First Cash Reports 17% Increase in Second Quarter Earnings Per Share to $0.56; Growth in Pawn Loans and Retail Merchandise Sales Drive Record Earnings ARLINGTON, Texas, July 18, 2012 (GLOBE NEWSWIRE) -- First Cash Financial Services, Inc. (Nasdaq:FCFS) today announced record-setting revenue, net income and earnings per share for the three months ended June 30, 2012. Earnings Highlights oDiluted earnings per share from continuing operations for the second quarter of 2012 were $0.56, an increase of 17% compared to $0.48 in the second quarter of 2011. oYear-to-date earnings per share from continuing operations increased 16% to $1.13, compared to $0.97 in the prior year. oNet income from continuing operations for the second quarter of 2012 increased to $16.3 million, up 8% over the prior-year quarter, while year-to-date net income increased 9% to $33.9 million. Revenue Highlights *Consolidated second quarter revenue increased 18% on a constant currency basis to $133 million. Revenue growth rates are presented herein on a constant currency basis, calculated by applying the currency exchange rate from the comparable prior-year period to the current year's Mexican peso-denominated revenue. The exchange rate for the second quarter of 2012 was 13.5 Mexican pesos / U.S. dollar versus 11.7 Mexican pesos / U.S. dollar in the prior-year period. *Revenue from the Company's operations in Mexico increased by 22% on a constant currency basis over the prior-year second quarter. U.S. pawn-related revenues increased 15% versus the same period last year. By country, 57% of second quarter revenue was generated in Mexico and 43% was derived from domestic operations. *On a consolidated product-line basis, the primary driver of revenue growth came from the Company's core store-based pawn operations. During the second quarter, pawn fees increased by 21% on a constant currency basis versus the prior-year second quarter, while pawn store merchandise sales increased by 22%. Pawn fee growth in Mexico was particularly strong, up 29%, and retail sales in Mexico, comprised primarily of electronics, tools and appliances, increased 25% versus the same period last year. *Wholesale scrap jewelry revenues during the second quarter of 2012 increased 13% compared to the same period last year. While the average selling price for gold increased 12% over the prior-year quarter, volume was essentially unchanged. Scrap jewelry operations accounted for only 7% of net revenue (gross profit) for the quarter. *Second quarter revenue from non-core short-term loan and credit services (payday loan products) was flat compared to the prior-year quarter and comprised only 9% of total revenue. *Consolidated same-store revenue increased by 6% (on a constant currency basis) for the second quarter. By country, same-store revenue increased 5% in Mexico and 6% in the United States. On a regional basis in Mexico, same store revenue increased by 13% in the interior markets, but was partially offset by small declines in the border regions. Pawn Metrics oPawn loans in Mexico increased 22% (on a constant currency basis), driven by continued growth in store counts and significant sequential quarterly improvement in most border markets. Pawn receivables in the U.S. increased by 17% versus the prior year, also driven by store count growth and continued same-store revenue growth. oThe consolidated gross margin on retail merchandise sales was 42% for the second quarter, compared to 40% in the prior-year quarter. The increase was driven by significantly improved retail margins in Mexico, which increased 400 basis points versus the prior-year period. U.S. retail margins remained consistent with the prior year. The consolidated gross margin on wholesale scrap jewelry was 22% for the quarter and 25% year-to-date, reflecting higher jewelry acquisition costs compared to the prior year. oConsolidated annualized inventory turns continued to improve in the second quarter to a record 4.5 turns versus 3.8 turns during the comparable prior-year quarter, driven by improved inventory quality and strong retail demand. oThe overall composition of pawn collateral remained constant in both the U.S. and Mexico. On a consolidated basis at June 30, 2012, 60% of total loans were collateralized with hard goods (electronics, tools and appliances) with the remainder collateralized by jewelry. In Mexico, 80% of the Company's pawns were collateralized with