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Diluted earnings per share for the fiscal year ended December 31, 2015 totaled $2.14, which includes the impact of non-recurring and primarily non-cash restructuring expenses related to U.S. consumer loan operations of $0.21 per share and non-recurring store acquisition expenses of $0.07 per share. Excluding these expenses, adjusted diluted earnings per share totaled $2.42 for fiscal 2015 compared to prior year adjusted earnings per share of $2.75. Adjusted net income and adjusted net income per share are defined in the detailed reconciliation of non-GAAP financial measures provided elsewhere in this release.

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On a comparative basis with the prior fiscal year, fiscal 2015 adjusted earnings were reduced by $0.34 per share due to the strong U.S. dollar and the resulting 19% decline in the average value of the Mexican peso, approximately $0.24 per share due to decreases in earnings from non-core jewelry scrapping and payday lending operations and $0.04 per share due to incremental interest expense related to the Company’s senior note offering in March 2014.

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Diluted earnings per share for the fourth quarter of 2015 were $0.69, which included non-recurring store acquisition expenses of $0.04 per share. Excluding these expenses, adjusted diluted earnings per share were $0.73 compared to $0.87 in the prior-year period. Comparative earnings for the fourth quarter of 2015 were reduced by $0.11 per share due to a 21% decline in the average value of the Mexican peso and approximately $0.08 per share due to decreases in earnings from non-core jewelry scrapping and payday lending operations.

•	Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and certain non-recurring charges) for fiscal 2015 totaled $132.2 million, which equaled the prior year adjusted EBITDA on a constant currency basis. Net income was $60.7 million for fiscal 2015. A reconciliation of adjusted EBITDA to net income is provided elsewhere in this release.

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Core pawn revenue, which is composed of retail merchandise sales and pawn service fees, increased 14% for fiscal 2015 compared to the prior-year. Total revenue for fiscal 2015 was $705 million, an increase of 8%, reflecting the strong growth in core pawn revenues partially offset by a 29% decline in total non-core payday lending and jewelry scrapping revenues. Core revenue increased 9% in the fourth quarter of 2015 as the year-over-year growth rate reflected the significant acquisitions made in the latter half of 2014.

•	Core revenues in Mexico grew 15% in fiscal 2015 while over 52% of total revenues in fiscal 2015 were from operations in Mexico. On a constant currency basis, using the prior year’s average exchange rate, 56% of fiscal 2015 revenues would have been generated in Mexico.

•	Retail merchandise sales in pawn stores increased by 16% during fiscal 2015 compared to fiscal 2014, composed of an 18% increase in Mexico and a 14% increase in the U.S. Pawn fee revenue grew 8% compared to fiscal 2014, with increases of 10% in Mexico and 5% in the U.S.

•	Consolidated core same-store revenue increased 3% for the full year and 4% for the current quarter, driven by same-store core pawn revenue growth in Mexico of 8% for the year and 7% for the fourth quarter. U.S. core same-store revenue decreased 3% for the full year and current quarter, primarily as a result of lower pawn receivable balances.

•	Consolidated gross margins on retail merchandise sales were on target at 38% for both the fourth quarter and the full 2015 fiscal year, down one percentage point compared to prior-year periods and consistent with the continued shift to retail sales of general merchandise items, such as electronics, tools and appliances, which carry slightly lower margins than retail jewelry items.

•	The average monthly pawn loan portfolio yield was approximately13.5% for fiscal 2015, which was consistent with the prior year. The combined yield from pawn gross profits (pawn fees plus sales gross profit), as a percentage of pawn assets (pawn receivables plus inventories), was 175% in fiscal 2015.

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During fiscal 2015, pawn loans outstanding increased by 14% in Latin America, were flat in the U.S. and increased 6% in total compared to the prior year. Growth in same-store pawn loans in Mexico continued to accelerate, increasing 5% compared to the prior year, which represents their largest same-store increase in six quarters. U.S. same-store pawn loans decreased 6%, reflecting the impacts of continued declines in U.S. gasoline prices and cautious lower-end consumer borrowing.

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Total inventories at December 31, 2015 increased 9% over the prior-year period, in-line with store growth and acquisitions. Annualized inventory turns for fiscal 2015 were 3.4 times per year. Aged inventories (items held for over a year) accounted for approximately 6% of total inventories. Excluding inventories in the stores acquired during fiscal 2015, aged inventories represented 5% of total inventories.

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•	A total of 103 pawn stores were added in fiscal 2015, composed of 70 new and acquired stores in Latin America and 33 stores acquired in the U.S. These additions increased the number of pawn stores operated by the Company in Latin America and the U.S. by 10% and 11%, respectively, over the past year.

