  Yes   [ X ]    No   [   ]

      Indicate by check mark if disclosure  of delinquent filers pursuant  to
 Item 405  of  Regulation  S-K is  not  contained  herein, and  will  not  be
 contained, to the  best of registrant's  knowledge, in  definitive proxy  or
 information statements incorporated by  reference in Part  III of this  Form
 10-K or any amendment to this Form 10-K.  [   ]

      The aggregate market value of the  voting stock held by  non-affiliates
 of the registrant, based  upon the last reported  sales price on the  Nasdaq
 National Market on  March 26, 2002  is $50,634,000.   As of March 26,  2002,
 there were 8,763,687 shares of Common Stock outstanding.

                     DOCUMENTS INCORPORATED BY REFERENCE

      The Company's Proxy Statement in connection with its Annual Meeting  of
 Stockholders to be  held on June  26, 2002 is  incorporated by reference  in
 Part III, Items 10, 11, 12 and 13.




                     FIRST CASH FINANCIAL SERVICES, INC.
                                  FORM 10-K

                     For the Year Ended December 31, 2001

                              TABLE OF CONTENTS

 PART I

 Item 1     Business.............................................   1
 Item 2     Properties...........................................  10
 Item 3.    Legal Proceedings ...................................  10
 Item 4.    Submission of Matters to a Vote of Security Holders..  10


 PART II

 Item 5.    Market for Registrant's Common Equity and Related
              Stockholder Matters...............................   11
 Item 6.    Selected Financial Data ............................   12
 Item 7.    Management's Discussion and Analysis of Financial
              Condition and Results of Operations...............   13
 Item 8.    Financial Statements and Supplementary Data ........   20
 Item 9.    Changes in and Disagreements with Accountants on
              Accounting and Financial Disclosure...............   20


 PART III.......................................................   20


 PART IV

 Item 14.   Exhibits, Financial Statement Schedules and Reports
              on Form 8-K.......................................   21


 SIGNATURES.....................................................   22



                                    PART I
                                    ------
 Forward Looking Information

      This annual  report may  contain forward-looking  statements about  the
 business,  financial  condition  and  prospects  of  First  Cash   Financial
 Services, Inc.  Forward-looking statements can  be identified by the use  of
 forward-looking  terminology   such   as   "believes,"   "expects,"   "may,"
 "estimates," "will," "should," "plans,"  "intends," or "anticipates" or  the
 negative thereof, or other variations thereon, or comparable terminology, or
 by discussions  of  strategy.   Forward-looking  statements in  this  annual
 report include, without limitation, the earnings per share discussion above,
 the expectation of  increased pawn  growth, the  expectation for  additional
 store openings, and the  expectation of growth  in the Company's  short-term
 advance products.   These statements  are made  to provide  the public  with
 management's 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 report speak only as of  the date of this report, and  the
 Company expressly disclaims  any obligation  or undertaking  to release  any
 updates or revisions  to any  such statement to  reflect any  change in  the
 Company's expectations or any change  in events, conditions or  circumstance
 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 report.  Such factors are difficult to predict and many are beyond  the
 control of the  Company, but  may include  changes in  regional or  national
 economic conditions,  the  ability  to  integrate  new  stores,  changes  in
 governmental regulations, unforeseen litigation,  changes in interest  rates
 or tax rates, future business decisions and other uncertainties.

 Item 1.  Business
 -----------------

 General

      First Cash Financial  Services, Inc.  (the "Company")  is the  nation's
 third largest publicly traded pawnshop operator and currently owns 114  pawn
 stores in  Texas,  Oklahoma,  Washington, D.C.,  Maryland,  Missouri,  South
 Carolina, Virginia and  Mexico.  The  Company's pawn stores  engage in  both
 consumer finance and  retail sales activities.   The  Company's pawn  stores
 provide a convenient source for  consumer advances, advancing money  against
 pledged tangible personal  property such as  jewelry, electronic  equipment,
 tools,  sporting  goods  and  musical  equipment.  These  pawn  stores  also
 function as retailers of previously owned merchandise acquired in  forfeited
 pawn transactions  and  over-the-counter  purchases  from  customers.    The
 Company's pawn stores also  offer short-term, secured advances  ("short-term
 advances").

      The Company also currently owns 50 check cashing and short-term advance
 stores in Texas, California,  Washington, Oregon, Illinois, and  Washington,
 D.C.  These  stores provide a  broad range of  consumer financial  services,
 including check cashing,  money order  sales, wire  transfers, bill  payment
 services and short-term advances.  In addition, the Company is a 50% partner
 in Cash & Go,  Ltd., a Texas limited  partnership, which currently owns  and
 operates 59  financial services  kiosks located  inside convenience  stores.
 For the year ended  December 31, 2001, the  Company's revenues were  derived
 49% from retail activities, 48% from  lending activities, and 3% from  other
 sources, including check-cashing fees.  The Company's primary business  plan
 is to significantly expand its short-term advance operations by opening  new
 stores in  Texas  and  other  states, by  accelerating  the  growth  of  its
 partnership, Cash &  Go, Ltd, which  operates short-term  advance and  check
 cashing kiosks inside  convenience stores, and  by expanding its  short-term
 advance operations in its existing pawn stores.

      Management believes  the pawnshop  industry is  highly fragmented  with
 approximately 15,000 stores in the United States.  The three publicly traded
 pawnshop companies currently operate approximately 866, or less than 6%,  of
 the pawnshops  in  the  United  States.    Management  believes  significant
 economies of scale, increased operating efficiencies, and revenue growth are
 achievable  by  increasing  the  number   of  stores  under  operation   and
 introducing modern merchandising techniques, point-of-sale systems, improved
 inventory management and store remodeling.  In addition, management believes
 that revenues  and operating  income  of its  existing  pawn stores  can  be
 enhanced by continuing to  add consumer financial  services, such as  short-
 term advances, which  will attract  new customers  to its  pawn stores,  and
 provide a broader array of services  to its existing customer base.   During
 the years ended December 31,  2001, 2000, and 1999,  the Company added 4,  2
 and 10 pawn stores to its network, respectively.

      The Company made its  initial entry into the  check cashing and  short-
 term advance business during the twelve months ended July 31, 1998, with the
 purchase of 11 stores  in California and  Washington.  Management  estimates
 there are  approximately 7,000  such check  cashing and  short-term  advance
 locations throughout the United  States.  The  check cashing and  short-term
 advance industry  is experiencing  rapid growth.   During  the  years  ended
 December 31,  2001, 2000  and 1999,  the Company added  14,  2 and  4  check
 cashing and short-term advance stores to its network, respectively.

      The Company was formed as a Texas corporation in July 1988 and in April
 1991 the  Company  reincorporated as  a  Delaware corporation.    Except  as
 otherwise  indicated,  the   term  "Company"  includes   its  wholly   owned
 subsidiaries, American  Loan &  Jewelry, Inc.,  WR Financial,  Inc.,  Famous
 Pawn, Inc., JB Pawn, Inc., Cash & Go, Inc., One Iron Ventures, Inc., Capital
 Pawnbrokers, Inc., Silver Hill Pawn, Inc., Elegant Floors, Inc., First Cash,
 S.A. de C.V.,  American Loan Employee  Services, S.A. de  D.V., First  Cash,
 Ltd., First Cash Corp, First Cash Management, LLC, and First Cash, Inc.  The
 Company's principal executive offices are located  at 690 East Lamar  Blvd.,
 Suite 400, Arlington,  Texas 76011, and  its telephone  number is  (817)460-
 3947.

 Industry

      The pawnshop industry in the United States is an established  industry,
 with the  highest concentration  of pawnshops  being  in the  Southeast  and
 Southwest.  The operation of pawnshops is governed primarily by state  laws,
 and accordingly, states that maintain pawn laws most conducive to profitable
 operations have  historically seen  the greatest  development of  pawnshops.
 The Company believes that the majority of pawnshops are owned by individuals
 operating one  to three  locations.   Management further  believes that  the
 highly fragmented nature  of the  industry is  due in  part to  the lack  of
 qualified  management  personnel,  the  difficulty  of  developing  adequate
 financial  controls  and  reporting  systems,  and  the  lack  of  financial
 resources.

      The check cashing and short-term advance  industry is a relatively  new
 industry, and management estimates that there are approximately 7,000  check
 cashing and short-term advance locations throughout the United States.  Some
 states have enacted formal check cashing  laws which regulate the amount  of
 fees that operators may charge for cashing checks, and in some cases  states
 have regulated the amount  of service charges that  may be charged on  small
 consumer  advances,   commonly  referred   to  as   "short-term   advances".
 Management believes that at least half of the check cashing locations in the
 United States are operated by individuals owning from one to ten  locations.
 Management further believes that this fragmented  nature of the industry  is
 due among other factors to the  lack of qualified management personnel,  the
 difficulty of developing adequate financial controls and reporting  systems,
 and the lack of financial resources.

 Business Strategy

      The Company's  primary business  plan is  to significantly  expand  its
 operations by opening 10  to 15 new short-term  advance stores primarily  in
 Texas and selectively  opening new  stores in other  states, as  well as  by
 opening 10 to 15 new pawn shops  in Mexico.  Secondarily, the Company  plans
 to increase the growth  of its partnership, Cash  & Go, Ltd, which  operates
 short-term advance and check cashing  kiosks inside convenience stores,  and
 by expanding its short-term advance operations in its existing pawn stores.

 New Store Openings

      The  Company  has  opened  21  new   pawn  stores  and  25  new   check
 cashing/short-term advance stores since its inception and currently  intends
 to open additional check cashing and short-term advance stores in  locations
 where management believes appropriate demand and other favorable  conditions
 exist.  In addition, the Company's partnership, Cash & Go, Ltd., has  opened
 59 financial services kiosks inside  convenience stores since its  inception
 in August 1999.   Management seeks to locate  new stores where  demographics
 are favorable and competition  is limited.  It  is the Company's  experience
 that after a suitable location has been identified and a lease and  licenses
 are obtained, a  new store can  be ready for  business within  six to  eight
 weeks.  The investment required to open a new pawn store includes inventory,
 funds available  for  pawns,  store  fixtures,  security  systems,  computer
 equipment, and start-up losses.  Although the total investment varies and is
 difficult to predict for each location, it has been the Company's experience
 that between $200,000 and $300,000 is required to fund a new pawn store  for
 the first six  months of operation.   Because existing  pawn stores  already
 have  an  established  customer  base,  pawn  portfolio,  and   retail-sales
 business, acquisitions generally contribute more quickly to revenues than do
 start-up  stores.   The Company  estimates  that approximately  $100,000  to
 $150,000 is required to  fund a new  check cashing/short-term advance  store
 for the  first  six months  of  operation, which  includes  investments  for
 leasehold improvements, equipment, pawn portfolio, store operating cash, and
 start-up losses.

 Acquisitions

      Because of the highly fragmented nature  of both the pawn industry  and
 the check cashing/short-term advance industry,  as well as the  availability
 of "mom & pop"  sole proprietors willing to  sell their stores, the  Company
 believes that  acquisition  opportunities as  well  as favorable  new  store
 locations  exist.   The  timing  of any  future  acquisitions  is  based  on
 identifying suitable stores and purchasing them on terms that are viewed  as
 favorable  to  the  Company.    Before  making  an  acquisition,  management
 typically studies a demographic analysis of the surrounding area,  considers
 the number and size of competing  stores, and researches regulatory  issues.
 Specific pawn store acquisition criteria include an evaluation of the volume
 of annual  pawn transactions,  outstanding receivable  balances,  historical
 redemption rates,  the  quality  and quantity  of  inventory  on  hand,  and
 location and  condition of  the facility,  including lease  terms.   Factors
 involved in evaluating the  acquisition of check cashing/short-term  advance
 stores include the annual volume of transactions, location and condition  of
 facilities,  and  a  demographic  evaluation  of  the  surrounding  area  to
 determine the potential for the Company's short-term advance product.

 Store Clusters

      Whether acquiring an existing store or opening a new store, the Company
 seeks to establish clusters of several stores in a specific geographic  area
 in order  to achieve  certain economies  of scale  relative to  supervision,
 purchasing and marketing.  In Texas, such clusters have been established  in
 the Dallas/Fort  Worth metroplex,  the Rio  Grande Valley  area, the  Corpus
 Christi area,  and  the  El  Paso  area.   Store  clusters  have  also  been
 established in the  St. Louis, Missouri  area, the  Oklahoma City,  Oklahoma
 area, in Washington D.C. and its surrounding Maryland suburbs, in Baltimore,
 Maryland, in Northern California,  in the Chicago,  Illinois area, in  South
 Carolina, and in  the Pacific  Northwest.   The Company  currently plans  to
 continue its expansion  in existing markets  in Texas,  Washington D.C.  and
 Mexico, and to enter new markets in other states with favorable demographics
 and regulatory environments.

 Enhance Productivity of Existing and Acquired Stores

      The primary  factors  affecting  the  profitability  of  the  Company's
 existing store base are the level of pawns outstanding, the volume of retail
 sales and gross  profit on  retail sales, the  volume of  check cashing  and
 related consumer financial services, and the control of store expenses.   To
 increase customer traffic, which management believes is a key determinant to
 increasing its stores' profitability, the Company has taken several steps to
 distinguish its stores  from traditional pawn  and check  cashing/short-term
 advance stores and to make customers feel more comfortable.  In addition  to
 well-lit parking facilities,  several of  the stores'  exteriors display  an
 attractive and  distinctive awning  similar to  those used  by  contemporary
 convenience and  video rental  stores.   The Company  also has  upgraded  or
 refurbished the interior of certain of  its stores and improved  merchandise
 presentation by categorizing items into departments, improving the  lighting
 and installing better in-store signage.

 Operating Controls

      The Company has an organizational structure that it believes is capable
 of supporting a larger, multi-state store  base.  Moreover, the Company  has
 installed an employee-training  program for both  store and  corporate-level
 personnel that stresses  productivity and  professionalism.   Each store  is
 monitored on a daily basis from corporate headquarters via an online,  real-
 time computer network, and  the Company has  strengthened its operating  and
 financial controls by  increasing its internal  audit staff as  well as  the
 frequency of  store audit  visits.   Management  believes that  the  current
 operating and financial controls and systems are adequate for the  Company's
 existing store base and can accommodate reasonably foreseeable growth in the
 near-term.

 Pawn Lending Activities

      The Company's pawn stores advance money against the security of pledged
 goods.    The  pledged  goods  are  tangible  personal  property   generally
 consisting of  jewelry,  electronic  equipment, tools,  sporting  goods  and
 musical equipment.  The  pledged goods provide security  to the Company  for
 the repayment of the pawn, as  pawns cannot be made with personal  liability
 to  the  borrower.   Therefore,  the   Company  does  not  investigate   the
 creditworthiness of the borrower, relying  instead on the marketability  and
 sale value of pledged goods as a basis for its credit decision.  The Company
 contracts for a pawn service charge in lieu of interest to compensate it for
 the pawn.  The statutory service charges on pawns at its Texas stores  range
 from 12% to 240% on an annualized basis  depending on the size of the  pawn,
 and from  36% to  240% on  an  annualized basis  at the  Company's  Oklahoma
 stores.  Pawns made in the Maryland  stores bear service charges of 144%  to
 240% on  an annualized  basis, while  pawns in  Virginia earn  120% to  180%
 annually.  In Washington, D.C.,  a flat $2 charge  per month applies to  all
 pawns of up to $40, and  a 48% to 60%  annualized service charge applies  to
 pawns of greater  than $40.   In Missouri, pawns  bear a  total service  and
 storage charge of  240% on  an annualized  basis, and  South Carolina  rates
 range from 60% to 300%.  As of December 31, 2001, the Company's average pawn
 per pawn ticket was  approximately $89.  Service  charge revenues for  pawns
 during the fiscal years ended December 31, 2001, 2000 and 1999 accounted for
 approximately 37%,  44%  and,  60%, respectively,  of  the  Company's  total
 service charge revenues  after considering the  application of  a change  in
 accounting.

