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, 1998 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 15, 1998, there were 7,012,846 shares of Company
common stock, par value $.01 per share ("Common Stock"), issued
and outstanding.
Part I. Financial Information
Item 1. Financial Statements
FIRST CASH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
<TABLE>
April 30, July 31,
1998 1997
---- ----
(unaudited)
(amounts in thousands)
ASSETS
<S> <C> <C>
Cash and cash equivalents............................. $ 2,699 $ 1,139
Service charges receivable............................ 2,055 1,949
Loans................................................. 13,596 12,877
Inventories........................................... 12,031 10,035
Prepaid expenses and other current assets............. 900 1,122
-------- --------
Total current assets............................. 31,281 27,122
Property and equipment, net........................... 7,445 6,554
Intangible assets, net................................ 24,642 22,256
Other................................................. 702 745
-------- --------
$ 64,070 $ 56,677
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt and notes payable... $ 365 $ 942
Accounts payable and accrued expenses................. 2,765 2,437
Income taxes payable.................................. 288 127
-------- --------
Total current liabilities........................ 3,418 3,506
Revolving credit facility............................. 19,400 15,575
Long-term debt and notes payable, net of
current portion...................................... 1,680 2,735
Debentures Due 1999................................... 6,022 6,022
Debentures Due 2004................................... 500 500
Deferred income taxes................................. 2,421 2,060
-------- --------
33,441 30,398
-------- --------
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; 5,336,751 and 4,931,376 shares issued,
respectively; 4,865,792 and 4,460,417 shares
outstanding, respectively......................... 53 50
Additional paid-in capital......................... 22,639 21,005
Retained earnings.................................. 10,202 7,489
Common stock held in treasury, at cost,
470,959 shares.................................... (2,265) (2,265)
-------- --------
30,629 26,279
-------- --------
$ 64,070 $ 56,677
======== ========
</TABLE>
The accompanying notes are an integral
part of these condensed consolidated financial statements.
FIRST CASH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
(unaudited)
(amounts in thousands, except per share amounts)
<TABLE>
Three Months Ended Nine Months Ended
April 30, April 30, April 30, April 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Merchandise sales................ $ 9,864 $ 8,529 $ 28,050 $ 24,538
Pawn service charges............. 4,718 4,002 14,152 12,268
Other............................ 81 79 252 221
-------- -------- -------- --------
14,663 12,610 42,454 37,027
-------- -------- -------- --------
Cost of goods sold and expenses:
Cost of goods sold............... 6,599 6,061 19,023 17,112
Operating expenses............... 4,632 4,005 13,375 11,590
Interest expense................. 506 578 1,585 1,779
Depreciation..................... 243 185 652 527
Amortization..................... 176 160 510 475
Administrative expenses.......... 1,110 912 2,968 2,755
-------- -------- -------- --------
13,266 11,901 38,113 34,238
-------- -------- -------- --------
Income before income taxes............ 1,397 709 4,341 2,789
Provision for income taxes............ 517 276 1,628 1,007
-------- -------- -------- --------
Net income............................ $ 880 $ 433 $ 2,713 $ 1,782
======== ======== ======== ========
Basic earnings per share.............. $ .20 $ .11 $ .61 $ .48
Diluted earnings per share............ $ .15 $ .09 $ .45 $ .36
</TABLE>
The accompanying notes are an integral
part of these condensed consolidated financial statements.
FIRST CASH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(unaudited)
(amounts in thousands)
<TABLE>
Nine-Month Period
Ended April 30,
1998 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income.......................................... $ 2,713 $ 1,782
Adjustments to reconcile net income to net cash
flows from operating activities:
Depreciation and amortization.................... 1,162 1,002
(Increase) decrease in:
Service charges receivable....................... 143 199
Inventories...................................... (445) (742)
Prepaid expenses and other assets................ (2,205) (417)
Increase (decrease) in:
Accounts payable and accrued expenses............ 219 623
Income taxes payable............................. 522 105
-------- --------
Net cash flows from operating activities....... 2,109 2,552
-------- --------
Cash flows from investing activities:
Net (increase) decrease in loans................... 899 1,023
Purchases of property and equipment................ (651) (806)
Acquisition of existing stores..................... (4,627) (2,543)
-------- --------
Net cash flows from investing activities....... (4,379) (2,326)
-------- --------
Cash flows from financing activities:
Proceeds from debt................................. 6,679 11,790
Repayments of debt................................. (4,486) (11,883)
Exercise of stock options and warrants............. 1,637 176
-------- --------
Net cash flows from financing activities....... 3,830 83
-------- --------
Increase in cash and cash equivalents.................. 1,560 309
Cash and cash equivalents at beginning of the period... 1,139 680
-------- --------
Cash and cash equivalents at end of the period......... $ 2,699 $ 989
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest....................................... $ 1,585 $ 1,833
======== ========
Income taxes................................... $ 1,107 $ 915
======== ========
</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., Famous Pawn, Inc., Capital
Pawnbrokers, Inc., Silver Hill Pawn, Inc., and Elegant Floors, 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 1997 Annual Report to
Stockholders. All significant intercompany accounts and transactions have been
eliminated in consolidation. The consolidated financial statements as of April
30, 1998 and for the periods ended April 30, 1998 and 1997 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, 1998 are not necessarily
indicative of the results that may be expected for the full fiscal year.