hard goods, and only 20% were collateralized with jewelry, compared to 78% and 22%, respectively, one year ago. In the U.S., jewelry comprised 62% of pawn collateral as of the quarter end, consistent with a 64% jewelry mix last year. Profitability and Return Metrics oThe Company's return on equity for the trailing twelve months increased to a record 24% versus 21% in the respective prior-year period. oThe return on assets over the trailing twelve months remained a record-level 20% versus 18% in the respective prior-year period. oConsolidated net operating margin (pre-tax income) was 20% for the trailing twelve month period, while store-level operating profit margins were 29% for the trailing twelve month period. Acquisitions and New Store Openings oIn total, the Company added 49 pawn store locations during the second quarter of 2012. Year-to-date, a total of 103 stores have been opened or acquired, compared to 48 additions at this point last year. oIn June 2012, the Company completed the acquisition of 24 pawn stores located in the states of Colorado (13), Kentucky (7), Wyoming (3) and Nebraska (1).The 24 acquired stores are all large format, full-service stores. The Company also completed the acquisition of one large format pawn store located in Maryland during the second quarter.Transaction costs and integration expenses associated with these acquisitions reduced second quarter earnings by approximately $0.01 per share. oU.S. pawn store openings in the second quarter also included two de novo stores: one located in Texas and the other in Oklahoma. Year-to-date, a total of 32 U.S. stores have been opened or acquired. As of June 30, 2012, First Cash had 263 stores in the U.S., of which 164 are large format, full-service stores.The Company has increased the number of large format pawn stores in the U.S. by 36% over the past twelve months. oPawn store openings in the second quarter also included 22 de novo stores in Mexico.Year-to-date, a total of 71 Mexico stores have been added, which included 42 de novo openings and a 29-store acquisition in January 2012.As of June 30, 2012, First Cash had 518 stores in Mexico, of which 465 are large format, full-service stores.The Company has increased the number of large format pawn stores in Mexico by 26% over the past twelve months. oIn June 2012, the Company increased its estimate of fiscal 2012 store additions to be in the range of 125 to 135 total locations.All of the 2012 store additions are expected to be large format pawn stores. Financial Position & Liquidity oEBITDA from continuing operations for the trailing twelve months was $124 million, an increase of 16% versus the comparable prior twelve-month period. EBITDA margins remained at a record 23% for the trailing twelve months versus 22% for the prior-year period.Free cash flow for the trailing twelve months increased to $55 million, compared to $24 million in the comparable prior-year period.EBITDA and free cash flow are defined in the detailed reconciliation of these non-GAAP financial measures provided elsewhere in this release. oDuring the first half of 2012, the Company utilized cash on-hand, operating cash flows and its credit facility to fund $71 million of pawn store acquisitions, repurchase $61 million of common stock and invest $10 million in capital expenditures. oIn April 2012, the Company completed its 1,500,000 share buyback authorization that was announced in December 2011.The 1,500,000 shares were repurchased at a total cost of $61 millionand at an average price of $40.85 per share. oIn June 2012, the Company expanded the term of its existing unsecured bank credit facility from $50 million to $100 million.The facility bears interest at the prevailing LIBOR rate plus a margin which varies from 1.5% to 2.0%, depending on the Company's leverage ratio.The total interest rate on the facility is currently 1.75% annually.At June 30, 2012, the Company had $72 million outstanding on the facility.Net debt (outstanding debt less investable cash) remains less than 50% of EBITDA for the trailing twelve-month period. Fiscal 2012 Outlook *The Company is maintaining its current 2012 guidance for earnings per diluted share of $2.70 to $2.75 which represents a 20% to 22% projected earnings increase over fiscal 2011. *Approximately 91% to 92% of 2012 revenues are expected to be derived from pawn operations, with the remainder expected to come from consumer loan and