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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Ocotber 18, 2006
----------------
(Date of Report - Date of Earliest Event Reported)
First Cash Financial Services, Inc.
-----------------------------------
(Exact name of registrant as specified in its charter)
Delaware
--------
(State or other jurisdiction of incorporation)
0-19133 75-2237318
------- ----------
(Commission File Number) (IRS Employer Identification No.)
690 East Lamar Blvd., Suite 400, Arlington, Texas 76011
-------------------------------------------------------
(Address of principal executive offices, including zip code)
(817) 460-3947
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(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
First Cash Financial Services, Inc. has issued a press release
announcing its financial results for the three month and nine month
periods ended September 30, 2006. The Company's press release dated
October 18, 2006 announcing the results is attached hereto as Exhibit
99.1 and is incorporated by reference in its entirety into this Item
2.02.
The information provided in this Item 2.02 shall not be deemed "filed"
for purposes of the Securities Act of 1934, as amended, or otherwise
subject to the liabilities of that section, nor shall such information
be deemed incorporated by reference in any filing under the Securities
Act of 1933, as amended, except as shall be expressly set forth by the
specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits:
99.1 Press Release date October 18, 2006 announcing the Company's
financial results for the three month and nine month periods
ended September 30, 2006.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: October 18, 2006 FIRST CASH FINANCIAL SERVICES, INC.
-----------------------------------
(Registrant)
/s/ R. DOUGLAS ORR
-------------------------------
R. Douglas Orr
Chief Accounting Officer
EXHIBIT INDEX
Exhibit Number Document
- -------------- --------
99.1 Press release dated October 18, 2006.
2
Exhibit 99.1
First Cash Reports Third Quarter Earnings of $0.25;
Up 32% Over Prior Year
Company Marks 23rd Consecutive Quarter of Double-Digit Earnings
Growth; Year-to-Date Store Openings Total 63, Up 85% Over Prior Year
ARLINGTON, Texas--(BUSINESS WIRE)--Oct. 18, 2006--First Cash
Financial Services, Inc. (Nasdaq:FCFS) today announced record-setting
third quarter revenues, net income and earnings per share for the
three months ended September 30, 2006. This marked First Cash's 23rd
consecutive quarter of double-digit earnings per share growth.
Earnings
-- Diluted earnings per share for the third quarter of 2006 were
$0.25, a 32% increase compared to diluted earnings per share
of $0.19 in the third quarter of 2005.
-- For the nine months ended September 30, 2006, diluted earnings
per share were $0.67, an increase of 26% over earnings per
share of $0.53 for the same nine-month period in 2005.
-- Diluted earnings per share for the trailing twelve months
ended September 30, 2006 were $0.90, an increase of 27% over
$0.71 per share for the trailing twelve months ended September
30, 2005.
-- Net income for the third quarter of 2006 was $7.9 million, a
25% increase over third quarter 2005 net income of $6.4
million. Year-to-date net income was $22.1 million, compared
to $17.7 million for the first nine months of 2005, which also
represents an increase of 25%.
Revenues
-- Consolidated revenues for the third quarter of 2006 increased
28%, totaling $69 million, compared to $54 million in the
comparative 2005 period. Year-to-date revenues were $182
million, up from $148 million in the comparative prior-year
period, which represents a 23% increase.
-- Same-store revenues for the third quarter of 2006 increased 9%
over the comparable prior-year period, while year-to-date
same-store revenues increased 10% over the comparable
prior-year period.
-- Revenues from Auto Master, a buy-here/pay-here automotive
retailer acquired on August 25, 2006, totaled $6.7 million for
the period August 26, 2006 through September 30, 2006. Auto
Master's revenues included $6.4 million in automobile sales
and $329,000 in finance charges.
