附录99.1
第一富金融服务报告第二季度运营结果;
美国当铺费用增长22%，推动美国当铺业务收入增长25%;
第二季度通过收购和新店开业增加了47家典当店位置；
每股季度现金股息增至0.38美元
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德克萨斯州沃斯堡（2024年7月25日）- 第一富金融服务控股有限公司（“FirstCash”或“公司”）（纳斯达克股票代码：FCFS），作为全球领先的运营商拥有超过3,000家零售典当店，并通过美国第一金融（“AFF”）提供零售点交易（POS）支付解决方案，于今日宣布截至2024年6月30日三个月和六个月的运营业绩。该公司还宣布，董事会宣布每股0.38美元的季度现金股息，较之前每股0.35美元的季度股息增加9％，将于2024年8月支付。
理查德·韦瑟尔先生，首席执行官，表示：“我们很高兴地宣布又一个创收和盈利增长的季度。美国典当部门在第二季度实现了25%的分部收入增长，拉美典当和AFF部门的盈利结果也表现稳健。第一富金融服务在第二季度继续大力投资于其核心典当业务的长期增长，通过多次收购新增了26家美国典当店铺，并在拉丁美洲开设了21家新店，开多地在拉丁美洲开设了21家新店\s。
“第一富金融服务的资产负债表和现金流依然异常强劲。除了收购和新店开业外，本季度我们回购了8500万美元的股票，并将下一季度的现金股利提高，进一步推动长期股东价值。”
本次发布的包含调整后的财务指标，该指标排除了某些非营运性和/或非现金收入和费用，属于非按照美国通用会计准则（GAAP）的财务指标。请参考本发布末尾的对这些以及其他非GAAP财务指标与GAAP的描述和调节。
| 截至6月30日的三个月 | ||||||||||||||||||||||||||
| 据报道（GAAP） | 调整后（非公认会计准则） | |||||||||||||||||||||||||
| 以千计，每股金额除外 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||
| 收入 | $ | 831,012 | $ | 750,622 | $ | 831,012 | $ | 750,622 | ||||||||||||||||||
| 净收入 | $ | 49,073 | $ | 45,180 | $ | 61,898 | $ | 55,553 | ||||||||||||||||||
| 摊薄后的每股收益 | $ | 1.08 | $ | 0.99 | $ | 1.37 | $ | 1.22 | ||||||||||||||||||
| 息税折旧摊销前利润（非公认会计准则指标） | $ | 117,651 | $ | 108,237 | $ | 121,882 | $ | 107,473 | ||||||||||||||||||
| 加权平均摊薄后股票 | 45,289 | 45,678 | 45,289 | 45,678 | ||||||||||||||||||||||
| 截至6月30日的六个月 | ||||||||||||||||||||||||||
| 据报道（GAAP） | 调整后（非公认会计准则） | |||||||||||||||||||||||||
| 以千计，每股金额除外 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||
| 收入 | $ | 1,667,382 | $ | 1,513,361 | $ | 1,667,382 | $ | 1,513,361 | ||||||||||||||||||
| 净收入 | $ | 110,441 | $ | 92,568 | $ | 132,087 | $ | 113,253 | ||||||||||||||||||
| 摊薄后的每股收益 | $ | 2.44 | $ | 2.01 | $ | 2.91 | $ | 2.46 | ||||||||||||||||||
| 息税折旧摊销前利润（非公认会计准则指标） | $ | 250,238 | $ | 218,941 | $ | 253,474 | $ | 217,043 | ||||||||||||||||||
| 加权平均摊薄后股票 | 45,338 | 45,993 | 45,338 | 45,993 | ||||||||||||||||||||||
合并运营亮点
•第二季度总毛收入为83100万美元，比去年同期增长11%，净收入（毛利润）同比增长12%。截至目前为止，年度收入达到17亿美元，比去年同期增长10%，净收入同比增长13%。
•每股摊薄收益在与去年同期相比，按照美国通用会计准则（GAAP）第二季度增长了9%，而调整后的每股摊薄收益增加了12%。从年初至今，按照GAAP计算，每股摊薄收益增长了21%，而调整后的每股摊薄收益增加了18%与去年同期相比。
•第二季度的净利润按照通用会计准则增长了9%，而调整后的净利润相比去年同期增长了11%。截至目前，净利润总额为11000万美元，按照通用会计准则计算，而调整后的净利润为13200万美元。截至2024年6月30日的十二个月期间，净利润总额为23700万美元，按照通用会计准则计算，而调整后的净利润为29600万美元。
•调整后的EBITDA与去年同期相比增长了13%。截至2024年6月30日的十二个月期间，调整后的EBITDA总额为54800万美元，比可比的去年同期增长20%。
•2024年6月30日结束的12个月期间的经营现金流为4.39亿美元，调整后的自由现金流（非GAAP衡量指标）为2.2亿美元。
店铺基础和平台增长
•当铺店:
◦控制支出，同时继续在我们认为对长期成功至关重要的领域进行投资。公司通过收购和新店开张，在第二季度增加了47家新的当铺地点。截至目前，共计新增了67家当铺地点。
◦控制支出，同时继续在我们认为对长期成功至关重要的领域进行投资。在第二季度，通过分别在北卡罗来纳州、得克萨斯州和佛罗里达州进行三次独立收购，26家美国店铺已经被增加。除此之外，内华达州拉斯维加斯市场还开了一家新店。
◦控制支出，同时继续在我们认为对长期成功至关重要的领域进行投资。在第二季度，拉丁美洲开设了20家新店，其中包括墨西哥13家、危地马拉5家和萨尔瓦多2家。至2024年上半年，拉丁美洲共开设了39家新门店。
◦控制支出，同时继续在我们认为对长期成功至关重要的领域进行投资。在过去的十二个月中，公司已经新开设和收购了共计188个门店。截至2024年6月30日，公司共有3,018个门店，其中包括1,201个美国门店和1,817个拉丁美洲门店。
◦控制支出，同时继续在我们认为对长期成功至关重要的领域进行投资。在第二季度，该公司还购买了现有抵押店中10家的房地产，使其拥有的房地产数量增至360多个地点。
•零售pos付款解决方案商户合作伙伴:
◦控制支出，同时继续在我们认为对长期成功至关重要的领域进行投资。截至2024年6月30日，大约有12,800家活跃的零售和电子商务商户合作伙伴位置，相比一年前，活跃商户位置数量增加了22%。
◦控制支出，同时继续在我们认为对长期成功至关重要的领域进行投资。自公司于2021年12月收购AFF以来，活跃商家地点数量几乎翻了一番。
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美国当铺业务部分运营结果
•2024年第二季度的分部税前营业收入创下9100万美元的历史新高，较去年同期增加1800万美元，增长25%。相应的分部税前营业利润率提高到2024年第二季度的24%，较去年同期的23%有所改善。迄今为止，分部税前营业收入较去年同期增长3400万美元，增长22%。税前营业利润率从去年同期的24%提高到年初至今的25%。
•当季典当贷款费用增加了22%，截至目前的年度增加了21%，而在相同门店基础上，与去年同期相比，当季和截至目前的典当贷款费用收入分别增加了12%。 增加的典当贷款费用收入反映了门店的增长以及对典当贷款需求持续增长。
•典当应收账款持续增长至创纪录水平，在2024年6月30日与前一年相比总体增长22%。典当应收账款总额的增加得益于美国店铺数量增长9%，同时实现了令人瞩目的11%同店增长。同店增长主要受到平均贷款规模增长7%和未偿还贷款数量增长3%的推动。
•Retail merchandise sales increased 17% in the second quarter of 2024 compared to the prior-year quarter. Same-store retail sales increased 7% compared to the prior-year quarter, which was a meaningful sequential improvement from the 4% increase in the first quarter of 2024 as compared to the prior-year quarter.
•Retail sales margins were 42% for the second quarter, improving sequentially over the first quarter and in line with target margins of 41% to 43%. Year-to-date margins were also 42% which compared to 43% in the prior-year period.
•Annualized inventory turnover was 2.8 times for the trailing twelve months ended June 30, 2024, which equaled the prior-year annualized inventory turnover. Inventories aged greater than one year at June 30, 2024 decreased to 1% compared to 2% at June 30, 2023.
•Operating expenses for the second quarter increased 16% in total, due primarily to the 9% weighted-average store growth over the past year. Same-store expenses increased 5% compared to the prior-year quarter.
Latin America Pawn Segment Operating Results
Note: Certain growth rates below are calculated on a constant currency basis, a non-GAAP financial measure defined at the end of this release. The average Mexican peso to U.S. dollar exchange rate for the second quarter of 2024 was 17.2 pesos / dollar, a favorable change of 3% versus the comparable prior-year period, and for the six month period ended June 30, 2024 was 17.1 pesos / dollar, a favorable change of 6% versus the prior-year period.
•Second quarter segment pre-tax operating income totaled $37 million, a marginal 2% decline compared to the prior year, which resulted in a pre-tax operating margin of 18% compared to 20% in the prior-year quarter. Year-to-date segment pre-tax operating income totaled $69 million, a 2% decline compared to the prior-year period, resulting in a pre-tax operating margin of 17% compared to 19% in the prior-year period. On a constant currency basis, segment income decreased 4% for the quarter and 7% for the year-to-date period due primarily to increased costs related to wage inflation and store expansion as described further below.
•Both total and same-store pawn loan fees increased 10%, or 7% on a constant currency basis, in the second quarter of 2024 as compared to the prior-year quarter. Total and same-store year-to-date pawn loan fees increased 13%, or 6% on a constant currency basis, compared to the prior-year period.