credit services operations. Commentary & Analysis Mr. Rick Wessel, chief executive officer, commented on the second quarter results, "We are very pleased with our second quarter results, which were driven by strong growth in our core pawn business.We achieved several significant milestones during the quarter as we opened our 750^th store, acquired 25 pawn stores in the U.S. and continued our de novo store growth in Mexico.During the quarter, we added operations in four additional states in the U.S. and one additional state in Mexico.We now operate in 24 of the 32 total states in Mexico." "Customer demand in our full-service pawn stores remains robust.The consolidated 21% growth in pawn service fees was particularly impressive, as was the 22% increase in retail sales.Of particular importance is the 29% growth in pawn fees and the 25% growth in retail sales in Mexico.In addition, both retail margins and inventory turns improved significantly over the prior year, reflecting the continued strength of consumer demand, the quality of our inventory and the training and systems utilized by our sales associates. These results demonstrate the consistency and profitability of our business model across regions and business cycles, both in the U.S. and particularly in Mexico, where our pawn operations are now almost entirely focused on hard good (non-gold) lending and retail sales." "The Company's strong operating cash flow and balance sheet provide us the ability to fund both organic growth and take advantage of acquisition opportunities as they arise. During the quarter, we doubled the size of our unsecured bank credit facility to $100 million, providing us with increased flexibility for growth.The significant pawn acquisitions that we completed this year position us well for the future. While we have invested over $70 million in acquisitions year-to-date and incurred associated non-recurring costs of approximately $0.02 per share, we believe that these acquisitions will become significantly accretive in 2013 and beyond." "In summary, given our competitive strengths, growth platform and expanding customer base, we are excited about our ability to further grow our store count, revenues, margins and earnings.Our business model, coupled with our strong balance sheet, should position us to drive sustainable long-term growth in shareholder value." Forward-Looking Information This release may contain forward-looking statements about the business, financial condition and prospects of 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," "targets," "intends," "could," or "anticipates," or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy or objectives.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, regulatory exposures, store openings, liquidity, cash flow, consumer demand for the Company's products and services, currency exchange rates, future share repurchases and the impact thereof, completion of disposition transactions and expected gains from the sale of such operations, earnings from acquisitions, the ability to successfully integrate acquisitions 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 the inflation rate, changes in the unemployment rate, changes in consumer purchasing, borrowing and repayment behaviors, changes in credit markets, the ability to renew and/or extend the Company's existing bank line of credit, credit losses, changes in the market value of pawn collateral and merchandise inventories, changes or increases in competition, the ability to locate, open and staff new stores, the availability or access to sources of inventory, inclement weather, the ability to successfully integrate acquisitions, the ability to hire and retain key management personnel, the ability to operate with limited regulation as a credit services organization, new federal, state or local legislative initiatives or governmental regulations (or changes to existing laws and regulations) affecting consumer loan businesses, credit services organizations and pawn businesses (in both the United States and Mexico), changes in import/export regulations and tariffs or duties, changes in anti-money laundering regulations, unforeseen litigation, changes in interest rates, monetary inflation, changes in tax rates or policies, changes in gold prices, changes in energy prices, cost of funds, changes in foreign currency exchange rates, future business decisions, public health issues