New Store Openings
-- A total of 20 new pawn and short-term/payday advance stores
were opened during the third quarter of 2006. Year-to-date,
the Company has opened 63 stores, an increase of 85% over the
34 stores opened in the first nine months of 2005. The net
effect of opening these 63 new stores during the first nine
months of 2006 was a reduction in third quarter earnings of
approximately $0.02 per share.
-- In addition to the new store openings, the Company acquired
eight buy-here/pay-here automobile dealerships through its
acquisition of Auto Master. The dealerships are located in
Northwest Arkansas, Missouri and Oklahoma.
-- The overall store and dealership count totals 398 units as of
September 30, 2006, a 27% increase over the 313 units open at
September 30, 2005.
Operating Metrics
-- The consolidated operating margin, calculated as income before
taxes as a percentage of revenues, for the trailing twelve
months ended September 30, 2006 was 19.3%, compared to 18.9%
for the comparable trailing twelve months of 2005.
-- Return on stockholders' equity increased to 17.9% for the
trailing twelve months ended September 30, 2006, compared to
16.0% for the comparable prior-year period.
-- Year-over-year pawn loan growth was strong across all markets.
At September 30, 2006, U.S. pawn balances totaled $21.4
million, an increase of 13% over the prior year, while pawn
balances in Mexico totaled $13.3 million, an increase of 30%
over the prior year. Combined short-term/payday advance and
third-party credit services loans outstanding totaled $17.9
million at quarter end. Excluding the Company's ten locations
in Illinois, where loan balances have decreased due to new
legislation, short-term advance and third-party credit
services loan balances outstanding in the Company's
short-term/payday advance locations increased 20%
year-over-year.
-- The year-to-date gross margin on total pawn merchandise sales
increased to 41%, compared to 40% for the prior year. For the
third quarter of 2006, the margin was 42%, an improvement over
the 39% margin recorded in the prior-year quarter, which is
primarily due to increased pricing on merchandise sales.
-- The year-to-date short-term/payday advance and credit services
loss provision for 2006 remains unchanged from the prior year
at 21% of fees. The current quarter credit provision is
slightly more than the same quarter last year; however, the
prior-year third quarter credit provision expense was reduced
as a result of non-recurring sales of certain very old
charged-off loan portfolios. Excluding such non-recurring
sales, the third quarter 2006 credit provision as a percent of
fees decreased, or improved, as compared to the prior-year
quarter.
Financial Position & Liquidity
-- Earnings before interest, taxes, depreciation and amortization
(EBITDA) for the trailing twelve-month period ended September
30, 2006 totaled $53 million, an increase of 25% over the
comparative prior-year period. A detailed reconciliation of
this non-GAAP financial measure to net income is provided
elsewhere in this release.
-- The Auto Master acquisition was funded through a combination
of cash, seller financing and amounts drawn on the revolving
bank line of credit. In anticipation of this transaction, the
Company increased its bank line of credit facility from $25
million to $50 million. As of September 30, 2006, the
Company's outstanding interest-bearing debt was comprised of
$10 million in notes payable to individuals and $31 million on
the Company's line of credit. Including the
acquisition-related debt, the ratio of total assets to total
liabilities at September 30, 2006 is 4 to 1 and the current
ratio stands at 7 to 1. The Company anticipates paying off the
bank line of credit, utilizing internally generated cash
flows, within the next six to eight quarters.
2006 and 2007 Outlook
-- The Company is reiterating its recently increased guidance for
2006 diluted earnings per share estimated at $0.96 to $0.97.
The forecast range represents 26% to 28% growth over 2005
diluted earnings per share. For the fourth quarter of 2006,
the Company's estimated range of earnings per share is $0.29
to $0.30, an increase of 26% to 30% over the fourth quarter of
2005.
-- Looking ahead to 2007, the Company expects continued earnings
growth from its core pawn and short-term/payday advance
businesses, primarily driven through its well-established
store expansion strategy. Including the projected accretive
earnings impact from Auto Master, the Company's earnings per
share estimate for 2007 is $1.25 to $1.30 per share. This
represents an increase of 29% to 34% over the upper end of the
2006 guidance.
