FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended Commission File Number:
April 30, 1997 0-19133
FIRST CASH, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-2237318
(State of Incorporation) (IRS Employers
Identification Number)
690 East Lamar, Suite 400
Arlington, Texas 76011
(Address of principal executive offices) (Zip Code)
(817)460-3947
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes x No
--- ---
As of June 12, 1997, there were 4,060,417 shares of Company common
stock, par value $.01 per share ("Common Stock"), issued and
outstanding.
Part I. Financial Information
Item 1. Financial Statements
<TABLE>
FIRST CASH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
April 30, July 31,
1997 1996
---- ----
(unaudited)
(amounts in thousands)
ASSETS
<S> <C> <C>
Cash and cash equivalents..................... $ 989 $ 680
Service charges receivable.................... 1,688 1,783
Loans......................................... 11,288 11,701
Inventories................................... 9,625 8,772
Prepaid expenses and other current assets..... 1,501 869
-------- --------
Total current assets..................... 25,091 23,805
Property and equipment, net................... 6,362 5,647
Intangible assets, net........................ 22,316 21,547
Other......................................... 777 946
-------- --------
$ 54,546 $ 51,945
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt and
notes payable............................... $ 731 $ 611
Accounts payable and accrued expenses......... 2,690 1,672
Income taxes payable.......................... 169 424
-------- --------
Total current liabilities................ 3,590 2,707
Revolving credit facility..................... 13,550 14,550
Long-term debt and notes payable,
net of current portion...................... 2,877 2,477
Debentures Due 1999........................... 6,950 7,500
Debentures Due 2004........................... 2,500 2,500
Deferred income taxes......................... 1,988 1,628
-------- --------
31,455 31,362
-------- --------
Stockholders' equity:
Preferred stock; $.01 par value;
10,000,000 shares authorized; no shares
issued or outstanding................... - -
Common stock; $.01 par value; 20,000,000
shares authorized; 4,331,376 and
4,168,459 shares issued, respectively;
3,860,417 and 3,697,500 shares
outstanding, respectively............... 43 42
Additional paid-in capital............... 18,336 17,611
Retained earnings........................ 6,977 5,195
Common stock held in treasury, at cost,
470,959 shares.......................... (2,265) (2,265)
-------- --------
23,091 20,583
-------- --------
$ 54,546 $ 51,945
======== ========
</TABLE>
The accompanying notes are an integral
part of these condensed consolidated financial statements.
<TABLE>
FIRST CASH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
April 30, April 30, April 30, April 30,
1997 1996 1997 1996
---- ---- ---- ----
(amounts in thousands, except
per share amounts)
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Revenues:
Merchandise sales........... $ 8,529 $ 6,474 $ 24,538 $ 18,884
Pawn service charges........ 4,002 3,242 12,268 9,533
Other....................... 79 12 221 43
-------- -------- -------- --------
12,610 9,728 37,027 28,460
-------- -------- -------- --------
Cost of goods sold and expenses:
Cost of goods sold.......... 6,061 4,374 17,112 12,736
Operating expenses.......... 4,005 3,204 11,590 9,239
Interest expense............ 578 497 1,779 1,569
Depreciation................ 185 136 527 401
Amortization................ 160 138 475 414
Administrative expenses..... 912 841 2,755 2,300
-------- -------- -------- --------
11,901 9,190 34,238 26,659
-------- -------- -------- --------
Income before income taxes..... 709 538 2,789 1,801
Provision for income taxes..... 276 208 1,007 697
-------- -------- -------- --------
Net income..................... $ 433 $ 330 $ 1,782 $ 1,104
======== ======== ======== ========
Primary earnings per share..... $ .11 $ .08 $ .40 $ .29
Fully diluted earnings
per share.................... $ .10 $ .08 $ .36 $ .29
</TABLE>
The accompanying notes are an integral
part of these condensed consolidated financial statements.
