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

April 24, 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


(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:

o

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

o

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

o

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

o

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 




Item 8.01   Other Events

First Cash Financial Services, Inc. has made available on its corporate website (www.firstcash.com) its most recent investor presentation.  This presentation is included herein as Exhibit 99.1.

The information provided in this Item 8.01 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     First Cash Financial Services, Inc. Investor Presentation

2



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:  April 24, 2006

 

FIRST CASH FINANCIAL SERVICES, INC.

 

 


 

 

(Registrant)

 

 

 

 

 

/s/ R. DOUGLAS ORR

 

 


 

 

R. Douglas Orr

 

 

Chief Accounting Officer

3



EXHIBIT INDEX

Exhibit Number

 

Document


 


99.1

 

First Cash Financial Services, Inc. Investor Presentation

4



Exhibit 99.1

 

 

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FIRST CASH FINANCIAL SERVICES

[LOGO OF FIRST CASH]

INVESTOR PRESENTATION - APRIL 2006



Safe Harbor Statement

Certain statements included in this presentation which are not historical in nature, including statements regarding the Company’s and/or management’s strategies, beliefs, expectations, plans for new stores, projections of earnings and revenues, expected effect of regulatory pronouncements, potential legislation, or other predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are intended to be covered by the Safe Harbor provisions for forward-looking statements contained in such Act.

 

 

Forward-looking statements are made based on assumptions involving certain known and unknown risks and uncertainties, many of which are beyond the Company’s control, and other important factors that could cause actual results, performance or achievements to differ materially from expectations expressed or implied by such forward-looking statements.  These risk factors and uncertainties are listed from time to time in the Company’s filings with the Securities and Exchange Commission, including, but not limited to, our annual reports on Form 10-K for the years ending December 31, 2004 and 2005, our report on Form 10-Q for the period ended March 31, 2006, and on various Form 8-K filings in 2006.

FIRST CASH FINANCIAL SERVICES



First Cash Overview

Leading provider of diversified specialty consumer finance products

 

 

Superior earnings performance and financial position

 

 

Significant future growth through store expansion

 

 

[GRAPHIC APPEARS HERE]

FIRST CASH FINANCIAL SERVICES



Company History

1988

Founded – 3 pawn stores in Texas

 

 

 

Early 90’s

Goes public; multi-state pawn store roll-up acquisitions

 

 

 

Late 90’s

Payday lending acquisitions; introduction of payday product in pawn stores

 

 

 

 [GRAPHIC APPEARS HERE]

 

 First pawn stores opened in Mexico 

 

 

 

2001 to present

Expansion through new store openings:  U.S. payday & Mexico pawn

 

 

 

2005

Introduction of credit services product

FIRST CASH FINANCIAL SERVICES



Store Count Growth

[CHART APPEARS HERE]

FIRST CASH FINANCIAL SERVICES



Geographic Markets & Product Offerings

As of March 31, 2006

[GRAPHIC APPEARS HERE]

FIRST CASH FINANCIAL SERVICES



Revenue Mix

[CHART APPEARS HERE]

FIRST CASH FINANCIAL SERVICES



Pawn Loan Product

Short-term loan secured by pledged personal property

 

 

 

No credit check

 

 

 

 

No bank account required

 

 

 

Regulations vary by state - typically provide for:

 

 

 

30 day term

 

 

 

 

10% to 20% monthly service fee

[GRAPHIC APPEARS HERE]

FIRST CASH FINANCIAL SERVICES



Pawn Customer Demographics

First Cash Pawn Loan Growth

[CHART APPEARS HERE]

Many un-banked or under-banked customers

 

 

 

Both in the U.S. and…

 

 

In Mexico, where:

 

 

 

88% of retail transactions are in cash

 

 

 

 

An estimated 80% of the population is un-banked

FIRST CASH FINANCIAL SERVICES



Pawn-Related Retail Sales

Composition of Retail Inventories

[CHART APPEARS HERE]

Retail inventories are primarily acquired via forfeited pawn loan collateral

 

 

Gold jewelry represents 58% of the retail inventory


Retail Metrics (trailing 12 Months)

 



 

Total merchandise margins

40%

Retail margins (excludes scrap jewelry sales)

44%

Inventory turns

3.1x

FIRST CASH FINANCIAL SERVICES



Payday Advance Product

Loan size: $100 to $1,000

 

 

Term:      7 to 31 days

 

 

Typical service charge per advance: 15%

 

 

Proof of employment and active bank account required – but no credit check

 

 

Advance secured by personal check held until due date

[GRAPHIC APPEARS HERE]

FIRST CASH FINANCIAL SERVICES



Payday Advance Regulatory Landscape

FDIC regulations affect only payday lending in other states where “bank model” is used

First Cash does not utilize the bank model in any state and is therefore not subject to FDIC regulations

[GRAPHIC APPEARS HERE]

FIRST CASH FINANCIAL SERVICES



Credit Services Product

In its Texas locations, First Cash has elected to operate as a Credit Services Organization (“CSO”)

 

 

 

As a CSO, First Cash provides customers access to a short-term loan funded by an independent consumer lending company

 

 

 

Customer pays a fee to CSO for its services:


 

 

processing of application with lender

 

 

 

 

 

 

providing letter of credit

 

 

 

 

 

 

disbursement and collection of lender funds

 

 

 

 

Customer pays interest to lender (at less than 10% APR)

FIRST CASH FINANCIAL SERVICES



Superior Performance & Financial Position

Operating Results

 