      At the time a pawn transaction is entered into, an agreement,  commonly
 referred to as a pawn ticket, is delivered to the borrower that sets  forth,
 among other items, the  name and address of  the pawnshop, borrower's  name,
 borrower's identification  number from  his/her  driver's license  or  other
 identification, date, identification and  description of the pledged  goods,
 including applicable serial numbers,  amount financed, pawn service  charge,
 maturity date, total amount that must be paid to redeem the pledged goods on
 the maturity date, and the annual percentage rate.

      The amount the Company  is willing to finance  typically is based on  a
 percentage of the  estimated sale  value of the  collateral.   There are  no
 minimum or maximum pawn to fair market value restrictions in connection with
 the Company's lending activities.  The basis for the Company's determination
 of the  sale  value includes  such  sources  as catalogs,  blue  books,  and
 newspapers.  The Company also utilizes its computer network to recall recent
 selling prices of  similar merchandise in  its own stores.   These  sources,
 together  with  the  employees'  experience  in  selling  similar  items  of
 merchandise  in  particular  stores,  influence  the  determination  of  the
 estimated sale value of such items.  The Company does not utilize a standard
 or mandated percentage of estimated sale value in determining the amount  to
 be financed.  Rather, the employee  has the authority to set the  percentage
 for a particular item and to determine the ratio of pawn amount to estimated
 sale value  with the  expectation that,  if  the item  is forfeited  to  the
 pawnshop, its subsequent sale should yield a gross profit margin  consistent
 with the Company's  historical experience.   It is the  Company's policy  to
 value merchandise on a conservative basis to avoid the risks associated with
 over-valuation.  The pledged property is held through the term of the  pawn,
 which is 30 days in Texas, South Carolina, Missouri, Virginia, Oklahoma  and
 Maryland, with an automatic extension period  of 15 to 60 days depending  on
 state laws, unless  the pawn  is earlier paid  or renewed.   In  Washington,
 D.C., pledged property is held for 30 days.  In the event the borrower  does
 not pay  or  renew a  pawn  within 90  days  in Texas,  South  Carolina  and
 Missouri, 60 days in Oklahoma, 45 days in Maryland and Virginia, and 30 days
 in Washington, D.C., the unredeemed collateral  is forfeited to the  Company
 and becomes inventory available  for general liquidation or  sale in one  of
 the Company's stores.   The Company does not  record pawn losses or  charge-
 offs because if the  pawn is not paid,  the principal amount pawned  becomes
 the  carrying  cost  of  the  forfeited  collateral  ("inventory")  that  is
 recovered by sale.

      The recovery of the principal and realization of gross profit on  sales
 of inventory  is  dependent  on the  Company's  initial  assessment  of  the
 property's estimated sale value.  Improper  assessment of the sale value  of
 the collateral in the lending function  can result in reduced  marketability
 of the  property and  sale of  the  property for  an  amount less  than  the
 principal amount pawned.   For  the fiscal  years ended  December 31,  2001,
 2000, and 1999, the Company's annualized  yield on average pawn balance  was
 141%, 127%, and 119%, respectively, after  considering the application of  a
 change in accounting.

 Short-term Advance Activities

      The Company's  check cashing/short-term  advance stores  make  secured,
 short-term advances in which the customer writes the store a personal  check
 in exchange  for  cash, net  of  a transaction  fee.   Fees  for  short-term
 advances may be regulated by state law and  are generally 15% to 18% of  the
 amount advanced per transaction.  The term of these advances is thirty  days
 or less.  Service charge revenues for short-term advances during the  fiscal
 years ended December 31,  2001, 2000, and  1999 accounted for  approximately
 63%, 56%,  and 40%,  respectively, of  the  Company's total  service  charge
 revenues after considering the application of a change in accounting.

      To qualify  for a  short-term advance,  customers generally  must  have
 proof of steady income, a checking account with a minimum of returned  items
 within a specified  period, and valid  identification.   Upon completing  an
 application and subsequent approval,  the customer writes  a check on  their
 personal checking account  for the amount  of the  advance, plus  applicable
 fees.  At maturity, the customer may either return to the store and pay  off
 the advance with cash, in which case the check is returned to the  customer,
 or the store  can deposit the  check into its  checking account.   The  bank
 returns a significant amount of short-term  advance checks deposited by  the
 Company; however, the Company through various means subsequently collects  a
 large percentage of  these bad debts.   The profitability  of the  Company's
 check cashing stores is dependent upon adequate collection of these returned
 items.

 Retail Activities

      The Company acquires merchandise inventory primarily through  forfeited
 pawns and  purchases  of used  goods  from the  general  public.   Sales  of
 inventory during the years ended December 31, 2001, 2000, and 1999 accounted
 for approximately 49%, 51%,  and 56%, respectively,  of the Company's  total
 revenues for these periods, after considering the application of a change in
 accounting.   For the  years ended  December 31,  2001, 2000,  and 1999  the
 Company realized gross profit margins on merchandise sales of 36%, 35%,  and
 30%, respectively.

      By operating multiple stores, the Company is able to transfer inventory
 between stores to best  meet consumer demand.   The Company has  established
 the necessary  internal financial  controls  to implement  such  inter-store
 transfers.

      Merchandise acquired by the Company through defaulted pawns is  carried
 in inventory at the  amount of the related  pawn.  Management believes  that
 this  practice  lessens   the  likelihood  that   the  Company  will   incur
 significant, unexpected inventory devaluations.

      The Company does not provide financing to purchasers of its merchandise
 nor does it  give the prospective  buyer any warranties  on the  merchandise
 purchased.   Nevertheless,  the  Company  may,  at  its  discretion,  refund
 purchases if merchandise is returned because  it was damaged or not in  good
 working order when purchased.  The Company permits its customers to purchase
 inventory on a "layaway" plan.  Should the customer fail to make a  required
 payment, the  item  is  returned to  inventory  and  previous  payments  are
 forfeited to the Company.

 Pawnshop Operations

      The typical Company  store is  a free-standing  building or  part of  a
 small  retail  strip  shopping  center  with  adequate,  well-lit   parking.
 Management has established a standard  store design intended to  distinguish
 the Company's stores from the competition.   The design consists of a  well-
 illuminated exterior with  a distinctive awning  and a layout  similar to  a
 contemporary convenience store or video rental store.  The Company's  stores
 are typically open six to seven days a  week from 9:00 a.m. to between  6:00
 p.m. and 9:00 p.m.

      The Company's  computer system  permits a  store  manager or  clerk  to
 recall rapidly the cost of an item  in inventory, the date it was  purchased
 as well as the prior transaction history of a particular customer.  It  also
 facilitates the  timely valuation  of goods  by showing  values assigned  to
 similar goods in the past.  The  Company has networked its stores to  permit
 the  Company's  headquarters  to  more  efficiently  monitor  each   store's
 operations, including sales,  interest income, pawns  written and  redeemed,
 and changes in inventory.

      The Company attempts to attract retail shoppers seeking bargain  prices
 through the  use  of  seasonal promotions,  special  discounts  for  regular
 customers, prominent display of impulse purchase  items such as jewelry  and
 tools, tent sales and  sidewalk sales, and a  layaway purchasing plan.   The
 Company  attempts  to  attract  and  retain  pawn  customers  by  lending  a
 competitively  large  percentage  of  the  estimated  sale  value  of  items
 presented  for  pledge  and  by  providing  quick  financing,  renewal   and
 redemption service in an appealing atmosphere.

      As of March 26, 2002, the Company operated pawn stores in the following
 markets:

                                                               Number of
                                                               Locations
                                                               ---------
           Dallas/Fort Worth, Texas.........................      27
           Corpus Christi, Texas............................       8
           Brownsville, Harlingen, McAllen, Texas...........      21
           El Paso..........................................       6
           St. Louis, Missouri..............................       3
           Oklahoma City, Oklahoma .........................       5
           Spartanburg, Columbia, Greenville, South Carolina       9
           Mexico...........................................       7
           Baltimore, Maryland..............................       5
           Washington, D.C. and surrounding Maryland suburbs      21
           Virginia.........................................       2
                                                                 ---
                Total.......................................     114
                                                                 ===


      Each pawnshop employs  a manager, one  or two  assistant managers,  and
 between one and eight sales personnel, depending upon the size, sales volume
 and location of the store.  The store manager is responsible for supervising
 personnel and assuring that the store is managed in accordance with  Company
 guidelines and established policies and procedures.  Each manager reports to
 an area  supervisor who  typically oversees  four to  seven store  managers.
 Each supervisor reports to one of three regional vice-presidents.

      The Company believes that profitability of its pawnshops is  dependent,
 among other factors, upon its employees' ability to make pawns that  achieve
 optimum redemption rates, to be effective sales people and to provide prompt
 and courteous service.  Therefore, the Company trains its employees  through
 direct  instruction  and  on-the-job pawn  and  sales  experience.  The  new
 employee is introduced to the business  through an orientation and  training
 program that includes  on-the-job training in  lending practices,  layaways,
 merchandise  valuation  and  general  administration  of  store  operations.
 Certain experienced employees  receive training and  an introduction to  the
 fundamentals of management to acquire the  skills necessary to advance  into
 management positions within the organization.  Management training typically
 involves exposure to income maximization, recruitment, inventory control and
 cost efficiency.   The  Company maintains  a performance-based  compensation
 plan for all store  employees, based, among other  factors, on sales,  gross
 profits and special promotional contests.

 Check Cashing/Short-term Advance Operations

      The Company's check cashing/short-term advance locations are  typically
 part of  a  small  retail strip  shopping  center  with  adequate,  well-lit
 parking.  Management  has established a  standard store  design intended  to
 distinguish the Company's stores from the competition.  The design  consists
 of a  well-illuminated  exterior  with  a  lighted  sign,  and  distinctive,
 conservative window signage.  The interiors usually feature an ample  lobby,
 separated from employee work areas by floor-to-ceiling teller windows.   The
 Company's stores are typically open six to seven days a week from 9:00  a.m.
 to between 6:00 p.m. and 9:00 p.m.

      Computer operating systems  in the  Company's check  cashing/short-term
 advance stores allow  a store manager  or clerk to  recall rapidly  customer
 check cashing  histories,  short-term  advance histories,  and  other  vital
 information.  The  Company attempts to  attract customers primarily  through
 television advertisements and yellow page advertisements.

      As of March  26, 2002,  the Company  operated check  cashing/short-term
 advance stores in the following markets:

                                                          Number of
                                                          Locations
                                                          ---------
           Chicago, Illinois......................           10
           Houston, Texas.........................            2
           Dallas/ Fort Worth, Texas..............           12
           Washington, D.C........................            6
           Oregon.................................            2
           Northern California....................           15
           Washington.............................            3
                                                            ---
                Total.............................           50
                                                            ===

      Each check cashing store employs a  manager, an assistant manager,  and
 between three and eight tellers, depending  upon the size, sales volume  and
 location of the  store.  The  store manager is  responsible for  supervising
 personnel and assuring that the store is managed in accordance with  Company
 guidelines and  established policies  and procedures.   Each  store  manager
 reports to  an  area  manager  who typically  oversees  two  to  five  store
 managers.  Each supervisor reports to one of two regional vice-presidents.

 Competition

      The Company encounters significant  competition in connection with  all
 aspects of  its  business  operations.   These  competitive  conditions  may
 adversely affect  the  Company's  revenues,  profitability  and  ability  to
 expand.

      The Company  competes primarily  with other  pawn store  operators  and
 check cashing/short-term advance  operators.   Both the  pawnshop and  check
 cashing/short-term advance industries are characterized by a large number of
 independent  owner-operators,  some  of   whom  own  and  operate   multiple
 locations.  The Company believes that the primary elements of competition in
 these businesses are store location, the ability to lend competitive amounts
 on pawns and short-term advances, customer service, and management of  store
 employees.  In addition, the  Company competes with financial  institutions,
 such as consumer finance companies, which generally lend on an unsecured  as
 well as on a secured basis.   Other lenders may and  do lend money on  terms
 more favorable than those offered by the Company.  Many of these competitors
 have greater financial resources than the Company.

      In its retail  operations, the Company's  competitors include  numerous
 retail and wholesale stores, including jewelry stores, gun stores,  discount
 retail stores, consumer electronics stores and other pawnshops.  Competitive
 factors in the Company's  retail operations include  the ability to  provide
 the customer with a variety of merchandise items at attractive prices.  Many
 retailers have significantly greater financial resources than the Company.

 Regulation

 General

      The Company is subject to extensive regulation in several jurisdictions
 in which it  operates, including jurisdictions  that regulate pawn  lending,
 short-term advance fees and check cashing fees. The Company is also  subject
 to federal and state regulation relating  to the reporting and recording  of
 certain  currency transactions.  There can be  no assurance that  additional
 state or federal statutes or regulations will not be enacted at some  future
 date which could inhibit the ability of the Company to expand, significantly
 decrease the  service  charges  for  lending  money,  or  prohibit  or  more
 stringently regulate the sale of certain  goods, any of which could cause  a
 significant adverse effect on the Company's future prospects.

 State Regulations

      The Company operates  in seven states  that have  licensing and/or  fee
 regulations on pawns, including  Texas, Oklahoma, Maryland, Virginia,  South
 Carolina, Washington, D.C., and Missouri.   The Company is licensed in  each
 of the states in which a license is currently required for it to operate  as
 a pawnbroker.  The Company's fee  structures are at or below the  applicable
 rate ceilings adopted by each of these states.  In addition, the Company  is
 in compliance with the net asset requirements in states where it is required
 to maintain certain levels of liquid assets for each pawn store it  operates
 in the applicable state.

      The Company also operates in states,  which have licensing, and/or  fee
 regulations on check cashing and short-term advances, including  California,
 Washington, Missouri, South Carolina, Oregon, Illinois and Washington,  D.C.
 The Company  is  licensed in  each  of the  states  in which  a  license  is
 currently required for  it to operate  as a check  casher and/or  short-term
 lender.   In addition,  in some  jurisdictions, check  cashing companies  or
 money transmission agents are  required to meet  minimum bonding or  capital
 requirements and are subject to record-keeping requirements.

      In Texas, which does  not have favorable  short-term lending laws,  the
 Company has entered into  an agreement with County  Bank of Rehoboth  Beach,
 Delaware,  a  federally  insured  state  of  Delaware  chartered   financial
 institution, to act as a loan servicer within the state of Texas for  County
 Bank.   As  compensation  for  the Company  acting  as  County  Bank's  loan
 servicer, the Company is entitled to  purchase a participation in the  loans
 made by County  Bank.   The Company's ability  to continue  to maintain  its
 current relationship with County Bank and to continue to service County Bank
 loans within  the state  of Texas  is subject  to County  Bank's ability  to
 continue to export its loan product to the state of Texas.  There can be  no
 assurance that  County Bank  will be  able to  continue to  export its  loan
 product to the  state of  Texas and bank's  failure to  do so  could have  a
 materially  adverse  impact  on  the  Company's  operations  and   financial
 condition.

 Federal Regulations

      Under the Bank Secrecy  Act regulations of the  U.S. Department of  the
 Treasury (the "Treasury Department"), transactions involving currency in  an
 amount greater than $10,000 or the purchase of monetary instruments for cash
 in amounts  from $3,000  to $10,000  must be  recorded.   In general,  every
 financial institution,  including the  Company,  must report  each  deposit,
 withdrawal, exchange of currency or other  payment or transfer, whether  by,
 through or to the financial institution, that involves currency in an amount
 greater than $10,000.  In addition, multiple  currency transactions must  be
 treated as single  transactions if the  financial institution has  knowledge
 that the transactions  are by, or  on behalf of,  any person  and result  in
 either cash  in  or cash  out  totaling more  than  $10,000 during  any  one
 business day.