-- With 63 new pawn and short-term/payday advance stores opened
year-to-date, the Company has already achieved its full-year
2006 target of 60 to 70 new store openings. First Cash intends
to continue its new store expansion program in 2007, with a
total of 70 to 75 new pawn and short-term/payday advance
stores anticipated for opening. In addition, Company forecasts
include opening 3 to 5 new Auto Master buy-here/pay-here
dealerships during the remainder of 2006 and 2007.
Commentary & Analysis
Mr. Rick Wessel, Vice-Chairman and President, commented on the
Company's third quarter operating results, "This was an outstanding
quarter in every respect, as we posted record quarterly consolidated
revenue and earnings results, which included a 28% increase in
revenues and a 32% increase in earnings per share. Our core pawn and
short-term/payday advance operations continued to grow at or above our
own high expectations. In addition, we demonstrated ongoing commitment
to further acceleration and diversification of our growth platforms,
through both our pawn and short-term/payday advance store expansion
programs and through the recent acquisition of the Auto Master
buy-here/pay-here automobile dealerships."
In addition to the strong third quarter and year-to-date revenue
and earnings results, the Company achieved positive results in other
key operating metrics. As noted above, pawn loan growth in the
Company's domestic locations, which are all mature stores, has been
especially strong over the entire year, while the Mexico pawn
locations experienced a significant seasonal surge in loan balances
during the third quarter. Short-term advance growth remains solid in
most markets, and despite macro concerns over consumer credit quality,
the Company's loss provision on short-term advances has remained
consistent as a percentage of revenues compared to the prior year.
The Company has also significantly exceeded its internal
expectations for year-to-date store openings. As of September 30,
2006, a total of 63 stores have been opened. In comparing the 63
year-to-date store openings to the 34 stores opened in the first nine
months of 2005, Mr. Doug Orr, Executive Vice President and Chief
Financial Officer, noted, "We view it as a significant accomplishment
for us to absorb such an increase in year-over-year store opening
expenses and simultaneously grow earnings to record levels. In
addition, the fact that so many of these new 2006 stores were opened
early in the year should make them more accretive to earnings in
2007."
The acquisition of Auto Master represents another key highlight of
the third quarter. Based in Northwest Arkansas, Auto Master owns and
operates eight buy-here/pay-here used automobile dealerships. The
customers of Auto Master, many of whom are "under-banked" or otherwise
credit-challenged, typically utilize the in-house financing programs
offered at the dealerships, which feature affordable weekly or
bi-weekly payment plans. "Adding Auto Master represents an exciting
and important strategic initiative and new growth platform for First
Cash," according to Mr. Wessel, "The buy-here/pay-here industry offers
significant growth potential within a stable regulatory environment
and it expands and diversifies the suite of products and services
available to our core customer base." In addition, the Company expects
the Auto Master transaction to be accretive to earnings beginning in
2006 and beyond.
In regard to financial position and liquidity, the Company's
balance sheet and cash flow metrics remain strong as well.
Year-to-date, First Cash has utilized operating cash flows to fund $25
million in stock repurchases and $11 million in capital expenditures
primarily related to new store openings. Total assets of the Company
at September 30, 2006 are $236 million, which represents a 37%
increase over the prior year.
In summary, Mr. Alan Barron, Chief Executive Officer and Chief
Operating Officer, said, "As we approach a six-year run of consecutive
double-digit quarterly earnings growth, it is also noteworthy that
over the same six-year period First Cash has posted average annual
earnings growth in excess of 25%. Our 2006 operating results show
continued acceleration of these growth and performance results. We
remain confident and excited about First Cash's ability to innovate,
grow and deliver long-term value to our shareholders."
