07/21/2021 | Press release | Distributed by Public on 07/21/2021 04:03
FORT WORTH, Texas, July 21, 2021 (GLOBE NEWSWIRE) -- FirstCash, Inc. (the 'Company') (Nasdaq: FCFS), the leading international operator of over 2,800 retail pawn stores in the U.S. and Latin America, today announced operating results for the three and six month periods ended June 30, 2021, and an update on the impact of COVID-19 on its business. In addition, the Board of Directors declared a $0.30 per share quarterly cash dividend to be paid in August 2021.
Mr. Rick Wessel, chief executive officer, stated, 'FirstCash posted strong second quarter earnings results driven by an accelerating recovery in pawn receivables and the continued strength of retail operations. At this point, Latin American pawn receivable balances have substantially recovered from the impacts of COVID-19 while U.S. pawn loan originations are rapidly approaching normalized levels as we begin the second half of the year.
'Second quarter highlights also include the acquisition of a 26-store chain of high-performing pawn stores in Texas and 12 de novo store openings during the quarter. FirstCash's store count has now surpassed 2,800 total locations and we believe there are additional growth opportunities ahead. In addition to funding store growth, our strong cash flows and balance sheet returned cash to shareholders through a quarterly cash dividend of $0.30 per share and $38 million in share repurchases during the first half of 2021.'
This release contains adjusted earnings measures, which exclude certain extraordinary and/or non-cash expenses, which are non-GAAP financial measures. Please refer to the descriptions and reconciliations to GAAP of these and other non-GAAP financial measures at the end of this release.
Three Months Ended June 30, | ||||||||||||||||
As Reported (GAAP) | Adjusted (Non-GAAP) | |||||||||||||||
In thousands, except per share amounts | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Revenue | $ | 389,578 | $ | 412,746 | $ | 389,578 | $ | 412,746 | ||||||||
Net income | $ | 28,427 | $ | 25,873 | $ | 29,038 | $ | 25,872 | ||||||||
Diluted earnings per share | $ | 0.70 | $ | 0.62 | $ | 0.71 | $ | 0.62 | ||||||||
EBITDA (non-GAAP measure) | $ | 56,786 | $ | 53,962 | $ | 57,524 | $ | 53,930 | ||||||||
Weighted-average diluted shares | 40,802 | 41,531 | 40,802 | 41,531 |
Six Months Ended June 30, | ||||||||||||||||
As Reported (GAAP) | Adjusted (Non-GAAP) | |||||||||||||||
In thousands, except per share amounts | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Revenue | $ | 797,517 | $ | 879,236 | $ | 797,517 | $ | 879,236 | ||||||||
Net income | $ | 62,142 | $ | 58,791 | $ | 63,966 | $ | 66,167 | ||||||||
Diluted earnings per share | $ | 1.52 | $ | 1.41 | $ | 1.56 | $ | 1.59 | ||||||||
EBITDA (non-GAAP measure) | $ | 120,741 | $ | 118,586 | $ | 123,125 | $ | 128,536 | ||||||||
Weighted-average diluted shares | 40,929 | 41,769 | 40,929 | 41,769 |
Consolidated Earnings Highlights
Acquisitions and Store Opening Highlights
U.S. Pawn Operations
Note: Certain growth rates in 'Latin America Pawn Operations' below are calculated on a constant currency basis, a non-GAAP financial measure defined at the end of this release. The average Mexican peso to U.S. dollar exchange rate for the three month period ended June 30, 2021 was 20.1 pesos / dollar, a favorable change of 14% versus the comparable prior-year period, and for the six month period ended June 30, 2021 was 20.2 pesos / dollar, a favorable change of 6% versus the prior-year period.
Latin America Pawn Operations
Liquidity and Shareholder Returns
2021 Outlook
Given the continued uncertainties related to COVID-19 and, in particular, the associated government assistance programs, the Company is not currently providing earnings guidance. However, the following factors are expected to impact operating trends in 2021:
Additional Commentary and Analysis
Mr. Wessel provided the following additional insights on the Company's second quarter and year-to-date operating results:
'We are very encouraged by the current trends, most notably the improved lending demand and the continuation of strong retail metrics. Even though revenues are still recovering, we posted year-to-date segment operating profit margins of 20% or more in both the U.S. and Latin America. These first half results, coupled with anticipated further growth in pawn receivables and revenues and continued expense discipline, position us well for earnings growth in the back half of 2021.
'Looking further at the U.S. segment results, as we began the second quarter, loan demand was under pressure with two rounds of stimulus and tax refunds being paid out in the first quarter. The recovery in lending demand we experienced in the second quarter appears to be driven by the further reopening of the economy, waning stimulus programs and consumer price inflation. More importantly, lending originations in the U.S. have continued to improve in July and are now nearing normalized 2019 levels. The major unknown at this point will be the potential impact, if any, of advance payments of the federal child tax credits which began in mid-July. Retail sales remained solid during the quarter and despite the declining impact of stimulus, retail margins through June remained at record levels.
'In Latin America, and Mexico in particular, the impact of COVID-19 on 2020 lending volumes was less severe and recovered more quickly due to limited governmental support programs. Resulting lending activity in the second quarter essentially recovered to pre-pandemic levels and retail results were boosted by improved retail margins. As in the U.S., we have reduced ongoing same-store store operating expenses from 2019 levels in our Latin American markets through a combination of optimized staffing levels and technology initiatives.
'Looking ahead, we expect additional revenue and earnings growth through continued store expansion initiatives. The 28 stores acquired in Texas this year are primarily in rapidly growing markets surrounding Houston and San Antonio. The purchase price for these acquisitions was in line with our historical valuation metrics and we believe that these acquired stores will be immediately accretive to earnings. Coupled with the 36 new, or de novo, stores opened this year, we have added a total of 64 locations year-to-date. Combined with the 137 store additions in 2020, we have now added 201 locations in the past 18 months. We remain on target to open 50 to 60 de novo locations in 2021 and continue to see opportunities for additional acquisitions.
'Finally, we remain committed to further drive shareholder value through our dividend and stock repurchase programs. The quarterly cash dividend was raised to $0.30 per share in the second quarter and the Board again declared a $0.30 cash dividend for the third quarter. We also continued our stock repurchase program in the second quarter with $33 million of total repurchases as we completed the previous $100 million share repurchase program and initiated purchases under the new January 2021$100 million repurchase program.