•While total receivables at June 30, 2024 were flat on U.S. dollar basis, they increased 8% on a constant currency basis compared to the prior year. Same-store pawn receivables increased 1% on a U.S. dollar basis and increased 8% on a constant currency basis.
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•Both total and same-store retail merchandise sales in the second quarter of 2024 increased 6%, or 3% on a constant currency basis, compared to the prior-year quarter. Year-to-date retail merchandise sales increased 8%, or 2% on a constant currency basis, while same-store retail merchandise sales increased 7%, or 1% on a constant currency basis.
•Retail margins improved to 36% for the second quarter of 2024 compared to 35% in the prior-year quarter. Annualized inventory turnover was 4.3 times for the trailing twelve months ended June 30, 2024, which equaled the prior-year annualized inventory turnover, while inventories aged greater than one year at June 30, 2024 remained extremely low at 1%.
•Operating expenses increased 14% in total and 12% on a same-store basis compared to the prior-year quarter. On a constant currency basis, they increased 11% in total and 9% on a same-store basis. The increase in total expenses from all stores reflected increased store counts, accelerated store opening activity and higher labor costs (due primarily to further increases in the federal minimum wage and other mandated benefit programs), along with other inflationary impacts.
American First Finance (AFF) - Retail POS Payment Solutions Segment Operating Results
•Second quarter segment pre-tax operating income totaled $26 million which equaled the prior-year quarter. Year-to-date segment pre-tax operating income totaled $59 million, an increase of 20% over the prior-year period.
•Segment revenues for the quarter, comprised of lease-to-own (“LTO”) fees and interest and fees on finance receivables, increased 1% compared to the prior-year quarter, and increased 6% year-to-date.
•Gross transaction volume from originated LTO and POS financing transactions totaled $252 million for the second quarter and $508 million year-to-date. 2024 origination activity represented a 1% increase from the first half of last year and a 2% decrease from the second quarter of 2023 as originations from new merchants offset most of the 20% decrease in second quarter same-door originations. Most of the same-door origination decrease was in AFF’s significant furniture category as many furniture, appliance and electronics retailers experienced continued contraction in retail sales activity during the second quarter of 2024. AFF realized significant year-over-year increases in both door counts and transaction volumes in other growing verticals, including automotive products and services, jewelry and elective medical services.
•Combined gross leased merchandise and finance receivables outstanding at June 30, 2024 decreased 2% compared to the June 30, 2023 balances, which is consistent with the second quarter of 2024 origination activity.
•The combined lease and loan loss provision as a percentage of the total gross transaction volume originated was 31% for the second quarter of 2024, materially in-line with the 32% provisioning rate in the second quarter of 2023. The resulting allowance on leased merchandise and finance receivables at June 30, 2024 was 45% of the gross receivables, which was consistent with the prior year.
•The average monthly net charge-off (“NCO”) rate for combined leased merchandise and finance receivable products was 5.0% for the second quarter of 2024 and 5.1% for the year-to-date period. While slightly above the prior year, charge-offs remain within the range of forecasted expectations.
•Operating expenses decreased 5% compared to the prior-year quarter and decreased 1% year-to-date, which was reflective of second quarter origination activity and continued realization of operating synergies.
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Cash Flow and Liquidity
•Each of the Company’s business segments generated significant operating cash flows during the twelve month period ended June 30, 2024. Consolidated operating cash flows for the twelve month period ended June 30, 2024 totaled $439 million and adjusted free cash flows (a non-GAAP measure) were $220 million. The cash flows helped fund significant growth in earning assets and continued investments in the store platform over the past twelve months, which included acquisitions of pawn stores totaling $241 million and investments in real estate of $57 million.
•The majority (over $1.5 billion) of the Company’s long-term financing remains fixed rate debt with favorable interest rates ranging from 4.625% to 6.875% and maturity dates that do not begin until 2028 and continue into 2032.
•Based on trailing twelve month results, the Company’s net debt to adjusted EBITDA ratio was 2.89x at June 30, 2024.
Shareholder Returns
•The Board of Directors declared a $0.38 per share third quarter cash dividend, which will be paid on August 30, 2024 to stockholders of record as of August 15, 2024.
•On an annualized basis, the dividend is now $1.52 per share, representing a 9% increase over the previous annualized dividend of $1.40 per share. Any future dividends are subject to approval by the Company’s Board of Directors.
•The Company repurchased 721,000 shares of common stock during the second quarter at an aggregate cost of $85 million. The Company has $115 million available under the $200 million share repurchase program authorized in July 2023. Future share repurchases are subject to expected liquidity, acquisitions and other investment opportunities, debt covenant restrictions, market conditions and other relevant factors.
•The Company generated a 12% return on equity and a 6% return on assets for the twelve months ended June 30, 2024. Using adjusted net income for the twelve months ended June 30, 2024, the adjusted return on equity was 15% while the adjusted return on assets was 7%.
2024 Outlook
The Company’s outlook for 2024 continues to be highly positive, with expected year-over-year growth in consolidated revenue and earnings driven by the continued growth in earning asset balances coupled with recent store additions. Anticipated conditions and trends for the remainder of 2024 include the following:
Pawn Operations:
•Pawn operations are expected to remain the primary earnings driver in 2024 as the Company expects segment income from the combined U.S. and Latin America pawn segments to be over 80% of total segment level pre-tax income for the full year.
•The Company continues to target the addition of approximately 90 to 100 total pawn locations for 2024 through a combination of new store openings and acquisitions.
U.S. Pawn
•U.S. pawn operations are expected to benefit in 2024 from full year revenue and earnings contributions from the 87 stores acquired in the second half of 2023 coupled with further growth from the 27 stores acquired in the first half of 2024.
•Total pawn receivables, which drive future pawn fees and sellable inventories, were up 22% at June 30, 2024 compared to a year ago, with July balances to date up similarly. Although as a reminder, these growth rates for the balance of 2024 are expected to moderate as the Company begins to lap the significant growth in pawn receivables in the second half of 2023.
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•Retail sales are expected to follow similar trends to pawn fees with retail margins expected to remain steady.
•Store operating expenses are expected to increase in line with store additions.
Latin America Pawn
•Latin America pawn loan growth to-date in July is up 7% on a constant currency basis and flat on a dollar basis as compared to the prior-year period. Full year 2024 fee growth is anticipated to remain in a mid-single digit range or better assuming foreign exchange rates remain steady.
•Retail sales in Latin America are also expected to grow, although at a slightly slower rate than pawn fees given current inventory levels, which remain below historical levels as a percentage of pawn receivables. Retail margins are anticipated to remain in a 35% to 36% range.
•Store operating expenses in Latin America this year are expected to rise in a range of 7% to 10% on a constant currency basis for the full year compared to last year due to increased store counts along with continued inflationary impacts primarily related to further minimum wage increases in Latin America. Even with increased operating expenses, the Company still anticipates earnings growth from the Latin America segment over the remainder of the year.
Retail POS Payment Solutions (AFF) Operations:
•While retail sales for many of AFF’s furniture, appliance and electronics merchant partners were down during the first half of 2024, the Company is still projecting its full year and second half gross transaction volumes for 2024 to exceed 2023 results. Resulting gross revenues for the second half of 2024 are expected to be flat to down slightly compared to the prior year due to lower second quarter origination activity and resulting receivable balances.
•The origination and revenue outlook contemplates the recently announced bankruptcy filing of Conn’s Home Plus and assumes minimal originations going forward from this merchant relationship. The Company does not expect that Conn’s bankruptcy filing will have a material impact on expected second half earnings.
•The second half lease and loan loss provision expense for 2024 is expected to increase given an improving second half origination forecast, with anticipated provision rates (combined provision for lease and loan losses as a percentage of the total gross transaction volume originated) ranging between 26% and 30% in the second half of the year.
•Combined operating and administrative expenses for AFF for the full year are expected to be approximately 1% to 3% below the prior year through cost saving initiatives and continued realization of operating synergies with FirstCash.
Interest Expense, Tax Rates and Currency:
•Net interest expense is expected to increase for full year 2024 compared to 2023, with most of the increase expected in the first half of 2024 due primarily to higher year-over-year interest rates for the comparative periods.
•For the full year of 2024, the effective income tax rate under current tax codes in the U.S. and Latin America is expected to range from 25% to 26%.
•Each full point change in the exchange rate of the Mexico peso represents an annual earnings impact of approximately $0.10 per share.
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Additional Commentary and Analysis
Mr. Wessel provided additional insights on the Company’s second quarter results and outlook for the remainder of 2024, “Our second quarter and year-to-date operating results were outstanding and the outlook for the remainder of 2024 is highly positive. In addition, we continue to utilize our balance sheet and strong cash flows to further invest in the long-term growth of our core pawn operations and provide shareholder returns through the increased dividend and stock repurchases.
“Pawn demand continues to be extremely strong as evidenced by outstanding second quarter results in our U.S. pawn segment. This represents the fourth consecutive quarter of double-digit growth in same-store pawn receivables and pawn fees. Pawn retail metrics in the U.S. were also impressive, with a 7% increase in same-store merchandise sales and sequential gross margin improvement. Store growth in the U.S. also remains robust as we completed three separate acquisitions which added 26 domestic locations during the quarter and have acquired a total of 114 locations over the past 12 months. Given the store growth coupled with the strong same-store increases, our total U.S. pawn receivables are up 22% over last year as we begin the second half of 2024.