<TABLE>
FIRST CASH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Nine-Month Period
Ended April 30,
---------------
1997 1996
---- ----
(amounts in thousands)
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Cash flows from operating activities:
Net income........................... $ 1,782 $ 1,104
Adjustments to reconcile net income
to net cash flows from operating
activities:
Depreciation and amortization... 1,002 815
(Increase) decrease in:
Service charges receivable...... 199 (9)
Inventories..................... (742) 216
Prepaid expenses and
other assets.................. (417) (346)
Increase (decrease) in:
Accounts payable and
accrued expenses.............. 623 96
Income taxes payable............ 105 383
-------- --------
Net cash flows from
operating activities..... 2,552 2,259
-------- --------
Cash flows from investing activities:
Net (increase) decrease in loans..... 1,023 (124)
Purchases of property and equipment.. (806) (829)
Acquisition of existing stores....... (2,543) (265)
-------- --------
Net cash flows from
investing activities..... (2,326) (1,218)
-------- --------
Cash flows from financing activities:
Proceeds from debt................... 11,790 10,046
Repayments of debt................... (11,883) (10,777)
Exercise of stock options
and warrants....................... 176 60
-------- --------
Net cash flows from
financing activities..... 83 (671)
-------- --------
Increase in cash and cash equivalents..... 309 370
Cash and cash equivalents at beginning
of the period........................... 680 266
-------- --------
Cash and cash equivalents at end of
the period.............................. $ 989 $ 636
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest........................ $ 1,833 $ 1,565
======== ========
Income taxes.................... $ 915 $ 260
======== ========
</TABLE>
The accompanying notes are an integral
part of these condensed consolidated financial statements.
FIRST CASH, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1 - Basis of Presentation
The accompanying unaudited consolidated financial statements,
including the notes thereto, include the accounts of First Cash, Inc.
and its wholly-owned subsidiaries, American Loan & Jewelry, Inc. and
Famous Pawn, Inc. Such unaudited consolidated financial statements are
condensed and do not include all disclosures and footnotes required by
generally accepted accounting principles for complete financial
statements. Such interim period financial statements should be read in
conjunction with the Company's consolidated financial statements which
are included in the Company's 1996 Annual Report to Stockholders. All
significant intercompany accounts and transactions have been eliminated
in consolidation. The consolidated financial statements as of April
30,1997 and for the periods ended April 30, 1997 and 1996 are unaudited,
but in management's opinion, include all adjustments (consisting of only
normal recurring adjustments) considered necessary to present fairly the
financial position, results of operations and cash flows for such
interim periods. Operating results for the period ended April 30, 1997
are not necessarily indicative of the results that may be expected for
the full fiscal year.
Note 2 - Earnings Per Share
Earnings per common share is calculated using the Modified Treasury
Stock Method as required by Accounting Principles Board Opinion No.15
("APB 15"), which requires a dual computation. The first computation
divides net income available to common shareholders by the weighted
average shares of common stock outstanding during the period. The
second computation requires all common stock equivalents, whether
dilutive or anti-dilutive, be included in an aggregate computation,
however, the number of common shares assumed to be repurchased into
treasury is limited to 20% of the number of common shares outstanding at
the end of the period. The remaining excess proceeds are then assumed
to first retire outstanding debt, and second, to purchase certain "risk
free" securities. Pursuant to APB 15, if the result of the aggregate
computation is dilutive, when compared to the first computation, its
result must be reported as earnings per share; otherwise, the result of
the first computation is reported. As a result of this computation, the
proceeds from the assumed exercise of common stock equivalents were
assumed to be used to repurchase 20% of the outstanding common shares at
the average stock price during the quarter and the remaining proceeds
were used to retire debt and invest in 5.25% securities. This increased
adjusted net income by $252,000 and $774,000, respectively, and
increased the share count by 2,603,000 and 2,642,000 shares,
respectively, for the three and nine months ended April 30, 1997. Thus,
the adjusted net income and share count used in computing primary
earnings per share were $685,000 and $2,556,000, respectively, and
6,463,000 and 6,412,000 shares, respectively, for the three and nine
months ended April 30, 1997. For purposes of calculating primary
earnings per share, convertible debentures are not included as they are
not considered common stock equivalents. Fully diluted earnings per
share is calculated in a similar manner except that all convertible
debentures are also included in this computation and the higher of the
closing stock price or average stock price for the quarter is used.