'We believe there are significant growth opportunities ahead that will continue to be driven by de novo store openings and strategic acquisitions. Combined with our focus on margin improvements and expense management, we believe that we can further increase earnings and enhance shareholder value,' concluded Mr. Wessel.
About FirstCash
FirstCash is the leading international operator of pawn stores with over 2,800 retail pawn locations and 16,000 employees in 24 U.S. states, the District of Columbia and four countries in Latin America including Mexico, Guatemala, Colombia and El Salvador. FirstCash focuses on serving cash and credit constrained consumers through its retail pawn locations, which buy and sell a wide variety of jewelry, electronics, tools, appliances, sporting goods, musical instruments and other merchandise, and make small consumer pawn loans secured by pledged personal property.
FirstCash is a component company in both the Standard & Poor's MidCap 400 Index® and the Russell 2000 Index®. FirstCash's common stock (ticker symbol 'FCFS') is traded on the Nasdaq, the creator of the world's first electronic stock market. For additional information regarding FirstCash and the services it provides, visit FirstCash's website located at http://www.firstcash.com.
Forward-Looking Information
This release contains forward-looking statements about the business, financial condition and prospects of FirstCash, Inc. and its wholly owned subsidiaries (together, 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 'outlook,' 'believes,' 'projects,' 'expects,' 'may,' 'estimates,' 'should,' 'plans,' 'targets,' 'intends,' 'could,' 'would,' 'anticipates,' 'potential,' 'confident,' 'optimistic,' or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy, objectives, estimates, guidance, expectations and future plans. Forward-looking statements can also be identified by the fact 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.
While the Company believes the expectations reflected in forward-looking statements are reasonable, there can be no assurances such expectations will prove to be accurate. Security holders are cautioned such forward-looking statements involve risks and uncertainties. Certain factors may cause results to differ materially from those anticipated by the forward-looking statements made in this release. Such factors may include, without limitation, the risks, uncertainties and regulatory developments: (1) related to the COVID-19 pandemic, including the unknown duration and severity of the COVID-19 pandemic, which may be impacted by variants of the COVID-19 virus and the timing, availability and efficacy of the COVID-19 vaccines in the jurisdictions in which the Company operates, the impact of governmental responses that have been, and may in the future be, imposed in response to the pandemic, including stimulus programs which could adversely impact lending demand and regulations which could adversely affect the Company's ability to continue to fully operate, potential changes in consumer behavior and shopping patterns which could impact demand for both the Company's pawn loan and retail products, changes in the economic conditions in the United States and Latin America, which potentially could have an impact on discretionary consumer spending or impact demand for pawn loan products, and currency fluctuations, primarily involving the Mexican peso, and (2) discussed and described in the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the 'SEC'), including the risks described in Part 1, Item 1A, 'Risk Factors' thereof, and in the other reports filed subsequently by the Company with the SEC. Many of these risks and uncertainties are beyond the ability of the Company to control, nor can the Company predict, in many cases, all of the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. The forward-looking statements contained in this release speak only as of the date of this release, 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, except as required by law.
FIRSTCASH, INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands, except per share amounts)
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||
Revenue: | ||||||||||||||||||||
Retail merchandise sales | $ | 265,567 | $ | 287,400 | $ | 537,609 | $ | 584,029 | ||||||||||||
Pawn loan fees | 109,909 | 101,990 | 225,431 | 244,105 | ||||||||||||||||
Wholesale scrap jewelry sales | 14,102 | 22,785 | 34,477 | 49,156 | ||||||||||||||||
Consumer loan and credit services fees | - | 571 | - | 1,946 | ||||||||||||||||
Total revenue | 389,578 | 412,746 | 797,517 | 879,236 | ||||||||||||||||
Cost of revenue: | ||||||||||||||||||||
Cost of retail merchandise sold | 153,424 | 171,511 | 310,577 | 356,206 | ||||||||||||||||
Cost of wholesale scrap jewelry sold | 11,932 | 18,357 | 29,129 | 41,204 | ||||||||||||||||
Consumer loan and credit services loss provision | - | (223 | ) | - | (584 | ) | ||||||||||||||
Total cost of revenue | 165,356 | 189,645 | 339,706 | 396,826 | ||||||||||||||||
Net revenue | 224,222 | 223,101 | 457,811 | 482,410 | ||||||||||||||||
Expenses and other income: | ||||||||||||||||||||
Store operating expenses | 139,128 | 141,051 | 276,452 | 294,551 | ||||||||||||||||
Administrative expenses | 27,398 | 28,386 | 58,397 | 61,288 | ||||||||||||||||
Depreciation and amortization | 10,902 | 10,324 | 21,514 | 20,998 | ||||||||||||||||
Interest expense | 7,198 | 6,974 | 14,428 | 15,392 | ||||||||||||||||
Interest income | (119 | ) | (525 | ) | (277 | ) | (710 | ) | ||||||||||||
Merger and acquisition expenses | 1,086 | 134 | 1,252 | 202 | ||||||||||||||||
(Gain) loss on foreign exchange | (577 | ) | (614 | ) | (310 | ) | 2,071 | |||||||||||||
Write-off of certain Cash America merger related lease intangibles | 401 | 182 | 1,279 | 3,812 | ||||||||||||||||
Impairment of certain other assets | - | - | - | 1,900 | ||||||||||||||||
Total expenses and other income | 185,417 | 185,912 | 372,735 | 399,504 | ||||||||||||||||
Income before income taxes | 38,805 | 37,189 | 85,076 | 82,906 | ||||||||||||||||
Provision for income taxes | 10,378 | 11,316 | 22,934 | 24,115 | ||||||||||||||||
Net income | $ | 28,427 | $ | 25,873 | $ | 62,142 | $ | 58,791 | ||||||||||||
Earnings per share: | ||||||||||||||||||||
Basic | $ | 0.70 | $ | 0.62 | $ | 1.52 | $ | 1.41 | ||||||||||||
Diluted | $ | 0.70 | $ | 0.62 | $ | 1.52 | $ | 1.41 | ||||||||||||
Weighted-average shares outstanding: | ||||||||||||||||||||
Basic | 40,754 | 41,440 | 40,893 | 41,676 | ||||||||||||||||
Diluted | 40,802 | 41,531 | 40,929 | 41,769 | ||||||||||||||||
Dividends declared per common share | $ | 0.30 | $ | 0.27 | $ | 0.57 | $ | 0.54 |
Certain amounts in the consolidated statements of income for the six months ended June 30, 2020 have been reclassified in order to conform to the 2021 presentation.