      The Money Laundering  Suppression Act of  1994 added a  section to  the
 Bank Secrecy Act requiring the registration of "money services  businesses,"
 like the Company,  that engage  in check-cashing,  currency exchange,  money
 transmission, or  the issuance  or redemption  of money  orders,  traveler's
 checks, and similar  instruments.   The purpose  of the  registration is  to
 enable governmental  authorities to  better enforce  laws prohibiting  money
 laundering and  other illegal  activities.   The regulations  require  money
 services businesses to register  with the Treasury  Department, by filing  a
 form to  be adopted  by  the Financial  Crimes  Enforcement Network  of  the
 Treasury Department ("FinCEN"), by December 31,  2001 and to re-register  at
 least every two years thereafter.  The regulations also require that a money
 services business  maintain a  list of  names and  addresses of,  and  other
 information about, its  agents and that  the list be  made available to  any
 requesting law enforcement agency  (through FinCEN).   That agent list  must
 first be  maintained  by  January 1,  2002  and  must be  updated  at  least
 annually.

      In March 2000, FinCEN adopted additional regulations, implementing  the
 Bank Secrecy Act that  is also addressed to  money services businesses.   In
 pertinent part,  those regulations  will require  money services  businesses
 like the Company to report suspicious transactions involving at least $2,000
 to FinCEN.  The regulations generally  describe three classes of  reportable
 suspicious transactions - one  or more related  transactions that the  money
 services business  knows, suspects,  or has  reason to  suspect (1)  involve
 funds derived from illegal activity or are intended to hide or disguise such
 funds, (2) are designed to evade  the requirements of the Bank Secrecy  Act,
 or (3) appear to serve no business or lawful purpose.  FinCEN has  indicated
 that it  would  provide guidance  in  the  form of  examples  of  reportable
 transactions, but (so far as the Company is aware) no such examples have yet
 been published.  This  reporting requirement will  apply only to  suspicious
 transactions that occur after December 31, 2001.

      The Gramm-Leach-Bliley  Act and  its implementing  federal  regulations
 require  the  Company  to  generally  protect  the  confidentiality  of  its
 customers' nonpublic personal information and  to disclose to its  customers
 its privacy  policy and  practices, including  those regarding  sharing  the
 customers'  nonpublic  personal  information  with  third  parties.     Such
 disclosure must be made to customers  at the time the customer  relationship
 is established, at least  annually thereafter, and if  there is a change  in
 the Company's privacy policy.

 Other

      With respect to  firearms and ammunition  sales, each  pawn store  must
 comply with the regulations promulgated by  the Department of the  Treasury-
 Bureau of  Alcohol, Tobacco  and Firearms,  which requires  each pawn  store
 dealing in firearms to maintain a  permanent written record of all  firearms
 received or disposed of and a similar record for all ammunition sales.   The
 Company does not currently sell handguns to the public.

      Under some municipal  ordinances, pawn stores  must provide the  police
 department having jurisdiction  copies of all  daily transactions  involving
 pawns and over-the-counter purchases.   These daily transaction reports  are
 designed to provide  the local  police with  a detailed  description of  the
 goods involved including serial numbers, if any, and the name and address of
 the owner obtained from  a valid identification card.   If these  ordinances
 are applicable, a copy  of the transaction ticket  is provided to local  law
 enforcement agencies  for processing  by  the National  Crime  Investigative
 Computer to determine  rightful ownership.   Goods held to  secure pawns  or
 goods purchased which are  determined to belong to  an owner other than  the
 borrower or seller are subject to recovery by the rightful owners.

      In connection with pawnshops operated by  the Company, there is a  risk
 that acquired  merchandise may  be subject  to  claims of  rightful  owners.
 Historically, the Company  has not  found these  claims to  have a  material
 adverse effect upon results  of operations.  The  Company does not  maintain
 insurance to  cover  the costs  of  returning merchandise  to  its  rightful
 owners.

      The Company's pawnshop  and short-term advance  operations are  subject
 to, and must  comply with, extensive  regulation, supervision and  licensing
 from various federal, state and local statutes, ordinances and  regulations.
 These   statutes  prescribed,   among  other  things,  service  charges  and
 interest rates that  may  be charged.  These regulatory agencies  have broad
 discretionary authority.  There can be  no assurance that additional  local,
 state or federal legislation will not  be enacted or that existing laws  and
 regulations will not be  amended which could have  an adverse impact on  the
 Company's operations and financial condition.

 Proposed Regulations

      Governmental action  to prohibit  or restrict  short-term advances  has
 been advocated over the  past few years by  consumer-advocacy groups and  by
 media reports and stories.  The consumer groups and media stories  typically
 focus on the cost to a consumer  for that type of short-term advance,  which
 is higher than the  interest typically charged by  credit-card issuers to  a
 more  creditworthy  consumer.   This  difference  in  credit  cost  is  more
 significant if a consumer  does not promptly  repay the short-term  advance,
 but renews  (or  "rolls over")  that  short-term  advance for  one  or  more
 additional short-term (e.g.,  two-week) periods.   The  consumer groups  and
 media  stories  typically  characterize  short-term  advance  activities  as
 abusive toward consumers.  During the  last few years, legislation has  been
 introduced in the United States Congress and in certain state  legislatures,
 and  regulatory  authorities  have   proposed  or  publicly  addressed   the
 possibility of proposing regulations, that would prohibit or restrict short-
 term advances.  So far as the Company is aware, no such federal  legislation
 or federal  regulatory proposal  has made  any significant  progress in  the
 legislative or regulatory  process.  But  legislation and regulatory  action
 that affects consumer lending has recently become effective in a few  states
 and may be taken  in other states.   The Company  intends to continue,  with
 others  in  the  short-term  advance  industry,  to  oppose  legislative  or
 regulatory action that would prohibit or restrict short-term advances.   But
 if legislative  or regulatory  action with  that effect  were taken  on  the
 federal level  or in  states such  as  Texas, in  which  the Company  has  a
 significant number  of stores,  that action  could have  a material  adverse
 effect on the Company's short-term advance-related activities and  revenues.
 There  can  be  no  assurance  that  additional  local,  state,  or  federal
 legislation will not be enacted or  that existing laws and regulations  will
 not be  amended,  which would  materially,  adversely impact  the  Company's
 operations and financial condition.

 Employees

      The Company had  approximately 1,026 employees  as of  March 17,  2002,
 including approximately 84 persons employed in executive, administrative and
 accounting  functions.   None of  the  Company's employees  are  covered  by
 collective  bargaining  agreements.   The  Company  considers  its  employee
 relations to be satisfactory.

 Insurance

      The Company  maintains  fire,  casualty,  theft  and  public  liability
 insurance for each of its pawn  stores and check cashing/short-term  advance
 locations in  amounts  management  believes  to  be  adequate.  The  Company
 maintains workers' compensation insurance in Maryland, Missouri, California,
 Virginia, Washington, Oregon, South Carolina, Illinois, Washington, D.C. and
 Oklahoma, as well as excess  employer's indemnification insurance in  Texas.
 The Company is a non-subscriber under the Texas Workers' Compensation Act.


 Item 2.  Properties
 -------------------

      The Company currently owns the real  estate and buildings for three  of
 its pawn  stores and  leases 169  pawn stores  and check  cashing/short-term
 advance locations.  Leased facilities are generally leased for a term of two
 to eight years with one  or more options to  renew.  The Company's  existing
 leases expire on dates  ranging between 2001 and  2016.  All current  leases
 provide for specified  periodic rental payments  ranging from  approximately
 $725 to $9,000 per month.  Most  leases require the Company to maintain  the
 property and pay  the cost  of insurance and  property taxes.   The  Company
 believes that termination of any particular lease would not have a  material
 adverse effect  on the  Company's  operations.   The Company's  strategy  is
 generally to lease, rather than purchase,  space for its pawnshop and  check
 cashing locations unless the  Company finds what it  believes is a  superior
 location at an attractive price.   The Company believes that the  facilities
 currently owned and leased by it as pawn stores and check cashing/short-term
 advance locations are suitable for such purpose.  The Company considers  its
 equipment, furniture and fixtures to be in good condition.

      The Company  currently  leases  approximately  14,000  square  feet  in
 Arlington, Texas for its executive offices.  The lease, which expires  March
 31, 2004, currently  provides for monthly  rental payments of  approximately
 $24,000.


 Item 3.  Legal Proceedings
 --------------------------

      In May 2000, three  plaintiffs filed a  complaint against Famous  Pawn,
 Inc., a  wholly  owned subsidiary  of  the  Company, in  the  United  States
 District Court  for  the District  of  Maryland (Northern  Division).    The
 allegations consists of five counts: (1)  violation of the federal Truth  in
 Lending Act; (2) violation of the  federal Racketeer Influenced and  Corrupt
 Organizations Act; (3) violation of the Maryland Interest and Usury Statute;
 (4) violation of the  Maryland Consumer Loan Law;  and (5) violation of  the
 Maryland  Consumer  Protection  Act.   The  plaintiffs  have  requested  the
 following relief: actual  and punitive damages,  attorneys' fees,  expenses,
 costs, injunctive relief and treble damages,  if available.  In April  2001,
 the court certified a TILA class in  this matter.  Later that month,  Famous
 Pawn, Inc. filed a motion to modify the class definition to exclude from the
 class those customers who  signed  arbitration agreements.  In August  2001,
 the court denied  that motion.   Famous Pawn, Inc.  next filed  a motion  to
 reconsider the motion to modify the  class definition, and filed a  separate
 motion to stay the  proceedings and compel arbitration.   These motions  are
 currently pending.  Since discovery has not yet commenced, nor the scope  of
 the case been  determined, management  can provide  no assurance  as to  the
 outcome of such litigation.

      Additionally, the Company is from time  to time a defendant (actual  or
 threatened) in certain other lawsuits encountered in the ordinary course  of
 its business, the resolution of which, in the opinion of management,  should
 not have  a material  adverse effect  on the  Company's financial  position,
 results of operations, or cash flows.


 Item 4.  Submission of Matters to a Vote of Security Holders
 ------------------------------------------------------------

      No matter was  submitted to a  vote of the  Company's security  holders
 during the fourth quarter of fiscal 2001.



                                   PART II
                                   -------

 Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
         ---------------------------------------------------------------------

      The Company's  Common Stock  is quoted  on the  Nasdaq National  Market
 under the symbol "FCFS".  The following table sets forth the quarterly  high
 and low closing sales prices per share for the Common Stock, as reported  by
 the Nasdaq National Market.

                                                          Common Stock
                                                           Price Range
                                                      ---------------------
                                                       High           Low
                                                      -------       -------
      Year Ended December 31, 2000
           Quarter Ended March 31, 2000..........    $   8.38      $   6.13
           Quarter Ended June 30, 2000...........        6.38          3.00
           Quarter Ended September 30, 2000......        3.20          2.00
           Quarter Ended December 31, 2000.......        2.88          1.66

      Year Ended December 31, 2001
           Quarter Ended March 31, 2001..........    $   5.06      $   2.19
           Quarter Ended June 30, 2001...........        7.46          4.94
           Quarter Ended September 30, 2001......        9.05          6.43
           Quarter Ended December 31, 2001.......        8.22          6.16

      On March 26,  2002, the  closing sales price  for the  Common Stock  as
 reported by the Nasdaq National  Market was $8.15 per  share.  On March  26,
 2002, there  were approximately  74 stockholders  of  record of  the  Common
 Stock.

      No cash dividends have  been paid by the  Company on its Common  Stock,
 and the  Company does  not currently  intend to  pay cash  dividends on  its
 Common Stock.  The current policy of the Company's Board of Directors is  to
 retain earnings, if any, to provide funds for operation and expansion of the
 Company's business.  Such policy will be reviewed by the Board of  Directors
 of the  Company from  time to  time in  light of,  among other  things,  the
 Company's earnings and  financial position  and limitations  imposed by  its
 revolving line  of credit  with its  syndicate  of commercial  lenders  (the
 "Credit Facility").    Pursuant to  the  terms  of its  agreement  with  its
 lenders, the Company is prohibited from  paying any dividends until  payment
 in full of its obligations under the Credit Facility.



 Item 6.  Selected Financial Data

      The information below should be  read in conjunction with  Management's
 Discussion and Analysis  of Financial  Condition and  Results of  Operations
 included in Item 7 and the  Company's Consolidated Financial Statements  and
 related notes thereto required by Item 8.


                                                                   Five Months
                                                                      Ended
                                      Year Ended December 31,      December 31,  Year Ended July 31,
                                   ------------------------------  ------------ --------------------
                                     2001       2000       1999        1998       1998       1997
                                   --------   --------   --------    --------   --------   --------
                                 (in thousands, except per share amounts and certain operating data)
                                                                        
  Income Statement Data:
  Revenues:
    Merchandise sales             $  53,893  $  53,177  $  50,071   $  19,154  $  37,282  $  32,628
    Service charges                  53,028     46,597     40,630      12,434     20,332     16,517
    Check cashing fees                2,264      2,216      2,184         754        255          -
    Other                             1,242      1,737      1,158         282        346        286
                                   --------   --------   --------    --------   --------   --------
                                    110,427    103,727     94,043      32,624     58,215     49,431
                                   --------   --------   --------    --------   --------   --------
  Cost of goods sold and expenses:
    Cost of goods sold               34,619     34,366     35,157      12,750     25,101     22,502
    Operating expenses               48,661     44,836     37,199      11,567     19,317     15,774
    Interest expense                  1,395      2,859      2,602       1,122      2,031      2,340
    Depreciation                      2,283      2,612      1,527         472        922        717
    Amortization                      1,530      1,694      1,475         553        779        636
    Administrative expenses           9,420      8,217      6,739       2,195      4,124      3,831
                                   --------   --------   --------    --------   --------   --------
                                     97,908     94,584     84,699      28,659     52,274     45,800
                                   --------   --------   --------    --------   --------   --------
  Income before income taxes         12,519      9,143      9,344       3,965      5,941      3,631
  Provision for income taxes          4,507      3,476      3,097       1,526      2,219      1,337
                                   --------   --------   --------    --------   --------   --------
  Income from continuing operations   8,012      5,667      6,247       2,439      3,722      2,294
  Discontinued operations
    Income (loss) from discontinued
    operations, net of taxes             33       (765)       231         130         76          -
    Loss on sale of subsidiary,
      net of tax                       (175)         -          -           -          -          -
                                   --------   --------   --------    --------   --------   --------
  Income (loss) from discontinued
    operations                         (142)      (765)       231         130         76          -
                                   --------   --------   --------    --------   --------   --------
  Cumulative effect of change
    in accounting principle               -     (2,287)         -           -          -          -
                                   --------   --------   --------    --------   --------   --------
  Net income                      $   7,870   $  2,615  $   6,478   $   2,569  $   3,798  $   2,294
                                   ========   ========   ========    ========   ========   ========

 Net income per share:
  Basic
    Income from continuing
      operations                  $    0.92   $   0.64  $    0.72   $    0.31  $    0.73  $    0.60
    Income (loss) from
      discontinued operations         (0.02)     (0.08)      0.03        0.01       0.01          -
    Cumulative effect of change
      in accounting principle             -      (0.26)         -           -          -          -
                                   --------   --------   --------    --------   --------   --------
    Net income                    $    0.90  $    0.30  $    0.75   $    0.32  $    0.74  $    0.60
                                   ========   ========   ========    ========   ========   ========
  Diluted
    Income from continuing
      operations                  $    0.87  $    0.63  $    0.67   $    0.28  $    0.58  $    0.46
    Income (loss) from
      discontinued operations         (0.02)     (0.08)      0.03        0.01       0.01          -
    Cumulative effect of change
      in accounting principle             -      (0.26)         -           -          -          -
                                   --------   --------   --------    --------   --------   --------
    Net income                    $    0.85  $    0.29  $    0.70   $    0.29  $    0.59  $    0.46
                                   ========   ========   ========    ========   ========   ========

 Unaudited pro forma amounts
   assuming retroactive
   application of change in
   accounting principle:
    Revenues from continuing
      operations                  $ 110,427  $ 103,727  $  89,320    $ 30,897   $ 54,832  $  46,702
    Net income from continuing
      operations                      8,012      5,667      5,619       2,137      3,142      2,144
    Basic earnings per share
     from continuing operations        0.92       0.64       0.65        0.27       0.62       0.56
    Diluted earning per share
      from continuing operations       0.87       0.63       0.60        0.25       0.50       0.44

