FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1996
Commission file number: 0-18291
U.S. PAWN, INC.
(Exact name of registrant as specified in its charter)
Colorado 84-0819941
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7215 Lowell Boulevard
Westminster, CO 80030
(Address of principal executive offices)
(Zip Code)
(303) 657-3550
(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 periods 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
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common Stock, No Par Value, 3,243,989 shares as of August 9, 1996.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
U.S. PAWN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(amounts in thousands)
ASSETS
June December
30, 1996 31, 1995
-------- --------
CURRENT ASSETS:
Cash $ 382 $ 282
Service charges receivable 368 352
Pawn loans 2,643 2,704
Accounts receivable, net 13 35
Notes receivable-related parties 242 241
Inventory 1,631 1,394
Prepaid expenses and other 122 96
------ ------
Total current assets 5,401 5,104
PROPERTY AND EQUIPMENT, at cost, net 1,239 1,249
NOTES RECEIVABLE-RELATED PARTIES 65 69
INTANGIBLE ASSETS, net 277 135
OTHER ASSETS 35 19
------ ------
$7,017 $6,576
====== ======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
2
<PAGE>
U.S. PAWN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
(amounts in thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
June December
30, 1996 31, 1995
-------- --------
CURRENT LIABILITIES:
Accounts payable $ 26 $ 32
Customer layaway deposits 39 41
Accrued expenses 117 149
Income taxes payable 112 81
Notes payable 831 887
Notes payable-related parties 433 419
Current portion of long-term debt 58 21
------ -----
Total current liabilities 1,616 1,630
LONG-TERM DEBT, less current portion - 50
DEFERRED INCOME TAXES 93 131
------ ------
Total Liabilities 1,709 1,811
COMMITMENTS AND CONTINGENCIES:
MINORITY INTEREST IN SUBSIDIARY 29 -
STOCKHOLDERS' EQUITY:
Redeemable preferred stock, 9.5%,
$10 par value, 1,000,000 authorized:
37,500 shares issued and outstanding 378 378
Common stock, no par value, 30,000,000 shares
authorized; 3,213,989 and 3,087,322
shares issued and outstanding 3,429 3,241
Additional paid-in capital 792 822
Retained earnings 680 324
----- ------
Total Stockholders' Equity 5,279 4,765
------ ------
$7,017 $6,576
====== ======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
3
<PAGE>
<TABLE>
<CAPTION>
U.S. PAWN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(amounts in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- ----------------
1996 1995 1996 1995
-------- ------- ------- -------
<S> <C> <C> <C> <C>
REVENUES:
Sales $1,280 $1,219 $2,706 $2,548
Pawn service charges 1,069 1,014 2,171 2,059
Other income 23 20 45 45
------ ----- ------ ------
Total Revenues 2,372 2,253 4,922 4,652
COST OF SALES AND EXPENSES:
Cost of sales 955 955 2,047 2,052
Operations 793 758 1,572 1,531
Administration 247 223 492 461
Interest 51 62 102 119
Depreciation and amortization 63 63 119 116
------ ------ ------ ------
Total Cost of Sales
and Expenses 2,109 2,061 4,332 4,279
------ ------ ------ ------
INCOME FROM OPERATIONS BEFORE
INCOME TAXES 263 192 590 373
PROVISION FOR INCOME TAXES 91 67 208 125
------ ------ ------ ------
NET INCOME 172 125 382 248
DIVIDENDS ON PREFERRED STOCK (9) (9) (18) (18)
MINORITY INTEREST (6) - (9) -
------ ----- ----- ---
EARNINGS AVAILABLE FOR
COMMON STOCKHOLDERS $ 157 $ 116 $ 355 $ 230
====== ====== ====== ======
EARNINGS PER COMMON SHARE
AND COMMON SHARE EQUIVALENTS $ 0.05 $ 0.04 $ 0.11 $ 0.08
------ ------ ====== ======
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES AND COMMON
SHARE EQUIVALENTS OUTSTANDING 3,403 3,057 3,310 3,035
====== ====== ====== ======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
U.S. PAWN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in thousands)
Six Months Ended June 30,
-------------------------
1996 1995
------- ------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 373 $ 248
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 119 116
Deferred income taxes (38) 125
Minority interest in subsidiary earnings 9 -
Changes in:
Service charges receivable (16) 3
Inventory, excluding forfeited loan collateral 1,405 1,538