•	As of December 31, 2015, the Company operated 1,075 stores, of which, 1,005 were pawn stores. There are 737 stores in Latin America, of which 709 are pawn stores, and 338 stores in the U.S., of which 296 are pawn stores.

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As previously announced this month, the Company made its largest and most significant acquisition in Latin America to-date which included 211 pawn locations in three countries. In this three-step transaction, the acquisition of 32 stores in Guatemala was completed on December 31, 2015, the purchase of 166 stores in Mexico was completed on January 6, 2016 and the addition of 13 stores in El Salvador is expected to be completed in February 2016.

•	As part of the Company’s long-term strategy for reducing non-core payday lending operations, the Company closed 23 consumer loan stores in Texas and wrote-off all remaining goodwill associated with these stores during fiscal 2015. These closings reduced the number of remaining freestanding U.S. consumer loan locations to 42 stores, all located in Texas.

•	The adjusted EBITDA margin was 19% for fiscal 2015. Excluding the impacts of currency, non-core payday lending and wholesale scrap jewelry operations, the adjusted EBITDA margin remained consistent with the prior year. The calculation of adjusted EBITDA margin is provided elsewhere in this release.

•	Pre-tax store operating margin was 24% for fiscal 2015, as compared to 26% in the prior year, primarily reflecting contraction in same-store payday lending, scrap sales and pawn lending revenues in the U.S. Currency-adjusted store level margins in Mexico, excluding current and prior year acquisitions, remained consistent compared to prior year.

•	The Company’s adjusted return on equity for fiscal 2015 was 16% and the adjusted return on assets was 9% for the same period. These financial ratios include the impact of the strong U.S. dollar, but are adjusted to exclude non-recurring expense items described in more detail elsewhere in this release.

•	As of December 31, 2015, the Company had $87 million in cash on its balance sheet and $162 million of availability for future borrowings under its long-term revolving bank credit facilities. The average interest rate on the Company’s $58 million outstanding bank debt at year end was 2.84%.

•	The leverage ratio at December 31, 2015 (outstanding indebtedness divided by adjusted EBITDA) was 2.0:1. Net debt, defined as funded debt less invested cash, was $184 million at December 31, 2015. The leverage ratio of adjusted EBITDA to net debt was 0.7:1 and the ratio of net debt to equity was 0.4:1.

•	Cash provided by operating activities was $93 million for fiscal 2015, while free cash flow totaled $68 million for the year. Free cash flow is defined in the detailed reconciliation of non-GAAP financial measures provided elsewhere in this release.

•	During fiscal 2015, the Company invested $47 million in acquisitions, $21 million in capital expenditures and $40 million in stock repurchases, funded primarily with operating cash flow and a nominal $15 million increase in net debt.

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•	The Board of Directors has approved the initiation of a cash dividend payment at an annual rate of $0.50 per share to be paid out quarterly.

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The first quarterly dividend payment of $0.125 per share is expected to be paid in the first quarter of 2016. The declaration and payment of cash dividends in the future (quarterly or otherwise) will be made by the Board of Directors, from time to time, subject to the Company’s financial condition, results of operations, business requirements, debt covenants and compliance with legal requirements.

•	During fiscal 2015, the Company repurchased 852,000 shares under the current 2.0 million share buyback authorization at an aggregate cost of $40 million. The Company has 1.1 million shares available for future repurchases under the current plan.

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Like many U.S.-based companies with foreign earnings exposure, the continued strength of the U.S. dollar against other currencies is expected to significantly impact reported earnings in fiscal 2016 as compared to fiscal 2015. The current exchange rate for the Mexican peso, the Company’s primary foreign currency, is approximately 18.5 pesos / U.S. dollar, which is 24% lower than the average exchange rate in the first quarter of 2015 and 17% lower than the average rate for all of 2015.

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Given the accelerated growth in same-store pawn receivables in Mexico, coupled with new stores and recently announced acquisitions, the Company is expecting Latin American constant currency store-level earnings growth in a range of 25% to 30% for fiscal 2016. However, reflecting the continued strengthening of the U.S. dollar compared to Latin American currencies over the last year, and the last ninety days in particular, the Company is tempering its outlook for 2016. The Company is initiating its fiscal full-year 2016 guidance for earnings to be in a range of $2.20 to $2.40 per diluted share. These estimates reflect the following assumptions:

◦	Using the current exchange rate of approximately 18.5 Mexican pesos / U.S. dollar for all of 2016, the guidance assumes approximately $0.35 to $0.40 of earnings per share drag, net of tax, as compared to the actual average rate of 15.8 in fiscal 2015.

◦	First quarter 2016 results will be especially impacted by currency as the current peso to dollar exchange rate is now down approximately 24% compared to the first quarter of last year. As a result, the Company is projecting first quarter 2016 earnings to be in a range of $0.41 to $0.46 per diluted share.