FIRSTCASH, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
June 30, | December 31, | ||||||||||||||
2021 | 2020 | 2020 | |||||||||||||
ASSETS | |||||||||||||||
Cash and cash equivalents | $ | 50,061 | $ | 70,956 | $ | 65,850 | |||||||||
Fees and service charges receivable | 40,183 | 30,418 | 41,110 | ||||||||||||
Pawn loans | 312,166 | 230,383 | 308,231 | ||||||||||||
Inventories | 216,955 | 179,967 | 190,352 | ||||||||||||
Income taxes receivable | 7,324 | 4,988 | 9,634 | ||||||||||||
Prepaid expenses and other current assets | 11,698 | 10,865 | 9,388 | ||||||||||||
Total current assets | 638,387 | 527,577 | 624,565 | ||||||||||||
Property and equipment, net | 404,283 | 341,114 | 373,667 | ||||||||||||
Operating lease right of use asset | 299,223 | 283,063 | 298,957 | ||||||||||||
Goodwill | 1,017,273 | 929,575 | 977,381 | ||||||||||||
Intangible assets, net | 83,372 | 84,389 | 83,651 | ||||||||||||
Other assets | 9,406 | 9,037 | 9,818 | ||||||||||||
Deferred tax assets | 4,489 | 7,764 | 4,158 | ||||||||||||
Total assets | $ | 2,456,433 | $ | 2,182,519 | $ | 2,372,197 | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||
Accounts payable and accrued liabilities | $ | 103,331 | $ | 69,810 | $ | 81,917 | |||||||||
Customer deposits | 44,486 | 35,439 | 34,719 | ||||||||||||
Income taxes payable | 369 | 13,230 | 1,148 | ||||||||||||
Lease liability, current | 89,027 | 83,580 | 88,622 | ||||||||||||
Total current liabilities | 237,213 | 202,059 | 206,406 | ||||||||||||
Revolving unsecured credit facilities | 163,000 | 200,000 | 123,000 | ||||||||||||
Senior unsecured notes | 493,303 | 296,923 | 492,916 | ||||||||||||
Deferred tax liabilities | 75,912 | 67,842 | 71,173 | ||||||||||||
Lease liability, non-current | 196,189 | 182,915 | 194,887 | ||||||||||||
Total liabilities | 1,165,617 | 949,739 | 1,088,382 | ||||||||||||
Stockholders' equity: | |||||||||||||||
Common stock | 493 | 493 | 493 | ||||||||||||
Additional paid-in capital | 1,219,948 | 1,226,512 | 1,221,788 | ||||||||||||
Retained earnings | 828,040 | 763,810 | 789,303 | ||||||||||||
Accumulated other comprehensive loss | (115,790 | ) | (172,150 | ) | (118,432 | ) | |||||||||
Common stock held in treasury, at cost | (641,875 | ) | (585,885 | ) | (609,337 | ) | |||||||||
Total stockholders' equity | 1,290,816 | 1,232,780 | 1,283,815 | ||||||||||||
Total liabilities and stockholders' equity | $ | 2,456,433 | $ | 2,182,519 | $ | 2,372,197 |
Certain amounts in the consolidated balance sheets as of June 30, 2020 have been reclassified in order to conform to the 2021 presentation.
FIRSTCASH, INC.
OPERATING INFORMATION
(UNAUDITED)
The Company's reportable segments are as follows:
The Company provides revenues, cost of revenues, store operating expenses, pre-tax operating income and earning assets by segment. Store operating expenses include salary and benefit expense of store-level employees, occupancy costs, bank charges, security, insurance, utilities, supplies and other costs incurred by the stores.
U.S. Operations Segment Results
The following table details earning assets, which consist of pawn loans and inventories, as well as other earning asset metrics of the U.S. operations segment as of June 30, 2021 as compared to June 30, 2020 (dollars in thousands, except as otherwise noted):
As of June 30, | ||||||||||||
2021 | 2020 | Increase | ||||||||||
U.S. Operations Segment | ||||||||||||
Earning assets: | ||||||||||||
Pawn loans | $ | 203,838 | $ | 158,253 | 29 | % | ||||||
Inventories | 144,083 | 120,408 | 20 | % | ||||||||
$ | 347,921 | $ | 278,661 | 25 | % | |||||||
Average outstanding pawn loan amount (in ones) | $ | 209 | $ | 190 | 10 | % | ||||||
Composition of pawn collateral: | ||||||||||||
General merchandise | 35 | % | 31 | % | ||||||||
Jewelry | 65 | % | 69 | % | ||||||||
100 | % | 100 | % | |||||||||
Composition of inventories: | ||||||||||||
General merchandise | 49 | % | 38 | % | ||||||||
Jewelry | 51 | % | 62 | % | ||||||||
100 | % | 100 | % | |||||||||
Percentage of inventory aged greater than one year | 1 | % | 3 | % | ||||||||
Inventory turns (trailing twelve months cost of merchandise sales divided by average inventories) | 3.1 times | 3.2 times |
FIRSTCASH, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)
The following table presents segment pre-tax operating income and other operating metrics of the U.S. operations segment for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 (dollars in thousands):
Three Months Ended | ||||||||||||||
June 30, | ||||||||||||||
2021 | 2020 | Decrease | ||||||||||||
U.S. Operations Segment | ||||||||||||||
Revenue: | ||||||||||||||
Retail merchandise sales | $ | 173,254 | $ | 208,944 | (17 | )% | ||||||||
Pawn loan fees | 66,942 | 71,900 | (7 | )% | ||||||||||
Wholesale scrap jewelry sales | 6,846 | 9,557 | (28 | )% | ||||||||||
Consumer loan and credit services fees (1) | - | 571 | (100 | )% | ||||||||||
Total revenue | 247,042 | 290,972 | (15 | )% | ||||||||||
Cost of revenue: | ||||||||||||||
Cost of retail merchandise sold | 95,599 | 121,661 | (21 | )% | ||||||||||
Cost of wholesale scrap jewelry sold | 5,387 | 8,432 | (36 | )% | ||||||||||
Consumer loan and credit services loss provision (1) | - | (223 | ) | (100 | )% | |||||||||
Total cost of revenue | 100,986 | 129,870 | (22 | )% | ||||||||||
Net revenue | 146,056 | 161,102 | (9 | )% | ||||||||||
Segment expenses: | ||||||||||||||
Store operating expenses | 93,574 | 103,302 | (9 | )% | ||||||||||
Depreciation and amortization | 5,347 | 5,561 | (4 | )% | ||||||||||
Total segment expenses | 98,921 | 108,863 | (9 | )% | ||||||||||
Segment pre-tax operating income | $ | 47,135 | $ | 52,239 | (10 | )% | ||||||||
Operating metrics: | ||||||||||||||
Retail merchandise sales margin | 45 | % | 42 | % | ||||||||||
Wholesale scrap jewelry sales margin | 21 | % | 12 | % | ||||||||||
Net revenue margin | 59 | % | 55 | % | ||||||||||
Segment pre-tax operating margin | 19 | % | 18 | % |
(1) Effective June 30, 2020, the Company no longer offers an unsecured consumer loan product in the U.S.