Accounts receivable 23 119
Prepaid expenses and other (26) (17)
Accounts payable (6) (26)
Accrued expenses (32) (57)
Income taxes payable 30 -
Customer layaway deposits (2) 2
------- ------
Net Cash Provided by Operating Activities 1,839 2,051
CASH FLOWS (TO) INVESTING ACTIVITIES:
Pawn loans made (4,811) (4,832)
Pawn loans repaid 3,319 3,090
Purchase of property and equipment (80) (512)
Payments on notes receivables-related parties 4 217
Decrease(increase) in other assets (91) 8
Acquisition of subsidiary company (83) -
------- ------
Net cash (Used) by Investing Activities (1,742) (2,029)
CASH FLOWS FROM(TO) FINANCING ACTIVITIES:
Dividends paid (18) (18)
Issuance of notes payable and long-term debt 351 823
Payments on notes payable and long-term debt (497) (908)
Payments on capital lease obligations - (2)
Issuance of notes payable-related parties 11 43
Payments on notes payable-related parties (3) -
Purchase of redeemable common stock - (29)
Issuance of common stock, net of offering costs 159 64
------- -------
Net Cash Provided(Used)
by Financing Activities 3 (27)
------- -------
NET INCREASE (DECREASE) IN CASH 100 (5)
CASH, beginning of year 282 270
------- -------
Cash, end of year $ 382 $ 265
------- -------
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 95 $ 120
======= =======
Income taxes $ 221 $ -
======= ======
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Conversion of forfeited loan collateral to
inventory $ 1,643 $ 1,677
======= =======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
5
</TABLE>
<PAGE>
U.S. PAWN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements (the "financial
statements") include the accounts of U.S. Pawn, Inc. and its 80%-owned
subsidiary, Advantage Pawn (the "Company"), from the effective acquisition date
of February 1, 1996. All material inter-company transactions have been
eliminated upon consolidation. The financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and in accordance with the instructions for Form 10-QSB.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, the financial statements contain all material
adjustments, consisting only of normal recurring adjustments necessary to
present fairly the financial condition, results of operations, and cash flows of
the Company for the interim periods presented.
The results for the three and six months ended June 30, 1996 are not necessarily
indicative of the results of operations for the full year. These financial
statements and related footnotes should be read in conjunction with the
financial statements and footnotes thereto included in the Company's Forms
10-KSB filed with the Securities and Exchange Commission for the year ended
September 30, 1995 and the three month transition period ended December 31,
1995.
Certain amounts in the prior year's financial statements have been reclassified
for comparative purposes to conform with the current year. These
reclassification had no effect on results of operations or retained earnings as
previously reported.
NOTE 2 - ACQUISITION
Effective February 1, 1996, the Company acquired 80% of the outstanding common
stock of Advantage Pawn, a Wyoming corporation ("Advantage"). Under the
agreement the sellers received $82,500 in cash, 45,000 shares of the Company's
common stock valued at $2.333 per share in exchange for 80% of the outstanding
Advantage common stock and $22,500 in cash in exchange for an agreement not to
compete. The Company also agreed to guarantee $105,000 in liabilities of
Advantage.
6
<PAGE>
U.S. PAWN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
NOTE 3 - INCOME TAXES
The provision for income taxes has been recorded based upon the Company's
estimate of the expected annualized effective tax rate for each interim period
presented. Deferred income taxes have been recorded in accordance with generally
accepted accounting principles under SFAS 109.
NOTE 4 - EARNING PER COMMON SHARE
Earnings per share is computed by dividing net income available to common
shareholders by the weighted average number of common stock and common stock
equivalents outstanding during each interim period presented. When common stock
equivalents have an anti-dilutive effect on earnings per share, they are
excluded from the calculation.