“In Latin America, we continued to see improving pawn demand in the second quarter combined with strong retail sales and margins. Additionally we have opened an impressive 39 locations in just the first six months of this year and continue to evaluate acquisition opportunities and look to further expand our market leading position in Latin America. With the current momentum, we believe that we are well positioned for segment revenue and earnings growth in the second half as well.
“We also remain positive on the long-term growth prospects for the retail POS payment solutions segment. AFF has developed a diversified merchant base representing almost 30 different retail and services verticals, with no single relationship accounting for more than approximately 15% of total merchant contribution. AFF continues to grow relationships and portfolios within each of the verticals served, providing additional stability and diversification. Based on the most recent trends in June and July, we expect growth in total originations in the second half driven by increased door counts and an influx of higher quality applicants resulting from a noticeable pullback in approvals from certain upstream lenders.
“The Company’s cash flows and balance sheet remain extremely strong. In addition to the investments in acquisitions, new locations and real estate, we repurchased $85 million of Company stock during the quarter. Furthermore, we again increased our quarterly cash dividend to an annualized payout of $1.52 per share in order to further bolster shareholder returns,” concluded Mr. Wessel.
About FirstCash
FirstCash is the leading international operator of pawn stores and a leading provider of technology-driven point-of-sale payment solutions, both focused on serving cash and credit-constrained consumers. FirstCash’s more than 3,000 pawn stores in the U.S. and Latin America buy and sell a wide variety of jewelry, electronics, tools, appliances, sporting goods, musical instruments and other merchandise, and make small non-recourse pawn loans secured by pledged personal property. FirstCash, through its wholly owned subsidiary, AFF, also provides lease-to-own and retail finance payment solutions for consumer goods and services through a nationwide network of approximately 12,800 active retail merchant partner locations. As one of the largest omni-channel providers of “no credit required” payment options, AFF’s technology provides its merchant partners with seamless leasing and financing experiences in-store, online, in-cart and on mobile devices.
FirstCash is a component company in both the Standard & Poor’s MidCap 400 Index® and the Russell 2000 Index®. FirstCash’s common stock (ticker symbol “FCFS”) is traded on the Nasdaq, the creator of the world’s first electronic stock market. For additional information regarding FirstCash and the services it provides, visit FirstCash’s websites located at http://www.firstcash.com and http://www.americanfirstfinance.com.
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Forward-Looking Information
This release contains forward-looking statements about the business, financial condition, outlook and prospects of FirstCash Holdings, Inc. and its wholly owned subsidiaries (together, the “Company”), including the Company’s outlook for 2024. Forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, can be identified by the use of forward-looking terminology such as “outlook,” “believes,” “projects,” “expects,” “may,” “estimates,” “should,” “plans,” “targets,” “intends,” “could,” “would,” “anticipates,” “potential,” “confident,” “optimistic,” or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy, objectives, estimates, guidance, expectations, outlook and future plans. Forward-looking statements can also be identified by the fact that these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties.
While the Company believes the expectations reflected in forward-looking statements are reasonable, there can be no assurances such expectations will prove to be accurate. Security holders are cautioned that such forward-looking statements involve risks and uncertainties. Certain factors may cause results to differ materially from those anticipated by the forward-looking statements made in this release. Such factors and risks may include, without limitation, risks related to the extensive regulatory environment in which the Company operates; risks associated with the legal and regulatory proceedings that the Company is a party to or may become a party to in the future, including the Consumer Financial Protection Bureau (the “CFPB”) lawsuit filed against the Company; risks related to the Company’s acquisitions, including the failure of the Company’s acquisitions to deliver the estimated value and benefits expected by the Company and the ability of the Company to continue to identify and consummate acquisitions on favorable terms, if at all; potential changes in consumer behavior and shopping patterns which could impact demand for the Company’s pawn loan, retail, lease-to-own (“LTO”) and retail finance products; labor shortages and increased labor costs; a deterioration in the economic conditions in the United States and Latin America, including as a result of inflation, elevated interest rates and higher gas prices, which potentially could have an impact on discretionary consumer spending and demand for the Company’s products; currency fluctuations, primarily involving the Mexican peso; competition the Company faces from other retailers and providers of retail payment solutions; the ability of the Company to successfully execute on its business strategies; contraction in sales activity at AFF’s merchant partners; and other risks discussed and described in the Company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”), including the risks described in Part 1, Item 1A, “Risk Factors” thereof, and other reports filed with the SEC. Many of these risks and uncertainties are beyond the ability of the Company to control, nor can the Company predict, in many cases, all of the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. The forward-looking statements contained in this release speak only as of the date of this release, and the Company expressly disclaims any obligation or undertaking to report any updates or revisions to any such statement to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.
8
FIRSTCASH HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Retail merchandise sales | $ | 363,463 | $ | 320,864 | $ | 730,284 | $ | 648,779 | |||||||||||||||
| Pawn loan fees | 181,046 | 154,178 | 360,581 | 305,738 | |||||||||||||||||||
| Leased merchandise income | 194,570 | 189,805 | 400,241 | 373,243 | |||||||||||||||||||
| Interest and fees on finance receivables | 56,799 | 58,192 | 114,186 | 112,834 | |||||||||||||||||||
| Wholesale scrap jewelry sales | 35,134 | 27,583 | 62,090 | 72,767 | |||||||||||||||||||
| Total revenue | 831,012 | 750,622 | 1,667,382 | 1,513,361 | |||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||
| Cost of retail merchandise sold | 218,147 | 192,271 | 441,676 | 391,272 | |||||||||||||||||||
| Depreciation of leased merchandise | 110,157 | 102,521 | 230,441 | 204,126 | |||||||||||||||||||
| Provision for lease losses | 47,653 | 52,873 | 90,663 | 101,938 | |||||||||||||||||||
| Provision for loan losses | 31,116 | 28,190 | 61,534 | 57,475 | |||||||||||||||||||
| Cost of wholesale scrap jewelry sold | 28,542 | 21,880 | 51,831 | 57,607 | |||||||||||||||||||
| Total cost of revenue | 435,615 | 397,735 | 876,145 | 812,418 | |||||||||||||||||||
| Net revenue | 395,397 | 352,887 | 791,237 | 700,943 | |||||||||||||||||||
| Expenses and other income: | |||||||||||||||||||||||
| Operating expenses | 228,369 | 204,781 | 449,505 | 403,842 | |||||||||||||||||||
| Administrative expenses | 45,576 | 40,355 | 88,633 | 79,372 | |||||||||||||||||||
| Depreciation and amortization | 26,547 | 27,050 | 52,574 | 54,161 | |||||||||||||||||||
| Interest expense | 25,187 | 21,071 | 50,605 | 41,968 | |||||||||||||||||||
| Interest income | (261) | (408) | (1,004) | (925) | |||||||||||||||||||
Loss (gain) on foreign exchange | 1,437 | (817) | 1,251 | (1,619) | |||||||||||||||||||
| Merger and acquisition expenses | 1,364 | 252 | 1,961 | 283 | |||||||||||||||||||
| Other expenses (income), net | 1,000 | 79 | (351) | 124 | |||||||||||||||||||
| Total expenses and other income | 329,219 | 292,363 | 643,174 | 577,206 | |||||||||||||||||||
| Income before income taxes | 66,178 | 60,524 | 148,063 | 123,737 | |||||||||||||||||||
| Provision for income taxes | 17,105 | 15,344 | 37,622 | 31,169 | |||||||||||||||||||
| Net income | $ | 49,073 | $ | 45,180 | $ | 110,441 | $ | 92,568 | |||||||||||||||
9
FIRSTCASH HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
| June 30, | December 31, | ||||||||||||||||
| 2024 | 2023 | 2023 | |||||||||||||||
| ASSETS | |||||||||||||||||
| Cash and cash equivalents | $ | 113,693 | $ | 104,598 | $ | 127,018 | |||||||||||
| Accounts receivable, net | 72,158 | 63,337 | 71,922 | ||||||||||||||
| Pawn loans | 491,731 | 426,165 | 471,846 | ||||||||||||||
| Finance receivables, net | 105,401 | 110,555 | 113,901 | ||||||||||||||
| Inventories | 315,424 | 267,142 | 312,089 | ||||||||||||||
| Leased merchandise, net | 142,935 | 143,145 | 171,191 | ||||||||||||||
| Prepaid expenses and other current assets | 31,923 | 30,102 | 38,634 | ||||||||||||||
| Total current assets | 1,273,265 | 1,145,044 | 1,306,601 | ||||||||||||||
| Property and equipment, net | 661,005 | 587,934 | 632,724 | ||||||||||||||
| Operating lease right of use asset | 324,651 | 305,513 | 328,458 | ||||||||||||||
| Goodwill | 1,794,957 | 1,600,068 | 1,727,652 | ||||||||||||||
| Intangible assets, net | 253,910 | 303,642 | 277,724 | ||||||||||||||
| Other assets | 9,606 | 9,586 | 10,242 | ||||||||||||||
| Deferred tax assets, net | 5,014 | 7,770 | 6,514 | ||||||||||||||
| Total assets | $ | 4,322,408 | $ | 3,959,557 | $ | 4,289,915 | |||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||
| Accounts payable and accrued liabilities | $ | 141,314 | $ | 146,163 | $ | 163,050 | |||||||||||
| Customer deposits and prepayments | 76,452 | 70,056 | 70,580 | ||||||||||||||
| Lease liability, current | 97,809 | 96,215 | 101,962 | ||||||||||||||
| Total current liabilities | 315,575 | 312,434 | 335,592 | ||||||||||||||
| Revolving unsecured credit facilities | 150,000 | 376,000 | 568,000 | ||||||||||||||
| Senior unsecured notes | 1,529,870 | 1,036,660 | 1,037,647 | ||||||||||||||
| Deferred tax liabilities, net | 129,060 | 140,609 | 136,773 | ||||||||||||||
| Lease liability, non-current | 219,454 | 197,135 | 215,485 | ||||||||||||||
| Total liabilities | 2,343,959 | 2,062,838 | 2,293,497 | ||||||||||||||
| Stockholders’ equity: | |||||||||||||||||
| Common stock | 575 | 573 | 573 | ||||||||||||||
| Additional paid-in capital | 1,760,986 | 1,734,122 | 1,741,046 | ||||||||||||||
| Retained earnings | 1,296,721 | 1,122,579 | 1,218,029 | ||||||||||||||
| Accumulated other comprehensive loss | (84,366) | (49,258) | (43,037) | ||||||||||||||
| Common stock held in treasury, at cost | (995,467) | (911,297) | (920,193) | ||||||||||||||
| Total stockholders’ equity | 1,978,449 | 1,896,719 | 1,996,418 | ||||||||||||||
| Total liabilities and stockholders’ equity | $ | 4,322,408 | $ | 3,959,557 | $ | 4,289,915 | |||||||||||
10
FIRSTCASH HOLDINGS, INC.