 

 

 

Industry leading performance metrics

 

 

 

 

Consistent growth

 

 

 

 

Increasing profit margins

 

 

 

Financial Position

 

 

 

Debt-free

 

 

 

 

Strong cash flows

Revenues

[CHART APPEARS HERE]

FIRST CASH FINANCIAL SERVICES



2006 - First Quarter Highlights

Q1 diluted EPS of $0.23

 

 

 

 

Up 28% over prior year

 

 

 

 

Exceeded consensus estimate by $0.02

 

 

 

 

21st consecutive quarter of double-digit EPS growth

 

 

 

Other highlights:

 

 

 

 

Quarterly revenues up 19%, to $56 million

 

 

 

 

Net income of $7.6 million, up 26%

 

 

 

 

20 new stores, a record number of openings for a single quarter


FIRST CASH FINANCIAL SERVICES



Earnings Per Share Growth

[CHART APPEARS HERE]

Reflects two-for-one stock split effective February 6, 2006

FIRST CASH FINANCIAL SERVICES



Consistency of Growth & Earnings

Trailing 12 Months Diluted Earnings per Share

[CHART APPEARS HERE]

Reflects two-for-one stock split effective February 6, 2006

[LOGO OF FORBES]

Forbes 200 Best
     Small
     Companies
     4 straight  years

[LOGO OF FORTUNE SMALL BUSINESS]

Fortune Small
      Business 100
     2 straight years

FIRST CASH FINANCIAL SERVICES



2006 Earnings & Growth Expectations

Earnings per share forecast

 

 

 

 

 

Raised guidance at end of Q1 to:

 

 

 

 

 

 

 

     $0.93 to $0.94 per share

 

 

 

 

 

Represents 22% to 24% increase over 2005 EPS

 

 

 

 

 

Q2 earnings forecast for $0.18 to $0.19

 

 

 

 

Store Openings

 

 

 

 

 

60 - 70 new store openings projected for 2006

 

 

 

 

 

 

Pawn (Mexico)

 

 

 

 

 

 

Payday Advance (U.S.)

 

 

 

 

 

20 stores opened in the first quarter


FIRST CASH FINANCIAL SERVICES



Increasing Market Visibility & Liquidity

Two-for-one stock split effective February 6, 2006

Market Cap

[CHART APPEARS HERE]

[GRAPHIC APPEARS HERE]

FIRST CASH FINANCIAL SERVICES



Balance Sheet Growth

[CHART APPEARS HERE]

FIRST CASH FINANCIAL SERVICES



Net Cash Position

[CHART APPEARS HERE]

FIRST CASH FINANCIAL SERVICES



Utilization of Cash Flows

All store openings funded from current cash flows

 

 

 

Loan growth at new & existing stores

 

 

 

 

Capital expenditures for new stores

 

 

 

 

Start-up costs for new stores

 

 

 

Stock repurchases of $24 million over past two years

 

 

[GRAPHIC APPEARS HERE]

New location under construction in Tijuana, Mexico

FIRST CASH FINANCIAL SERVICES



Growth Strategy

New store openings in multiple markets

 

 

 

United States

 

 

 

 

Mexico

 

 

 

Diversified product line

 

 

 

 

Pawn loans & related retail

 

 

 

 

Payday advances

 

 

 

 

Credit services

[GRAPHIC APPEARS HERE]

First Cash Advance location in Hurst, Texas

FIRST CASH FINANCIAL SERVICES



New Store Openings

[CHART APPEARS HERE]

FIRST CASH FINANCIAL SERVICES



New Store Financial Model

Cap Ex

$80,000 to $150,000

 

 

- Leasehold improvements

 

- Computer & security equipment

 

 

 

Working Capital (first year)

$80,000 to $150,000

 

 

- Operating cash

 

- Loan funding

 

- Inventory (pawn only)

 

 

 

Start-up Losses

$40,000 to $60,000

 

 

- Pre-opening

 

- First six months of operation

 

 

 

Totals

$200,000 to $360,000

FIRST CASH FINANCIAL SERVICES



Mexico Expansion Markets

[GRAPHIC APPEARS HERE]

FIRST CASH FINANCIAL SERVICES



First Cash Pawn Stores in Mexico

[GRAPHICS APPEAR HERE]

FIRST CASH FINANCIAL SERVICES



U.S. Payday Expansion

Continued growth in key Texas markets:

 

 

 

Dallas/Fort Worth

 

 

 

 

Houston

 

 

 

 

San Antonio/Austin

 

 

 

 

Other mid-sized markets in Texas

 

 

 

First stores in Michigan opened in Q2 of 2006

FIRST CASH FINANCIAL SERVICES



First Cash Summary

Industry leader in a fast growth sector

 

 

 

Strong demand for specialty consumer finance products

 

 

 

 

Multiple products:  pawn and payday advance

 

 

 

Superior financial metrics

 

 

 

 

21 consecutive quarters (over five years) of double-digit EPS growth

 

 

 

 

Strong cash flows; no debt

 

 

 

Well-defined expansion strategy will drive continued growth

 

 

 

Significant headroom for new stores in multiple markets

 

 

 

 

20% increase in store count targeted for 2006

FIRST CASH FINANCIAL SERVICES



FIRST CASH FINANCIAL SERVICES

[LOGO OF FIRST CASH]

Investor contact information:

 

Phone:

817.505.3199

[LOGO OF FCFS]

Email:

investorrelations@firstcash.com

Website:

www.firstcash.com