FIRSTCASH, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)
The following table presents segment pre-tax operating income and other operating metrics of the U.S. operations segment for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020 (dollars in thousands):
Six Months Ended | ||||||||||||||
June 30, | ||||||||||||||
2021 | 2020 | Decrease | ||||||||||||
U.S. Operations Segment | ||||||||||||||
Revenue: | ||||||||||||||
Retail merchandise sales | $ | 363,211 | $ | 404,910 | (10 | )% | ||||||||
Pawn loan fees | 143,339 | 169,757 | (16 | )% | ||||||||||
Wholesale scrap jewelry sales | 16,049 | 25,035 | (36 | )% | ||||||||||
Consumer loan and credit services fees (1) | - | 1,946 | (100 | )% | ||||||||||
Total revenue | 522,599 | 601,648 | (13 | )% | ||||||||||
Cost of revenue: | ||||||||||||||
Cost of retail merchandise sold | 202,129 | 241,190 | (16 | )% | ||||||||||
Cost of wholesale scrap jewelry sold | 12,900 | 22,438 | (43 | )% | ||||||||||
Consumer loan and credit services loss provision (1) | - | (584 | ) | (100 | )% | |||||||||
Total cost of revenue | 215,029 | 263,044 | (18 | )% | ||||||||||
Net revenue | 307,570 | 338,604 | (9 | )% | ||||||||||
Segment expenses: | ||||||||||||||
Store operating expenses | 188,821 | 211,008 | (11 | )% | ||||||||||
Depreciation and amortization | 10,729 | 10,962 | (2 | )% | ||||||||||
Total segment expenses | 199,550 | 221,970 | (10 | )% | ||||||||||
Segment pre-tax operating income | $ | 108,020 | $ | 116,634 | (7 | )% | ||||||||
Operating metrics: | ||||||||||||||
Retail merchandise sales margin | 44 | % | 40 | % | ||||||||||
Wholesale scrap jewelry sales margin | 20 | % | 10 | % | ||||||||||
Net revenue margin | 59 | % | 56 | % | ||||||||||
Segment pre-tax operating margin | 21 | % | 19 | % |
(1) Effective June 30, 2020, the Company no longer offers an unsecured consumer loan product in the U.S.
FIRSTCASH, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)
Latin America Operations Segment Results
The Company's management reviews and analyzes certain operating results in Latin America on a constant currency basis because the Company believes this better represents the Company's underlying business trends. Constant currency results are non-GAAP financial measures, which exclude the effects of foreign currency translation and are calculated by translating current-year results at prior-year average exchange rates. The wholesale scrap jewelry sales in Latin America are priced and settled in U.S. dollars, and are not affected by foreign currency translation, as are a small percentage of the operating and administrative expenses in Latin America, which are billed and paid in U.S. dollars. Amounts presented on a constant currency basis are denoted as such. See the 'Constant Currency Results' section below for additional discussion of constant currency results.
The following table provides exchange rates for the Mexican peso, Guatemalan quetzal and Colombian peso for the current and prior-year periods:
June 30, | |||||||||
2021 | 2020 | Favorable | |||||||
Mexican peso / U.S. dollar exchange rate: | |||||||||
End-of-period | 19.8 | 23.0 | 14 | % | |||||
Three months ended | 20.1 | 23.4 | 14 | % | |||||
Six months ended | 20.2 | 21.6 | 6 | % | |||||
Guatemalan quetzal / U.S. dollar exchange rate: | |||||||||
End-of-period | 7.7 | 7.7 | - | % | |||||
Three months ended | 7.7 | 7.7 | - | % | |||||
Six months ended | 7.7 | 7.7 | - | % | |||||
Colombian peso / U.S. dollar exchange rate: | |||||||||
End-of-period | 3,757 | 3,759 | - | % | |||||
Three months ended | 3,690 | 3,846 | 4 | % | |||||
Six months ended | 3,622 | 3,689 | 2 | % |
FIRSTCASH, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)
The following table details earning assets, which consist of pawn loans and inventories, as well as other earning asset metrics of the Latin America operations segment as of June 30, 2021 as compared to June 30, 2020 (dollars in thousands, except as otherwise noted):
Constant Currency Basis | |||||||||||||||||||||
As of | |||||||||||||||||||||
June 30, | |||||||||||||||||||||
As of June 30, | 2021 | Increase | |||||||||||||||||||
2021 | 2020 | Increase | (Non-GAAP) | (Non-GAAP) | |||||||||||||||||
Latin America Operations Segment | |||||||||||||||||||||
Earning assets: | |||||||||||||||||||||
Pawn loans | $ | 108,328 | $ | 72,130 | 50 | % | $ | 94,098 | 30 | % | |||||||||||
Inventories | 72,872 | 59,559 | 22 | % | 63,300 | 6 | % | ||||||||||||||
$ | 181,200 | $ | 131,689 | 38 | % | $ | 157,398 | 20 | % | ||||||||||||
Average outstanding pawn loan amount (in ones) | $ | 80 | $ | 59 | 36 | % | $ | 69 | 17 | % | |||||||||||
Composition of pawn collateral: | |||||||||||||||||||||
General merchandise | 67 | % | 66 | % | |||||||||||||||||
Jewelry | 33 | % | 34 | % | |||||||||||||||||
100 | % | 100 | % | ||||||||||||||||||
Composition of inventories: | |||||||||||||||||||||
General merchandise | 64 | % | 61 | % | |||||||||||||||||
Jewelry | 36 | % | 39 | % | |||||||||||||||||
100 | % | 100 | % | ||||||||||||||||||
Percentage of inventory aged greater than one year | 1 | % | 2 | % | |||||||||||||||||
Inventory turns (trailing twelve months cost of merchandise sales divided by average inventories) | 4.4 times | 3.9 times |
FIRSTCASH, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)
The following table presents segment pre-tax operating income and other operating metrics of the Latin America operations segment for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 (dollars in thousands):