Forward-Looking Information
This release may contain forward-looking statements about the
business, financial condition and prospects of First Cash Financial
Services, Inc. ("First Cash" or the "Company"). Forward-looking
statements, as that term is defined in the Private Securities
Litigation Reform Act of 1995, can be identified by the use of
forward-looking terminology such as "believes," "projects," "expects,"
"may," "estimates," "should," "plans," "intends," "could," or
"anticipates," or the negative thereof, or other variations thereon,
or comparable terminology, or by discussions of strategy.
Forward-looking statements can also be identified by the fact that
these statements do not relate strictly to historical or current
matters. Rather, forward-looking statements relate to anticipated or
expected events, activities, trends or results. Because
forward-looking statements relate to matters that have not yet
occurred, these statements are inherently subject to risks and
uncertainties. Forward-looking statements in this release include,
without limitation, the Company's expectations of earnings per share,
earnings growth, expansion strategies, earnings accretion from
acquisitions, store and dealership openings, future liquidity, cash
flows, debt levels and other performance results. These statements are
made to provide the public with management's current assessment of the
Company's business. Although the Company believes that the
expectations reflected in forward-looking statements are reasonable,
there can be no assurances that such expectations will prove to be
accurate. Security holders are cautioned that such forward-looking
statements involve risks and uncertainties. The forward-looking
statements contained in this release speak only as of the date of this
statement, and the Company expressly disclaims any obligation or
undertaking to report any updates or revisions to any such statement
to reflect any change in the Company's expectations or any change in
events, conditions or circumstances on which any such statement is
based. Certain factors may cause results to differ materially from
those anticipated by some of the statements made in this release. Such
factors are difficult to predict and many are beyond the control of
the Company and may include changes in regional, national or
international economic conditions, changes in consumer borrowing and
repayment behaviors, credit losses, changes or increases in
competition, the ability to locate, open and staff new stores and
dealerships, the availability or access to sources of inventory,
inclement weather, the ability to successfully integrate acquisitions,
the ability to retain key management personnel, the ability to operate
with limited regulation as a credit services organization in Texas,
new legislative initiatives or governmental regulations (or changes to
existing laws and regulations) affecting payday advance businesses,
credit services organizations, pawn businesses and buy-here/pay-here
automotive retailers in both the U.S. and Mexico, unforeseen
litigation, changes in interest rates, changes in tax rates or
policies, changes in gold prices, changes in energy prices, changes in
used vehicle prices, cost of funds, changes in foreign currency
exchange rates, future business decisions, and other uncertainties.
These and other risks and uncertainties are indicated in the Company's
2005 Annual Report on Form 10-K (see "Item 1A. Risk Factors") and
updated in subsequent quarterly reports on Form 10-Q.
About First Cash
First Cash Financial Services, Inc. is a leading provider of
specialty consumer financial services and related retail products. Its
pawn stores make small loans secured by pledged personal property,
retail pawned merchandise acquired through loan forfeitures and in
certain locations provide payday advances and credit services
products. The Company's short-term/payday advance locations provide
various combinations of short-term/payday advance products,
check-cashing, credit services and other financial services products.
First Cash also operates automobile dealerships and related financing
operations focused exclusively on the "buy-here/pay-here" segment of
the used vehicle market. The Company owns and operates approximately
400 stores and buy-here/pay-here dealerships in thirteen U.S. states
and eight states in Mexico. In addition, First Cash is an equal
partner in Cash & Go, Ltd., a joint venture, which owns and operates
40 check-cashing and financial services kiosks located inside
convenience stores. First Cash has been recognized for five
consecutive years by Forbes magazine as one of its "200 Best Small
Companies." This annual ranking is based on a combination of
profitability and growth performance measures over the most current
one and five-year periods.
First Cash's common stock (ticker symbol "FCFS") is traded on the
Nasdaq Global Select Market, which has the highest initial listing
standards of any stock exchange in the world based on financial and
liquidity requirements.