Fully diluted earnings per share's adjusted net income increased
$416,000 and $1,278,000, respectively, and the share count increased
4,606,000 and 4,693,000 shares, respectively, for the three and nine
months ended April 30, 1997. Thus, the adjusted net income and share
count used in computing fully diluted earnings per share were $849,000
and $3,060,000, respectively, and 8,466,000 and 8,485,000 shares,
respectively, for the three and nine months ended April 30, 1997. For
the three and nine month periods ended April 30, 1996, the result of the
Modified Treasury Stock Method was not dilutive for primary and fully
diluted earnings per share, therefore primary and fully diluted earnings
per share were the same and were based on a weighted average share count
of 3,945,000 and 3,754,000 shares, respectively.
In February 1997 the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per
Share" ("FAS 128"), which the Company is required to adopt during the
quarter beginning November 1, 1997. FAS 128 permits a pro forma
disclosure of the new earnings per share computations in periods prior
to adoption. Using the computations in FAS 128, the Company's basic and
diluted earnings per share for the three months ended April 30, 1997
would be $0.11 and $0.09, respectively, compared to basic and diluted
earnings per share of $0.09 and $0.08, respectively for the three months
ended April 30, 1996. Basic and diluted earnings per share for the nine
months ended April 30, 1997 would be $0.47 and $0.35, respectively,
compared to basic and diluted earnings per share of $0.30 and $0.27,
respectively, for the nine months ended April 30, 1996.
Note 3 - Revolving Credit Facility
The Company maintains a $20,000,000 long-term line of credit with a
major commercial bank (the "Credit Facility"). The Credit Facility
bears interest at the prevailing LIBOR rate plus one and three-quarters
percent, and matures in December 1998. The Credit Facility allows the
Company to borrow funds based upon 80% of loans and service charges
receivable and 60% of inventory of the Company. As of April 30, 1997,
$13,550,000 was drawn under this Credit Facility and an additional
$2,130,000 was available to the Company pursuant to the available
borrowing base. The Credit Facility requires that interest be paid
monthly with the principal due upon maturity. It is secured by
substantially all of the Company's assets. Under the terms of the
Credit Facility, the Company is required to maintain certain financial
ratios and comply with certain technical covenants. The Company was in
compliance with these requirements and covenants during the first nine
months of fiscal 1997 and as of June 12, 1997.
Note 4 - Business Acquisitions
In September and October 1996, the Company acquired four individual
stores in its Mid-Atlantic division, in December 1996 the Company
acquired one store in the Dallas, Texas area, in February 1997 the
Company acquired one store in Corpus Christi, Texas, and in March 1997
the Company acquired one store in Bladensburg, Maryland. These
acquisitions were financed with proceeds from the Company's Credit
Facility and acquisition term notes provided by the Company's primary
lender.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company's revenues are derived primarily from service charges
on pawn loans and the sale of unredeemed goods, or "merchandise sales".
Loans are made for a 30-day term with an automatic extension of 60 days
in Texas, 30 days in Oklahoma and 15 days in Maryland. Loans made in
Washington, DC are made for 120 days with no automatic extension. All
loans are collateralized by tangible personal property placed in the
custody of the Company. The annualized service charge rates on the
loans are set by state laws and range between 12% and 240% in Texas and
36% and 240% in Oklahoma, depending on the amount of the loan. Service
charge rates are 144% on an annualized basis in Maryland, regardless of
loan amount. In Washington, DC, loans up to $40 bear a flat $2 charge per
month, while loans over $40 bear a 60% annualized rate. In its
Texas stores, the Company recognizes service charges at the inception of
the loan at the lesser of the statutory amount for the initial 30-day
term or $15, in accordance with state law. In Oklahoma, Maryland and
Washington, DC the Company recognizes service charges at the inception
of the loan at the amount allowed by law for the first 30 days. Pawn
service charge income applicable to the remaining term and/or extension
period is not recognized until the loan is repaid or renewed. If a loan
is not repaid prior to the expiration of the automatic extension period,
the property is forfeited to the Company and held for resale.