Constant Currency Basis | ||||||||||||||||||||||
Three Months | ||||||||||||||||||||||
Ended | ||||||||||||||||||||||
Three Months Ended | June 30, | Increase / | ||||||||||||||||||||
June 30, | Increase / | 2021 | (Decrease) | |||||||||||||||||||
2021 | 2020 | (Decrease) | (Non-GAAP) | (Non-GAAP) | ||||||||||||||||||
Latin America Operations Segment | ||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||
Retail merchandise sales | $ | 92,313 | $ | 78,456 | 18 | % | $ | 79,905 | 2 | % | ||||||||||||
Pawn loan fees | 42,967 | 30,090 | 43 | % | 37,175 | 24 | % | |||||||||||||||
Wholesale scrap jewelry sales | 7,256 | 13,228 | (45 | )% | 7,256 | (45 | )% | |||||||||||||||
Total revenue | 142,536 | 121,774 | 17 | % | 124,336 | 2 | % | |||||||||||||||
Cost of revenue: | ||||||||||||||||||||||
Cost of retail merchandise sold | 57,825 | 49,850 | 16 | % | 50,076 | - | % | |||||||||||||||
Cost of wholesale scrap jewelry sold | 6,545 | 9,925 | (34 | )% | 5,645 | (43 | )% | |||||||||||||||
Total cost of revenue | 64,370 | 59,775 | 8 | % | 55,721 | (7 | )% | |||||||||||||||
Net revenue | 78,166 | 61,999 | 26 | % | 68,615 | 11 | % | |||||||||||||||
Segment expenses: | ||||||||||||||||||||||
Store operating expenses | 45,554 | 37,749 | 21 | % | 39,793 | 5 | % | |||||||||||||||
Depreciation and amortization | 4,534 | 3,602 | 26 | % | 3,995 | 11 | % | |||||||||||||||
Total segment expenses | 50,088 | 41,351 | 21 | % | 43,788 | 6 | % | |||||||||||||||
Segment pre-tax operating income | $ | 28,078 | $ | 20,648 | 36 | % | $ | 24,827 | 20 | % | ||||||||||||
Operating metrics: | ||||||||||||||||||||||
Retail merchandise sales margin | 37 | % | 36 | % | 37 | % | ||||||||||||||||
Wholesale scrap jewelry sales margin | 10 | % | 25 | % | 22 | % | ||||||||||||||||
Net revenue margin | 55 | % | 51 | % | 55 | % | ||||||||||||||||
Segment pre-tax operating margin | 20 | % | 17 | % | 20 | % |
FIRSTCASH, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)
The following table presents segment pre-tax operating income and other operating metrics of the Latin America operations segment for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020 (dollars in thousands):
Constant Currency Basis | |||||||||||||||||||||||
Six Months | |||||||||||||||||||||||
Ended | |||||||||||||||||||||||
Six Months Ended | June 30, | Increase / | |||||||||||||||||||||
June 30, | Increase / | 2021 | (Decrease) | ||||||||||||||||||||
2021 | 2020 | (Decrease) | (Non-GAAP) | (Non-GAAP) | |||||||||||||||||||
Latin America Operations Segment | |||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Retail merchandise sales | $ | 174,398 | $ | 179,119 | (3 | )% | $ | 163,529 | (9 | )% | |||||||||||||
Pawn loan fees | 82,092 | 74,348 | 10 | % | 76,951 | 4 | % | ||||||||||||||||
Wholesale scrap jewelry sales | 18,428 | 24,121 | (24 | )% | 18,428 | (24 | )% | ||||||||||||||||
Total revenue | 274,918 | 277,588 | (1 | )% | 258,908 | (7 | )% | ||||||||||||||||
Cost of revenue: | |||||||||||||||||||||||
Cost of retail merchandise sold | 108,448 | 115,016 | (6 | )% | 101,709 | (12 | )% | ||||||||||||||||
Cost of wholesale scrap jewelry sold | 16,229 | 18,766 | (14 | )% | 15,210 | (19 | )% | ||||||||||||||||
Total cost of revenue | 124,677 | 133,782 | (7 | )% | 116,919 | (13 | )% | ||||||||||||||||
Net revenue | 150,241 | 143,806 | 4 | % | 141,989 | (1 | )% | ||||||||||||||||
Segment expenses: | |||||||||||||||||||||||
Store operating expenses | 87,631 | 83,543 | 5 | % | 82,513 | (1 | )% | ||||||||||||||||
Depreciation and amortization | 8,797 | 7,665 | 15 | % | 8,310 | 8 | % | ||||||||||||||||
Total segment expenses | 96,428 | 91,208 | 6 | % | 90,823 | - | % | ||||||||||||||||
Segment pre-tax operating income | $ | 53,813 | $ | 52,598 | 2 | % | $ | 51,166 | (3 | )% | |||||||||||||
Operating metrics: | |||||||||||||||||||||||
Retail merchandise sales margin | 38 | % | 36 | % | 38 | % | |||||||||||||||||
Wholesale scrap jewelry sales margin | 12 | % | 22 | % | 17 | % | |||||||||||||||||
Net revenue margin | 55 | % | 52 | % | 55 | % | |||||||||||||||||
Segment pre-tax operating margin | 20 | % | 19 | % | 20 | % |
FIRSTCASH, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)
Consolidated Results of Operations
The following table reconciles pre-tax operating income of the Company's U.S. operations segment and Latin America operations segment discussed above to consolidated net income (in thousands):
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||
Consolidated Results of Operations | |||||||||||||||||||
Segment pre-tax operating income: | |||||||||||||||||||
U.S. operations | $ | 47,135 | $ | 52,239 | $ | 108,020 | $ | 116,634 | |||||||||||
Latin America operations | 28,078 | 20,648 | 53,813 | 52,598 | |||||||||||||||
Consolidated segment pre-tax operating income | 75,213 | 72,887 | 161,833 | 169,232 | |||||||||||||||
Corporate expenses and other income: | |||||||||||||||||||
Administrative expenses | 27,398 | 28,386 | 58,397 | 61,288 | |||||||||||||||
Depreciation and amortization | 1,021 | 1,161 | 1,988 | 2,371 | |||||||||||||||
Interest expense | 7,198 | 6,974 | 14,428 | 15,392 | |||||||||||||||
Interest income | (119 | ) | (525 | ) | (277 | ) | (710 | ) | |||||||||||
Merger and acquisition expenses | 1,086 | 134 | 1,252 | 202 | |||||||||||||||