 Operating Data:
  Locations in operation:
    Beginning of the period             148        147        133          97         57         50
    Acquisitions                          7          2          4          34         38          7
    Opened                               11          2         10           2          2          -
    Consolidated/closed                  (8)        (3)         -           -          -          -
                                   --------   --------   --------    --------   --------   --------
    End of the period                   158        148        147         133         97         57
                                   ========   ========   ========    ========   ========   ========

  Receivables                     $  23,556   $ 22,043  $  23,568   $  20,392  $  17,054  $  12,877
  Average receivables balance
    per store                     $     149   $    149  $     160   $     153  $     176  $     226
  Average inventory per
    pawn store                    $     113   $    148  $     183   $     164  $     154  $     176
  Annualized inventory turnover         2.3x       1.8x       1.8x        2.0x       2.2x       2.4x
  Gross profit percentage on
    merchandise sales                  35.8%      35.4%      29.8%       33.4%      32.7%      31.0%

 Balance Sheet Data:
  Working capital                 $   8,540   $ 41,835  $  54,333   $  39,421  $  31,987  $  23,616
  Total assets                      122,806    119,118    128,847     113,325     91,128     56,677
  Long-term liabilities               5,277     44,833     55,560      42,699     34,533     26,892
  Total liabilities                  48,703     53,464     62,324      52,617     39,611     30,398
  Stockholders' equity               74,103     65,654     66,523      60,708     51,517     26,279