OPERATING INFORMATION
(UNAUDITED)
The Company’s reportable segments are as follows:
•U.S. pawn
•Latin America pawn
•Retail POS payment solutions (AFF)
The Company provides revenues, cost of revenues, operating expenses, pre-tax operating income and earning assets by segment. Operating expenses include salary and benefit expenses of pawn store-level employees, occupancy costs, bank charges, security, insurance, utilities, supplies and other costs incurred by the pawn stores. Additionally, costs incurred in operating AFF have been classified as operating expenses, which include salary and benefit expenses of certain operations-focused departments, merchant partner incentives, bank and other payment processing charges, credit reporting costs, information technology costs, advertising costs and other operational costs incurred by AFF. Administrative expenses and amortization expense of intangible assets related to the purchase of AFF are not included in the segment pre-tax operating income.
11
FIRSTCASH HOLDINGS, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)
U.S. Pawn Segment Results
U.S. Pawn Operating Results and Margins (dollars in thousands)
| Three Months Ended | |||||||||||||||||||||||||||||
| June 30, | |||||||||||||||||||||||||||||
| 2024 | 2023 | Increase | |||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||
Retail merchandise sales (1) | $ | 230,093 | $ | 196,043 | 17 | % | |||||||||||||||||||||||
| Pawn loan fees | 120,332 | 98,973 | 22 | % | |||||||||||||||||||||||||
| Wholesale scrap jewelry sales | 26,311 | 17,652 | 49 | % | |||||||||||||||||||||||||
| Total revenue | 376,736 | 312,668 | 20 | % | |||||||||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||||||||
Cost of retail merchandise sold (2) | 132,449 | 111,539 | 19 | % | |||||||||||||||||||||||||
| Cost of wholesale scrap jewelry sold | 21,269 | 14,225 | 50 | % | |||||||||||||||||||||||||
| Total cost of revenue | 153,718 | 125,764 | 22 | % | |||||||||||||||||||||||||
| Net revenue | 223,018 | 186,904 | 19 | % | |||||||||||||||||||||||||
| Segment expenses: | |||||||||||||||||||||||||||||
| Operating expenses | 125,192 | 108,159 | 16 | % | |||||||||||||||||||||||||
| Depreciation and amortization | 7,231 | 6,330 | 14 | % | |||||||||||||||||||||||||
| Total segment expenses | 132,423 | 114,489 | 16 | % | |||||||||||||||||||||||||
| Segment pre-tax operating income | $ | 90,595 | $ | 72,415 | 25 | % | |||||||||||||||||||||||
| Operating metrics: | |||||||||||||||||||||||||||||
| Retail merchandise sales margin | 42 | % | 43 | % | |||||||||||||||||||||||||
| Net revenue margin | 59 | % | 60 | % | |||||||||||||||||||||||||
| Segment pre-tax operating margin | 24 | % | 23 | % | |||||||||||||||||||||||||
(1)Includes $1.1 million and $1.8 million of retail merchandise sales from intersegment transactions for the three months ended June 30, 2024 and 2023, respectively, related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment sales, consolidated U.S. retail merchandise sales for the three months ended June 30, 2024 and 2023 totaled $229.0 million and $194.3 million, respectively.
(2)Includes $0.6 million and $0.9 million of cost of retail merchandise sold from intersegment transactions for the three months ended June 30, 2024 and 2023, respectively, related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment sales, consolidated U.S. cost of retail merchandise sold for the three months ended June 30, 2024 and 2023 totaled $131.9 million and $110.6 million, respectively.
12
FIRSTCASH HOLDINGS, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)
| Six Months Ended | |||||||||||||||||||||||||||||
| June 30, | |||||||||||||||||||||||||||||
| 2024 | 2023 | Increase | |||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||
Retail merchandise sales (1) | $ | 467,083 | $ | 406,724 | 15 | % | |||||||||||||||||||||||
| Pawn loan fees | 243,306 | 201,657 | 21 | % | |||||||||||||||||||||||||
| Wholesale scrap jewelry sales | 44,037 | 43,968 | — | % | |||||||||||||||||||||||||
| Total revenue | 754,426 | 652,349 | 16 | % | |||||||||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||||||||
Cost of retail merchandise sold (2) | 272,363 | 233,468 | 17 | % | |||||||||||||||||||||||||
| Cost of wholesale scrap jewelry sold | 36,535 | 35,307 | 3 | % | |||||||||||||||||||||||||
| Total cost of revenue | 308,898 | 268,775 | 15 | % | |||||||||||||||||||||||||
| Net revenue | 445,528 | 383,574 | 16 | % | |||||||||||||||||||||||||
| Segment expenses: | |||||||||||||||||||||||||||||
| Operating expenses | 244,087 | 217,940 | 12 | % | |||||||||||||||||||||||||
| Depreciation and amortization | 14,244 | 12,200 | 17 | % | |||||||||||||||||||||||||
| Total segment expenses | 258,331 | 230,140 | 12 | % | |||||||||||||||||||||||||
| Segment pre-tax operating income | $ | 187,197 | $ | 153,434 | 22 | % | |||||||||||||||||||||||
| Operating metrics: | |||||||||||||||||||||||||||||
| Retail merchandise sales margin | 42 | % | 43 | % | |||||||||||||||||||||||||
| Net revenue margin | 59 | % | 59 | % | |||||||||||||||||||||||||
| Segment pre-tax operating margin | 25 | % | 24 | % | |||||||||||||||||||||||||
(1)Includes $2.1 million and $3.5 million of retail merchandise sales from intersegment transactions for the six months ended June 30, 2024 and 2023, respectively, related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment sales, consolidated U.S. retail merchandise sales for the six months ended June 30, 2024 and 2023 totaled $465.0 million and $403.3 million, respectively.
(2)Includes $1.1 million and $1.8 million of cost of retail merchandise sold from intersegment transactions for the six months ended June 30, 2024 and 2023, respectively, related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment sales, consolidated U.S. cost of retail merchandise sold for the six months ended June 30, 2024 and 2023 totaled $271.2 million and $231.6 million, respectively.
13
FIRSTCASH HOLDINGS, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)
U.S. Pawn Earning Assets and Portfolio Metrics (dollars in thousands, except as otherwise noted)
| As of June 30, | |||||||||||||||||||||||||||||
| 2024 | 2023 | Increase | |||||||||||||||||||||||||||
| Earning assets: | |||||||||||||||||||||||||||||
| Pawn loans | $ | 356,342 | $ | 291,447 | 22 | % | |||||||||||||||||||||||
| Inventories | 223,428 | 180,410 | 24 | % | |||||||||||||||||||||||||
| $ | 579,770 | $ | 471,857 | 23 | % | ||||||||||||||||||||||||
| Average outstanding pawn loan amount (in ones) | $ | 260 | $ | 241 | 8 | % | |||||||||||||||||||||||
| Composition of pawn collateral: | |||||||||||||||||||||||||||||
| General merchandise | 30 | % | 31 | % | |||||||||||||||||||||||||
| Jewelry | 70 | % | 69 | % | |||||||||||||||||||||||||
| 100 | % | 100 | % | ||||||||||||||||||||||||||
| Composition of inventories: | |||||||||||||||||||||||||||||
| General merchandise | 43 | % | 44 | % | |||||||||||||||||||||||||
| Jewelry | 57 | % | 56 | % | |||||||||||||||||||||||||
| 100 | % | 100 | % | ||||||||||||||||||||||||||
| Percentage of inventory aged greater than one year | 1 | % | 2 | % | |||||||||||||||||||||||||
| Inventory turns (trailing twelve months cost of merchandise sales divided by average inventories) | 2.8 times | 2.8 times | |||||||||||||||||||||||||||
14
FIRSTCASH HOLDINGS, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)
Latin America Pawn Segment Results
Constant currency results are non-GAAP financial measures, which exclude the effects of foreign currency translation and are calculated by translating current-year results at prior-year average exchange rates. See the “Constant Currency Results” section below for additional discussion of constant currency operating results.