and other uncertainties.These and other risks, uncertainties and regulatory developments are further and more completely described in the Company's Annual Report on Form 10-K and updated in subsequent releases on Form 10-Q. About First Cash First Cash Financial Services, Inc. is a leading international specialty retailer and provider of consumer financial services.Its retail pawn locations buy and sell a wide variety of jewelry, electronics, tools and other merchandise, and make small customer loans secured by pledged personal property.The Company's focus is serving cash and credit constrained consumers through deep value retailing and offering small loans and other financial products.In total, the Company owns and operates 783 stores in twelve U.S. states and 24 states in Mexico. First Cash was named by Fortune Magazine as one of America's 100 fastest growing companies for 2011.First Cash is also a component company in both the Standard & Poor's SmallCap 600 Index^® and the Russell 2000 Index^®.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. The First Cash Financial Services, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3365 STORE COUNT ACTIVITY The following table details store openings for the three months ended June 30, 2012: Pawn Locations Consumer Large Small Loan Total Format (1) Format (2) Locations (3) Locations United States: Total locations, 137 27 72 236 beginning of period New locations opened 2 -- -- 2 Locations acquired 25 -- -- 25 Total locations, end 164 27 72 263 of period Mexico: Total locations, 443 19 34 496 beginning of period New locations opened 22 -- -- 22 Locations acquired -- -- -- -- Total locations, end 465 19 34 518 of period Total: Total locations, 580 46 106 732 beginning of period New locations opened 24 -- -- 24 Locations acquired 25 -- -- 25 Total locations, end 629 46 106 781 of period (1) The large format locations include retail showrooms and accept a broad array of pawn collateral including jewelry, electronics, appliances, tools and other consumer hard goods.At June 30, 2012, 109 of the U.S. large format pawn stores also offered consumer loans or credit services products, which includes the 24 locations acquired from Mister Money. (2) The small format locations typically have limited retail operations and primarily accept jewelry and small electronic items as pawn collateral.At June 30, 2012, all of the Texas and Mexico small format pawn stores also offered consumer loans or credit services products. (3) The Company's U.S. free-standing, small format consumer loan locations offer a credit services product and are all located in Texas.The Mexico locations offer small, short-term consumer loans.In addition to stores shown on this chart, First Cash is also an equal partner in Cash & Go, Ltd., a joint venture, which owns and operates 38 check cashing and financial services kiosks located inside convenience stores in the state of Texas. The following table details store openings for the six months ended June 30, 2012: Pawn Locations Consumer Large Small Loan Total Format (1) Format (2) Locations (3) Locations United States: Total locations, 132 25 74 231 beginning of period New locations opened 4 -- -- 4 Locations acquired 28 -- -- 28 Store format -- 2 (2) -- conversions Total locations, end 164 27 72 263 of period Mexico: Total locations, 394 19 34 447 beginning of period New locations opened 42 -- -- 42 Locations acquired 29 -- -- 29 Total locations, end 465 19 34 518 of period Total: Total locations, 526 44 108 678 beginning of period New locations opened 46 -- -- 46 Locations acquired 57 -- -- 57 Store format -- 2 (2) -- conversions Total locations, end 629 46 106 781 of period (1) The large format locations include retail showrooms and accept a broad array of pawn collateral including jewelry, electronics, appliances, tools and other consumer hard goods.At June 30, 2012, 109 of the U.S. large format pawn stores also offered consumer loans or credit services products, which includes the 24 locations acquired from Mister Money. (2) The small format locations typically have limited retail operations and primarily accept jewelry and small electronic items as pawn collateral.At June 30, 2012, all of the Texas and Mexico small format pawn stores also offered consumer loans or credit services products. (3) The Company's U.S. free-standing, small format consumer loan locations offer a credit services product and are