Note 2 - Revolving Credit Facility
- ----------------------------------
Effective November 1, 1997, the Company increased its long-term line of
credit with its senior commercial lender to $35,000,000 (the "Credit Facility").
At April 30, 1998, $19,400,000 was outstanding under this Credit Facility and an
additional $8,418,000 was available to the Company pursuant to the available
borrowing base. The Credit Facility bears interest at the prevailing LIBOR rate
plus one percent, and matures on November 1, 2000. Amounts available under the
Credit Facility are limited to 325% of the Company's earnings before income
taxes, interest, depreciation and amortization for the trailing twelve months.
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 1998 and as of June 15, 1998.
Note 3 - Business Acquisitions
- ------------------------------
In August, September, and October 1997, the Company acquired the assets of
seven individual stores in various regions where the Company operates. In
December 1997, the Company acquired 100% of the common stock of Silver Hill
Pawn, Inc. and Capital Pawnbrokers, Inc., which each operate one store. In
February and March 1998, the Company acquired the assets of two individual
stores. In April 1998 the Company acquired 100% of the common stock of JB Pawn,
Inc., which operates eleven stores, and in April 1998 the Company also acquired
the assets of an individual store in St. Louis, Missouri, and two other
individual stores in the Company's existing markets. These acquisitions bring
the Company's total number of stores owned as of April 30, 1998 to eighty-two.
The acquisitions were financed with proceeds from the Company's Credit Facility.
Note 4 - Earnings Per Share
- ---------------------------
In February 1997, the Financial Accounting Standards Board issued Financial
Accounting Standard No. 128, "Earnings Per Share" ("FAS 128"), which became
effective for periods ending after December 15, 1997. FAS 128 establishes
standards for computing and presenting earnings per share for entities with
publicly held common stock or potential common stock. Basic and diluted
earnings per share for the three and nine month periods ended April 30, 1998
have been calculated in accordance with FAS 128. Earnings per share for prior
periods have been restated to conform with FAS 128.
The following table sets forth the computation of basic and diluted
earnings per share (in thousands, except per share data):
<TABLE>
Three Months Ended Nine Months Ended
April 30, April 30, April 30, April 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Numerator:
Net income for calculating
basic earnings per share $ 880 $ 433 $ 2,713 $ 1,782
Plus interest expense,
net of taxes, relating to
convertible debentures 120 161 360 505
-------- -------- -------- --------
Net income for calculating
diluted earnings per share $ 1,000 $ 594 $ 3,073 $ 2,287
======== ======== ======== ========
Denominator:
Weighted-average common
shares for calculating basic
earnings per share 4,471 3,843 4,466 3,758
Effect of dilutive securities:
Stock options and warrants 993 688 930 560
Convertible debentures 1,402 2,017 1,402 2,078
-------- -------- -------- --------
Weighted-average common
shares for calculating diluted
earnings per share 6,866 6,548 6,798 6,396
======== ======== ======== ========
Basic earnings per share $ .20 $ .11 $ .61 $ .48
Diluted earnings per share $ .15 $ .09 $ .45 $ .36
</TABLE>
Note 5 - Subsequent Event
- -------------------------
In May and June 1998, the Company initiated conversion of all outstanding
convertible debentures, which totaled $6,522,000 at April 30, 1998. The holders
of the Convertible Debentures Due 1999 and the Convertible Debentures Due 2004
converted all such debentures into a total of 1,402,054 shares of First Cash,
Inc. common stock.