NOTE 5 - CONTINGENCIES
On February 26, 1996, a former officer and director of the Company, filed a
legal action alleging a breach of the terms of a certain stock registration
agreement between the former officer and director and the Company. The Company
and its legal counsel believe that the action has no merit. On July 8, 1996, the
Company reached a settlement of the action under which the former officer and
director agreed to a dismissal of the suit.
In addition, the Company is party to a number lawsuits arising in the normal
course of business. In the opinion of management, the resolution of these
matters will not have a material effect on the Company's financial position.
NOTE 6 - SUBSEQUENT EVENT
On August 2, 1996, the Company announced the acquisition of three pawnshops, one
in Fort Collins, Colorado and two in Cheyenne, Wyoming. The assets of the three
pawn shops were acquired for an aggregate price of $775,000 in cash.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
U.S. Pawn, Inc. (the "Company") is one of four publicly traded pawnshop
operators in the United States. The Company operates pawnshops that lend money
on the security of pledged tangible personal property (a transaction commonly
referred to as a "pawn loan"), for which the Company receives a pawn service
charge to compensate it for the pawn loan. The pawn service charge is calculated
as a percentage of the pawn loan amount, in a manner similar to which interest
is charged on a loan, and has generally ranged from 120% to 240% annually. The
pledged property is held through the term of the pawn loan, which generally is
30 to 90 days, unless otherwise earlier paid or renewed. Generally, the customer
repays the pawn loan and accrued service charge in full, redeeming the pledged
property, or pays the accrued service charge and renews the pawn loan. In the
event the customer does not redeem the pledged property or renew the pawn loan,
the unredeemed collateral is forfeited to the Company and becomes inventory
available for sale in the pawnshop. As of the date of this report, the Company
owns and operates sixteen (16) pawnshops, of which twelve (12) are located
in Colorado and four (4) are located in Wyoming.
Expansion of Operations
As an integral part of its business strategy, the Company intends to continue
concentrating multiple pawnshops in single markets in order to improve market
penetration, enhance name recognition and reinforce market programs. Consistent
with this philosophy, the Company added 4, 2, 2 and 3 stores to its operations
during Fiscal 1996, 1994, 1993 and 1992, respectively. On January 26, 1996, the
Company agreed to acquire 80% of the outstanding common stock of Advantage Pawn,
a Wyoming corporation, for total consideration of $187,500, payable $82,500 in
cash and $105,000 of common stock in the Company valued at the closing date. In
addition, the Company agreed to pay $22,500 in cash in exchange for a
non-compete agreement with the Advantage shareholders. The transaction closed on
March 16, 1996, at which time $82,500 in cash and 45,000 shares of the Company's
common stock valued at $2.333 per share were transferred to the Advantage
shareholders in exchange for 80% of the outstanding voting common shares of
Advantage Pawn. The Company also agreed to guarantee $105,000 in liabilities of
Advantage Pawn. On June, 1, 1996, the Company closed its under-performing
Colorado Springs, Colorado store. On August 2, 1996, the Company acquired the
assets of three pawnshops, one in Fort Collins, Colorado and two in Cheyenne,
Wyoming for $775,000 in cash.
8
<PAGE>
Profitability vs. Liquidity
The profitability and liquidity of the Company is affected by the amount of the
Company's outstanding pawn loans, which in turn is affected in part by the
Company's pawn loan decisions. The Company is generally able to influence the
frequency of pawn loan redemptions and forfeitures of pawn loan collateral by
increasing or decreasing the amount loaned in relation to the estimated resale
value of the pledged property. A more conservative loan policy, i.e. smaller
loans in relation to the pledged property's estimated resale value, generally
results in fewer and smaller transactions being entered into, a decrease in the
Company's aggregate loan balance and a decrease in pawn service charge income.