all located in Texas.The Mexico locations offer small, short-term consumer loans.In addition to stores shown on this chart, First Cash is also an equal partner in Cash & Go, Ltd., a joint venture, which owns and operates 38 check cashing and financial services kiosks located inside convenience stores in the state of Texas. FIRST CASH FINANCIAL SERVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended Six Months Ended June 30, June 30, 2012 2011 2012 2011 (in thousands, except per share amounts) Revenue: Merchandise sales $86,307 $77,358 $173,213 $155,663 Pawn loan fees 33,932 30,564 68,844 59,536 Consumer loan and credit 12,304 12,410 25,291 25,634 services fees Other revenue 235 249 546 586 Total revenue 132,778 120,581 267,894 241,419 Cost of revenue: Cost of goods sold 54,579 48,879 108,894 97,121 Consumer loan and credit 3,093 2,716 5,481 4,973 services loss provision Other cost of revenue 33 52 53 98 Total cost of revenue 57,705 51,647 114,428 102,192 Net revenue 75,073 68,934 153,466 139,227 Expenses and other income: Store operating expenses 35,240 31,778 71,559 63,496 Administrative expenses 11,612 10,971 23,918 22,503 Depreciation and amortization 3,119 2,821 6,155 5,468 Interest expense 176 40 253 66 Interest income (36) (66) (117) (165) Total expenses and other 50,111 45,544 101,768 91,368 income Income from continuing operations before income 24,962 23,390 51,698 47,859 taxes Provision for income taxes 8,613 8,186 17,837 16,750 Income from continuing 16,349 15,204 33,861 31,109 operations Income from discontinued -- 134 -- 6,785 operations, net of tax (1) Net income $16,349 $15,338 $33,861 $37,894 Basic income per share: Income from continuing $0.57 $0.49 $1.16 $1.00 operations (basic) Income from discontinued -- -- -- 0.21 operations (basic) Net income per basic share $0.57 $0.49 $1.16 $1.21 Diluted income per share: Income from continuing $0.56 $0.48 $1.13 $0.97 operations (diluted) Income from discontinued -- -- -- 0.21 operations (diluted) Net income per diluted share $0.56 $0.48 $1.13 $1.18 Weighted average shares outstanding: Basic 28,658 31,087 29,119 31,199 Diluted 29,404 31,869 29,878 31,972 (1) Represents non-recurring gain on the sale of the discontinued Illinois consumer loan stores in March 2011. FIRST CASH FINANCIAL SERVICES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) June 30, December 31, 2012 2011 2011 (in thousands) ASSETS Cash and cash equivalents $29,793 $68,259 $70,296 Pawn loan fees and service charges 13,159 11,862 10,842 receivable Pawn loans 88,298 79,654 73,287 Consumer loans, net 2,035 1,072 858 Inventories 52,978 54,636 44,412 Other current assets 2,841 10,266 10,783 Total current assets 189,104 225,749 210,478 Property and equipment, net 83,577 69,909 73,451 Goodwill, net 127,603 72,523 70,395 Other non-current assets 4,948 3,036 2,772 Total assets $405,232 $371,217 $357,096 LIABILITIES AND STOCKHOLDERS' EQUITY Current portion of notes payable $1,605 $479 $-- Accounts payable and accrued liabilities 30,126 29,584 25,629 Income taxes payable and deferred taxes 440 7,417 9,776 payable Total current liabilities 32,171 37,480 35,405 Revolving unsecured credit facility 71,600 -- -- Notes payable, net of current portion 2,641 1,143 -- Deferred income tax liabilities 8,362 9,899 6,319 Total liabilities 114,774 48,522 41,724 Stockholders' equity Preferred stock -- -- -- Common stock 383 383 383 Additional paid-in capital 148,474 147,204 147,649 Retained earnings 367,384 293,635 333,523 Accumulated other comprehensive income (loss) from cumulative foreign currency (11,788) 1,285 (13,463) translation adjustments Common stock held in treasury, at cost (213,995) (119,812) (152,720) Total stockholders' equity 290,458 322,695 315,372 Total liabilities and stockholders' equity $405,232 $371,217 $357,096 FIRST CASH FINANCIAL SERVICES, INC. OPERATING INFORMATION (UNAUDITED) The following table details the components of revenue for the three months ended June 30, 2012, as compared to the three months ended June 30, 2011 (in thousands).Constant currency results exclude the effects of foreign currency translation and are calculated by translating current year results at prior year average exchange rates, which is more fully described elsewhere in this release. Three Months Ended Increase/(Decrease) June 30, Constant Currency 2012 2011 Increase/(Decrease) Basis United States revenue: Retail merchandise $21,200 $18,254 $2,946 