Item 7. Management's Discussion and Analysis of Financial Condition and --------------------------------------------------------------- Results of Operations --------------------- General The Company's pawn store revenues are derived primarily from service charges on pawns, service charges from short term, secured advances ("short- term advances"), and the sale of unredeemed goods, or "merchandise sales." Pawn advances are made for a 30-day term with an automatic extension of 60 days in South Carolina and Missouri, 30 days in Texas and Oklahoma, and 15 days in Maryland and Virginia. Pawn advances made in Washington, D.C. are made for a 120-day term with no automatic extension. All pawn advances are collateralized by tangible personal property placed in the custody of the Company. The annualized service charge rates on pawns are set by state laws and range between 12% and 240% in Texas and 36% and 240% in Oklahoma, depending on the size of the pawn. Service charge rates are 144% to 240% on an annualized basis in Maryland, with a $6 monthly minimum charge. In Washington, D.C., pawns up to $40 bear a flat $2 charge per month, while pawns over $40 bear a 48% to 60% annualized rate. Missouri pawns bear service and storage charges totaling 240% per year, and in Virginia rates range from 120% to 180% annually. Annualized rates in South Carolina range from 60% to 300%. The Company accrues pawn service charge revenue on a constant yield basis over the life of the pawn for all pawns that the Company deems collection to be probable based on historical pawn redemption statistics. If a pawn is not repaid prior to the expiration of the automatic extension period, if applicable, the property is forfeited to the Company and transferred to inventory at a value equal to the pawn principal. Service charges from short-term advances, which range from 15% to 18% of the amount advanced, are recognized on a constant-yield basis over the life of the advance, which is generally 30 days or less. Effective January 1, 2000, the Company changed its method of income recognition on pawns. The Company now accrues pawn service charge revenue on a constant yield basis over the life of the pawn for all pawns that the Company deems collection to be probable based on historical pawn redemption statistics. For pawns not repaid, the cost of the forfeited collateral (inventory) is the cash amount originally pawned. Prior to 2000, the Company recognized service charge income on a constant yield basis over the initial pawn period for all pawns written. Service charges applicable to the extension periods or additional pawn periods were not recognized as income until the pawn was repaid or renewed. If the pawn was not repaid, the carrying value of the forfeited collateral (inventory) was stated at the lower of cost (the principal amount pawned plus accrued service charges) or market. The Company believes the accounting change provides a timelier matching of revenues and expenses with which to measure the results of operations. The cumulative effect of the accounting method change on all periods since inception through December 31, 1999 is $2,287,000 (after an income tax benefit of $1,373,000) and is included as a one-time reduction of net income for the year ended December 31, 2000. The Company's check cashing and short-term advance revenues are derived primarily from check cashing fees, fees on short-term advances, and fees from the sale of money orders and wire transfers. Short-term advances carry a 15% to 18% service charge. The Company recognizes service charge income on short-term advances on a constant-yield basis over the life of the advance, which is generally 30 days or less. The Company charges operating expense for the estimated net potential losses on returned checks in the same period in which revenues from the short-term advances are recognized. Although the Company has had significant increases in revenues due primarily to new store openings, and secondarily to acquisitions, the Company has also incurred increases in operating expenses attributable to the additional stores and increases in administrative expenses attributable to building a management team and the support personnel required by the Company's growth. Operating expenses consist of all items directly related to the operation of the Company's stores, including salaries and related payroll costs, rent, utilities, equipment depreciation, advertising, property taxes, licenses, supplies, security and net returned checks (net bad debts) for both check cashing and short term advances. Administrative expenses consist of items relating to the operation of the corporate office, including the salaries of corporate officers, area supervisors and other management, accounting and administrative costs, liability and casualty insurance, outside legal and accounting fees and stockholder-related expenses. Presented below are selected consolidated data for the Company. Due to the increased short-term advance operations in its pawn stores and the sale of its software operations, the Company has restructured its operations into one primary operating segment whose operating results are regularly reviewed by the chief operating decision maker to assess performance. The following table, as well as the discussion, should be read in conjunction with Selected Financial Data included in Item 6 and the Consolidated Financial Statements and notes thereto of the Company required by Item 8. Critical Accounting Policies The preparation of financial statements in conformity with accounting principals generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and related revenues and expenses and disclosure of gain and loss contingencies at the date of the financial statements. Such estimates and assumptions are subject to a number of risks and uncertainties, which may cause actual results to differ materially from the Company's estimates. The significant accounting policies which we believe are the most critical to aid in fully understanding and evaluating our reported financial results include the following: Principles of consolidation - The accompanying consolidated financial statements of the Company include the accounts of its wholly owned subsidiaries. All significant inter-company accounts and transactions have been eliminated. In August 1999, the Company entered into a joint venture to form Cash & Go, Ltd., a company that owns financial services kiosks inside convenience stores. The Company presently has a 50% ownership interest in the partnership, which is accounted for by the equity method of accounting as neither partner has control. The Company records its 50% share of the partnership's earnings or losses in its consolidated financial statements. The Company funds substantially all of the working capital requirements of the joint venture in the form o f loans to the joint venture. This loan bear interest at the prime rate plus 1%, and matures on August 31, 2002. Receivables and income recognition - Receivables on the accompanying balance sheet consist of pawn and short-term advances. Pawns are made on the pledge of tangible personal property. The Company accrues pawn service charge revenue on a constant yield basis over the life of the pawn for all pawns that the Company deems collection to be probable based on historical pawn redemption statistics. If the pawn is not repaid, the principal amount pawned becomes the carrying value of the forfeited collateral ("inventory"), which is recovered through sale. Short-term advances are made for thirty days or less. The Company recognizes the service charges associated with short-term advances on a constant yield basis over the term of the short-term advance. Returned checks - The Company charges operating expense for the estimated net potential losses on returned checks in the same period in which revenues from the short-term advances are recognized. Inventories - Inventories represent merchandise purchased directly from the public and merchandise acquired from forfeited pawns. Inventories purchased directly from customers are recorded at cost. Inventories from forfeited pawns are recorded at the amount of the pawn principal on the unredeemed goods. The cost of inventories is determined on the specific identification method. Inventories are stated at the lower of cost or market; accordingly, inventory valuation allowances are established when inventory carrying values are in excess of estimated selling prices, net of direct costs of disposal. Management has evaluated inventory and determined that a valuation allowance is not necessary. Long-lived assets - Long-lived assets (i.e., property, plant and equipment and intangible assets) are reviewed for impairment whenever events or changes in circumstances indicate that the net book value of the asset may not be recoverable. An impairment loss is recognized if the sum of the expected future cash flows (undiscounted and before interest) from the use of the asset is less than the net book value of the asset. Generally, the amount of the impairment loss is measured as the difference between the net book value of the assets and the estimated fair value of the related assets. During the fourth quarter of 2000 the Company recorded a one-time non-cash pretax charge in the amount of $765,000 to write-off fixed assets and goodwill relating to approximately nine stores. Management does not believe any assets have been additionally impaired at December 31,2001. Year Ended December 31, ------------------------ 2001 2000 1999 ---- ---- ---- Income statement items as a percent of total revenues: Revenues: Merchandise sales .......... 48.8% 51.3% 53.3% Service charges ............ 48.0 44.9 43.2 Check cashing fees ......... 2.1 2.1 2.3 Other ...................... 1.1 1.7 1.2 Expenses: Operating expenses ......... 44.1 43.2 39.5 Interest expense ........... 1.2 2.7 2.8 Depreciation ............... 2.0 2.5 1.6 Amortization ............... 1.4 1.6 1.6 Administrative expenses .... 8.5 7.9 7.2 Gross profit as a percent of merchandise sales 35.8 35.4 29.8 Results of Operations Twelve Months Ended December 31, 2001 Compared to Twelve Months Ended December 31, 2000 Total revenues increased 6% to $110,427,000 for the fiscal year ended December 31, 2001 ("Fiscal 2001") as compared to $103,727,000 for the fiscal year ended December 31, 2000 ("Fiscal 2000"). The change resulted from an increase in revenues of $2,402,000 generated by the 22 pawn and check cashing/short-term advance stores which were opened or acquired during Fiscal 2000 and Fiscal 2001, and an increase of $4,298,000 at the 136 stores which were in operation during all of Fiscal 2000 and Fiscal 2001. Of the $6,700,000 increase in total revenues, 11%, or $716,000, was attributable to increased merchandise sales, 96%, or $6,431,000 was attributable to a net increase in service charges on pawn and short-term advances, $48,000 was attributable to increased check cashing fees, and the remaining decrease of $495,000, or 7%, was attributable to a decrease in other income. Service charges from short-term advances increased from $26,012,000 in Fiscal 2000 to $33,314,000 in fiscal 2001, while service charges from pawns decreased from $20,585,000 in Fiscal 2000 to $19,714,000 in Fiscal 2001. Of the $6,431,000 net increase in service charges; an increase of $7,302,000 was attributable to short-term advances service charges, while $871,000 was attributable to a decrease in pawn service charges. As a percentage of total revenues, merchandise sales decreased from 51% to 49% during Fiscal 2001 as compared to Fiscal 2000, service charges increased from 45% to 48%, check cashing fees and other income decreased from 4% to 3% during Fiscal 2001 as compared to Fiscal 2000. The aggregate receivables balance increased 7% from $22,043,000 at December 31, 2000 to $23,556,000 at December 31, 2001. Of the $1,513,000 increase, an increase of $957,000 was attributable to growth at the 18 pawn and check cashing/short-term advance stores opened or acquired since December 31, 2000, and an increase of $556,000 was attributable to the 140 pawn stores and check cashing/short-term advance stores, which were in operation as of December 31, 2001 and 2000. The annualized yield on the average aggregate receivables balance was 233% during Fiscal 2001 compared to 204% during Fiscal 2000. Gross profit as a percentage of merchandise sales increased from 35.4% during Fiscal 2000 to 35.8% during Fiscal 2001. Sales of scrap gold had a negative effect on gross profit margins during Fiscal 2000 and Fiscal 2001. Factoring out the negative impact of scrap sales, margins would have been 38% and 41% during Fiscal 2000 and Fiscal 2001, respectively. Operating expenses increased 9% to $48,661,000 during Fiscal 2001 compared to $44,836,000 during Fiscal 2000, primarily as a result of the addition of 18 pawn stores and check cashing/short-term advance stores in Fiscal 2001, and increases in net bad debt expense in 2001 due to increases in the volume of short-term advances in the pawnshops. Of the $3,825,000 increase in operating expenses, an increase of $2,338,000 was attributable to increased net bad debt on short-term advances. The Company's net bad debt expense relating to short-term advances increased from $6,346,000 in Fiscal 2000 to $8,684,000 in Fiscal 2001. During the fourth quarter of 2001 the Company sold its check cashing software business unit. The revenues, expenses, and costs have been segregated in the accompanying operating results and reported as a "Loss From Discontinued Operations", which resulted in $0.02 per share charge in the fourth quarter of 2001. The Company made the strategic decision to exit the third party check cashing software business to utilize its staff and resources in its core lending business, which should further enhance future profitability. The software and staff continue to support and enhance other aspects of the Company's operations. Administrative expenses increased 15% to $9,420,000 during Fiscal 2001 compared to $8,217,000 during Fiscal 2000 due primarily to the addition of personnel to supervise store operations. Interest expense decreased to $1,395,000 in Fiscal 2001 compared to $2,859,000 in Fiscal 2000 as a result of lower average outstanding debt balances and lower average interest rates during Fiscal 2001. For Fiscal 2001 and 2000, the Company's effective federal income tax rates of 36% and 38%, respectively, differed from the statutory tax rate of 34% primarily as a result of state income taxes, utilization of tax net operating loss carry-forwards from acquisitions, and amortization of non- deductible intangible assets. Twelve Months Ended December 31, 2000 Compared to Twelve Months Ended December 31, 1999 Total revenues increased 16% to $103,727,000 for the fiscal year ended December 31, 2000 ("Fiscal 2000") as compared to $89,320,000, pro forma revenues assuming retroactive application of change in accounting principle, for the fiscal year ended December 31, 1999 ("Fiscal 1999"). This increase of $14,407,000, resulted from an increase in revenues of $4,809,000 generated by the 15 pawn and check cashing/short-term advance stores, which were opened or acquired during Fiscal 1999, and Fiscal 2000, and an increase of $9,598,000 at the 133 stores, which were in operation during all of Fiscal 1999, and Fiscal 2000. Of the $14,407,000 increase in total revenues, 22%, or $3,106,000, was attributable to increased merchandise sales, 74%, or $10,690,000, was attributable to a net increase in service charges on pawns and short-term advances, $32,000 was attributable to increased check cashing fees, and the remaining increase of $579,000, or 4% was attributable to the increase in other income. Of the $10,690,000 net increase in service charges, an increase of $11,484,000 was attributable to short-term advance service charges, and a decrease of $794,000 was attributable to pawn service charges. As a percentage of total revenues, merchandise sales decreased from 56% to 51% during Fiscal 2000 as compared to Fiscal 1999, service charges increased from 40% to 45%, check cashing fees and other income remained at 4%. The aggregate receivables balance decreased 6% from $23,568,000 at December 31, 1999 to $22,043,000 at December 31, 2000. Of the $1,525,000 decrease, an increase of $613,000 was attributable to growth at the 4 pawn and check cashing/short-term advance stores opened or acquired during Fiscal 2000, while a $2,138,000 decrease was attributable to the 144 pawn stores and check cashing/short-term advance stores which were in operation as of December 31, 2000 and 1999. The annualized yield on the average aggregate receivables balance was 204% during Fiscal 2000 compared to 183% during Fiscal 1999. The Company's average receivables balance per store decreased from $160,000 as of December 31, 1999 to $149,000 as of December 31, 2000, primarily due to our lowering of our pawn to value ratio on pawns during 2000; as well as a higher ratio of short-term advance stores in the Company's store count as of December 31, 2000, which generally have lower per-store receivables balances than the Company's pawn stores. Gross profit as a percentage of merchandise sales increased from 29.8% during Fiscal 1999 to 35.4% during Fiscal 2000. This increase in the Company's gross profit margin was primarily the result of the change in accounting principle in Fiscal 2000. The 1999 pro forma gross profit as a percentage of merchandise sales was 39%. Sales of scrap gold had a negative effect on gross profit margins during Fiscal 1999 and Fiscal 2000. Factoring out the negative impact of scrap sales, pro forma margins would have been 32% and 39% during Fiscal 1999 and Fiscal 2000, respectively. Operating expenses increased 21% to $44,836,000 during Fiscal 2000 compared to $37,199,000 during Fiscal 1999, primarily as a result of the addition of 18 pawn stores and check cashing/short-term advance stores in Fiscal 1999 and Fiscal 2000, and increases in net bad debt expense in 2000 due to increases in the volume of short-term advances in the pawnshops. Of the $7,637,000 increase in operating expenses, an increase of $2,358,000 was attributable to increased net bad debt on short-term advances. The Company's net bad debt expense relating to short-term advances increased from $3,988,000 in Fiscal 1999 to $6,346,000 in Fiscal 2000. During the fourth quarter of 2000 the Company recorded a one-time non-cash pretax charge in the amount of $765,000 to write-off fixed assets and goodwill relating to approximately nine stores. These stores are primarily located in the Company's East Coast market, and continue to be unprofitable or under performing locations. This one-time store closing charge had a $0.05 per share impact on the Company's earnings per share. The Company will continue to evaluate and aggressively address any stores that do not measure up to the Company's earnings expectations. Administrative expenses increased 22% to $8,217,000 during Fiscal 2000 compared to $6,739,000 during Fiscal 1999 due primarily to the addition of personnel to supervise store operations. Interest expense increased to $2,859,000 in Fiscal 2000 compared to $2,602,000 in Fiscal 1999 as a result of higher average outstanding debt balances and higher average interest rates during Fiscal 2000. For Fiscal 2000 and 1999, the Company's effective federal income tax rates of 38% and 33%, respectively, differed from the statutory tax rate of 34% primarily as a result of state income taxes, utilization of tax net operating loss carry-forwards from acquisitions, and amortization of non- deductible intangible assets. Liquidity and Capital Resources The Company's operations and acquisitions have been financed with funds generated from operations, bank and other borrowings, and the issuance of the Company's securities. The Company currently maintains a $50,000,000 long-term line of credit with a group of commercial lenders (the "Credit Facility"). At December 31, 2001, $32,000,000 was outstanding under this Credit Facility and an additional $18,000,000 was available to the Company pursuant to the available borrowing base. The Credit Facility bears interest at the prevailing LIBOR rate (which was approximately 1.9% at December 31, 2001) plus one percent, and matures on September 1, 2002. Management believes its lenders will extend the maturity of its Credit Facility for an additional two-year term prior to its current maturity date under substantially similar terms. Amounts available under the Credit Facility are limited to 325% of the Company's earnings before income taxes, interest, depreciation and amortization for the trailing twelve months. Under the terms of the Credit Facility, the Company is required to maintain certain financial ratios and comply with certain technical covenants. The Company was in compliance with these requirements and covenants during the year ended December 31, 2001 and as of March 26, 2002. The Company is required to pay an annual commitment fee of 1/8 of 1% on the average daily, unused portion of the Credit Facility commitment. The Company is prohibited from paying dividends to its stockholders. Substantially all of the unencumbered assets of the Company have been pledged as collateral against indebtedness under the Credit Facility. In December 2001, the Company acquired 100% of the outstanding common stock of WR, Financial, which operates 7 stores in Texas, for a total cash purchase price of $1,394,000. The Company financed the cash purchase price for this purchase through its Credit Facility. The purchase price for this acquisition was determined based upon the volume of annual pawn and sales transactions, outstanding receivable balances, inventory on hand, location and condition of the facilities, and projected future operating results. In December 2000, the Company acquired the assets of one pawn store in LaFeria, Texas and one pawn store in Laredo, Texas. The aggregate cash purchase price for these two acquisitions was $1,200,000. The Company financed the cash purchase price for these acquisitions through its Credit Facility. The purchase price for these acquisitions was determined based upon the volume of annual pawn and sales transactions, outstanding receivable balances, inventory on hand, location and condition of the facilities, and projected future operating results. In February 1999, the Company acquired the assets of two pawn stores in El Paso, Texas. In September 1999, the Company acquired the assets of one pawn store in Arlington, Virginia, and in October 1999, the Company acquired the assets of one pawn store in Palm View, Texas. The aggregate purchase price for these four acquisitions was $2,019,000, including legal, consulting, assumed liabilities and other costs incidental to the acquisitions. The Company financed substantially the entire cash purchase price for its fiscal 1999 acquisitions through its Credit Facility. The purchase price for these acquisitions was determined based upon the volume of annual pawn and sales transactions, outstanding receivable balances, inventory on hand, location and condition of the facilities, and projected future operating results. As of December 31, 2001, the Company's primary sources of liquidity were $11,252,000 in cash and cash equivalents, $2,817,000 in service charges receivable, $23,556,000 in receivables, $12,681,000 in inventories and $18,000,000 of available and unused funds under the Company's Credit Facility. The Company had working capital as of December 31, 2001 of $8,540,000 and liabilities to equity ratio of 0.7 to 1. Net cash provided by operating activities of the Company during the year ended December 31, 2001 was $19,771,000, consisting primarily of income from continuing operations before non-cash depreciation and amortization and income on discontinued operations of $12,417,000, plus a decrease in inventory and increase in accrued service fees of $4,687,000 and $89,000 respectively, in addition to an increase in accounts payable of $3,509,000. Net cash used for investing activities during the year ended December 31, 2001 was $7,040,000, which was primarily comprised of cash used in increasing receivables of $1,110,000, and cash paid for acquisitions, other fixed asset additions, and cash paid to fund the expansion of our Cash & Go, Ltd. joint venture of $6,160,000. Net cash used by financing activities was $8,090,000 during the year ended December 31, 2001, which primarily consisted of a net decrease in the Company's debt of $8,669,000 and a decrease in common stock receivables from officers of $775,000. The Company funds substantially all of the working capital needs of Cash & Go, Ltd. The Company's receivable from the partnership was $7,455,000 at December 31, 2001. The profitability and liquidity of the Company is affected by the amount of pawns outstanding, which is controlled in part by the Company's lending decisions. The Company is able to influence the frequency of pawn redemption by increasing or decreasing the amount pawned in relation to the resale value of the pledged property. Tighter credit decisions generally result in smaller pawns in relation to the estimated resale value of the pledged property and can thereby decrease the Company's aggregate pawn balance and, consequently, decrease pawn service charges. Additionally, small advances in relation to the pledged property's estimated resale value tend to increase pawn redemptions and improve the Company's liquidity. Conversely, providing larger pawns in relation to the estimated resale value of the pledged property can result in an increase in the Company's pawn service charge income. Also, larger average pawn balances can result in an increase in pawn forfeitures, which increases the quantity of goods on hand and, unless the Company increases inventory turnover, reduces the Company's liquidity. The Company's renewal policy allows customers to renew pawns by repaying all accrued interest on such pawns, effectively creating a new pawn transaction. In addition to these factors, merchandise sales and the pace of store expansions affect the Company's liquidity. Management believes that the Credit Facility and cash generated from operations will be sufficient to accommodate the Company's current operations for fiscal 2002. The Company has no significant capital commitments. The Company currently has no written commitments for additional borrowings or future acquisitions; however, the Company intends to continue to grow and will likely seek additional capital to facilitate expansion. The Company will evaluate acquisitions, if any, based upon opportunities, acceptable financing, purchase price, strategic fit and qualified management personnel. The Company currently intends to continue to engage in a plan of expansion primarily through new store openings. During fiscal 2002, the Company currently plans to open between 10 and 15 check cashing/short-term advance locations, primarily located in Texas, as well as 10 to 15 pawnshops in Mexico. Secondarily, the Company plans to increase the growth of its partnership, Cash & Go, Ltd, which operates short-term advance and check cashing kiosks inside convenience stores, and by expanding its short-term advance operations in its existing pawn stores. This expansion will be funded through the Company's Credit Facility. While the Company continually looks for, and is presented with, potential acquisition candidates, the Company has no definitive plans or commitments for further acquisitions. If the Company encounters an attractive opportunity to acquire or open a new store in the near future, the Company will seek additional financing, the terms of which will be negotiated on a case-by-case basis. Between January 1, 2002 and March 26, 2002, the Company opened four new check cashing/short- term advance locations and three pawnshops in Mexico. Contractual Commitments. A schedule of contractual commitments at December 31, 2001 is as follows: Operating Long-term Fiscal Leases Debt ------ ------ ------ 2002 ................ $ 6,458 $33,385 2003 ................ 5,817 952 2004 ................ 4,537 656 2005 ................ 3,560 - 2006 ................ 2,756 - Thereafter .......... 6,604 - ------ ------ $29,732 $34,993 ====== ====== Related Parties In June 1998, in conjunction with the purchase of 11 check cashing stores, the Company entered into lease agreements relating to one store location and certain office space located in California. These properties were partially owned through September 2000 by Mr. Blake Miraglia, an employee of the Company. Total lease payments made pursuant to these leases were $130,000 and $239,000 during the fiscal years ended December 31, 2000 and 1999, respectively, which approximated market rates. In addition, the Company has an outstanding, unsecured note payable due July 5, 2003, bearing interest at 7%, to Mr. Miraglia, which amounted to $800,000 and $1,281,000 as of December 31, 2001 and 2000, respectively, including accrued interest. As of December 31, 2001 and 2000, the Company had notes receivable outstanding from certain of its officers totaling $5,051,000 and $5,826,000, respectively. These notes are secured by a total of 650,000 shares of common stock of the Company owned by these individuals, term life insurance policies, and bear interest at four percent. These notes are due upon the sale of the underlying shares of common stock. Inflation The Company does not believe that inflation has had a material effect on the amount of pawns and short-term advances made or unredeemed goods sold by the Company or its results of operation. Seasonality The Company's retail business is seasonal in nature with its highest volume of sales of unredeemed goods occurring during the first and fourth calendar quarters of each year. The Company's lending and short-term advance activities are also seasonal, with the highest volume of lending activity occurring during the second and third calendar quarters of each year. Recent Accounting Pronouncements In June 2001, the FASB issued Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets," which is effective as of January 1, 2002. Under SFAS No. 142, goodwill is no longer amortized but reviewed for impairment annually, or more frequently if certain indicators arise. The Company is required to complete the initial step of a transitional impairment test within six months of adoption of SFAS No. 142 and to complete the final step of the transitional impairment test by the end of the fiscal year. Any impairment loss resulting from the transitional impairment test will be recorded as a cumulative effect of a change in accounting principle for the year ended December 31, 2002. Subsequent impairment losses will be reflected in operating income or loss in the statements of operations. The Company has not yet determined the impact, if any; on its earnings and financial position of the required impairment tests of goodwill and other indefinite lived intangible assets. The FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143") in August 2001 and SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144") in October 2001. SFAS 143 addresses reporting for obligations associated with the retirement of tangible long-lived assets and the related asset retirement costs. SFAS 143 is effective for fiscal years beginning after June 15, 2002 with earlier application permitted. SFAS 144 supercedes earlier guidance with respect to such accounting and is effective for years beginning after December 15, 2001. The Company has not yet determined the effect the adoption of SFAS 143 and SFAS 144 will have on its financial statements. SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," is effective for all fiscal years beginning after June 15, 2000. SFAS 133, as amended, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. Under SFAS 133, certain contracts that were not formerly considered derivatives may now meet the definition of a derivative. The Company adopted SFAS 133 effective January 1, 2001. The adoption of SFAS 133 did not have a significant impact on the financial position, results of operations, or cash flows of the Company. Item 7a. Quantitative and Qualitative Disclosures About Market Risk ---------------------------------------------------------- The Company is exposed to market risk in the form of interest rate risk. At December 31, 2001, the Company had $32 million outstanding under its revolving line of credit. This revolving line is priced with a variable rate based on LIBOR or a base rate, plus one percent. See "Note 8 - Revolving Credit Facility". Based on the average outstanding indebtedness during the year ended December 31, 2001, a 10% increase in interest rates would have increased the Company's interest expense by approximately $179,000 for the year ended December 31, 2001. Item 8. Financial Statements and Supplementary Data ------------------------------------------- The financial statements prepared in accordance with Regulation S-X are included in a separate section of this report. See the index to Financial Statements at Item 14(a)(1) and (2) of this report. Item 9. Changes in and Disagreements with Accountants on Accounting and --------------------------------------------------------------- Financial Disclosure -------------------- There have been no disagreements concerning matters of accounting principles or financial statement disclosure between the Company and Deloitte & Touche LLP requiring disclosure hereunder. PART III -------- In accordance with General Instruction G(3), a presentation of information required in response to Items 10, 11, 12, and 13 shall appear in the Company's definitive Proxy Statement to be filed pursuant to Regulation 14A within 120 days of the Company's year end and shall be incorporated herein by reference when filed. PART IV ------- Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K --------------------------------------------------------------- (a) The following documents are filed as a part of this report: (1) Consolidated Financial Statements: Page Report of Independent Auditors..................... F-1 Consolidated Balance Sheets........................ F-2 Consolidated Statements of Income.................. F-3 Consolidated Statements of Cash Flows.............. F-4 Consolidated Statements of Changes in Stockholders' Equity........................................... F-5 Notes to Consolidated Financial Statements......... F-6 (b) During Fiscal 2001 the Company filed no reports on Form 8-K. (c) Exhibits: 3.1(5) Amended Certificate of Incorporation 3.2(6) Amended Bylaws 4.2a(2) Common Stock Specimen 10.3(1) First Cash, Inc. 1990 Stock Option Plan 10.8(8) Employment Agreement -- Rick Powell 10.15(8) Employment Agreement -- Rick L. Wessel 10.59(4) Acquisition Agreement - Miraglia, Inc. 10.60(3) Audited Financial Statements of Miraglia, Inc. for the ten months ended May 31, 1998. 10.61(5) Acquisition Agreement for Twelve Pawnshops in South Carolina 10.62(5) Acquisition Agreement for One Iron Ventures, Inc. 10.63(5) First Cash Financial Services, Inc. 1999 Stock Option Plan 10.64(9) First Addendum to Executive Employment Agreement - Rick Powell 10.65(9) First Addendum to Executive Employment Agreement - Rick Wessel 18.1(7) Letter re Change in Accounting Principle 21.0(9) Subsidiaries 23.1(9) Independent Auditors' Consent of Deloitte & Touche LLP 23.2(9) Consent of Brewer & Pritchard, P.C. (d) All schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto. (1) Filed as an exhibit to the Company's Registration Statement on Form S-18 (No. 33-37760-FW) and incorporated herein by reference. (2) Filed as an exhibit to the Company's Registration Statement on Form S-1 (No. 33-48436) and incorporated herein by reference. (3) Filed as an exhibit to Form 8-K dated September 22, 1998. (4) Filed as an exhibit to the Annual Report on Form 10-K for the fiscal year ended July 31, 1998 (File No. 0 - 19133) and incorporated herein by reference. (5) Filed as an exhibit to the Company's Registration Statement on Form S-3 dated January 22, 1999 (File No. 333-71077) and incorporated herein by reference. (6) Filed as an exhibit to the Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 0 - 19133) and incorporated herein by reference. (7) Filed as an exhibit to the quarterly report on Form 10-Q for the quarter ended March 31, 2000 (File No. 0 - 19133) and incorporated herein by reference. (8) Filed as an exhibit to the Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 0 - 19133) and incorporated herein by reference. (9) Filed herewith. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. FIRST CASH FINANCIAL SERVICES, INC. /s/ PHILLIP E. POWELL ------------------------------------------ Phillip E. Powell, Chief Executive Officer March 26, 2002 /s/ RICK L. WESSEL -------------------------------------------- Rick L. Wessel, Principal Accounting Officer March 26, 2002 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Capacity Date --------- -------- ---- /s/ PHILLIP E. POWELL Chairman of the Board and March 26, 2002 --------------------- Chief Executive Officer Phillip E. Powell /s/ RICK L. WESSEL President, Chief Financial March 26, 2002 --------------------- Officer, Secretary and Rick L. Wessel Treasurer /s/ JOE R. LOVE Director March 26, 2002 --------------------- Joe R. Love /s/ RICHARD T. BURKE Director March 26, 2002 --------------------- Richard T. Burke /s/ TARA SCHUCHMANN Director March 26, 2002 --------------------- Tara Schuchmann REPORT OF INDEPENDENT AUDITORS To the Board of Directors and Stockholders of First Cash Financial Services, Inc. We have audited the accompanying consolidated balance sheets of First Cash Financial Services, Inc. and subsidiaries as of December 31, 2001 and 2000, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the years ended December 31, 2001, 2000 and 1999. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the consolidated financial position of First Cash Financial Services, Inc. and subsidiaries at December 31, 2001 and 2000, and the consolidated results of its operations and its cash flows for each of the years ended December 31, 2001, 2000 and 1999 in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 3 to the financial statements, the Company changed its method of accounting for income recognition on pawns in 2000. DELOITTE & TOUCHE LLP Fort Worth, Texas January 29, 2002 FIRST CASH FINANCIAL SERVICES, INC. CONSOLIDATED BALANCE SHEETS December 31, December 31, 2001 2000 ------- ------- (in thousands, except share data) ASSETS Cash and cash equivalents.................... $ 11,252 $ 6,611 Service charges receivable................... 2,817 2,707 Receivables.................................. 23,556 22,043 Inventories.................................. 12,681 17,132 Prepaid expenses and other current assets.... 1,226 1,387 Income taxes receivable...................... 434 - Net current assets of discontinued operations - 586 ------- ------- Total current assets ....................... 51,966 50,466 Property and equipment, net.................. 10,034 10,378 Intangible assets, net of accumulated amortization of $8,448 and $7,136, respectively .............................. 53,194 53,508 Receivable from Cash & Go, Ltd............... 7,455 4,580 Other........................................ 157 186 ------- ------- $122,806 $119,118 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current portion of long-term debt and notes payable.................................... $ 1,385 $ 1,643 Revolving credit facility.................... 32,000 - Accounts payable and accrued expenses........ 10,041 6,460 Income taxes payable......................... - 528 ------- ------- Total current liabilities .................. 43,426 8,631 Revolving credit facility.................... - 39,000 Long-term debt and notes payable, net of current portion............................ 1,608 3,019 Deferred income taxes........................ 3,669 2,814 ------- ------- 48,703 53,464 ------- ------- Stockholders' equity: Preferred stock; $.01 par value; 10,000,000 shares authorized; no shares issued or outstanding............................... - - Common stock; $.01 par value; 20,000,000 shares authorized; 9,417,868 and 9,320,868 shares issued, respectively; 8,763,687 and 8,796,027 shares outstanding, respectively 95 93 Additional paid-in capital ................. 51,255 50,953 Retained earnings .......................... 30,819 22,949 Common stock receivables from officers ..... (5,051) (5,826) Common stock held in treasury, at cost, 654,181 and 524,841 shares, respectively . (3,015) (2,515) ------- ------- 74,103 65,654 ------- ------- $122,806 $119,118 ======= ======= Commitments and contingencies (see Note 11) The accompanying notes are an integral part of these consolidated financial statements.
FIRST CASH FINANCIAL SERVICES, INC. CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31, ----------------------------- 2001 2000 1999 ------- ------- ------- (in thousands, except per share amounts) Revenues: Merchandise sales ..................... $ 53,893 $ 53,177 $ 50,071 Service charges ....................... 53,028 46,597 40,630 Check cashing fees .................... 2,264 2,216 2,184 Other ................................. 1,242 1,737 1,158 ------- ------- ------- 110,427 103,727 94,043 ------- ------- ------- Cost of goods sold and expenses: Cost of goods sold .................... 34,619 34,366 35,157 Operating expenses .................... 48,661 44,836 37,199 Interest expense ...................... 1,395 2,859 2,602 Depreciation .......................... 2,283 2,612 1,527 Amortization .......................... 1,530 1,694 1,475 Administrative expenses ............... 9,420 8,217 6,739 ------- ------- ------- 97,908 94,584 84,699 ------- ------- ------- Income before income taxes ............... 12,519 9,143 9,344 Provision for income taxes ............... 4,507 3,476 3,097 ------- ------- ------- Income from continuing operations 8,012 5,667 6,247 Discontinued operations (Note 14): Income (loss) from discontinued operations, net of tax............... 33 (765) 231 Loss on sale of subsidiary, net of tax (175) - - ------- ------- ------- Income (loss) from discontinued operations (142) (765) 231 ------- ------- ------- Cumulative effect of change in accounting principle.................... - (2,287) - ------- ------- ------- Net income ............................... $ 7,870 $ 2,615 $ 6,478 ======= ======= ======= Net income per share: Basic Income from continuing operations.... $ 0.92 $ 0.64 $ 0.72 Income (loss) from discontinued operations......................... (0.02) (0.08) 0.03 Cumulative effect of change in accounting principle .............. - (0.26) - ------- ------- ------- Net income........................... $ 0.90 $ 0.30 $ 0.75 ======= ======= ======= Diluted Income from continuing operations.... $ 0.87 $ 0.63 $ 0.67 Income (loss) from discontinued operations......................... (0.02) (0.08) 0.03 Cumulative effect of change in accounting principle .............. - (0.26) - ------- ------- ------- Net income........................... $ 0.85 $ 0.29 $ 0.70 ======= ======= ======= Unaudited pro forma amounts assuming retroactive application of change in accounting principle: Revenues from continuing operations.... $110,427 $103,727 $ 89,320 Income from continuing operations...... 8,012 5,667 5,619 Basic earnings per share from continuing operations................ 0.92 0.64 0.65 Diluted earnings per share from continuing operations................ 0.87 0.63 0.60 The accompanying notes are an integral part of these consolidated financial statements.
FIRST CASH FINANCIAL SERVICES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, ----------------------------- 2001 2000 1999 ------- ------- ------- (in thousands) Cash flows from operating activities: Income from continuing operations........ $ 8,012 $ 5,667 $ 6,247 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation and amortization......... 3,813 4,306 3,002 Income (loss) from discontinued operations.......................... 592 (108) (189) Changes in operating assets and liabilities, net of effect of purchases of existing stores: Service charges receivable............ (89) 728 (1,045) Inventories .......................... 4,687 1,616 (3,358) Prepaid expenses and other assets..... (646) (323) 1,673 Accounts payable and accrued expenses. 3,509 1,546 452 Current and deferred income taxes..... (107) 1,196 (232) ------- ------- ------- Net cash flows from operating activities 19,771 14,628 6,550 ------- ------- ------- Cash flows from investing activities: Net (increase) decrease in receivables... (1,110) 1,021 (2,704) Purchases of property and equipment...... (1,891) (2,055) (3,282) Acquisition of existing operations....... (1,394) (1,200) (2,060) Proceeds from sale of discontinued operations............................. 230 - - Increase in receivable from Cash & Go, Ltd. ....................... (2,875) (2,764) (1,816) ------- ------- ------- Net cash flows from investing activities. (7,040) (4,998) (9,862) ------- ------- ------- Cash flows from financing activities: Proceeds from debt ...................... 14,200 6,000 21,000 Repayments of debt ...................... (22,869) (16,252) (10,490) Common stock receivables from officers... 775 (3,234) (1,303) Purchase of treasury stock .............. (500) (250) - Registration fees ....................... - - (12) Proceeds from exercise of options and warrants............................... 304 - 376 ------- ------- ------- Net cash flows from financing activities (8,090) (13,736) 9,571 ------- ------- ------- Change in cash and cash equivalents........ 4,641 (4,106) 6,259 Cash and cash equivalents at beginning of the year.............................. 6,611 10,717 4,458 ------- ------- ------- Cash and cash equivalents at end of the year.............................. $11,252 $ 6,611 $ 10,717 ======= ======= ======= Supplemental disclosure of cash flow information: Cash paid during the year for: Interest ............................... $ 2,394 $ 2,813 $ 2,553 ======= ======= ======= Income taxes ........................... $ 4,533 $ 2,013 $ 2,296 ======= ======= ======= Supplemental disclosure of non-cash investing and financing activities: Non-cash transactions in connection with various acquisitions: Fair market value of assets acquired and goodwill........................ $ 2,302 $ 1,222 $ 2,602 Less issuance of debt .............. - - (523) Less assumption of liabilities and costs of acquisition.............. (908) (22) (19) ------- ------- ------- Net cash paid......................... $ 1,394 $ 1,200 $ 2,060 ======= ======= ======= The accompanying notes are an integral part of these consolidated financial statements.
FIRST CASH FINANCIAL SERVICES, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY Additional Common Stock Common Stock Paid- Preferred Stock Receivables Treasury Stock -------------- In --------------- Retained From -------------- Shares Amount Capital Shares Amount Earnings Officers Shares Amount Total ------ ------ ------- ------ ------ -------- -------- ------ ------ ------- (in thousands) Balance at December 31, 1998 9,089 91 49,026 - - 13,856 (1,289) 471 (2,265) 59,419 Exercise of stock options and warrants, including income tax benefit of $24 77 1 376 - - - - - - 377 Common stock issued to retire debt 155 1 1,551 - - - - - - 1,552 Common stock receivables from officers - - - - - - (1,303) - - (1,303) Net income - - - - - 6,478 - - - 6,478 ------ ------ ------- ------ ------ -------- -------- ------ ------ ------- Balance at December 31, 1999 9,321 93 50,953 - - 20,334 (2,592) 471 (2,265) 66,523 Common stock receivables from officers - - - - - - (3,234) - - (3,234) Purchase of treasury stock - - - - - - - 54 (250) (250) Net income - - - - - 2,615 - - - 2,615 ------ ------ ------- ------ ------ -------- -------- ------ ------ ------- Balance at December 31, 2000 9,321 $ 93 $ 50,953 - - $ 22,949 $ (5,826) 525 $(2,515) $ 65,654 Exercise of stock options and warrants 97 2 302 - - - - - - 304 Common stock receivables from officers - - - - - - 775 - - 775 Purchase of treasury stock - - - - - - - 129 (500) (500) Net income - - - - - 7,870 - - - 7,870 ------ ------ ------- ------ ------ -------- -------- ------ ------ ------- Balance at December 31, 2001 9,418 $ 95 $ 51,255 - - $ 30,819 $ (5,051) 654 $(3,015) $ 74,103 ====== ====== ======= ====== ====== ======== ======== ====== ====== ======= The accompanying notes are an integral part of these consolidated financial statements.
FIRST CASH FINANCIAL SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - ORGANIZATION AND NATURE OF THE COMPANY First Cash Financial Services, Inc. (the "Company") was incorporated in Texas on July 5, 1988 and was reincorporated in Delaware in April 1991. The Company is engaged in the operation of pawn stores which lend money on the collateral of pledged personal property, and which retail previously-owned merchandise acquired through pawn forfeitures. In addition to making short- term secured pawns, most of the Company's pawn stores offer short-term secured advances ("short-term advances"). The Company also operates check cashing and short-term advance stores that provide short-term advances, check cashing services, and other related financial services. As of December 31, 2001, the Company owned 112 pawn stores and 46 check cashing and short-term advance stores. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed in the preparation of these financial statements. Principles of consolidation - The accompanying consolidated financial statements of the Company include the accounts of its wholly owned subsidiaries. All significant inter-company accounts and transactions have been eliminated. In August 1999, the Company entered into a partnership to form Cash & Go, Ltd., a Texas limited partnership, which owns financial services kiosks inside convenience stores. The Company presently has a 50% ownership interest in the partnership, which is accounted for by the equity method of accounting as neither partner has control. The Company records its 50% share of the partnership's earnings or losses in its consolidated financial statements. The Company funds substantially all of the working capital requirements of the partnership in the form of a loan to the partnership. This loan bears interest at the prime rate plus 1%, and matures on August 31, 2002. Summarized financial information for Cash & Go, Ltd. as of December 31, 2001 and 2000 and for the years ended December 31, 2001, 2000 and 1999 are as follows: December 31, December 31, 2001 2000 ----- ----- (in thousands) Current assets .......................... $5,647 $3,215 Non-current assets ..................... 1,458 994 Current note payable to First Cash Financial Services, Inc................ (7,455) (4,580) Other current liabilities ............... (389) (192) ----- ----- Net assets .......................... $ (739) $ (563) ===== ===== Company's share of net assets ........... $ (369) $ (282) ===== ===== Company's receivable from the partnership $7,455 $4,580 ===== ===== Year Ended December 31, -------------------------- 2001 2000 1999 ----- ----- ----- (in thousands) Revenues ......................... $6,788 $3,512 $ 119 Expenses ......................... 6,964 3,836 369 ----- ----- ----- Net loss before taxes ........ $ (176) $ (324) $ (250) ===== ===== ===== Company's share of pretax net loss $ (88) $ (162) $ (125) ===== ===== ===== Cash and cash equivalents - The Company considers any highly liquid investments with an original maturity of three months or less at date of acquisition to be cash equivalents. Receivables and income recognition - Receivables on the accompanying balance sheet consist of pawn and short-term advances. Pawns are made on the pledge of tangible personal property. The Company accrues pawn service charge revenue on a constant yield basis over the life of the pawn for all pawns that the Company deems collection to be probable based on historical pawn redemption statistics. If the pawn is not repaid, the principal amount pawned becomes the carrying value of the forfeited collateral ("inventory"), which is recovered through sale. Short-term advances are made for thirty days or less. The Company recognizes the service charges associated with short-term advances on a constant yield basis over the term of the short-term advance. Returned checks - The Company charges operating expense for the estimated net potential losses on returned checks in the same period in which revenues from the short-term advances are recognized. Operating expenses - Costs incurred in operating the pawn stores and check-cashing stores have been classified as operating expenses. Operating expenses include salary and benefit expense of store employees, rent and other occupancy costs, bank charges, security, net returned checks, utilities, cash shortages and other costs incurred by the stores. Layaway and deferred revenue - Interim payments from customers on layaway sales are credited to deferred revenue and subsequently recorded as income during the period in which final payment is received. Inventories - Inventories represent merchandise purchased directly from the public and merchandise acquired from forfeited pawns. Inventories purchased directly from customers are recorded at cost. Inventories from forfeited pawns are recorded at the amount of the pawn principal on the unredeemed goods. The cost of inventories is determined on the specific identification method. Inventories are stated at the lower of cost or market; accordingly, inventory valuation allowances are established when inventory carrying values are in excess of estimated selling prices, net of direct costs of disposal. Management has evaluated inventory and determined that a valuation allowance is not necessary. Property and equipment - Property and equipment are recorded at cost. Depreciation is determined on the straight-line method based on estimated useful lives of thirty-one years for buildings and three to ten years for equipment. The costs of improvements on leased stores are capitalized as leasehold improvements and are amortized on the straight-line method over the applicable lease period, or useful life if shorter. Maintenance and repairs are charged to expense as incurred; renewals and betterments are charged to the appropriate property and equipment accounts. Upon sale or retirement of depreciable assets, the cost and related accumulated depreciation is removed from the accounts, and the resulting gain or loss is included in the results of operations in the period retired. Intangible assets - Intangible assets consist of the excess of purchase price over net assets acquired and non-compete agreements. Excess purchase price over net assets acquired is being amortized on a straight-line basis over an estimated useful life of forty years and payments relative to non- compete agreements are amortized over their estimated useful lives, generally ranging from five to ten years. The Company's amortization policy is reviewed annually by the Board of Directors to determine if any change is appropriate. Management of the Company periodically evaluates the carrying value of the excess purchase price over the net tangible assets of businesses acquired to determine that no diminution in carrying value has occurred by comparing expected future cash flows, undiscounted and without interest charges, to the net carrying value of the related intangibles. Upon any such diminution in value, an appropriate amount would be charged to earnings. Long-lived assets - Long-lived assets (i.e., property, plant and equipment and intangible assets) are reviewed for impairment whenever events or changes in circumstances indicate that the net book value of the asset may not be recoverable. An impairment loss is recognized if the sum of the expected future cash flows (undiscounted and before interest) from the use of the asset is less than the net book value of the asset. Generally, the amount of the impairment loss is measured as the difference between the net book value of the assets and the estimated fair value of the related assets. During the fourth quarter of 2000 the Company recorded a one-time non-cash pretax charge in the amount of $765,000 to write-off fixed assets and goodwill relating to approximately nine stores. Management does not believe any assets have been additionally impaired at December 31,2001. Fair value of financial instruments - The fair value of financial instruments is determined by reference to various market data and other valuation techniques, as appropriate. Unless otherwise disclosed, the fair values of financial instruments approximate their recorded values, due primarily to their short-term nature. Income taxes - The Company uses the liability method of computing deferred income taxes on all material temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Advertising - The Company expenses the costs of advertising the first time the advertising takes place. Advertising expense for the fiscal years ended December 31, 2001, 2000 and 1999, was $1,070,000, $1,283,000, and $1,112,000, respectively. Stock-Based Compensation - Compensation expense is recorded with respect to stock option grants and retention stock awards to employees using the intrinsic value method as prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"). Entities electing to remain with the accounting in APB 25 must make pro forma disclosures of net income and earnings per share as if the fair value based method of accounting defined in Statement of Financial Accounting Standard No. 123; "Accounting for Stock-Based Compensation" ("SFAS 123") had been applied. The Company accounts for stock-based employee compensation plans under the intrinsic method pursuant to APB 25 and has made the disclosures in the footnotes as required by SFAS 123. Earnings per share - Basic net income per share is computed by dividing net income by the weighted average number of shares outstanding during the year. Diluted net income per share is calculated by giving effect to the potential dilution that could occur if securities or other contracts to issue common shares were exercised and converted into common shares during the year. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data): Year Ended December 31, ----------------------- 2001 2000 1999 ----- ----- ----- Numerator: Net income for calculating basic and diluted earnings per share $7,870 $2,615 $6,478 ===== ===== ===== Denominator: Weighted-average common shares for calculating basic earnings per share 8,699 8,813 8,656 Effect of dilutive securities: Stock options and warrants 569 56 478 Contingently issuable shares due to acquisitions - - 133 ----- ----- ----- Weighted-average common shares for calculating diluted earnings per share 9,268 8,869 9,267 ===== ===== ===== Basic earnings per share $ 0.90 $ 0.30 $ 0.75 Diluted earnings per share $ 0.85 $ 0.29 $ 0.70 Pervasiveness of estimates - The preparation of financial statements in conformity with accounting principals generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and related revenues and expenses and disclosure of gain and loss contingencies at the date of the financial statements. Such estimates and assumptions are subject to a number of risks and uncertainties, which may cause actual results to differ materially from the Company's estimates. Operating Segment - Due to the increased short-term advance operations in its pawn stores and the sale of its software operations, the Company has restructured its operations into one primary operating segment whose operating results are regularly reviewed by the chief operating decision maker to assess performance. Reclassification - Certain amounts as of December 31, 2000 and for the years ended December 31, 2000 and 1999 have been reclassified in order to conform to the 2001 presentation. New Accounting Standards - In June 2001, the FASB issued Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets," which is effective as of January 1, 2002. Under SFAS No. 142, goodwill is no longer amortized but reviewed for impairment annually, or more frequently if certain indicators arise. The Company is required to complete the initial step of a transitional impairment test within six months of adoption of SFAS No. 142 and to complete the final step of the transitional impairment test by the end of the fiscal year. Any impairment loss resulting from the transitional impairment test will be recorded as a cumulative effect of a change in accounting principle for the year ended December 31, 2002. Subsequent impairment losses will be reflected in operating income or loss in the statements of operations. The Company has not yet determined the impact, if any; on its earnings and financial position of the required impairment tests of goodwill and other indefinite lived intangible assets. The FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143") in August 2001 and SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144") in October 2001. SFAS 143 addresses reporting for obligations associated with the retirement of tangible long-lived assets and the related asset retirement costs. SFAS 143 is effective for fiscal years beginning after June 15, 2002 with earlier application permitted. SFAS 144 supercedes earlier guidance with respect to such accounting and is effective for years beginning after December 15, 2001. The Company has not yet determined the effect the adoption of SFAS 143 and SFAS 144 will have on its financial statements. SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," is effective for all fiscal years beginning after June 15, 2000. SFAS 133, as amended, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. Under SFAS 133, certain contracts that were not formerly considered derivatives may now meet the definition of a derivative. The Company adopted SFAS 133 effective January 1, 2001. The adoption of SFAS 133 did not have a significant impact on the financial position, results of operations, or cash flows of the Company. NOTE 3 - CHANGE IN ACCOUNTING PRINCIPLE Effective January 1, 2000, the Company changed its method of income recognition on pawns. The Company now accrues pawn service charge revenue on a constant yield basis over the life of the pawn for all pawns that the Company deems collection to be probable based on historical pawn redemption statistics. For pawns not repaid, the cost of the forfeited collateral (inventory) is the cash amount originally pawned. Prior to 2000, the Company recognized service charge income on a constant yield basis over the initial pawn period for all pawns written. Service charges applicable to the extension periods or additional pawn periods were not recognized as income until the pawn was repaid or renewed. If the pawn was not repaid, the carrying value of the forfeited collateral (inventory) was stated at the lower of cost (the principal amount pawned plus accrued service charges) or market. The Company believes the accounting change provides a timelier matching of revenues and expenses with which to measure the results of operations. The cumulative effect of the accounting method change on all periods since inception through December 31, 1999 is $2,287,000 (after an income tax benefit of $1,373,000) and is included as a one-time reduction of net income for the year ended December 31, 2000. Operating results for Fiscal 2000 have been calculated using the new accounting method. The effect for Fiscal 2000 of adopting the change in income recognition on pawns was to decrease net income before cumulative effect of change in accounting principle $9,000, and decrease net income $2,296,000 ($0.26 per share.) The unaudited pro forma amounts shown in the statements of income reflect the effect of retroactive application on service charge revenues, cost of goods sold, and related income taxes. NOTE 4 - BUSINESS ACQUISITIONS In December 2001, the Company acquired 100% of the outstanding common stock of WR Financial, Inc., which operates 7 stores in Texas, for a total purchase price of $1,394,000, consisting of cash. The Company financed substantially the all cash purchase price for its fiscal 2001 acquisition through its Credit Facility. The purchase price for this acquisition was determined based upon the volume of annual pawn and sales transactions, outstanding receivable balances, inventory on hand, location and condition of the facilities, and projected future operating results. In December 2000, the Company acquired the assets of one pawn store in LaFeria, Texas, and one pawn store in Laredo, Texas. The aggregate purchase price for these two acquisitions was $1,200,000, including legal, consulting, assumed liabilities and other costs incidental to the acquisitions. The Company financed substantially the all cash purchase price for its fiscal 2000 acquisitions through its Credit Facility. The purchase price for these acquisitions was determined based upon the volume of annual pawn and sales transactions, outstanding receivable balances, inventory on hand, location and condition of the facilities, and projected future operating results. In February 1999, the Company acquired the assets of two pawn stores in El Paso, Texas. In September 1999, the Company acquired the assets of one pawn store in Arlington, Virginia, and in October 1999, the Company acquired the assets of one pawn store in Palm View, Texas. The aggregate purchase price for these four acquisitions was $2,019,000, including legal, consulting, assumed liabilities and other costs incidental to the acquisitions. The Company financed the cash purchase price for its fiscal 1999 acquisitions through its Credit Facility. The purchase price for these acquisitions was determined based upon the volume of annual pawn and sales transactions, outstanding receivable balances, inventory on hand, location and condition of the facilities, and projected future operating results. All of these acquisitions have been accounted for using the purchase method of accounting. Accordingly, the purchase price was allocated to assets and liabilities acquired based upon their estimated fair market values at the dates of acquisition. The excess purchase price over the fair market value of the net tangible assets acquired and identifiable intangible assets has been recorded as goodwill. Goodwill and other intangible assets, net of accumulated amortization, resulting from acquisitions were $53,194,000 and $53,508,000 as of December 31, 2001 and 2000, respectively. The results of operations of the acquired companies are included in the consolidated financial statements from their respective dates of acquisition. In connection with these acquisitions, the Company entered into non-compete agreements with the former owners, generally ranging from five to ten years. NOTE 5 - RELATED PARTY TRANSACTIONS In June 1998, in conjunction with the purchase of 11 check cashing stores, the Company entered into lease agreements relating to one store location and certain office space located in California. These properties were partially owned through September 2000 by Mr. Blake Miraglia, an employee of the Company. Total lease payments made pursuant to these leases were $130,000 and $239,000 during the fiscal years ended December 31, 2000 and 1999, respectively, which approximated market rates. In addition, the Company has an outstanding, unsecured note payable due July 5, 2003, bearing interest at 7%, to Mr. Miraglia, which amounted to $800,000 and $1,281,000 as of December 31, 2001 and 2000, respectively, including accrued interest. As of December 31, 2001 and 2000, the Company had notes receivable outstanding from certain of its officers totaling $5,051,000 and $5,826,000, respectively. These notes are secured by a total of 650,000 shares of common stock of the Company owned by these individuals, term life insurance policies, and bear interest at four percent. These notes are due upon the sale of the underlying shares of common stock. NOTE 6 - PROPERTY AND EQUIPMENT Property and equipment consist of the following (in thousands): December 31, December 31, 2001 2000 ------- ------- Land $ 672 $ 672 Buildings 1,002 1,002 Leasehold improvements 2,104 2,127 Furniture, fixtures and equipment 15,922 15,089 ------- ------- 19,700 18,890 Less: accumulated depreciation (9,666) (8,512) ------- ------- $ 10,034 $ 10,378 ======= ======= NOTE 7 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consist of the following (in thousands): December 31, December 31, 2001 2000 ------- ------- Accounts payable $ 628 $ 450 Money orders payable 890 850 Wire transfers payable 342 395 Accrued payroll 1,067 779 Layaway deposits 1,198 1,017 Sales tax payable 488 364 Other 5,428 2,605 ------- ------- $ 10,041 $ 6,460 ======= ======= NOTE 8 - REVOLVING CREDIT FACILITY The Company currently maintains a $50,000,000 long-term line of credit with a group of commercial lenders (the "Credit Facility"). At December 31, 2001, $32,000,000 was outstanding under this Credit Facility and an additional $18,000,000 was available to the Company pursuant to the available borrowing base. The Credit Facility bears interest at the prevailing LIBOR rate (which was approximately 1.9% at December 31, 2001) plus one percent, and matures on September 1, 2002. Management believes its lenders will extend the maturity of its Credit Facility for an additional two-year term prior to its current maturity date under substantially similar terms Amounts available under the Credit Facility are limited to 325% of the Company's earnings before income taxes, interest, depreciation and amortization for the trailing twelve months. Under the terms of the Credit Facility, the Company is required to maintain certain financial ratios and comply with certain technical covenants. The Company was in compliance with these requirements and covenants during the year ended December 31, 2001. Pursuant to the terms of the Credit Facility, the Company is prohibited from paying any dividends. NOTE 9 - LONG-TERM DEBT AND NOTES PAYABLE Long-term debt and notes payable consist of the following (in thousands, except payment information): December 31, December 31, 2001 2000 ------ ------ Note payable to a bank; bearing interest at LIBOR plus 2%; monthly principal and interest payments of $5,257; matures December 31, 2004; secured by real estate $ 439 $ 474 Note payable to a bank; bearing interest at LIBOR plus 2%; monthly principal and interest payments of $5,518; matures December 31, 2004; secured by real estate 364 406 Unsecured demand note payable to an individual; bearing interest at 7%; interest payable monthly in installments of $583 100 100 Note payable to a bank; bearing interest at 8.9%; monthly principal and interest payments of $7,367, until entire unpaid balance was retired in October 2001; secured by equipment - 71 Note payable to a bank; bearing interest at 9.2%; monthly principal and interest payments of $5,797, until maturity at January 15, 2002; secured by equipment 5 71 Note payable to a bank; bearing interest at 9.3%; monthly principal and interest payments of $5,452, until maturity at July 1, 2002; secured by equipment 37 96 Note payable to a corporation; bearing interest at 14.7%; monthly principal and interest payments of $1,658 until entire unpaid balance was retired in August 2001; secured by equipment - 13 Note payable to a corporation; bearing interest at 7%; monthly principal and interest payments of $16,151 until maturity at March 1, 2002; secured by specific acquired assets 48 231 Notes payable to five former shareholders of Miraglia, Inc.; bearing interest at 7%; quarterly principal payments of $300,000 and quarterly interest payments based upon the unpaid balance until maturity at July 5, 2003; unsecured 2,000 3,200 ------ ------ 2,993 4,662 Less: current portion (1,385) (1,643) ------ ------ $ 1,608 $ 3,019 ====== ====== Long-term debt and notes payable are scheduled to mature as follows (in thousands): Fiscal ------ 2002 $1,385 2003 952 2004 656 ----- $2,993 ===== NOTE 10 - INCOME TAXES Components of the provision for income taxes consist of the following (in thousands): Year Ended December 31, ----------------------- 2001 2000 1999 ----- ----- ----- Current: Federal $2,609 $2,627 $2,392 State and foreign 1,042 399 441 ----- ----- ----- 3,651 3,026 2,833 Deferred 856 450 264 ----- ----- ----- $4,507 $3,476 $3,097 ===== ===== ===== The principal current and non-current deferred tax liabilities consist of the following at December 31, 2001 and 2000 (in thousands): December 31, December 31, 2001 2000 ------ ------ Deferred tax liabilities: Intangible asset amortization $ 3,834 $ 3,166 Depreciation 1,107 1,046 Change in accounting principle (1,135) (1,373) Net operating loss benefit carry-forward (198) (394) State income taxes 204 377 Service charges receivable 46 50 Legal accruals (430) (435) Other 241 377 ------ ------ Net deferred tax liability $ 3,669 $ 2,814 ====== ====== Reported as: Current liabilities - income taxes payable $ - $ - Non-current liabilities - deferred income taxes 3,669 2,814 ------ ------ Net deferred tax liability $ 3,669 $ 2,814 ====== ====== The provision for income taxes differs from the amounts determined by applying the expected federal statutory tax rate to income from continuing operations before income taxes. The following is a reconciliation of such differences (in thousands): Year Ended December 31, ----------------------- 2001 2000 1999 ----- ----- ----- Tax at the federal statutory rate $4,256 $3,109 $3,177 State income taxes, net of federal tax benefit 646 278 381 Other, net (395) 89 (461) ----- ----- ----- $4,507 $3,476 $3,097 ===== ===== ===== NOTE 11 - COMMITMENTS AND CONTINGENCIES The Company leases certain of its facilities and equipment under operating leases with terms generally ranging from three to ten years. Most facility leases contain renewal and/or purchase options. Remaining future minimum rentals due under non-cancelable operating leases are as follows (in thousands): Fiscal ------ 2002 $ 6,458 2003 5,817 2004 4,537 2005 3,560 2006 2,756 Thereafter 6,604 ------- $ 29,732 ======= Rent expense under such leases was $6,515,000, $6,311,000, and $5,708,000 for the years ended December 31, 2001, 2000 and 1999, respectively. In May 2000, three plaintiffs filed a complaint against Famous Pawn, Inc., a wholly owned subsidiary of the Company, in the United States District Court for the District of Maryland (Northern Division). The allegations consists of five counts: (1) violation of the federal Truth in Lending Act; (2) violation of the federal Racketeer Influenced and Corrupt Organizations Act; (3) violation of the Maryland Interest and Usury Statute; (4) violation of the Maryland Consumer Loan Law; and (5) violation of the Maryland Consumer Protection Act. The plaintiffs have requested the following relief: actual and punitive damages, attorneys' fees, expenses, costs, injunctive relief and treble damages, if available. In April 2001, the court certified a TILA class in this matter. Later that month, Famous Pawn, Inc. filed a motion to modify the class definition to exclude from the class those customers who signed arbitration agreements. In August 2001, the court denied that motion. Famous Pawn, Inc. next filed a motion to reconsider the motion to modify the class definition, and filed a separate motion to stay the proceedings and compel arbitration. These motions are currently pending. Since discovery has not yet commenced, nor the scope of the case been determined, management can provide no assurance as to the outcome of such litigation. Additionally, the Company is from time to time a defendant (actual or threatened) in certain other lawsuits encountered in the ordinary course of its business, the resolution of which, in the opinion of management, should not have a material adverse effect on the Company's financial position, results of operations, or cash flows. NOTE 12 - EMPLOYEE STOCK OPTION PLAN AND OUTSTANDING WARRANTS On October 30, 1990, the Company's Board of Directors adopted the 1990 Stock Option Plan (the "1990 Plan"). The 1990 Plan provides for the issuance of incentive stock options and non-qualified stock options to key employees and directors of the Company. The total number of shares of Common Stock authorized and reserved for issuance under the 1990 Plan is 250,000 shares. The exercise price for each stock option granted under the 1990 Plan may not be less than the fair market value of the Common Stock on the date of the grant, unless, in the case of incentive stock options, the optionee owns greater than 10% of the total combined voting power of all classes of capital stock of the Company, in which case the exercise price may not be less than 110% of the fair market value of the Common Stock on the date of the grant. Unless otherwise determined by the Board, options granted under the 1990 Plan have a maximum duration of five years and vest in up to four equal installments, commencing on the first anniversary of the date of grant. As of December 31, 2001, options to purchase 21,187 shares of Common Stock were available for grant under the 1990 Plan. Options to purchase 104,000 shares were vested at December 31, 2001. On January 14, 1999, the Company's shareholders adopted the 1999 Stock Option Plan (the "1999 Plan"). The 1999 Plan provides for the issuance of incentive stock options and non-qualified stock options to key employees and directors of the Company. The total number of shares of Common Stock authorized and reserved for issuance under the 1999 Plan is 1,200,000 shares. The exercise price for each stock option granted under the 1999 Plan may not be less than the fair market value of the Common Stock on the date of the grant, unless, in the case of incentive stock options, the optionee owns greater than 10% of the total combined voting power of all classes of capital stock of the Company, in which case the exercise price may not be less than 110% of the fair market value of the Common Stock on the date of the grant. Unless otherwise determined by the Board, options granted under the 1999 Plan have a maximum duration of ten years unless, in the case of incentive stock options, the optionee owns at least 10% of the total combined voting power of all classes of capital stock of the Company, in which case the maximum duration is five years. As of December 31, 2001, options to purchase 11,589 shares of Common Stock were available for grant under the 1999 Plan. Options to purchase 829,911 shares of common stock under the 1999 Plan were vested as of December 31, 2001. The Company also issues warrants to purchase shares of Common Stock to certain key members of management, to members of the Board of Directors who are not employees or officers of the Company and to outside consultants and advisors in connection with various acquisitions, debt offerings and consulting engagements. In accordance with the provisions of FAS 123, the issuance of warrants to outside consultants and advisors is accounted for using the fair value method prescribed by FAS 123. Warrants granted to outside consultants and advisors prior to December 15, 1995 are accounted for using methods prescribed by APB 25. Stock option and warrant activity for fiscal 1999, 2000 and 2001 is summarized in the accompanying chart (in thousands, except exercise price). Exercisable ----------------- Weighted Weighted Average Average Exercise Options Warrants Exercise Price Number Price ------- -------- -------------- ------ ----- December 31, 1998 234 1,896 $ 9.65 2,075 $ 9.66 Granted 480 - 10.07 Exercised (73) (5) 4.63 ---- ------ December 31, 1999 641 1,891 9.88 2,001 9.84 Granted 475 - 2.00 Cancelled (65) (630) 14.35 ---- ------ December 31, 2000 1,051 1,261 6.92 1,816 6.28 Granted 335 - 4.48 Exercised (84) (13) 3.12 Cancelled (57) (310) 11.24 ---- ------ December 31, 2001 1,245 938 5.99 1,689 5.30 Options and warrants outstanding as of December 31, 2001 are as follows (in thousands, except exercise price and life): Total Warrants Exercise and Remaining Currently Price Options Life Exercisable ----- ------- ---- ----------- $2.00 425 9.0 375 2.00 14 4.5 14 4.00 245 9.1 190 4.00 9 4.5 9 4.63 549 9.0 549 4.63 17 4.5 17 8.00 438 1.1 310 10.00 323 7.4 200 10.00 69 4.5 14 12.00 83 7.5 - 12.00 11 4.5 11 ----- ----- 2,183 1,689 ===== ===== The Company applies the intrinsic value method in accounting for its stock option and warrant issuances. Accordingly, no compensation cost has been recognized for its stock option and warrant grants. Had compensation cost for the Company's stock options and warrants been determined based on the fair value at the grant dates for such option and warrant awards, the Company's net income would have been reduced by $1,492,000, $1,349,000, and $748,000 during the years ended December 31, 2001, 2000 and 1999, respectively. Basic and diluted earnings per share would have been reduced by $0.17 and $0.16, $0.15 and $0.15,and $0.09 and $0.08 respectively, during the years ended December 31, 2001, 2000 and 1999. Weighted average grant-date fair values of options issued were $4.48, $1.59 and $6.62 per unit during the years ended December 31, 2001, 2000 and 1999, respectively, which were calculated in accordance with the Black Scholes option pricing model, using the following assumptions: Year Ended December 31, ----------------------- 2001 2000 1999 ---- ---- ---- Expected volatility 55% 80% 55% Expected dividend yield - - - Expected option term 10 years 10 years 10 years Risk-free rate of return 3.8% 5.0% 5.5% NOTE 13 - FIRST CASH 401(k) PLAN The First Cash 401(k) Plan (the "Plan") is provided by the Company for all full-time employees who have been employed with the Company for one year. Under the Plan, a participant may contribute up to 15% of earnings, with the Company matching the first 3% at a rate of 50%. The employee and company contributions are paid to a corporate trustee and invested in various funds. Contributions made to participants' accounts become fully vested upon completion of five years of service. The total Company contributions to the Plan were $162,000, $146,000, and $121,000 for the years ended December 31, 2001, 2000, and 1999, respectively. NOTE 14 - DISCONTINUED OPERATIONS INFORMATION On November 30, 2001, the Company sold all of its common stock of its subsidiary, Miraglia, Inc. to a former employee of the Company for approximately $230,000 in cash. The sale resulted in a pretax loss of $273,000. The disposal of the software company and, accordingly, its operating results are segregated and reported as discontinued operations in the accompanying Consolidated Statements of Income. Prior year financial statements have been reclassified to conform to the current year presentation. The condensed statements of operations relating to the discontinued software operations for the years ended December 31, 2001, 2000, and 1999 are presented below: Year Ended December 31, -------------------------- 2001 2000 1999 ------ ------ ------ Revenues $ 1,897 $ 2,131 $ 3,708 Costs and expenses 1,846 3,367 3,363 ------ ------ ------ Income (loss) before income taxes 51 (1,236) 345 Income tax benefit (expenses) (18) 471 (114) ------ ------ ------ Net loss $ 33 $ (765) $ 231 ====== ====== ======
                                                                Exhibit 10.64