(Gain) loss on foreign exchange | (577 | ) | (614 | ) | (310 | ) | 2,071 | ||||||||||||
Write-off of certain Cash America merger related lease intangibles | 401 | 182 | 1,279 | 3,812 | |||||||||||||||
Impairment of certain other assets | - | - | - | 1,900 | |||||||||||||||
Total corporate expenses and other income | 36,408 | 35,698 | 76,757 | 86,326 | |||||||||||||||
Income before income taxes | 38,805 | 37,189 | 85,076 | 82,906 | |||||||||||||||
Provision for income taxes | 10,378 | 11,316 | 22,934 | 24,115 | |||||||||||||||
Net income | $ | 28,427 | $ | 25,873 | $ | 62,142 | $ | 58,791 |
FIRSTCASH, INC.
STORE COUNT ACTIVITY
The following tables detail store count activity:
Three Months Ended June 30, 2021 | ||||||||||||
U.S. | Latin America | |||||||||||
Operations Segment | Operations Segment | Total Locations | ||||||||||
Total locations, beginning of period | 1,046 | 1,725 | 2,771 | |||||||||
New locations opened | 1 | 11 | 12 | |||||||||
Locations acquired | 26 | - | 26 | |||||||||
Consolidation of existing pawn locations (1) | (2 | ) | (3 | ) | (5 | ) | ||||||
Total locations, end of period | 1,071 | 1,733 | 2,804 | |||||||||
Six Months Ended June 30, 2021 | ||||||||||||
U.S. | Latin America | |||||||||||
Operations Segment | Operations Segment | Total Locations | ||||||||||
Total locations, beginning of period | 1,046 | 1,702 | 2,748 | |||||||||
New locations opened | 1 | 35 | 36 | |||||||||
Locations acquired | 28 | - | 28 | |||||||||
Consolidation of existing pawn locations (1) | (4 | ) | (4 | ) | (8 | ) | ||||||
Total locations, end of period | 1,071 | 1,733 | 2,804 |
(1) Store consolidations were primarily acquired locations over the past four years which have been combined with overlapping stores and for which the Company expects to maintain a significant portion of the acquired customer base in the consolidated location.
FIRSTCASH, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES
(UNAUDITED)
The Company uses certain financial calculations such as adjusted net income, adjusted diluted earnings per share, EBITDA, adjusted EBITDA, free cash flow, adjusted free cash flow and constant currency results as factors in the measurement and evaluation of the Company's operating performance and period-over-period growth. The Company derives these financial calculations on the basis of methodologies other than generally accepted accounting principles ('GAAP'), primarily by excluding from a comparable GAAP measure certain items the Company does not consider to be representative of its actual operating performance. These financial calculations are 'non-GAAP financial measures' as defined under the SEC rules. The Company uses these non-GAAP financial measures in operating its business because management believes they are less susceptible to variances in actual operating performance that can result from the excluded items, other infrequent charges and currency fluctuations. The Company presents these financial measures to investors because management believes they are useful to investors in evaluating the primary factors that drive the Company's core operating performance and provide greater transparency into the Company's results of operations. However, items that are excluded and other adjustments and assumptions that are made in calculating these non-GAAP financial measures are significant components in understanding and assessing the Company's financial performance. These non-GAAP financial measures should be evaluated in conjunction with, and are not a substitute for, the Company's GAAP financial measures. Further, because these non-GAAP financial measures are not determined in accordance with GAAP and are thus susceptible to varying calculations, the non-GAAP financial measures, as presented, may not be comparable to other similarly titled measures of other companies.
While acquisitions are an important part of the Company's overall strategy, the Company has adjusted the applicable financial calculations to exclude merger and acquisition expenses to allow more accurate comparisons of the financial results to prior periods. In addition, the Company does not consider these merger and acquisition expenses to be related to the organic operations of the acquired businesses or its continuing operations and such expenses are generally not relevant to assessing or estimating the long-term performance of the acquired businesses. Merger and acquisition expenses include incremental costs directly associated with merger and acquisition activities, including professional fees, legal expenses, severance, retention and other employee-related costs, contract breakage costs and costs related to the consolidation of technology systems and corporate facilities, among others.
The Company has certain leases in Mexico which are denominated in U.S. dollars. The lease liability of these U.S. dollar denominated leases, which is considered a monetary liability, is remeasured into Mexican pesos using current period exchange rates resulting in the recognition of foreign currency exchange gains or losses. The Company has adjusted the applicable financial measures to exclude these remeasurement gains or losses because they are non-cash, non-operating items that could create volatility in the Company's consolidated results of operations due to the magnitude of the end of period lease liability being remeasured and to improve comparability of current periods presented with prior periods.