However, smaller loans also tend to increase loan redemptions and improve the
Company's liquidity. A conservative loan policy also tends to decrease the cost
of merchandise inventory, thereby improving the margins possible through resale
of forfeited loan collateral. Conversely, a more aggressive loan policy which
provides for larger loans in relation to the estimated resale value of the
pledged property generally results in increased pawn service charge income, but
also tends to increase loan forfeitures, thereby increasing the quantity and
cost of inventory on hand and, unless the Company is able to increase inventory
turns, reducing the Company's liquidity.
RESULTS OF OPERATIONS
Three and Six Months Ended June 30, 1996 ("1996 Periods") Compared to Three and
Six Months Ended June 30, 1995 ("1995 Periods")
Revenues
Total revenues for the 1996 Periods increased by 5.3% and 5.8% to $2,372,049 and
$4,921,429 from $2,252,775 and $4,652,221 for the 1995 Periods, respectively.
During the 1996 Periods, same store operations (twelve stores) generated
revenues of $2,179,817 and $4,617,326 and stores acquired during the 1996 Period
(two stores) contributed revenues of $192,232 and $304,103. The increase in
revenues reflects an improvement of 5.0% and 6.2% in merchandise sales to
$1,279,989 and $2,705,788 from $1,218,641 and $2,548,288, an improvement of 5.4%
and 5.5% in pawn service charges to $1,069,052 and $2,170,704 from $1,014,178
and $2,058,592. Other income remained the same. As a percentage of total
revenues, merchandise sales and pawn service charges remained constant at 55%
and 45%, respectively during the 1996 Periods as compared to the 1995 Periods.
This revenue mix is consistent with the Company's renewed emphasis on better
merchandising of for-sale inventory at annualized inventory turns of 3.0 to 4.0
times per year. The Company expects that merchandise sales will continue to
comprise the majority of its total revenues for the reasonably foreseeable
future.
9
<PAGE>
Merchandise Sales
During the 1996 Periods, same store operations generated merchandise sales of
$1,165,038 and $2,515,822 and stores acquired during the 1996 Period posted
merchandise sales of $114,951 and $189,966. For the 1996 Periods, the Company's
annualized inventory turnover rate was 2.5 and 2.7 times with a gross profit
margin on sales of 24.3% and 25.4% as compared to 3.0 and 3.4 times at 21.6% and
19.5% for the 1995 Periods. The increase in gross profit margin on sales is due
primarily to the Company's renewed emphasis on better merchandising of for-sale
inventory and compensation incentives for store managers and customer service
personnel to reach and/or exceed profitability goals set by management. As a
result, inventories have been more evenly maintained at desired levels which has
allowed the Company to eliminate the practice of discounting merchandise
inventory to generate working capital during the first and second calendar
quarters.
Historically, the Company's sales of merchandise increase during the third and
fourth quarters. The Company expects its annualized inventory turnover rate to
approximate 3.5 times and to produce gross margins on sales in excess of 20% for
the twelve months ending December 31, 1996 (Fiscal 1996).
Pawn Service Charges
During the 1996 Periods, same store operations generated pawn service charges of
$994,347 and $2,060,120 and stores acquired during the 1996 Periods contributed
pawn service charges of $74,705 and $110,584. The Company's pawn loan balance
outstanding decreased by $60,898 or 2.3% to $2,643,350 from $2,704,248 at
December 31, 1995. The decrease in the pawn loan balance is consistent with the
Company's historical experience during the second quarter. Demand for new pawn
loans during the 1996 Periods decreased slightly by .04% as compared to the 1995
Periods due primarily to fewer pawn loans written in January 1996 as compared to
January 1995. The Company expects the demand for pawn loans to remain strong for
the remainder of Fiscal 1996.
The forfeiture rate for pawn loans (calculated as total current period new loans
plus previous period ending loan balance minus current period ending loan
balance in relationship to total forfeited amount during the period) decreased
to 33.7% for the 1996 Periods from 35.2% as compared to the 1995 Periods. The
Company's forfeiture rate is slightly higher than industry comparisons primarily
due to the Company's aggressive loan policy which provides for slightly higher
loan to value ratios than competing pawn shops in an effort to attract more pawn
customers. The Company plans to continue this loan strategy for the reasonably
foreseeable future and expects the forfeiture rate to approximate 35% for Fiscal
1996.