◦	Fiscal 2016 estimates are also tempered by further expected declines in earnings from payday lending operations of approximately $0.08 to $0.12 per share, net of tax. The Company expects total U.S. payday lending revenues to be less than 3% of consolidated revenues in 2016.

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The Company expects to add approximately 210 to 225 new stores in 2016, of which at least 190 additions have already or are expected to occur in the first quarter. Additionally, the Company will continue to look opportunistically for full-service pawn acquisitions in strategic markets in both Latin America and the U.S., which could further drive revenue and result in additional EBITDA growth for 2016.

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•	changes in foreign currency exchange rates and the U.S. dollar to the Mexican peso and Guatemalan quetzal exchange rates in particular;

•	new federal, state or local legislative initiatives or governmental regulations (or changes to existing laws and regulations) affecting pawn businesses, consumer loan businesses and credit services organizations (in the United States, Mexico, Guatemala and El Salvador), including administrative or legal interpretations thereto;

•	changes in consumer demand, including purchasing, borrowing and repayment behaviors;

•	changes in regional, national or international economic conditions, including inflation rates, unemployment rates and energy prices;

•	changes in pawn forfeiture rates and credit loss provisions;

•	changes in the market value of pawn collateral and merchandise inventories, including gold prices and the value of consumer electronics and other products;

•	changes or increases in competition;

•	the ability to locate, open and staff new stores and successfully integrate acquisitions;

•	the availability or access to sources of used merchandise inventory;

•	changes in credit markets, interest rates and the ability to establish, renew and/or extend the Company’s debt financing;

•	the ability to maintain banking relationships for treasury services and processing of certain consumer lending transactions;

•	the ability to hire and retain key management personnel;

•	risks and uncertainties related to foreign operations in Mexico, Guatemala and El Salvador;

•	changes in import/export regulations and tariffs or duties;

•	changes in banking, anti-money laundering or gun control regulations;

•	unforeseen litigation;

•	changes in tax rates or policies in the U.S., Mexico, Guatemala and El Salvador;

•	inclement weather, natural disasters and public health issues;

•	security breaches, cyber attacks or fraudulent activity;

•	a prolonged interruption in the Company’s operations of its facilities, systems, and business functions, including its information technology and other business systems;

•	the implementation of new, or changes in the interpretation of existing, accounting principles or financial reporting requirements; and

•	future business decisions.

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(1)

Certain deferred tax balances as of December 31, 2014 have been reclassified in order to conform to current year presentation due to the Company’s retrospective early adoption of ASU 2015-17, “Balance Sheet Classification of Deferred Taxes.” In addition, foreign currency translation adjustments affecting certain deferred tax balances and accumulated other comprehensive loss have been revised to conform with current year presentation.

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(1)	Wholesale scrap jewelry revenue during the three months ended December 31, 2015 consisted primarily of gold sales, of which approximately 5,900 ounces were sold at an average price of $1,064 per ounce, compared to approximately 7,800 ounces of gold sold at $1,222 per ounce in the prior-year period.

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(1)	Wholesale scrap jewelry revenue during the twelve months ended December 31, 2015 consisted primarily of gold, of which approximately 24,100 ounces sold at an average selling price of $1,145 per ounce, compared to approximately 33,100 ounces of gold sold at $1,268 per ounce in the prior-year period.

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(1)	CSO amounts outstanding are composed of the principal portion of active CSO extensions of credit by an independent third-party lender, which are not included on the Company’s balance sheet, net of the Company’s estimated fair value of its liability under the letters of credit guaranteeing the extensions of credit.

(2)

Combined customer loans is a non-GAAP measure, as it includes CSO credit extensions held by an independent third-party not included on the Company’s balance sheet. The Company believes this non-GAAP measure provides investors with important information needed to evaluate the magnitude of potential loan losses and the opportunity for revenue performance of the consumer loan portfolio on an aggregate basis. The Company also believes the comparison of the aggregate amounts from period to period is more meaningful than comparing only the amounts reflected on the Company’s balance sheet since both credit services fee revenue and the corresponding loss provision are impacted by the aggregate amount of loans owned by the Company and those guaranteed by the Company as reflected in its financial statements.

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(1)	At December 31, 2015, 138 of the U.S. pawn stores, which are primarily located in Texas, also offered consumer loans or credit services products, while 49 Mexico pawn stores offer consumer loan products.

(2)	The Company’s U.S. free-standing consumer loan locations offer a credit services product and are all located in Texas. The Mexico locations offer small, short-term consumer loans. The Company’s credit services operations also include an internet distribution channel for customers residing in the state of Texas.

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(1)	For the twelve months ended December 31, 2015, excludes $493,000 of depreciation and amortization, which is included in the non-recurring restructuring expenses related to U.S. consumer loan operations.

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