As a result of the Company's policy of accruing pawn service
charges only for the initial 30-day term, unredeemed merchandise is
transferred to inventory at a value equal to the loan principal plus
one-month's accrued interest. The Company's accounting policy defers
recognition of an amount of income equal to the amount of pawn service
charges relating to the remaining term and/or extension period until the
loan is repaid, renewed, or until the merchandise is resold. As a
result of this policy, the Company's annualized loan yield is lower than
certain of its publicly traded competitors. Conversely, this revenue
recognition policy results in inventory being recorded at a lower value,
which results in realization of a larger gross profit margin on
merchandise sales than would be realized by certain of its publicly
traded competitors, which lessens the risk that the inventory's cost
will exceed its realizable value when sold. However, if the pawn loan
is repaid or renewed, or if the forfeited merchandise is resold, the
amount of income which would be recognized by the Company or certain of
its publicly traded competitors would be the same over time.
Although the Company has had significant increases in revenues due
to acquisitions and store openings, the Company has also incurred
increases in operating expenses attributable to the additional stores
and increases in administrative expenses attributable to establishing a
management team and supporting personnel associated with the Company's
growth. Operating expenses consist of all items directly related to the
operation of the Company's stores, including salaries and related
payroll costs, rent, utilities, equipment depreciation, advertising,
property taxes, licenses, supplies and security. Administrative
expenses consist of items relating to the operation of the corporate
office, including the salaries of corporate officers, area supervisors
and other management, accounting and administrative costs, liability and
casualty insurance, outside legal and accounting fees and stockholder
related expenses.
RESULTS OF OPERATIONS
Nine months ended April 30, 1997 compared to nine months
ended April 30, 1996
- --------------------------------------------------------
Total revenues increased 30% to $37,027,000 for the nine months
ended April 30, 1997 (the "Nine-Month 1997 Period") as compared to
$28,460,000 for the nine months ended April 30, 1996 (the "Nine-Month
1996 Period"). Of the $8,567,000 increase in total revenues, $3,156,000
relates to the 11% same-store revenue increase at the 42 stores which
were in operation throughout both the Nine-Month 1996 Period and the
Nine-Month 1997 Period. The remaining increase of $5,411,000 resulted
from revenues generated by 15 stores which were acquired or opened
subsequent to August 1, 1995. In addition, 66% of the increase in total
revenues, or $5,654,000, was attributable to increased merchandise
sales, 32%, or $2,735,000, was attributable to increased pawn service
charges, and the remaining increase of $178,000 was attributable to the
increase in other income, consisting primarily of fees generated from
the agreement to manage stores owned by another company. As a
percentage of total revenues, merchandise sales were 66% and pawn
service charges were 33% during both the Nine-Month 1997 Period and the
Nine-Month 1996 Period.
The aggregate loan balance increased 21% from $9,330,000 at April
30, 1996 to $11,288,000 at April 30, 1997. Of the $1,958,000 increase,
$1,081,000 was attributable to the addition of 13 stores since April 30,
1996. The remaining increase of $877,000 was due to the 9% increase in
same-store loan balances at the 44 stores in operation at both April 30,
1996 and April 30, 1997. The annualized yield on the average aggregate
loan balance was 142% during the Nine-Month 1997 Period compared to 138%
during the Nine-Month 1996 Period. The Company's average loan balance
per store decreased from $212,000 as of April 30, 1996 to $198,000 as of
April 30, 1997, primarily due to the large number of stores less than a
year old as of April 30, 1997. Same-store loan balances during the same
period increased 9%.
The gross profit as a percentage of merchandise sales decreased
from 33% during the Nine-Month 1996 Period to 30% during the Nine-Month
1997 Period. This decrease in the Company's gross profit margin on
merchandise sales was primarily the result of significant jewelry scrap
sales during the first nine months of fiscal 1997 to improve the
Company's liquidity and inventory turnover. Such scrap sales have much
smaller profit margins than the Company's regular retail sales. Without
scrap jewelry sales, the Company's gross profit margin was 34% during
both the Nine-Month 1996 Period and the Nine-Month 1997 Period.