In conjunction with the Cash America merger in 2016, the Company recorded certain lease intangibles related to above or below market lease liabilities of Cash America which are included in the operating lease right of use asset on the consolidated balance sheets. As the Company continues to opportunistically purchase real estate from landlords at certain Cash America stores, the associated lease intangible, if any, is written-off and gain or loss is recognized. The Company has adjusted the applicable financial measures to exclude these gains or losses given the variability in size and timing of these transactions and because they are non-cash, non-operating gains or losses. The Company believes this improves comparability of operating results for current periods presented with prior periods.
FIRSTCASH, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES (CONTINUED)
(UNAUDITED)
Adjusted Net Income and Adjusted Diluted Earnings Per Share
Management believes the presentation of adjusted net income and adjusted diluted earnings per share provides investors with greater transparency and provides a more complete understanding of the Company's financial performance and prospects for the future by excluding items that management believes are non-operating in nature and not representative of the Company's core operating performance of its continuing operations. In addition, management believes the adjustments shown below are useful to investors in order to allow them to compare the Company's financial results for the current periods presented with the prior periods presented.
The following table provides a reconciliation between net income and diluted earnings per share calculated in accordance with GAAP to adjusted net income and adjusted diluted earnings per share, which are shown net of tax (in thousands, except per share amounts):
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||
In Thousands |
Per Share |
In Thousands |
Per Share |
In Thousands |
Per Share |
In Thousands |
Per Share |
||||||||||||||||||||||||
Net income and diluted earnings per share, as reported | $ | 28,427 | $ | 0.70 | $ | 25,873 | $ | 0.62 | $ | 62,142 | $ | 1.52 | $ | 58,791 | $ | 1.41 | |||||||||||||||
Adjustments, net of tax: | |||||||||||||||||||||||||||||||
Merger and acquisition expenses | 826 | 0.02 | 96 | - | 942 | 0.02 | 146 | - | |||||||||||||||||||||||
Non-cash foreign currency (gain) loss related to lease liability | (524 | ) | (0.02 | ) | (308 | ) | - | (103 | ) | - | 2,761 | 0.07 | |||||||||||||||||||
Non-cash write-off of certain Cash America merger related lease intangibles | 309 | 0.01 | 140 | - | 985 | 0.02 | 2,935 | 0.07 | |||||||||||||||||||||||
Non-cash impairment of certain other assets (1) | - | - | - | - | - | - | 1,463 | 0.04 | |||||||||||||||||||||||
Consumer lending wind-down costs and asset impairments | - | - | 71 | - | - | - | 71 | - | |||||||||||||||||||||||
Adjusted net income and diluted earnings per share | $ | 29,038 | $ | 0.71 | $ | 25,872 | $ | 0.62 | $ | 63,966 | $ | 1.56 | $ | 66,167 | $ | 1.59 |
(1) Impairment related to a non-operating asset in which the Company determined that an other than temporary impairment existed as of March 31, 2020.
FIRSTCASH, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES (CONTINUED)
(UNAUDITED)
The following tables provide a reconciliation of the gross amounts, the impact of income taxes and the net amounts for the adjustments included in the table above (in thousands):
Three Months Ended June 30, | |||||||||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||||||||
Pre-tax | Tax | After-tax | Pre-tax | Tax | After-tax | ||||||||||||||||||||||||
Merger and acquisition expenses | $ | 1,086 | $ | 260 | $ | 826 | $ | 134 | $ | 38 | $ | 96 | |||||||||||||||||
Non-cash foreign currency gain related to lease liability | (749 | ) | (225 | ) | (524 | ) | (440 | ) | (132 | ) | (308 | ) | |||||||||||||||||
Non-cash write-off of certain Cash America merger related lease intangibles | 401 | 92 | 309 | 182 | 42 | 140 | |||||||||||||||||||||||
Consumer lending wind-down costs and asset impairments | - | - | - | 92 | 21 | 71 | |||||||||||||||||||||||
Total adjustments | $ | 738 | $ | 127 | $ | 611 | $ | (32 | ) | $ | (31 | ) | $ | (1 | ) | ||||||||||||||
Six Months Ended June 30, | |||||||||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||||||||
Pre-tax | Tax | After-tax | Pre-tax | Tax | After-tax | ||||||||||||||||||||||||
Merger and acquisition expenses | $ | 1,252 | $ | 310 | $ | 942 | $ | 202 | $ | 56 | $ | 146 | |||||||||||||||||
Non-cash foreign currency (gain) loss related to lease liability | (147 | ) | (44 | ) | (103 | ) | 3,944 | 1,183 | 2,761 | ||||||||||||||||||||
Non-cash write-off of certain Cash America merger related lease intangibles | 1,279 | 294 | 985 | 3,812 | 877 | 2,935 | |||||||||||||||||||||||
Non-cash impairment of certain other assets | - | - | - | 1,900 | 437 | 1,463 | |||||||||||||||||||||||
Consumer lending wind-down costs and asset impairments | - | - | - | 92 | 21 | 71 | |||||||||||||||||||||||
Total adjustments | $ | 2,384 | $ | 560 | $ | 1,824 | $ | 9,950 | $ | 2,574 | $ | 7,376 |
FIRSTCASH, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES (CONTINUED)
(UNAUDITED)
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA
The Company defines EBITDA as net income before income taxes, depreciation and amortization, interest expense and interest income and adjusted EBITDA as EBITDA adjusted for certain items as listed below that management considers to be non-operating in nature and not representative of its actual operating performance. The Company believes EBITDA and adjusted EBITDA are commonly used by investors to assess a company's financial performance, and adjusted EBITDA is used in the calculation of the net debt ratio as defined in the Company's senior unsecured notes covenants. The following table provides a reconciliation of net income to EBITDA and adjusted EBITDA (dollars in thousands):
Trailing Twelve | ||||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | Months Ended | ||||||||||||||||||||||||||||
June 30, | June 30, | June 30, | ||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||
Net income | $ | 28,427 | $ | 25,873 | $ | 62,142 | $ | 58,791 | $ | 109,930 | $ | 147,706 | ||||||||||||||||||
Income taxes | 10,378 | 11,316 | 22,934 | 24,115 | 35,939 | 55,682 | ||||||||||||||||||||||||
Depreciation and amortization | 10,902 | 10,324 | 21,514 | 20,998 | 42,621 | 42,518 | ||||||||||||||||||||||||