FIRST CASH FINANCIAL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Nine Months Ended
September 30, September 30,
2006(1) 2005 2006(1) 2005
--------- ------- -------- --------
(unaudited)
(in thousands, except per share
amounts)
Revenues:
Merchandise sales $ 36,988 $25,441 $ 95,850 $ 72,222
Finance and service charges 31,479 27,932 82,685 72,386
Other 1,005 934 3,012 3,026
---------- -------- ------------------
69,472 54,307 181,547 147,634
---------- -------- ------------------
Cost of revenues:
Cost of goods sold 20,781 15,635 55,314 43,605
Credit loss provision 6,789 4,257 11,328 8,856
Other 122 72 312 206
---------- -------- ------------------
27,692 19,964 66,954 52,667
---------- -------- ------------------
Net revenues 41,780 34,343 114,593 94,967
---------- -------- ------------------
Expenses and other income:
Store operating expenses 21,086 17,574 57,853 49,499
Administrative expenses 6,031 5,251 16,801 13,676
Depreciation and
amortization 2,090 1,533 5,690 4,195
Interest expense 219 - 219 -
Interest income (141) (46) (691) (217)
---------- -------- ------------------
29,285 24,312 79,872 67,153
---------- -------- ------------------
Income before income taxes 12,495 10,031 34,721 27,814
Provision for income taxes 4,560 3,661 12,669 10,152
---------- -------- ------------------
Net income $ 7,935 $ 6,370 $ 22,052 $ 17,662
========== ======== ==================
Net income per share:
Basic $ 0.26 $ 0.20 $ 0.70 $ 0.56
========== ======== ==================
Diluted $ 0.25 $ 0.19 $ 0.67 $ 0.53
========== ======== ==================
Weighted average common shares
outstanding:
Basic 30,938 31,142 31,514 31,542
========== ======== ==================
Diluted 32,283 32,866 32,866 33,242
========== ======== ==================
(1) On August 25, 2006, the Company acquired Guaranteed Auto
Finance, Inc. and SHAC, Inc. (collectively doing business as "Auto
Master"). Accordingly, the Consolidated Statement of Income includes
the results of Auto Master for the period August 26, 2006 through
September 30, 2006. All significant intercompany accounts have been
eliminated.
FIRST CASH FINANCIAL SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30,
-------------------
2006(1) 2005
-------- --------
(unaudited, in
thousands)
Assets:
Cash and cash equivalents $ 20,789 $ 29,657
Service fees receivable 5,203 4,227
Customer receivables, net of allowance 71,692 35,750
Inventories 28,018 21,461
Prepaid expenses and other current assets 7,026 4,005
--------- ---------
Total current assets 132,728 95,100
Property and equipment, net 29,119 22,396
Goodwill and other intangible assets 72,631 53,237
Other 1,208 938
--------- ---------
$235,686 $171,671
========= =========
Liabilities and stockholders' equity:
Current portion of long-term debt $ 2,250 $ -
Accounts payable 2,091 945
Accrued liabilities 14,228 9,242
--------- ---------
Total current liabilities 18,569 10,187
Revolving credit facility 31,000 -
Long-term debt, net of current portion 7,750 -
Deferred income taxes payable 9,245 8,569
--------- ---------
Total liabilities 66,564 18,756
Stockholders' equity 169,122 152,915
--------- ---------
$235,686 $171,671
========= =========
(1) On August 25, 2006, the Company acquired Guaranteed Auto
Finance, Inc. and SHAC, Inc. (collectively doing business as "Auto
Master"). Accordingly, the Consolidated Balance Sheet includes the
accounts of Auto Master as of September 30, 2006. All significant
intercompany accounts have been eliminated.