Operating expenses increased 25% to $11,590,000 during the Nine
Month 1997 Period compared to $9,239,000 during the Nine-Month 1996
Period, primarily as a result of the addition of 15 stores subsequent to
August 1, 1995, as well as overall higher revenues at the Company's
existing stores. Administrative expenses increased 20% to $2,755,000
during the Nine-Month 1997 Period compared to $2,300,000 during the
Nine-Month 1996 Period. Interest expense increased to $1,779,000 in the
Nine-Month 1997 Period compared to $1,569,000 in the Nine-Month 1996
Period as a result of the borrowings utilized to fund the Company's
acquisitions.
For the Nine-Month 1997 and 1996 Periods, the Company's tax
provisions of 36% and 39%, respectively, of income before income taxes
differed from the statutory rate of 34% primarily due to state income
taxes, net of the federal tax benefit.
Three months ended April 30, 1997 compared to the three months
ended April 30, 1996
- --------------------------------------------------------------
Total revenues increased 30% to $12,610,000 for the three month
period ended April 30, 1997 ("the Third Quarter of Fiscal 1997") as
compared to $9,728,000 for the three month period ended April 30, 1996
("the Third Quarter of Fiscal 1996"). Of the $2,882,000 increase in
total revenues, $1,077,000 relates to the 11% same-store revenue
increase at the 44 stores which were in operation throughout both the
Third Quarter of Fiscal 1997 and the Third Quarter of Fiscal 1996. The
remaining increase of $1,805,000 resulted from revenues generated by 13
stores which were acquired or opened subsequent to February 1, 1996. In
addition, 71% or $2,055,000 of the increase in total revenues was
attributable to increased merchandise sales, 26% or $760,000 was
attributable to increased pawn service charges, and the remaining
increase of $67,000 was attributable to the increase in other income,
consisting primarily of fees generated from the agreement to manage
stores owned by another company. As a percentage of total revenues,
merchandise sales increased from 67% to 68%, and pawn service charges
decreased from 33% to 32%, during the Third Quarter of Fiscal 1997 as
compared to the Third Quarter of Fiscal 1996.
The aggregate loan balance increased 21% from $9,330,000 at April
30, 1996 to $11,288,000 at April 30, 1997. Of the $1,958,000 increase,
$1,081,000 was attributable to the addition of 13 stores since April 30,
1996. The remaining increase of $877,000 was due to the 9% increase in
same-store loan balances at the 44 stores in operation at both April 30,
1996 and April 30, 1997. The annualized yield on the average aggregate
loan balance was 142% during the Nine-Month 1997 Period compared to 138%
during the Nine-Month 1996 Period. The Company's average loan balance
per store decreased from $212,000 as of April 30, 1996 to $198,000 as of
April 30, 1997, primarily due to the large number of stores less than a
year old as of April 30, 1997. Same-store loan balances during the same
period increased 9%.
The gross profit as a percentage of merchandise sales decreased
from 32% during the Third Quarter of Fiscal 1996 to 29% during the Third
Quarter of Fiscal 1997. This decrease in the Company's gross profit
margin on merchandise sales was primarily the result of larger jewelry
scrap sales during the Third Quarter of Fiscal 1997 to improve the
Company's liquidity and inventory turnover. Such scrap sales have much
smaller profit margins than the Company's regular retail sales. Without
scrap jewelry sales, the Company's gross profit margin decreased from
34% during the Third Quarter of Fiscal 1996 to 32% during the Third
Quarter of Fiscal 1997.
Operating expenses increased 25% to $4,005,000 during the Third
Quarter of Fiscal 1997 compared to $3,204,000 during the Third Quarter
of Fiscal 1996, primarily as a result of the 13 stores added subsequent
to February 1, 1996, and higher overall revenues at the Company's
existing stores. Administrative expenses increased 8% to $912,000
during the Third Quarter of Fiscal 1997 compared to $841,000 during the
Third Quarter of Fiscal 1996. Interest expense increased to $578,000 in
the Third Quarter of Fiscal 1997 compared to $497,000 in the Third
Quarter of Fiscal 1996 as a result of borrowings utilized to fund the
Company's acquisitions.