Interest expense | 7,198 | 6,974 | 14,428 | 15,392 | 28,380 | 32,509 | ||||||||||||||||||||||||
Interest income | (119 | ) | (525 | ) | (277 | ) | (710 | ) | (1,107 | ) | (1,406 | ) | ||||||||||||||||||
EBITDA | 56,786 | 53,962 | 120,741 | 118,586 | 215,763 | 277,009 | ||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||
Merger and acquisition expenses | 1,086 | 134 | 1,252 | 202 | 2,366 | 1,263 | ||||||||||||||||||||||||
Non-cash foreign currency (gain) loss related to lease liability | (749 | ) | (440 | ) | (147 | ) | 3,944 | (2,842 | ) | 3,546 | ||||||||||||||||||||
Loss on extinguishment of debt | - | - | - | - | 11,737 | - | ||||||||||||||||||||||||
Non-cash write-off of certain Cash America merger related lease intangibles | 401 | 182 | 1,279 | 3,812 | 4,522 | 3,812 | ||||||||||||||||||||||||
Non-cash impairment of certain other assets | - | - | - | 1,900 | - | 1,900 | ||||||||||||||||||||||||
Consumer lending wind-down costs and asset impairments | - | 92 | - | 92 | 17 | 1,002 | ||||||||||||||||||||||||
Adjusted EBITDA | $ | 57,524 | $ | 53,930 | $ | 123,125 | $ | 128,536 | $ | 231,563 | $ | 288,532 | ||||||||||||||||||
Net debt ratio calculation: | ||||||||||||||||||||||||||||||
Total debt (outstanding principal) | $ | 663,000 | $ | 500,000 | ||||||||||||||||||||||||||
Less: cash and cash equivalents | (50,061 | ) | (70,956 | ) | ||||||||||||||||||||||||||
Net debt | $ | 612,939 | $ | 429,044 | ||||||||||||||||||||||||||
Adjusted EBITDA | $ | 231,563 | $ | 288,532 | ||||||||||||||||||||||||||
Net debt ratio (net debt divided by adjusted EBITDA) | 2.6 | :1 | 1.5 | :1 |
FIRSTCASH, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES (CONTINUED)
(UNAUDITED)
Free Cash Flow and Adjusted Free Cash Flow
For purposes of its internal liquidity assessments, the Company considers free cash flow and adjusted free cash flow. The Company defines free cash flow as cash flow from operating activities less purchases of furniture, fixtures, equipment and improvements and net fundings/repayments of loan receivables, which are considered to be operating in nature by the Company but are included in cash flow from investing activities. Adjusted free cash flow is defined as free cash flow adjusted for merger and acquisition expenses paid that management considers to be non-operating in nature.
Free cash flow and adjusted free cash flow are commonly used by investors as an additional measure of cash generated by business operations that may be used to repay scheduled debt maturities and debt service or, following payment of such debt obligations and other non-discretionary items, may be available to invest in future growth through new business development activities or acquisitions, repurchase stock, pay cash dividends or repay debt obligations prior to their maturities. These metrics can also be used to evaluate the Company's ability to generate cash flow from business operations and the impact that this cash flow has on the Company's liquidity. However, free cash flow and adjusted free cash flow have limitations as analytical tools and should not be considered in isolation or as a substitute for cash flow from operating activities or other income statement data prepared in accordance with GAAP. The following table reconciles cash flow from operating activities to free cash flow and adjusted free cash flow (in thousands):
Trailing Twelve | ||||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | Months Ended | ||||||||||||||||||||||||||||
June 30, | June 30, | June 30, | ||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||
Cash flow from operating activities | $ | 44,575 | $ | 65,914 | $ | 113,749 | $ | 143,299 | $ | 192,714 | $ | 268,922 | ||||||||||||||||||
Cash flow from investing activities: | ||||||||||||||||||||||||||||||
Loan receivables, net (1) | (50,886 | ) | 126,000 | (8,492 | ) | 178,279 | (79,763 | ) | 193,111 | |||||||||||||||||||||
Purchases of furniture, fixtures, equipment and improvements | (11,534 | ) | (9,895 | ) | (21,025 | ) | (20,476 | ) | (38,092 | ) | (41,883 | ) | ||||||||||||||||||
Free cash flow | (17,845 | ) | 182,019 | 84,232 | 301,102 | 74,859 | 420,150 | |||||||||||||||||||||||
Merger and acquisition expenses paid, net of tax benefit | 826 | 96 | 942 | 146 | 1,787 | 892 | ||||||||||||||||||||||||
Adjusted free cash flow | $ | (17,019 | ) | $ | 182,115 | $ | 85,174 | $ | 301,248 | $ | 76,646 | $ | 421,042 |
(1) Includes the funding of new loans net of cash repayments and recovery of principal through the sale of inventories acquired from forfeiture of pawn collateral.
FIRSTCASH, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES (CONTINUED)
(UNAUDITED)
Constant Currency Results
The Company's reporting currency is the U.S. dollar. However, certain performance metrics discussed in this release are presented on a 'constant currency' basis, which is considered a non-GAAP financial measure. The Company's management uses constant currency results to evaluate operating results of business operations in Latin America, which are primarily transacted in local currencies.
The Company believes constant currency results provide valuable supplemental information regarding the underlying performance of its business operations in Latin America, consistent with how the Company's management evaluates such performance and operating results. Constant currency results reported herein are calculated by translating certain balance sheet and income statement items denominated in local currencies using the exchange rate from the prior-year comparable period, as opposed to the current comparable period, in order to exclude the effects of foreign currency rate fluctuations for purposes of evaluating period-over-period comparisons. Business operations in Mexico, Guatemala and Colombia are transacted in Mexican pesos, Guatemalan quetzales and Colombian pesos. The Company also has operations in El Salvador where the reporting and functional currency is the U.S. dollar. See the Latin America operations segment tables elsewhere in this release for an additional reconciliation of certain constant currency amounts to as reported GAAP amounts.
For further information, please contact:
Gar Jackson
Global IR Group
Phone: (817) 886-6998
Email: [email protected]
Doug Orr, Executive Vice President and Chief Financial Officer
Phone: (817) 258-2650
Email: [email protected]
Website: investors.firstcash.com
Source: FirstCash, Inc.