Revenues, Cost of Revenues and Net Revenues by Product Line
- ----------------------------------------------------------------------
The following tables detail revenues, cost of revenues and net
revenues by product line for the three months ended September 30,
2006 and September 30, 2005 (amounts shown in thousands):
Short-term/ Buy-Here/
Payday Pay-Here
Pawn Advances Automotive Consolidated
-------- ----------- ---------- ------------
Three Months Ended
September 30, 2006
- -------------------------
Revenues:
Merchandise sales:
Retail $22,087 $ - $6,221 $28,308
Wholesale 8,533 - 147 8,680
Finance and service
charges 12,906 18,244 329 31,479
Other 3 976 26 1,005
-------- ----------- ---------- ------------
$43,529 $19,220 $6,723 $69,472
======== =========== ========== ============
Cost of revenues:
Cost of goods sold:
Retail $12,285 $ - $2,749 $15,034
Wholesale 5,537 - 210 5,747
Credit loss provision - 5,237 1,552 6,789
Other - 122 - 122
-------- ----------- ---------- ------------
$17,822 $ 5,359 $4,511 $27,692
======== =========== ========== ============
Net revenues $25,707 $13,861 $2,212 $41,780
======== =========== ========== ============
Three Months Ended
September 30, 2005
- -------------------------
Revenues:
Merchandise sales:
Retail $19,245 $ - $ - $19,245
Wholesale 6,196 - - 6,196
Finance and service
charges 10,732 17,200 - 27,932
Other 32 902 - 934
-------- ----------- ---------- ------------
$36,205 $18,102 $ - $54,307
======== =========== ========== ============
Cost of revenues:
Cost of goods sold:
Retail $10,593 $ - $ - $10,593
Wholesale 5,042 - - 5,042
Credit loss provision - 4,257 - 4,257
Other - 72 - 72
-------- ----------- ---------- ------------
$15,635 $ 4,329 $ - $19,964
======== =========== ========== ============
Net revenues $20,570 $13,773 $ - $34,343
======== =========== ========== ============
The following tables detail revenues, cost of revenues and net
revenues by product line for the nine months ended September 30, 2006
and September 30, 2005 (amounts shown in thousands):
Short-term/ Buy-Here
Payday Pay-Here/
Pawn Advances Automotive Consolidated
--------- ----------- ---------- ------------
Nine Months Ended
September 30, 2006
- ------------------------
Revenues:
Merchandise sales:
Retail $ 65,858 $ - $6,221 $ 72,079
Wholesale 23,624 - 147 23,771
Finance and service
charges 35,306 47,050 329 82,685
Other 13 2,973 26 3,012
--------- ----------- ---------- ------------
$124,801 $50,023 $6,723 $181,547
========= =========== ========== ============
Cost of revenues:
Cost of goods sold:
Retail $ 36,634 $ - $2,749 $ 39,383
Wholesale 15,721 - 210 15,931
Credit loss provisions - 9,776 1,552 11,328
Other - 312 - 312
--------- ----------- ---------- ------------
$ 52,355 $10,088 $4,511 $ 66,954
========= =========== ========== ============
Net revenues $ 72,446 $39,935 $2,212 $114,593
========= =========== ========== ============
Nine Months Ended
September 30, 2005
- ------------------------
Revenues:
Merchandise sales:
Retail $ 56,790 $ - $ - $ 56,790
Wholesale 15,432 - - 15,432
Finance and service
charges 29,255 43,131 - 72,386
Other 108 2,918 - 3,026
--------- ----------- ---------- ------------
$101,585 $46,049 $ - $147,634
========= =========== ========== ============
Cost of revenues:
Cost of goods sold:
Retail $ 31,522 $ - $ - $ 31,522
Wholesale 12,083 - - 12,083
Credit loss provision - 8,856 - 8,856
Other - 206 - 206
--------- ----------- ---------- ------------
$ 43,605 $ 9,062 $ - $ 52,667
========= =========== ========== ============
Net revenues $ 57,980 $36,987 $ - $ 94,967
========= =========== ========== ============
Selected Assets by Product Line
- ----------------------------------------------------------------------
The following table details selected assets by product line as of
September 30, 2006 and September 30, 2005 (amounts shown in
thousands):
Short-term/ Buy-Here
Payday Pay-Here/
Pawn Advances Automotive Consolidated
-------- ----------- ---------- ------------
September 30, 2006
- -------------------------
Customer receivables, net
of allowance $34,699 $ 6,459 $30,534 $71,692
CSO loans held by
independent third-party
lender (1) - 11,457 - 11,457
-------- ----------- ---------- ------------
$34,699 $17,916 $30,534 $83,149
======== =========== ========== ============
Inventories $24,912 $ - $ 3,106 $28,018
======== =========== ========== ============
September 30, 2005
- -------------------------
Customer receivables, net
of allowance $29,152 $ 6,598 $ - $35,750
CSO loans held by
independent third-party
lender (1) - 9,994 - 9,994
-------- ----------- ---------- ------------
$29,152 $16,592 $ - $45,744
======== =========== ========== ============
Inventories $21,461 $ - $ - $21,461
======== =========== ========== ============
(1) CSO loans outstanding are comprised of the principal portion
of active CSO loans outstanding from an independent third-party
lender, which are not included on the Company's balance sheet.