For the Third Quarters of Fiscal 1997 and Fiscal 1996, the
Company's tax provision of 39% of income before income taxes differed
from the statutory rate of 34% primarily due to state income taxes, net
of the federal tax benefit.
LIQUIDITY AND CAPITAL RESOURCES
The Company's operations and acquisitions have been financed with
funds generated from operations, bank borrowings, seller-financed
indebtedness, the private placement of convertible debentures.
The Company maintains a $20,000,000 long-term line of credit with a
major commercial bank (the "Credit Facility"). The Credit Facility
bears interest at the prevailing LIBOR rate plus one and three-quarters
percent, and matures in December 1998. The Credit Facility allows the
Company to borrow funds based upon 80% of loans and service charges
receivable and 60% of inventory of the Company. As of April 30, 1997,
$13,550,000 was drawn under this Credit Facility and an additional
$2,130,000 was available to the Company pursuant to the available
borrowing base. The Credit Facility requires that interest be paid
monthly with the principal due upon maturity. It is secured by
substantially all of the Company's assets. Under the terms of the
Credit Facility, the Company is required to maintain certain financial
ratios and comply with certain technical covenants. The Company was in
compliance with these requirements and covenants during the first nine
months of Fiscal 1997 and as of June 12, 1997.
In September and October 1996, the Company acquired four individual
stores in its Mid-Atlantic division, in December 1996 the Company
acquired one store in the Dallas, Texas area, in February 1997 the
Company acquired one store in Corpus Christi, Texas, and in March 1997
the Company acquired a store in Bladensburg, Maryland. These
acquisitions were financed with proceeds from the Company's Credit
Facility and acquisition term notes provided by the Company's primary
lender.
As of April 30, 1997, the Company's primary sources of liquidity
were $989,000 in cash and cash equivalents, $1,688,000 in service
charges receivable, $11,288,000 in loans, $9,625,000 in inventories and
$2,130,000 of available and unused funds under the Company's Credit
Facility. The Company had working capital as of April 30, 1997 of
$21,501,000 and a total liabilities to equity ratio of 1.36 to 1.
During the Nine-Month 1997 Period, the Company received proceeds of
$176,000 from the issuance of 44,000 shares of common stock relating to
the exercise of outstanding stock warrants. In addition, debenture
holders converted $550,000 of outstanding subordinated convertible
debentures into 118,917 shares of common stock of the Company.
Net cash provided by operating activities for the Company during
the Nine-Month 1997 Period was $2,552,000 as compared with $2,259,000
during the Nine-Month 1996 Period. Net cash used for investing
activities during the Nine-Month 1997 Period was $2,326,000 as compared
with $1,218,000 during the Nine-Month 1996 Period. Net cash provided by
financing activities of $83,000 during the Nine-Month 1997 Period
compares to net cash used for financing activities of $671,000 during
the Nine-Month 1996 Period.
The profitability and liquidity of the Company are affected by the
amount of loans outstanding, which is controlled in part by the
Company's loan decisions. The Company is able to influence the
frequency of forfeiture of collateral by increasing or decreasing the
amount loaned in relation to the resale value of the pledged property.
Tighter credit decisions generally result in smaller loans in relation
to the estimated resale value of the pledged property and can thereby
decrease the Company's aggregate loan balance and, consequently,
decrease pawn service charges. Additionally, small loans in relation to
the pledged property's estimated sale value tend to increase loan
redemptions and improve the Company's liquidity. Conversely, providing
larger loans in relation to the estimated sale value of the pledged
property can result in an increase in the Company's pawn service charge
income. Also larger average loan balances can result in an increase in
loan forfeitures, which increases the quantity of goods on hand and,
unless the Company increases inventory turnover, reduces the Company's
liquidity. In each of the Company's last three fiscal years, at least
70% of the amounts loaned were either paid in full or renewed. The
Company's renewal policy allows customers to renew pawn loans by
repaying all accrued interest on such pawn loans. In addition to these
factors, the Company's liquidity is affected by merchandise sales and
the pace of store expansions.