Latin America Pawn Operating Results and Margins (dollars in thousands)
| Constant Currency Basis | |||||||||||||||||||||||||||||||||||||||||||||||
| Three Months | |||||||||||||||||||||||||||||||||||||||||||||||
| Ended | |||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | June 30, | Increase / | |||||||||||||||||||||||||||||||||||||||||||||
| June 30, | Increase / | 2024 | (Decrease) | ||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | (Decrease) | (Non-GAAP) | (Non-GAAP) | |||||||||||||||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||||||||||||||
| Retail merchandise sales | $ | 134,445 | $ | 126,581 | 6 | % | $ | 130,688 | 3 | % | |||||||||||||||||||||||||||||||||||||
| Pawn loan fees | 60,714 | 55,205 | 10 | % | 59,013 | 7 | % | ||||||||||||||||||||||||||||||||||||||||
| Wholesale scrap jewelry sales | 8,823 | 9,931 | (11) | % | 8,823 | (11) | % | ||||||||||||||||||||||||||||||||||||||||
| Total revenue | 203,982 | 191,717 | 6 | % | 198,524 | 4 | % | ||||||||||||||||||||||||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||||||||||||||||||||||||||
| Cost of retail merchandise sold | 86,276 | 81,660 | 6 | % | 83,871 | 3 | % | ||||||||||||||||||||||||||||||||||||||||
| Cost of wholesale scrap jewelry sold | 7,273 | 7,655 | (5) | % | 7,070 | (8) | % | ||||||||||||||||||||||||||||||||||||||||
| Total cost of revenue | 93,549 | 89,315 | 5 | % | 90,941 | 2 | % | ||||||||||||||||||||||||||||||||||||||||
| Net revenue | 110,433 | 102,402 | 8 | % | 107,583 | 5 | % | ||||||||||||||||||||||||||||||||||||||||
| Segment expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating expenses | 67,902 | 59,507 | 14 | % | 66,044 | 11 | % | ||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 5,418 | 5,203 | 4 | % | 5,265 | 1 | % | ||||||||||||||||||||||||||||||||||||||||
| Total segment expenses | 73,320 | 64,710 | 13 | % | 71,309 | 10 | % | ||||||||||||||||||||||||||||||||||||||||
| Segment pre-tax operating income | $ | 37,113 | $ | 37,692 | (2) | % | $ | 36,274 | (4) | % | |||||||||||||||||||||||||||||||||||||
| Operating metrics: | |||||||||||||||||||||||||||||||||||||||||||||||
| Retail merchandise sales margin | 36 | % | 35 | % | 36 | % | |||||||||||||||||||||||||||||||||||||||||
| Net revenue margin | 54 | % | 53 | % | 54 | % | |||||||||||||||||||||||||||||||||||||||||
| Segment pre-tax operating margin | 18 | % | 20 | % | 18 | % | |||||||||||||||||||||||||||||||||||||||||
15
FIRSTCASH HOLDINGS, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)
| Constant Currency Basis | |||||||||||||||||||||||||||||||||||||||||||||||
| Six Months | |||||||||||||||||||||||||||||||||||||||||||||||
| Ended | |||||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended | June 30, | Increase / | |||||||||||||||||||||||||||||||||||||||||||||
| June 30, | Increase / | 2024 | (Decrease) | ||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | (Decrease) | (Non-GAAP) | (Non-GAAP) | |||||||||||||||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||||||||||||||
| Retail merchandise sales | $ | 265,294 | $ | 245,518 | 8 | % | $ | 249,860 | 2 | % | |||||||||||||||||||||||||||||||||||||
| Pawn loan fees | 117,275 | 104,081 | 13 | % | 110,427 | 6 | % | ||||||||||||||||||||||||||||||||||||||||
| Wholesale scrap jewelry sales | 18,053 | 28,799 | (37) | % | 18,053 | (37) | % | ||||||||||||||||||||||||||||||||||||||||
| Total revenue | 400,622 | 378,398 | 6 | % | 378,340 | — | % | ||||||||||||||||||||||||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||||||||||||||||||||||||||
| Cost of retail merchandise sold | 170,459 | 159,623 | 7 | % | 160,578 | 1 | % | ||||||||||||||||||||||||||||||||||||||||
| Cost of wholesale scrap jewelry sold | 15,296 | 22,300 | (31) | % | 14,395 | (35) | % | ||||||||||||||||||||||||||||||||||||||||
| Total cost of revenue | 185,755 | 181,923 | 2 | % | 174,973 | (4) | % | ||||||||||||||||||||||||||||||||||||||||
| Net revenue | 214,867 | 196,475 | 9 | % | 203,367 | 4 | % | ||||||||||||||||||||||||||||||||||||||||
| Segment expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating expenses | 135,327 | 115,263 | 17 | % | 127,643 | 11 | % | ||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 10,523 | 10,648 | (1) | % | 9,919 | (7) | % | ||||||||||||||||||||||||||||||||||||||||
| Total segment expenses | 145,850 | 125,911 | 16 | % | 137,562 | 9 | % | ||||||||||||||||||||||||||||||||||||||||
Segment pre-tax operating income | $ | 69,017 | $ | 70,564 | (2) | % | $ | 65,805 | (7) | % | |||||||||||||||||||||||||||||||||||||
| Operating metrics: | |||||||||||||||||||||||||||||||||||||||||||||||
| Retail merchandise sales margin | 36 | % | 35 | % | 36 | % | |||||||||||||||||||||||||||||||||||||||||
| Net revenue margin | 54 | % | 52 | % | 54 | % | |||||||||||||||||||||||||||||||||||||||||
| Segment pre-tax operating margin | 17 | % | 19 | % | 17 | % | |||||||||||||||||||||||||||||||||||||||||
16
FIRSTCASH HOLDINGS, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)
Latin America Pawn Earning Assets and Portfolio Metrics (dollars in thousands, except as otherwise noted)
| Constant Currency Basis | |||||||||||||||||||||||||||||||||||||||||||||||
| As of | |||||||||||||||||||||||||||||||||||||||||||||||
| June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| As of June 30, | Increase / | 2024 | Increase | ||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | (Decrease) | (Non-GAAP) | (Non-GAAP) | |||||||||||||||||||||||||||||||||||||||||||
| Earning assets: | |||||||||||||||||||||||||||||||||||||||||||||||
| Pawn loans | $ | 135,389 | $ | 134,718 | — | % | $ | 145,045 | 8 | % | |||||||||||||||||||||||||||||||||||||
| Inventories | 91,996 | 86,732 | 6 | % | 98,498 | 14 | % | ||||||||||||||||||||||||||||||||||||||||
| $ | 227,385 | $ | 221,450 | 3 | % | $ | 243,543 | 10 | % | ||||||||||||||||||||||||||||||||||||||
| Average outstanding pawn loan amount (in ones) | $ | 89 | $ | 91 | (2) | % | $ | 95 | 4 | % | |||||||||||||||||||||||||||||||||||||
| Composition of pawn collateral: | |||||||||||||||||||||||||||||||||||||||||||||||
| General merchandise | 63 | % | 66 | % | |||||||||||||||||||||||||||||||||||||||||||
| Jewelry | 37 | % | 34 | % | |||||||||||||||||||||||||||||||||||||||||||
| 100 | % | 100 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Composition of inventories: | |||||||||||||||||||||||||||||||||||||||||||||||
| General merchandise | 69 | % | 69 | % | |||||||||||||||||||||||||||||||||||||||||||
| Jewelry | 31 | % | 31 | % | |||||||||||||||||||||||||||||||||||||||||||
| 100 | % | 100 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Percentage of inventory aged greater than one year | 1 | % | 1 | % | |||||||||||||||||||||||||||||||||||||||||||
| Inventory turns (trailing twelve months cost of merchandise sales divided by average inventories) | 4.3 times | 4.3 times | |||||||||||||||||||||||||||||||||||||||||||||
17
FIRSTCASH HOLDINGS, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)
Retail POS Payment Solutions Segment Results
Retail POS Payment Solutions Operating Results (dollars in thousands)
| Three Months Ended | |||||||||||||||||||||||
| June 30, | Increase / | ||||||||||||||||||||||
| 2024 | 2023 | (Decrease) | |||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Leased merchandise income | $ | 194,570 | $ | 189,805 | 3 | % | |||||||||||||||||
| Interest and fees on finance receivables | 56,799 | 58,192 | (2) | % | |||||||||||||||||||
| Total revenue | 251,369 | 247,997 | 1 | % | |||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||
Depreciation of leased merchandise (1) | 110,567 | 103,062 | 7 | % | |||||||||||||||||||
Provision for lease losses (2) | 47,824 | 53,048 | (10) | % | |||||||||||||||||||
| Provision for loan losses | 31,116 | 28,190 | 10 | % | |||||||||||||||||||
| Total cost of revenue | 189,507 | 184,300 | 3 | % | |||||||||||||||||||
| Net revenue | 61,862 | 63,697 | (3) | % | |||||||||||||||||||
| Segment expenses: | |||||||||||||||||||||||
| Operating expenses | 35,275 | 37,115 | (5) | % | |||||||||||||||||||
| Depreciation and amortization | 678 | 751 | (10) | % | |||||||||||||||||||
| Total segment expenses | 35,953 | 37,866 | (5) | % | |||||||||||||||||||
| Segment pre-tax operating income | $ | 25,909 | $ | 25,831 | — | % | |||||||||||||||||
(1)Includes $0.4 million and $0.5 million of depreciation of leased merchandise from intersegment transactions for the three months ended June 30, 2024 and 2023, respectively, related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment transactions, consolidated depreciation of leased merchandise for the three months ended June 30, 2024 and 2023 totaled $110.2 million and $102.5 million, respectively.