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 and Missouri,
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 Missouri,
service charge rates are 240% on an annualized basis for loans less than $400,
while loans over $400 bear interest at a 180% 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, Washington, DC and Missouri
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, 1998 compared to nine months ended April 30, 1997
- -----------------------------------------------------------------------------
Total revenues increased 15% to $42,454,000 for the nine months ended April
30, 1998 (the "Nine-Month 1998 Period") as compared to $37,027,000 for the nine
months ended April 30, 1997 (the "Nine-Month 1997 Period"). Of the $5,427,000
increase in total revenues, $1,475,000 relates to the 4% same-store revenue
increase at the 50 stores which were in operation throughout both the Nine-Month
1997 Period and the Nine-Month 1998 Period. The remaining increase of
$3,952,000 resulted from revenues generated by 32 stores which were acquired or
opened subsequent to August 1, 1996. In addition, 65% of the increase in total
revenues, or $3,512,000, was attributable to increased merchandise sales, 35%,
or $1,884,000, was attributable to increased pawn service charges, and the
remaining increase of $31,000 was attributable to the increase in other income.
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 20% from $11,288,000 at April 30, 1997
to $13,596,000 at April 30, 1998. Of the $2,308,000 increase, $1,786,000 was
attributable to the addition of 25 stores since April 30, 1997. The remaining
increase of $522,000 was due to the 5% increase in same-store loan balances at
the 57 stores in operation at both April 30, 1997 and April 30, 1998. The
annualized yield on the average aggregate loan balance was 143% during the Nine-
Month 1998 Period compared to 142% during the Nine-Month 1997 Period. The
Company's average loan balance per store decreased from $198,000 as of April 30,
1997 to $166,000 as of April 30, 1998, primarily due to the large number of
stores less than a year old as of April 30, 1998. Same-store loan balances
during the same period increased 5%.
The gross profit as a percentage of merchandise sales increased from 30%
during the Nine-Month 1997 Period to 32% during the Nine-Month 1998 Period.
This increase in the Company's gross profit margin on merchandise sales was
primarily the result of significant, low-margin jewelry scrap sales during the
first nine months of fiscal 1997, and improved utilization of the Company's
internally-developed computer system. Without scrap jewelry sales, the
Company's gross profit margin increased from 34% during the Nine-Month 1997
Period to 35% during the Nine-Month 1998 Period.
Operating expenses increased 15% to $13,375,000 during the Nine-Month 1998
Period compared to $11,590,000 during the Nine-Month 1997 Period, primarily as a
result of the addition of 32 stores subsequent to August 1, 1996, as well as
overall higher revenues at the Company's existing stores. Administrative
expenses increased 8% to $2,968,000 during the Nine-Month 1998 Period compared
to $2,755,000 during the Nine-Month 1997 Period. Interest expense decreased to
$1,585,000 in the Nine-Month 1998 Period compared to $1,779,000 in the Nine-
Month 1997 Period as a result of lower borrowing costs under the Company's
recently re-negotiated line of credit, and conversion of certain outstanding
convertible debentures.
For the Nine-Month 1998 and 1997 Periods, the Company's tax provisions of
37.5% and 36%, 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, 1998 compared to the three months ended April 30,
1997
- ------------------------------------------------------------------------------
Total revenues increased 16% to $14,663,000 for the three month period
ended April 30, 1998 ("the Third Quarter of Fiscal 1998") as compared to
$12,610,000 for the three month period ended April 30, 1997 ("the Third Quarter
of Fiscal 1997"). Of the $2,053,000 increase in total revenues, $598,000
relates to the 5% same-store revenue increase at the 55 stores which were in
operation throughout both the Third Quarter of Fiscal 1998 and the Third Quarter
of Fiscal 1997. The remaining increase of $1,455,000 resulted from revenues
generated by 27 stores which were acquired or opened subsequent to February 1,
1997. In addition, 65% or $1,335,000 of the increase in total revenues was
attributable to increased merchandise sales, 35% or $716,000 was attributable to
increased pawn service charges, and the remaining increase of $2,000 was
attributable to the increase in other income. As a percentage of total
revenues, merchandise sales decreased from 68% to 67%, and pawn service charges
decreased from 32% to 33%, during the Third Quarter of Fiscal 1998 as compared
to the Third Quarter of Fiscal 1997.
The aggregate loan balance increased 20% from $11,288,000 at April 30, 1997
to $13,596,000 at April 30, 1998. Of the $2,308,000 increase, $1,786,000 was
attributable to the addition of 25 stores since April 30, 1997. The remaining
increase of $522,000 was due to the 5% increase in same-store loan balances at
the 57 stores in operation at both April 30, 1997 and April 30, 1998. The
annualized yield on the average aggregate loan balance increased to 140% during
the Third Quarter of Fiscal 1998 compared to 137% during the Third Quarter of
Fiscal 1997. The Company's average loan balance per store decreased from
$198,000 as of April 30, 1997 to $166,000 as of April 30, 1998, primarily due to
the large number of stores less than a year old as of April 30, 1998. Same-
store loan balances during the same period increased 5%.