Management believes that the Credit Facility, current assets and
cash generated from operations will be sufficient to accommodate the
Company's current operations for at least the next twelve months. The
Company has no significant capital commitments as of June 10, 1997. The
Company currently has no written commitments for additional borrowings
or future acquisitions; however, the Company intends to continue to grow
and will likely seek additional capital to facilitate expansion. The
Company will evaluate acquisitions, if any, based upon opportunities,
acceptable financing, purchase price, strategic fit and qualified
management personnel.
The Company intends to continue to engage in a plan of expansion
through existing store acquisitions and new store openings. While the
Company continually looks for, and is presented with, potential
acquisition candidates, the Company has no definitive plans or
commitments for further acquisitions. If the Company encounters an
attractive opportunity to acquire or open a new store in the near
future, the Company will seek additional financing, the terms of which
will be negotiated on a case-by-case basis. In September and October
1996, the Company acquired four individual stores in its Mid-Atlantic division,
in December 1996 the Company acquired one store in the Dallas,
Texas area, in February 1997 the Company acquired one store in Corpus
Christi, Texas, and in March 1997 the Company acquired a store in
Bladensburg, Maryland. These acquisitions were financed with proceeds
from the Company's Credit Facility and acquisition term notes provided
by the Company's primary lender.
FORWARD LOOKING INFORMATION
Statements, either written or oral, which express the Company's
expectation for the future with respect to financial performance or
operating strategies can be identified as "forward-looking statements."
These statements are made to provide the public with management's
assessment of the Company's business. The Company may or may not update
information contained in previously released forward-looking statements
and does not assume the duty to do so.
Certain portions of this report contain forward-looking statements,
particularly the portion captioned "Liquidity and Capital Resources".
Factors such as changes in regional or national economic or competitive
conditions, changes in government regulations, changes in regulations
governing pawn service charges, unforeseen litigation, changes in
interest rates or tax rates, future business decisions and other
uncertainties may cause results to differ materially from those
anticipated by some of the statements made in this report. Such factors
are difficult to predict and many are beyond the control of the Company.
PART II. OTHER INFORMATION
ITEM 4. Submission of matters to a vote of security holders
ITEM 6. Exhibits and reports on Form 8-K
a. Exhibits
27.0 Financial Data Schedules (Edgar version only).
b. On June 4, 1997, the Company filed a Form 8-K to report a
change in the Company's independent accountants.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: June 12, 1997 FIRST CASH, INC.
----------------
(Registrant)
Phillip E. Powell Rick L. Wessel
- ----------------- ----------------
Phillip E. Powell Rick L. Wessel
Chairman of the Board and Chief Accounting Officer
Chief Executive Officer
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSENSED CONSOLIDATED BALANCE SHEETS AND CONDENSED CONSOLIDATED STATEMENTS OF
INCOME FOUND IN THE COMPANY'S FORM 10-Q FOR THE YEAR TO DATE, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-END> APR-30-1997
<CASH> 989
<SECURITIES> 0
<RECEIVABLES> 12976
<ALLOWANCES> 0
<INVENTORY> 9625
<CURRENT-ASSETS> 25091
<PP&E> 8911
<DEPRECIATION> 2549
<TOTAL-ASSETS> 54546
<CURRENT-LIABILITIES> 3590
<BONDS> 0
0
0
<COMMON> 43
<OTHER-SE> 23048
<TOTAL-LIABILITY-AND-EQUITY> 54546
<SALES> 24538
<TOTAL-REVENUES> 37027
<CGS> 17112
<TOTAL-COSTS> 34238
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1779
<INCOME-PRETAX> 2789
<INCOME-TAX> 1007
<INCOME-CONTINUING> 1782
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1782
<EPS-PRIMARY> .40
<EPS-DILUTED> .36
</TABLE>