                              FIRST ADDENDUM TO
                        EXECUTIVE EMPLOYMENT AGREEMENT

      This First Addendum to Executive Employment Agreement (the "Addendum")
 is made this 21st day of March, 2002, by and between First Cash Financial
 Services, Inc. (the "Company"), a Delaware corporation, and Phillip Eric
 Powell (the "Executive").  The Company and Executive may be hereinafter
 collectively referred to as the "Parties."

 I.   RECITALS

 A.   Executive is employed by the Company pursuant to an Executive
      Employment Agreement dated as of September 30, 2000 (the "Original
      Agreement").

 B.   The Parties jointly wish to make additions to the Original Agreement.

 C.   The additions to the Original Agreement are set forth in this Addendum.

                                  AGREEMENT:

      NOW, THEREFORE, in consideration of the promises, terms, covenants and
 conditions set forth herein and in the Original Agreement, and for other
 good and valuable consideration, the receipt of which is undisputed and
 hereby acknowledged, the Parties agree as follows:

      1.   Extension of Term.  Executive  has met the stipulated  performance
 criteria established by the  Board.  Accordingly,  pursuant to the  Original
 Agreement, Executive's term of Employment has been extended through December
 31, 2006.

      2.   Base Salary.   As  a result  of Executive  meeting the  stipulated
 performance  criteria  established  by  the  Board,  in  August  2001,   the
 Executive's annual base salary was increased to $400,000 for the period from
 August 20, 2001 until  December 31, 2001.   Again as  a result of  Executive
 meeting the stipulated  performance criteria, in  January 2002,  Executive's
 annual base salary for  the year ending December  31, 2002 was increased  to
 $500,000.  During the remaining term of Executive's employment,  Executive's
 annual base salary shall not be decreased, but shall be adjusted annually in
 each December at  a rate  of no less  than 10%  of the  current year's  base
 salary.  In addition, the compensation committee of the Board may  determine
 such other  adjustments  as may  be  appropriate based  on  the  Executive's
 performance during the  most recent performance  period, in accordance  with
 the Company's compensation policies.

      3.    Interpretation.

 a.   No Other Additions.  Sections 1  and 2 of this Addendum constitute  the
 only additions to  the Original Agreement,  all other  terms and  conditions
 therein shall remain unaltered.

 b.   Definitions.   All  capitalized terms  used  herein and  not  otherwise
 defined shall  have  the same  meaning  assigned  to them  in  the  Original
 Agreement.

 c.   Severability.   Should  any one  or  more  of the  provisions  of  this
 Addendum be determined to be illegal or unenforceable, all other  provisions
 of this Addendum  shall be  given effect  separately from  the provision  or
 provisions determined  to  be illegal  or  unenforceable and  shall  not  be
 effected thereby.

 d.   Choice of Law.   This Addendum shall be  governed by, and construed  in
 accordance with, the laws of the State of Texas.

 f.   Headings.  The  headings of sections  and paragraphs  of this  Addendum
 have been inserted for convenience of reference only and do not constitute a
 part of this Addendum.

 g.   Counterparts.  This Addendum may  be executed in multiple  counterparts
 with the same effect as if  all parties had signed  the same document.   All
 such counterparts shall be deemed an  original, shall be construed  together
 and shall constitute one and the same instrument.

 IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be  duly
 executed and delivered as of the day first above written.

 FIRST CASH FINANCIAL SERVICES, INC.


      -----------------------
 By:  Richard T. Burke
      Director




      EXECUTIVE

      -----------------------
      Phillip Eric Powell

                                                                Exhibit 10.65

                              FIRST ADDENDUM TO
                        EXECUTIVE EMPLOYMENT AGREEMENT

      This First Addendum to Executive Employment Agreement (the "Addendum")
 is made this 21st day of March, 2002, by and between First Cash Financial
 Services, Inc. (the "Company"), a Delaware corporation, and Rick L. Wessel
 (the "Executive").  The Company and Executive may be hereinafter
 collectively referred to as the "Parties."

 RECITALS

 A.   Executive is employed by the Company pursuant to an Executive
 Employment Agreement dated as of September 30, 2000 (the "Original
 Agreement").

 B.   The Parties jointly wish to make additions to the Original Agreement.

 C.   The additions to the Original Agreement are set forth in this Addendum.

                                  AGREEMENT:

      NOW, THEREFORE, in consideration of the promises, terms, covenants and
 conditions set forth herein and in the Original Agreement, and for other
 good and valuable consideration, the receipt of which is undisputed and
 hereby acknowledged, the Parties agree as follows:

      1.   Extension of Term.  Executive  has met the stipulated  performance
 criteria established by the  Board.  Accordingly,  pursuant to the  Original
 Agreement, Executive's term of Employment has been extended through December
 31, 2006.

      2.   Base Salary.   As  a result  of Executive  meeting the  stipulated
 performance  criteria  established  by  the  Board,  in  August  2001,   the
 Executive's annual base salary was increased to $275,000 for the period from
 August 20, 2001 until December  31, 2001.  Again,  as a result of  Executive
 meeting the stipulated  performance criteria, in  January 2002,  Executive's
 annual base salary for  the year ending December  31, 2002 was increased  to
 $350,000.  During the remaining term of Executive's employment,  Executive's
 annual base salary shall not be decreased, but shall be adjusted annually in
 each December at  a rate  of no less  than 10%  of the  current year's  base
 salary.  In addition, the compensation committee of the Board may  determine
 such other  adjustments  as may  be  appropriate based  on  the  Executive's
 performance during the  most recent performance  period, in accordance  with
 the Company's compensation policies.

      3.    Interpretation.

 a.   No Other Additions.  Sections 1  and 2 of this Addendum constitute  the
 only additions to  the Original Agreement,  all other  terms and  conditions
 therein shall remain unaltered.

 b.   Definitions.   All  capitalized terms  used  herein and  not  otherwise
 defined shall  have  the same  meaning  assigned  to them  in  the  Original
 Agreement.

 c.   Severability.   Should  any one  or  more  of the  provisions  of  this
 Addendum be determined to be illegal or unenforceable, all other  provisions
 of this Addendum  shall be  given effect  separately from  the provision  or
 provisions determined  to  be illegal  or  unenforceable and  shall  not  be
 effected thereby.

 d.   Choice of Law.   This Addendum shall be  governed by, and construed  in
 accordance with, the laws of the State of Texas.

 f.   Headings.  The  headings of sections  and paragraphs  of this  Addendum
 have been inserted for convenience of reference only and do not constitute a
 part of this Addendum.

 g.   Counterparts.  This Addendum may  be executed in multiple  counterparts
 with the same effect as if  all parties had signed  the same document.   All
 such counterparts shall be deemed an  original, shall be construed  together
 and shall constitute one and the same instrument.

 IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be  duly
uted and delivered as of the day first above written.

 FIRST CASH FINANCIAL SERVICES, INC.



      -----------------------
 By:  Phillip E. Powell
      Chief Executive Officer




      EXECUTIVE

      -----------------------
      Rick L. Wessel

                                                                 Exhibit 21.0
                     FIRST CASH FINANCIAL SERVICES, INC.
                                 SUBSIDIARIES

                                                              Percentage
                                           Country/State of     Owned
       Subsidiary Name                      Incorporation    by Registrant
       ---------------                      -------------    -------------
       American Loan and Jewelry, Inc.          Texas            100%
       WR Financial, Inc.                       Texas            100%
       Famous Pawn, Inc.                        Maryland         100%
       JB Pawn, Inc.                            Texas            100%
       Cash & Go, Inc.                          California       100%
       Capital Pawnbrokers, Inc.                Maryland         100%
       Silver Hill Pawn, Inc.                   Maryland         100%
       Elegant Floors, Inc.                     Maryland         100%
       One Iron Ventures, Inc.                  Illinois         100%
       First Cash, S.A. de C.V.                 Mexico           100%
       American Loan Employee
         Services, S.A. de D.V.                 Mexico           100%
       First Cash, Ltd.                         Texas            100%
       First Cash Corp                          Delaware         100%
       First Cash Management, LLC               Delaware         100%
       First Cash, Inc.                         Nevada           100%
       Cash & Go, Ltd.                          Texas             49.5%
       Cash & Go Management, LLC                Texas             50%

                                                                 Exhibit 23.1

                        INDEPENDENT AUDITORS' CONSENT


 We consent to the  incorporation by reference in  Registration Statement No.
 333-71077  of  First  Cash   Financial  Services,  Inc.  on   Form  S-3  and
 Registration Statement No. 333-73391 on Form S-8 of our report dated January
 29, 2002  (which report  expresses an  unqualified  opinion and  includes an
 explanatory  paragraph  relating  to  the  Company's  change  in  method  of
 accounting for  income  recognition on  pawns  in 2000),  appearing  in this
 Annual Report on Form  10-K of First  Cash Financial Services,  Inc. for the
 year ended December 31, 2001.



 DELOITTE & TOUCHE LLP
 Fort Worth, Texas
 March 26, 2002

                                                           Exhibit 23.2

                                   CONSENT


 The Board of Directors
 First Cash Financial Services, Inc.

 We consent to the incorporation by reference of our legal opinion  contained
 in the Registration Statement on Form  S-3 dated January 22, 1999, File  No.
 333-71077 and in the Registration Statement on Form S-8 dated March 5, 1999,
 File No. 333-73391.


 BREWER & PRITCHARD, P.C.
 Houston, Texas
 March 26, 2002