10
<PAGE>
Total Cost of Sales and Expenses
Total cost of sales and expenses for the 1996 Periods increased by 2.3% and 1.2%
to $2,108,692 and $4,332,100 as compared to $2,060,899 and $4,279,103 for the
1995 Periods. As a percentage of total revenues, total cost of sales and
expenses for the 1996 Periods decreased to 89% and 88% from 91% and 92% as
compared to the 1995 Periods. The decrease in total cost of sales and expenses
as a percentage of total revenues is comprised primarily of a 2% decrease in
cost of sales and a 1% decrease in operating expenses. Administration, interest
and depreciation as a group were relatively unchanged. The Company will continue
its efforts, whenever possible, to reduce cost of sales and expenses as a
percentage of total revenues.
Operating Expenses
Operating expenses increased during the 1996 Periods by $35,191 and $41,204 or
4.6% and 2.7% to $793,301 and $1,571,708 from $758,110 and $1,530,504 as
compared to the 1995 Periods. The increase in operating expenses is due
primarily to expenses related to the two stores acquired during the 1996
Periods. However, as a percentage of total revenues, operating expenses
decreased to 33% and 32% for the 1996 Periods as compared to 34% and 33% for the
1995 Periods. The number of employees increased to 88 from 84 due to the
acquisition completed during the 1996 Period.
Administration
Administrative overhead increased during the 1996 Periods by $23,570 and $31,132
or 10% and 7% to $246,857 and $491,847 from $223,287 and $460,715 as compared to
the 1995 Periods. As a percentage of total revenues, administrative overhead
remained constant at 10%.
Other
Interest expense decreased for the 1996 Periods due to the Company's ability to
reduce outstanding principal due on debt. Depreciation expense increased
slightly due to new equipment purchased to replace fully used older equipment
and amortization of goodwill related to the acquisition.
Operating Results
While total revenues increased by 5.3% and 5.8% for the 1996 Periods as compared
to the 1995 Periods, gross profit margin on sales increased to 25.4% and 24.3%
from 21.6% and 19.5% and total cost of sales and expenses remained relatively
steady. As a result, income from operations before income taxes for the 1996
Periods increased by 37% and 58% to $263,357 and $589,329 from $191,856 and
$373,118 as compared to the 1995 Periods. As a percentage of total revenues,
income from operations for the 1996 Periods increased to 12% from 8% as compared
to the 1995 Periods. After accounting for the effects of income taxes, net
income for the 1996 Periods increased 37% and 54% to $171,708 and $381,622 from
$124,707 and $247,969 as compared to the 1995 Periods. As a percentage of total
revenues, net income for the 1996 Period increased to 7.8% from 5.3% as compared
to the 1995 Period.
11
<PAGE>
Earnings Per Share
Earnings per share for the 1996 Periods equaled $0.05 and $0.11 as compared to
$0.04 and $0.08 for the 1995 Periods. The weighted average number of shares and
common share equivalents outstanding increased by 10% and 9% in the 1996 Periods
to 3,403,307 and 3,310,126 from 3,056,768 and 3,034,888 for the 1995 Periods.
The increase in the number of weighted average shares and common share
equivalents outstanding is primarily due to the issuance of common shares in
connection with the acquisition, the exercise of stock purchase options and
additional common share equivalents due to the increase in the average market
price for the Company's stock during the 1996 Periods.
LIQUIDITY AND CAPITAL RESOURCES
Working Capital
Working capital increased by 10% to $3,791,131 at June 30, 1996 from $3,473,718
at December 31, 1995. Total assets increased during the 1996 Period by $441,172
mainly due to increases in cash, inventory and intangibles associated with the
acquisition completed during the 1996 Period. Total shareholders' equity
increased during the 1996 Period by $513,985 as a result of profits, net of
income taxes, preferred dividends and minority interest, of $354,708 and net
common stock transactions of $159,277.