Store Openings
- ----------------------------------------------------------------------
The following tables detail store openings and closings for the three
months and nine months ended September 30, 2006:
Short-term/ Buy-Here/
Pawn Payday Pay-Here Total
Stores Stores Dealerships Stores
-------- ----------- ----------- ------
Three Months Ended
September 30, 2006
- ------------------------------
Total stores, beginning of
period 244 126 - 370
New stores opened 5 15 - 20
Stores acquired - - 8 8
Stores closed or consolidated - - - -
-------- ----------- ----------- ------
Total stores, end of period 249 141 8 398
======== =========== =========== ======
Nine Months Ended
September 30, 2006
- ------------------------------
Total stores, beginning of
period 226 102 - 328
New stores opened 24 39 - 63
Stores acquired - - 8 8
Stores closed or consolidated (1) - - (1)
-------- ----------- ----------- ------
Total stores, end of period 249 141 8 398
======== =========== =========== ======
For the three months and nine months ended September 30, 2006, the
Company's 50% owned joint venture, Cash & Go, Ltd., operated a total
of 40 kiosks located inside convenience stores in the state of Texas,
which are not included in the above charts. No kiosks were opened or
closed during fiscal 2006.
Unaudited Non-GAAP Financial Information - EBITDA
- ----------------------------------------------------------------------
EBITDA is commonly used by investors to assess a company's leverage
capacity, liquidity and financial performance. EBITDA is not
considered a measure of financial performance under U.S. generally
accepted accounting principles ("GAAP"), and the items excluded from
EBITDA are significant components in understanding and assessing the
Company's financial performance. Since EBITDA is not a measure
determined in accordance with GAAP and is thus susceptible to varying
calculations, EBITDA, as presented, may not be comparable to other
similarly titled measures of other companies. EBITDA should not be
considered as an alternative to net income, cash flows provided by or
used in operating, investing or financing activities or other
financial statement data presented in the Company's consolidated
financial statements as an indicator of financial performance or
liquidity. Non-GAAP measures should be evaluated in conjunction with,
and are not a substitute for, GAAP financial measures. The following
table provides a reconciliation of net income to EBITDA (amounts in
thousands):
Twelve Months Ended
September 30,
2006 2005
----------- ----------
Net income $29,773 $23,754
Adjustments:
Interest expense 219 13
Interest income (791) (242)
Income taxes 16,812 13,730
Depreciation and amortization 7,299 5,386
----------- ----------
Earnings before interest, income taxes,
depreciation and amortization $53,312 $42,641
=========== ==========
CONTACT: First Cash Financial Services, Inc.
Rick Wessel, 817-505-3199
Vice Chairman & President
or
Doug Orr, 817-505-3199
Executive Vice President & Chief Financial Officer
Email: investorrelations@firstcash.com
Website: www.firstcash.com