16 % 16 % sales Scrap jewelry 11,745 9,744 2,001 21 % 21 % sales Pawn loan fees 13,108 11,894 1,214 10 % 10 % Credit services 11,208 11,114 94 1 % 1 % fees Consumer loan 147 31 116 374 % 374 % fees Other revenue 235 247 (12) (5)% (5)% 57,643 51,284 6,359 12 % 12 % Mexico revenue: Retail merchandise 41,061 37,836 3,225 9 % 25 % sales Scrap jewelry 12,301 11,524 777 7 % 7 % sales Pawn loan fees 20,824 18,670 2,154 12 % 29 % Consumer loan 949 1,265 (316) (25)% (13)% fees Other revenue -- 2 (2) (100)% (100)% 75,135 69,297 5,838 8 % 22 % Total revenue: Retail merchandise 62,261 56,090 6,171 11 % 22 % sales Scrap jewelry 24,046 21,268 2,778 13 % 13 % sales Pawn loan fees 33,932 30,564 3,368 11 % 21 % Credit services 11,208 11,114 94 1 % 1 % fees Consumer loan 1,096 1,296 (200) (15)% (4)% fees Other revenue 235 249 (14) (6)% (6)% $ 132,778 $120,581 $12,197 10 % 18 % FIRST CASH FINANCIAL SERVICES, INC. OPERATING INFORMATION (CONTINUED) (UNAUDITED) The following table details the components of revenue for the six months ended June 30, 2012, as compared to the six months ended June 30, 2011 (in thousands).Constant currency results exclude the effects of foreign currency translation and are calculated by translating current year results at prior year average exchange rates, which is more fully described elsewhere in this release. Six Months Ended Increase/(Decrease) June 30, Constant Currency 2012 2011 Increase/(Decrease) Basis United States revenue: Retail merchandise $46,262 $39,182 $7,080 18 % 18 % sales Scrap jewelry 26,781 24,326 2,455 10 % 10 % sales Pawn loan fees 27,647 24,401 3,246 13 % 13 % Credit services 23,163 23,037 126 1 % 1 % fees Consumer loan 178 127 51 40 % 40 % fees Other revenue 546 584 (38) (7)% (7)% 124,577 111,657 12,920 12 % 12 % Mexico revenue: Retail merchandise 78,643 71,263 7,380 10 % 23 % sales Scrap jewelry 21,527 20,892 635 3 % 3 % sales Pawn loan fees 41,197 35,135 6,062 17 % 31 % Consumer loan 1,950 2,470 (520) (21)% (12)% fees Other revenue -- 2 (2) (100)% (100)% 143,317 129,762 13,555 10 % 21 % Total revenue: Retail merchandise 124,905 110,445 14,460 13 % 21 % sales Scrap jewelry 48,308 45,218 3,090 7 % 7 % sales Pawn loan fees 68,844 59,536 9,308 16 % 24 % Credit services 23,163 23,037 126 1 % 1 % fees Consumer loan 2,128 2,597 (469) (18)% (9)% fees Other revenue 546 586 (40) (7)% (7)% $ 267,894 $241,419 $26,475 11 % 17 % FIRST CASH FINANCIAL SERVICES, INC. OPERATING INFORMATION (CONTINUED) (UNAUDITED) The following table details customer loans and inventories held by the Company and active CSO credit extensions from an independent third-party lender as of June 30, 2012, as compared to June 30, 2011 (in thousands). Constant currency results exclude the effects of foreign currency translation and are calculated by translating current year balances at the prior year end-of-period exchange rate, which is more fully described elsewhere in this release. Balance at Increase/(Decrease) June 30, Constant Currency 2012 2011 Increase/(Decrease) Basis United States: Pawn loans $42,596 $36,383 $6,213 17 % 17 % CSO credit extensions held 13,462 12,167 1,295 11 % 11 % by independent third-party (1) Other consumer 1,242 46 1,196 2,600 % 2,600 % loans 57,300 48,596 8,704 18 % 18 % Mexico: Pawn loans 45,702 43,271 2,431 6 % 22 % Other consumer 793 1,026 (233) (23)% (10)% loans 46,495 44,297 2,198 5 % 22 % Total: Pawn loans 88,298 79,654 8,644 11 % 20 % CSO credit extensions held 13,462 12,167 1,295 11 % 11 % by independent third-party (1) Other consumer 2,035 1,072 963 90 % 102 % loans $ 103,795 $92,893 $10,902 12 % 20 % Pawn inventories: U.S. pawn $24,415 $20,030 $4,385 22 % 22 % inventories Mexico pawn 28,563 34,606 (6,043) (17)% (4)% inventories $52,978 $54,636 $(1,658) (3)% 5 % (1) CSO amounts are comprised 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 loans. FIRST CASH FINANCIAL SERVICES, INC. UNAUDITED NON-GAAP FINANCIAL INFORMATION The Company uses certain financial calculations, such as free cash flow, EBITDA and constant currency results, which are not considered measures of financial performance under U.S. generally accepted accounting principles ("GAAP").Items excluded from the calculation of free cash flow, EBITDA and constant currency results are significant components in understanding and assessing the Company's financial performance.Since free cash flow, EBITDA and constant currency results are not measures determined in accordance