The Company's operations have been financed from funds generated from
operations, bank borrowing, private borrowing, and public offerings. During the
1996 Period, the Company raised sufficient capital to satisfy all capital
requirements.
During the 1996 Period, the Company maintained a bank line of credit totaling
$650,000. As of June 30, 1996, the Company had borrowed $23,431 under this
credit facility. The line of credit agreement is renewable on an annual basis
and the agreement expires on April 1, 1997.
The private borrowing which comprises $1,206,101 of the total liabilities are
due in 1996 and 1997 and there is no indication that these notes will not be
renewed.
The Company plans to continue expanding its operating base with acquisitions of
existing pawn companies, but will review potential start-up locations that may
become available. The Company expects to fund this expansion and meet its
on-going working capital needs with internally generated funds, debt or equity
offerings if needed and additional lines of credit. There can be no assurance
however, that such debt or equity offerings and lines of credit will be
available to the Company.
12
<PAGE>
The Company has experienced that new start-up stores generally result in
operating losses during the first three to twelve months of operations.
Leasehold improvements and equipment costs for new stores have ranged from
approximately $75,000 to $100,000 per store. Acquisition of existing pawn
companies generally result in immediate increases in operating income. However,
acquisitions also generally result in an increase in intangibles due to purchase
prices which may be in excess of the value of assets acquired. Such intangibles
are then amortized to expense over their estimated useful lives.
Inflation
The Company does not believe that inflation has had a material effect on the
loans made or unredeemed goods sold by the Company or on its results of
operations.
Seasonality
The Company's loan demand and sales follow slight seasonal trends, with loan
demand decreasing during the first calendar quarter and sales increasing during
the fourth calendar quarter.
PART II. OTHER INFORMATION
ITEM 1. Legal proceedings
On February 26, 1996, a former officer and director of the Company filed a legal
action alleging a breach of the terms of a certain stock registration agreement
between the former officer and director and the Company. The Company and its
legal counsel believe that the action has no merit. On July 8, 1996, the Company
reached a settlement of the action under which the former officer and director
agreed to a dismissal of the suit.
ITEM 2. Changes in securities
None.
ITEM 3. Defaults upon senior securities
None.
ITEM 4. Submission of matters to a vote of security holders
On June 22, 1996, the Company held its Annual Meeting of Shareholders ("Annual
Meeting"). At the Annual Meeting, the shareholders of the Company, by an
affirmative vote of a majority of the Company's shares issued and outstanding,
re-elected Gary A. Agron and Daniel B. Rudden as directors of the Company and
approved the Company's 1995 Directors' Stock Option Plan.
13
<PAGE>
ITEM 5. Other information
None.
ITEM 6. Exhibits and reports on Form 8-K
Exhibits: Exhibit #27 - Financial Data Schedule.
Reports on Form 8-K: During the three months covered by this report, the Company
filed no reports on Form 8-K.
14
<PAGE>
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 thereto duly authorized.
Date: August 12, 1996 U.S. PAWN, INC.
----------------------------------
(Registrant)
/S/ MELVIN WEDGLE
---------------------------------
Melvin Wedgle
Chief Executive Officer
/S/ CHARLES C. VAN GUNDY
---------------------------------
Charles C. Van Gundy
Chief Financial Officer
(Principal Accounting Officer)
15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 382
<SECURITIES> 0
<RECEIVABLES> 3,297
<ALLOWANCES> (31)
<INVENTORY> 1,631
<CURRENT-ASSETS> 5,401
<PP&E> 2,306
<DEPRECIATION> (1,067)
<TOTAL-ASSETS> 7,017
<CURRENT-LIABILITIES> 1,616
<BONDS> 0
0
378
<COMMON> 3,429
<OTHER-SE> 1,472
<TOTAL-LIABILITY-AND-EQUITY> 7,017
<SALES> 2,706
<TOTAL-REVENUES> 4,922
<CGS> 2,047
<TOTAL-COSTS> 4,230
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 102
<INCOME-PRETAX> 590
<INCOME-TAX> 208
<INCOME-CONTINUING> 382
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 382
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
</TABLE>