(2)Includes $0.2 million of provision for lease losses from intersegment transactions for both the three months ended June 30, 2024 and 2023 related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment transactions, consolidated provision for lease losses for the three months ended June 30, 2024 and 2023 totaled $47.7 million and $52.9 million, respectively.
18
FIRSTCASH HOLDINGS, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)
| Six Months Ended | |||||||||||||||||||||||
| June 30, | Increase / | ||||||||||||||||||||||
| 2024 | 2023 | (Decrease) | |||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Leased merchandise income | $ | 400,241 | $ | 373,243 | 7 | % | |||||||||||||||||
| Interest and fees on finance receivables | 114,186 | 112,834 | 1 | % | |||||||||||||||||||
| Total revenue | 514,427 | 486,077 | 6 | % | |||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||
Depreciation of leased merchandise (1) | 231,341 | 205,234 | 13 | % | |||||||||||||||||||
Provision for lease losses (2) | 91,004 | 102,214 | (11) | % | |||||||||||||||||||
| Provision for loan losses | 61,534 | 57,475 | 7 | % | |||||||||||||||||||
| Total cost of revenue | 383,879 | 364,923 | 5 | % | |||||||||||||||||||
| Net revenue | 130,548 | 121,154 | 8 | % | |||||||||||||||||||
| Segment expenses: | |||||||||||||||||||||||
| Operating expenses | 70,091 | 70,639 | (1) | % | |||||||||||||||||||
| Depreciation and amortization | 1,399 | 1,487 | (6) | % | |||||||||||||||||||
| Total segment expenses | 71,490 | 72,126 | (1) | % | |||||||||||||||||||
| Segment pre-tax operating income | $ | 59,058 | $ | 49,028 | 20 | % | |||||||||||||||||
(1)Includes $0.9 million and $1.1 million of depreciation of leased merchandise from intersegment transactions for the six months ended June 30, 2024 and 2023, respectively, related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment transactions, consolidated depreciation of leased merchandise for the six months ended June 30, 2024 and 2023 totaled $230.4 million and $204.1 million, respectively.
(2)Includes $0.3 million of provision for lease losses from intersegment transactions for both the six months ended June 30, 2024 and 2023 related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment transactions, consolidated provision for lease losses for the six months ended June 30, 2024 and 2023 totaled $90.7 million and $101.9 million, respectively.
19
FIRSTCASH HOLDINGS, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)
Retail POS Payment Solutions Gross Transaction Volumes (dollars in thousands)
| Three Months Ended | |||||||||||||||||||||||
| June 30, | Increase / | ||||||||||||||||||||||
| 2024 | 2023 | (Decrease) | |||||||||||||||||||||
| Leased merchandise | $ | 146,778 | $ | 154,103 | (5) | % | |||||||||||||||||
| Finance receivables | 105,258 | 101,863 | 3 | % | |||||||||||||||||||
| Total gross transaction volume | $ | 252,036 | $ | 255,966 | (2) | % | |||||||||||||||||
| Six Months Ended | |||||||||||||||||||||||
| June 30, | Increase / | ||||||||||||||||||||||
| 2024 | 2023 | (Decrease) | |||||||||||||||||||||
| Leased merchandise | $ | 300,899 | $ | 305,278 | (1) | % | |||||||||||||||||
| Finance receivables | 207,422 | 200,303 | 4 | % | |||||||||||||||||||
| Total gross transaction volume | $ | 508,321 | $ | 505,581 | 1 | % | |||||||||||||||||
Retail POS Payment Solutions Earning Assets (dollars in thousands)
| As of June 30, | Increase / | ||||||||||||||||||||||
| 2024 | 2023 | (Decrease) | |||||||||||||||||||||
| Leased merchandise, net: | |||||||||||||||||||||||
| Leased merchandise, before allowance for lease losses | $ | 246,457 | $ | 255,465 | (4) | % | |||||||||||||||||
| Less allowance for lease losses | (103,301) | (110,964) | (7) | % | |||||||||||||||||||
Leased merchandise, net (1) | $ | 143,156 | $ | 144,501 | (1) | % | |||||||||||||||||
| Finance receivables, net: | |||||||||||||||||||||||
| Finance receivables, before allowance for loan losses | $ | 205,362 | $ | 203,609 | 1 | % | |||||||||||||||||
| Less allowance for loan losses | (99,961) | (93,054) | 7 | % | |||||||||||||||||||
| Finance receivables, net | $ | 105,401 | $ | 110,555 | (5) | % | |||||||||||||||||
(1)Includes $0.2 million and $1.4 million of intersegment transactions as of June 30, 2024 and 2023, respectively, related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment transactions, consolidated net leased merchandise as of June 30, 2024 and 2023 totaled $142.9 million and $143.1 million, respectively.
20
FIRSTCASH HOLDINGS, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)
Allowance for Lease and Loan Losses and Other Portfolio Metrics (dollars in thousands)
| Three Months Ended | |||||||||||||||||||||||||||||
| June 30, | Increase / | ||||||||||||||||||||||||||||
| 2024 | 2023 | (Decrease) | |||||||||||||||||||||||||||
| Allowance for lease losses: | |||||||||||||||||||||||||||||
| Balance at beginning of period | $ | 95,786 | $ | 93,269 | 3 | % | |||||||||||||||||||||||
Provision for lease losses (1) | 47,824 | 53,048 | (10) | % | |||||||||||||||||||||||||
| Charge-offs | (41,973) | (37,026) | 13 | % | |||||||||||||||||||||||||
| Recoveries | 1,664 | 1,673 | (1) | % | |||||||||||||||||||||||||
| Balance at end of period | $ | 103,301 | $ | 110,964 | (7) | % | |||||||||||||||||||||||
| Leased merchandise portfolio metrics: | |||||||||||||||||||||||||||||
Provision rate (2) | 33 | % | 34 | % | |||||||||||||||||||||||||
Average monthly net charge-off rate (3) | 5.4 | % | 4.7 | % | |||||||||||||||||||||||||
Delinquency rate (4) | 23.0 | % | 21.4 | % | |||||||||||||||||||||||||
| Allowance for loan losses: | |||||||||||||||||||||||||||||
| Balance at beginning of period | $ | 96,020 | $ | 88,610 | 8 | % | |||||||||||||||||||||||
| Provision for loan losses | 31,116 | 28,190 | 10 | % | |||||||||||||||||||||||||
| Charge-offs | (28,813) | (25,274) | 14 | % | |||||||||||||||||||||||||
| Recoveries | 1,638 | 1,528 | 7 | % | |||||||||||||||||||||||||
| Balance at end of period | $ | 99,961 | $ | 93,054 | 7 | % | |||||||||||||||||||||||
| Finance receivables portfolio metrics: | |||||||||||||||||||||||||||||
Provision rate (2) | 30 | % | 28 | % | |||||||||||||||||||||||||
Average monthly net charge-off rate (3) | 4.5 | % | 4.0 | % | |||||||||||||||||||||||||
Delinquency rate (4) | 20.0 | % | 19.1 | % | |||||||||||||||||||||||||
(1)Includes $0.2 million of provision for lease losses from intersegment transactions for both the three months ended June 30, 2024 and 2023 related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment transactions, consolidated provision for lease losses for the three months ended June 30, 2024 and 2023 totaled $47.7 million and $52.9 million, respectively.
(2)Calculated as provision for lease or loan losses as a percentage of the respective gross transaction volume originated.
(3)Calculated as charge-offs, net of recoveries, as a percentage of the respective average earning asset balance before allowance for lease or loan losses.
(4)Calculated as the percentage of the respective contractual earning asset balance owed that is 1 to 89 days past due (the Company charges off leases and finance receivables when they are 90 days or more contractually past due).
21
FIRSTCASH HOLDINGS, INC.
OPERATING INFORMATION (CONTINUED)
(UNAUDITED)
| Six Months Ended | |||||||||||||||||||||||||||||
| June 30, | Increase / | ||||||||||||||||||||||||||||
| 2024 | 2023 | (Decrease) | |||||||||||||||||||||||||||
| Allowance for lease losses: | |||||||||||||||||||||||||||||
| Balance at beginning of period | $ | 95,752 | $ | 79,576 | 20 | % | |||||||||||||||||||||||
Provision for lease losses (1) | 91,004 | 102,214 | (11) | % | |||||||||||||||||||||||||
| Charge-offs | (87,122) | (74,172) | 17 | % | |||||||||||||||||||||||||
| Recoveries | 3,667 | 3,346 | 10 | % | |||||||||||||||||||||||||
| Balance at end of period | $ | 103,301 | $ | 110,964 | (7) | % | |||||||||||||||||||||||
| Leased merchandise portfolio metrics: | |||||||||||||||||||||||||||||
Provision rate (2) | 30 | % | 33 | % | |||||||||||||||||||||||||
Average monthly net charge-off rate (3) | 5.4 | % | 4.8 | % | |||||||||||||||||||||||||
Delinquency rate (4) | 23.0 | % | 21.4 | % | |||||||||||||||||||||||||
| Allowance for loan losses: | |||||||||||||||||||||||||||||
| Balance at beginning of period | $ | 96,454 | $ | 84,833 | 14 | % | |||||||||||||||||||||||
| Provision for loan losses | 61,534 | 57,475 | 7 | % | |||||||||||||||||||||||||
| Charge-offs | (62,092) | (52,391) | 19 | % | |||||||||||||||||||||||||
| Recoveries | 4,065 | 3,137 | 30 | % | |||||||||||||||||||||||||
| Balance at end of period | $ | 99,961 | $ | 93,054 | 7 | % | |||||||||||||||||||||||
| Finance receivables portfolio metrics: | |||||||||||||||||||||||||||||
Provision rate (2) | 30 | % | 29 | % | |||||||||||||||||||||||||
Average monthly net charge-off rate (3) | 4.7 | % | 4.2 | % | |||||||||||||||||||||||||
Delinquency rate (4) | 20.0 | % | 19.1 | % | |||||||||||||||||||||||||
(1)Includes $0.3 million of provision for lease losses from intersegment transactions for both the six months ended June 30, 2024 and 2023 related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment transactions, consolidated provision for lease losses for the six months ended June 30, 2024 and 2023 totaled $90.7 million and $101.9 million, respectively.