The gross profit as a percentage of merchandise sales increased from 29%
during the Third Quarter of Fiscal 1997 to 33% during the Third Quarter of
Fiscal 1998. This increase in the Company's gross profit margin on merchandise
sales was primarily the result of more low-margin jewelry scrap sales during the
Third Quarter of Fiscal 1997, and improved utilization of the Company's
internally-developed computer system. Without scrap jewelry sales, the
Company's gross profit margin increased from 32% during the Third Quarter of
Fiscal 1997 to 37% during the Third Quarter of Fiscal 1998.
Operating expenses increased 16% to $4,632,000 during the Third Quarter of
Fiscal 1998 compared to $4,005,000 during the Third Quarter of Fiscal 1997,
primarily as a result of the 27 stores added subsequent to February 1, 1997, and
higher overall revenues at the Company's existing stores. Administrative
expenses increased 22% to $1,110,000 during the Third Quarter of Fiscal 1998
compared to $912,000 during the Third Quarter of Fiscal 1997. Interest expense
decreased to $506,000 in the Third Quarter of Fiscal 1998 compared to $578,000
in the Third Quarter of Fiscal 1997 as a result of lower borrowing costs under
the Company's recently re-negotiated line of credit, and conversion of certain
outstanding convertible debentures.
For the Third Quarters of Fiscal 1998 and Fiscal 1997, the Company's tax
provision of 37% 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.
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.
Effective November 1, 1997, the Company increased its long-term line of
credit with its senior commercial lender to $35,000,000 (the "Credit Facility").
At April 30, 1998, $19,400,000 was outstanding under this Credit Facility and an
additional $8,418,000 was available to the Company pursuant to the available
borrowing base. The Credit Facility bears interest at the prevailing LIBOR rate
plus one percent, and matures on November 1, 2000. Amounts available under the
Credit Facility are limited to 325% of the Company's earnings before income
taxes, interest, depreciation and amortization for the trailing twelve months.
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 1998 and as of June 15, 1998.
In August, September, and October 1997, the Company acquired the assets of
seven individual stores in various regions where the Company operates. In
December 1997, the Company acquired 100% of the common stock of Silver Hill
Pawn, Inc. and Capital Pawnbrokers, Inc., which each operate one store. In
February and March 1998, the Company acquired the assets of two individual
stores. In April 1998 the Company acquired 100% of the common stock of JB Pawn,
Inc., which operates eleven stores, and in April 1998 the Company also acquired
the assets of an individual store in St. Louis, Missouri, and two other
individual stores in the Company's existing markets. These acquisitions bring
the Company's total number of stores owned as of April 30, 1998 to eighty-two.
The acquisitions were financed with proceeds from the Company's Credit Facility.
As of April 30, 1998, the Company's primary sources of liquidity were
$2,699,000 in cash and cash equivalents, $2,055,000 in service charges
receivable, $13,596,000 in loans, $12,031,000 in inventories and $8,418,000 of
available and unused funds under the Company's Credit Facility. The Company had
working capital as of April 30, 1998 of $27,863,000 and a total liabilities to
equity ratio of 1.09 to 1. During the Nine-Month 1998 Period, the Company
received proceeds of $1,637,000 from the issuance of 405,000 shares of common
stock relating to the exercise of outstanding stock warrants and options.
Net cash provided by operating activities for the Company during the Nine-
Month 1998 Period was $2,109,000 as compared with $2,552,000 during the Nine-
Month 1997 Period. Net cash used for investing activities during the Nine-Month
1998 Period was $4,379,000 as compared with $2,326,000 during the Nine-Month
1997 Period. Net cash provided by financing activities of $3,830,000 during the
Nine-Month 1998 Period compares to net cash provided by financing activities of
$83,000 during the Nine-Month 1997 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 15, 1998. 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 August, September, and
October 1997, the Company acquired the assets of seven individual stores in
various regions where the Company operates. In December 1997, the Company
acquired 100% of the common stock of Silver Hill Pawn, Inc. and Capital
Pawnbrokers, Inc., which each operate one store. In February and March 1998,
the Company acquired the assets of two individual stores. In April 1998 the
Company acquired 100% of the common stock of JB Pawn, Inc., which operates
eleven stores, and in April and May 1998 the Company also acquired the assets of
two individual stores in St. Louis, Missouri, and two other individual stores in
the Company's existing markets. These acquisitions bring the Company's number
of pawn stores owned as of June 15, 1998 to eighty-three. The acquisitions were
financed with proceeds from the Company's Credit Facility.
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,
significant changes in the prevailing market price of gold, 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).
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 15, 1998 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
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
condensed 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-31-1998
<PERIOD-END> APR-30-1998
<CASH> 2,699
<SECURITIES> 0
<RECEIVABLES> 15,651
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0
0
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