with GAAP and are thus susceptible to varying calculations, free cash flow, EBITDA and constant currency results, as presented, may not be comparable to other similarly titled measures of other companies.Free cash flow, EBITDA and constant currency results should not be considered as alternatives to net income, cash flow provided by or used in operating, investing or financing activities or other financial statement data presented in the Company's consolidated financial statements as indicators of financial performance or liquidity.Non-GAAP measures should be evaluated in conjunction with, and are not a substitute for, GAAP financial measures. Earnings Before Interest, Taxes, Depreciation and Amortization EBITDA is commonly used by investors to assess a company's leverage capacity, liquidity and financial performance.The following table provides a reconciliation of income from continuing operations to EBITDA (in thousands): Trailing Twelve Months Ended June 30, 2012 2011 Income from continuing operations $73,617 $62,091 Adjustments: Income taxes 38,425 33,687 Depreciation and amortization 11,701 10,837 Interest expense 322 184 Interest income (230) (239) Earnings from continuing operations before $123,835 $106,560 interest, taxes, depreciation and amortization EBITDA margin calculated as follows: Total revenue from continuing operations $547,777 $475,008 Earnings from continuing operations before 123,835 106,560 interest, taxes, depreciation and amortization EBITDA as a percentage of revenue 23% 22% FIRST CASH FINANCIAL SERVICES, INC. UNAUDITED NON-GAAP FINANCIAL INFORMATION (CONTINUED) Free Cash Flow For purposes of its internal liquidity assessments, the Company considers free cash flow, which is defined as cash flow from the operating activities of continuing and discontinued operations reduced by purchases of property and equipment and net cash outflow from pawn and consumer loans.Free cash flow is commonly used by investors as a measure of cash generated by business operations that will be used to repay scheduled debt maturities and can be used to invest in future growth through new business development activities or acquisitions, repurchase stock, 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.The following table reconciles "net cash flow from operating activities" to "free cash flow" (in thousands): Trailing Twelve Months Ended June 30, 2012 2011 Cash flow from operating activities, including $84,693 $75,938 discontinued operations Cash flow from investing activities: Pawn and consumer loans (5,620) (26,156) Purchases of property and equipment (23,720) (25,872) Free cash flow $55,353 $23,910 Constant Currency Certain performance metrics discussed in this release are presented on a "constant currency" basis, which may be considered a non-GAAP financial measurement of financial performance under GAAP. The Company's management uses constant currency results to evaluate operating results of certain business operations in Mexico, which are transacted primarily in Mexican pesos.Pawn scrap jewelry in Mexico is sold in U.S. dollars and, accordingly, does not require a constant currency adjustment.Constant currency results reported herein are calculated by translating certain balance sheet and income statement items denominated in Mexican pesos 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.For balance sheet items, the closing exchange rate at the end of the applicable prior-year period (June 30, 2011) of 11.8 to 1 was used, compared to the current end of period (June 30, 2012) exchange rate of 13.7 to 1.For income statement items, the average closing daily exchange rate for the appropriate period was used.The average exchange rate for the prior-year quarter ended June 30, 2011 was 11.7 to 1, compared to the current-quarter rate of 13.5 to 1.The average exchange rate for the prior-year six-month period ended June 30, 2011 was 11.9 to 1, compared to the current year-to-date rate of 13.3 to 1. CONTACT: Gar Jackson Phone: (949) 873-2789 Email: firstname.lastname@example.org Rick Wessel, Chairman and Chief Executive Officer Doug Orr, Executive Vice President and Chief Financial Officer Phone: (817) 505-3199 Email: email@example.com Website: www.firstcash.com company logo
First Cash Reports 17% Increase in Second Quarter Earnings Per Share to $0.56; Growth in Pawn Loans and Retail Merchandise Sales
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