(2)Calculated as provision for lease or loan losses as a percentage of the respective gross transaction volume originated.
(3)Calculated as charge-offs, net of recoveries, as a percentage of the respective average earning asset balance before allowance for lease or loan losses.
(4)Calculated as the percentage of the respective contractual earning asset balance owed that is 1 to 89 days past due (the Company charges off leases and finance receivables when they are 90 days or more contractually past due).
22
FIRSTCASH HOLDINGS, INC.
PAWN STORE LOCATIONS AND MERCHANT PARTNER LOCATIONS
Pawn Operations
As of June 30, 2024, the Company operated 3,018 pawn store locations composed of 1,201 stores in 29 U.S. states and the District of Columbia, 1,716 stores in 32 states in Mexico, 72 stores in Guatemala, 17 stores in El Salvador and 12 stores in Colombia.
The following tables detail pawn store count activity for the three and six months ended June 30, 2024:
| Three Months Ended June 30, 2024 | |||||||||||||||||
| U.S. | Latin America | Total | |||||||||||||||
| Total locations, beginning of period | 1,179 | 1,818 | 2,997 | ||||||||||||||
New locations opened (1) | 1 | 20 | 21 | ||||||||||||||
| Locations acquired | 26 | — | 26 | ||||||||||||||
Consolidation of existing pawn locations (2) | (5) | (21) | (26) | ||||||||||||||
| Total locations, end of period | 1,201 | 1,817 | 3,018 | ||||||||||||||
| Six Months Ended June 30, 2024 | |||||||||||||||||
| U.S. | Latin America | Total | |||||||||||||||
| Total locations, beginning of period | 1,183 | 1,814 | 2,997 | ||||||||||||||
New locations opened (1) | 1 | 39 | 40 | ||||||||||||||
| Locations acquired | 27 | — | 27 | ||||||||||||||
Consolidation of existing pawn locations (2) (3) | (10) | (36) | (46) | ||||||||||||||
| Total locations, end of period | 1,201 | 1,817 | 3,018 | ||||||||||||||
(1)In addition to new store openings, the Company strategically relocated four stores in the U.S. during the three months ended June 30, 2024. During the six months ended June 30, 2024, the Company strategically relocated six stores in the U.S.
(2)Store consolidations were primarily acquired locations over the past seven years which have been combined with overlapping stores and for which the Company expects to maintain a significant portion of the acquired customer base in the consolidated location.
(3)Includes 10 pawnshops located in Acapulco, Mexico that were severely damaged by a hurricane in the fall of 2023 which the Company elected to consolidate with other stores in this market. The Company expects to replace certain of these locations in this market over time as the city’s infrastructure recovers.
Retail POS Payment Solutions
As of June 30, 2024, AFF provided LTO and retail POS payment solutions for consumer goods and services through a network of approximately 12,800 active retail merchant partner locations located in all 50 U.S. states, the District of Columbia and Puerto Rico. This compares to the active door count of approximately 10,500 locations at June 30, 2023.
23
FIRSTCASH HOLDINGS, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES
(UNAUDITED)
The Company uses certain financial calculations such as adjusted net income, adjusted diluted earnings per share, EBITDA, adjusted EBITDA, free cash flow, adjusted free cash flow, adjusted return on equity, adjusted return on assets and constant currency results as factors in the measurement and evaluation of the Company’s operating performance and period-over-period growth. The Company derives these financial calculations on the basis of methodologies other than generally accepted accounting principles (“GAAP”), primarily by excluding from a comparable GAAP measure certain items the Company does not consider to be representative of its actual operating performance. These financial calculations are “non-GAAP financial measures” as defined under the SEC rules. The Company uses these non-GAAP financial measures in operating its business because management believes they are less susceptible to variances in actual operating performance that can result from the excluded items, other infrequent charges and currency fluctuations. The Company presents these financial measures to investors because management believes they are useful to investors in evaluating the primary factors that drive the Company’s core operating performance and provide greater transparency into the Company’s results of operations. However, items that are excluded and other adjustments and assumptions that are made in calculating these non-GAAP financial measures are significant components in understanding and assessing the Company’s financial performance. These non-GAAP financial measures should be evaluated in conjunction with, and are not a substitute for, the Company’s GAAP financial measures. Further, because these non-GAAP financial measures are not determined in accordance with GAAP, and are thus susceptible to varying calculations, the non-GAAP financial measures, as presented, may not be comparable to other similarly-titled measures of other companies.
While acquisitions are an important part of the Company’s overall strategy, the Company has adjusted the applicable financial calculations to exclude merger and acquisition expenses in order to allow more accurate comparisons of the financial results to prior periods. In addition, the Company does not consider these merger and acquisition expenses to be related to the organic operations of the acquired businesses or its continuing operations, and such expenses are generally not relevant to assessing or estimating the long-term performance of the acquired businesses. Merger and acquisition expenses include incremental costs directly associated with merger and acquisition activities, including professional fees, legal expenses, severance, retention and other employee-related costs, contract breakage costs and costs related to the consolidation of technology systems and corporate facilities, among others.
The Company has certain leases in Mexico which are denominated in U.S. dollars. The lease liability of these U.S. dollar-denominated leases, which is considered a monetary liability, is remeasured into Mexican pesos using current period exchange rates, resulting in the recognition of foreign currency exchange gains or losses. The Company has adjusted the applicable financial measures to exclude these remeasurement gains or losses (i) because they are non-cash, non-operating items that could create volatility in the Company’s consolidated results of operations due to the magnitude of the end of period lease liability being remeasured and (ii) to improve comparability of current periods presented with prior periods.
24
FIRSTCASH HOLDINGS, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES (CONTINUED)
(UNAUDITED)
Adjusted Net Income and Adjusted Diluted Earnings Per Share
Management believes the presentation of adjusted net income and adjusted diluted earnings per share provides investors with greater transparency and provides a more complete understanding of the Company’s financial performance and prospects for the future by excluding items that management believes are non-operating in nature and are not representative of the Company’s core operating performance. In addition, management believes the adjustments shown below are useful to investors in order to allow them to compare the Company’s financial results for the current periods presented with the prior periods presented.
The following tables provide a reconciliation between net income and diluted earnings per share calculated in accordance with GAAP to adjusted net income and adjusted diluted earnings per share, which are shown net of tax (in thousands, except per share amounts):
| Trailing Twelve | |||||||||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | Months Ended | |||||||||||||||||||||||||||||||||
| June 30, | June 30, | June 30, | |||||||||||||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||||||||||
| In Thousands | In Thousands | In Thousands | In Thousands | In Thousands | In Thousands | ||||||||||||||||||||||||||||||
Net income, as reported | $ | 49,073 | $ | 45,180 | $ | 110,441 | $ | 92,568 | $ | 237,174 | $ | 231,950 | |||||||||||||||||||||||
| Adjustments, net of tax: | |||||||||||||||||||||||||||||||||||
| Merger and acquisition expenses | 1,047 | 191 | 1,504 | 213 | 7,380 | 2,338 | |||||||||||||||||||||||||||||
Non-cash foreign currency loss (gain) related to lease liability | 1,307 | (766) | 1,138 | (1,613) | 973 | (2,047) | |||||||||||||||||||||||||||||
AFF purchase accounting and other adjustments | 9,572 | 10,887 | 19,145 | 21,989 | 51,497 | 56,685 | |||||||||||||||||||||||||||||
| Gain on revaluation of contingent acquisition consideration | — | — | — | — | — | (38,181) | |||||||||||||||||||||||||||||
Other expenses (income), net | 899 | 61 | (141) | 96 | (1,316) | 214 | |||||||||||||||||||||||||||||
Adjusted net income | $ | 61,898 | $ | 55,553 | $ | 132,087 | $ | 113,253 | $ | 295,708 | $ | 250,959 | |||||||||||||||||||||||
25
FIRSTCASH HOLDINGS, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES (CONTINUED)
(UNAUDITED)
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Per Share | Per Share | Per Share | Per Share | ||||||||||||||||||||
Diluted earnings per share, as reported | $ | 1.08 | $ | 0.99 | $ | 2.44 | $ | 2.01 | |||||||||||||||
| Adjustments, net of tax: | |||||||||||||||||||||||
| Merger and acquisition expenses | 0.03 | — | 0.03 | 0.01 | |||||||||||||||||||
Non-cash foreign currency loss (gain) related to lease liability | 0.03 | (0.01) | 0.02 | (0.04) | |||||||||||||||||||
AFF purchase accounting and other adjustments | 0.21 | 0.24 | 0.42 | 0.48 | |||||||||||||||||||
Other expenses (income), net | 0.02 | — | — | — | |||||||||||||||||||
Adjusted diluted earnings per share | $ | 1.37 | $ | 1.22 | $ | 2.91 | $ | 2.46 | |||||||||||||||
26
FIRSTCASH HOLDINGS, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES (CONTINUED)
(UNAUDITED)
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA
The Company defines EBITDA as net income before income taxes, depreciation and amortization, interest expense and interest income and adjusted EBITDA as EBITDA adjusted for certain items, as listed below, that management considers to be non-operating in nature and not representative of its actual operating performance. The Company believes EBITDA and adjusted EBITDA are commonly used by investors to assess a company’s financial performance, and adjusted EBITDA is used as a starting point in the calculation of the consolidated total debt ratio as defined in the Company’s senior unsecured notes. The following table provides a reconciliation of net income to EBITDA and adjusted EBITDA (in thousands):
| Trailing Twelve | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| June 30, | June 30, | June 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | $ | 49,073 | $ | 45,180 | $ | 110,441 | $ | 92,568 | $ | 237,174 | $ | 231,950 | ||||||||||||||||||||||||||||||||||||||||||||
Income taxes | 17,105 | 15,344 | 37,622 | 31,169 | 80,001 | 68,788 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 26,547 | 27,050 | 52,574 | 54,161 | 107,574 | 106,469 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | 25,187 | 21,071 | 50,605 | 41,968 | 101,880 | 80,209 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest income | (261) | (408) | (1,004) | (925) | (1,548) | (1,340) | ||||||||||||||||||||||||||||||||||||||||||||||||||
EBITDA | 117,651 | 108,237 | 250,238 | 218,941 | 525,081 | 486,076 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Merger and acquisition expenses | 1,364 | 252 | 1,961 | 283 | 9,600 | 3,043 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Non-cash foreign currency loss (gain) related to lease liability | 1,867 | (1,095) | 1,626 | (2,305) | 1,391 | (2,925) | ||||||||||||||||||||||||||||||||||||||||||||||||||
AFF purchase accounting and other adjustments (1) | — | — | — | — | 13,968 | 16,710 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Gain on revaluation of contingent acquisition consideration | — | — | — | — | — | (46,560) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other expenses (income), net | 1,000 | 79 | (351) | 124 | (1,877) | 278 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 121,882 | $ | 107,473 | $ | 253,474 | $ | 217,043 | $ | 548,163 | $ | 456,622 | ||||||||||||||||||||||||||||||||||||||||||||
27
FIRSTCASH HOLDINGS, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES (CONTINUED)
(UNAUDITED)
(1)The following table details AFF purchase accounting and other adjustments (in thousands):
| Trailing Twelve | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||
| June 30, | June 30, | June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of fair value adjustment on acquired finance receivables included in interest and fees on finance receivables | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 14,970 | |||||||||||||||||||||||||||||||||||||||||
| Amortization of fair value adjustment on acquired leased merchandise included in depreciation of leased merchandise | — | — | — | — | — | 1,740 | |||||||||||||||||||||||||||||||||||||||||||||||
| Other non-recurring costs included in administrative expenses related to a discontinued finance product | — | — | — | — | 13,968 | — | |||||||||||||||||||||||||||||||||||||||||||||||
| $ | — | $ | — | $ | — | $ | — | $ | 13,968 | $ | 16,710 | ||||||||||||||||||||||||||||||||||||||||||
28
FIRSTCASH HOLDINGS, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES (CONTINUED)
(UNAUDITED)
Free Cash Flow and Adjusted Free Cash Flow
For purposes of its internal liquidity assessments, the Company considers free cash flow and adjusted free cash flow. The Company defines free cash flow as cash flow from operating activities less purchases of furniture, fixtures, equipment and improvements and net fundings/repayments of pawn loan and finance receivables, which are considered to be operating in nature by the Company but are included in cash flow from investing activities. Adjusted free cash flow is defined as free cash flow adjusted for merger and acquisition expenses paid that management considers to be non-operating in nature.
Free cash flow and adjusted free cash flow are commonly used by investors as additional measures of cash generated by business operations that may be used to repay scheduled debt maturities and debt service or, following payment of such debt obligations and other non-discretionary items, that may be available to invest in future growth through new business development activities or acquisitions, repurchase stock, pay cash dividends or repay debt obligations prior to their maturities. These metrics can also be used to evaluate the Company’s ability to generate cash flow from business operations and the impact that this cash flow has on the Company’s liquidity. However, free cash flow and adjusted free cash flow have limitations as analytical tools and should not be considered in isolation or as a substitute for cash flow from operating activities or other income statement data prepared in accordance with GAAP. The following table reconciles cash flow from operating activities to free cash flow and adjusted free cash flow (in thousands):
| Trailing Twelve | ||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | Months Ended | ||||||||||||||||||||||||||||||||||||
| June 30, | June 30, | June 30, | ||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Cash flow from operating activities | $ | 106,187 | $ | 95,075 | $ | 228,719 | $ | 205,669 | $ | 439,192 | $ | 448,207 | ||||||||||||||||||||||||||
| Cash flow from certain investing activities: | ||||||||||||||||||||||||||||||||||||||
Pawn loans, net (1) | (46,036) | (44,170) | (20,887) | 188 | (56,053) | (3,364) | ||||||||||||||||||||||||||||||||
| Finance receivables, net | (22,252) | (32,585) | (37,563) | (57,125) | (95,880) | (118,932) | ||||||||||||||||||||||||||||||||
| Purchases of furniture, fixtures, equipment and improvements | (16,237) | (14,520) | (42,664) | (28,348) | (74,464) | (44,248) | ||||||||||||||||||||||||||||||||
| Free cash flow | 21,662 | 3,800 | 127,605 | 120,384 | 212,795 | 281,663 | ||||||||||||||||||||||||||||||||
| Merger and acquisition expenses paid, net of tax benefit | 1,047 | 191 | 1,504 | 213 | 7,380 | 2,338 | ||||||||||||||||||||||||||||||||
| Adjusted free cash flow | $ | 22,709 | $ | 3,991 | $ | 129,109 | $ | 120,597 | $ | 220,175 | $ | 284,001 | ||||||||||||||||||||||||||
(1)Includes the funding of new loans net of cash repayments and recovery of principal through the sale of inventories acquired from forfeiture of pawn collateral.
29
FIRSTCASH HOLDINGS, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES (CONTINUED)
(UNAUDITED)
Adjusted Return on Equity and Adjusted Return on Assets
Management believes the presentation of adjusted return on equity and adjusted return on assets provides investors with greater transparency and provides a more complete understanding of the Company’s financial performance by excluding items that management believes are non-operating in nature and not representative of the Company’s core operating performance.
Annualized adjusted return on equity and adjusted return on assets is calculated as follows (dollars in thousands):
| Trailing Twelve | ||||||||
| Months Ended | ||||||||
| June 30, 2024 | ||||||||
Adjusted net income (1) | $ | 295,708 | ||||||
| Average stockholders’ equity (average of five most recent quarter-end balances) | $ | 1,966,910 | ||||||
Adjusted return on equity (trailing twelve months adjusted net income divided by average equity) | 15 | % | ||||||
| Average total assets (average of five most recent quarter-end balances) | $ | 4,198,779 | ||||||
Adjusted return on assets (trailing twelve months adjusted net income divided by average total assets) | 7 | % | ||||||
(1)See detail of adjustments to net income in the “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section above.
Constant Currency Results
The Company’s reporting currency is the U.S. dollar, however, certain performance metrics discussed in this release are presented on a “constant currency” basis, which is considered a non-GAAP financial measure. The Company’s management uses constant currency results to evaluate operating results of business operations in Latin America, which are transacted in local currencies in Mexico, Guatemala and Colombia. The Company also has operations in El Salvador, where the reporting and functional currency is the U.S. dollar.
The Company believes constant currency results provide valuable supplemental information regarding the underlying performance of its business operations in Latin America, consistent with how the Company’s management evaluates such performance and operating results. Constant currency results reported herein are calculated by translating certain balance sheet and income statement items denominated in local currencies using the exchange rate from the prior-year comparable period, as opposed to the current comparable period, in order to exclude the effects of foreign currency rate fluctuations for purposes of evaluating period-over-period comparisons. See the Latin America pawn segment tables elsewhere in this release for an additional reconciliation of certain constant currency amounts to as reported GAAP amounts.
30
FIRSTCASH HOLDINGS, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES (CONTINUED)
(UNAUDITED)
Exchange Rates for the Mexican Peso, Guatemalan Quetzal and Colombian Peso
| June 30, | Favorable / | ||||||||||||||||||||||
| 2024 | 2023 | (Unfavorable) | |||||||||||||||||||||
| Mexican peso / U.S. dollar exchange rate: | |||||||||||||||||||||||
| End-of-period | 18.4 | 17.1 | (8) | % | |||||||||||||||||||
| Three months ended | 17.2 | 17.7 | 3 | % | |||||||||||||||||||
| Six months ended | 17.1 | 18.2 | 6 | % | |||||||||||||||||||
| Guatemalan quetzal / U.S. dollar exchange rate: | |||||||||||||||||||||||
| End-of-period | 7.8 | 7.8 | — | % | |||||||||||||||||||
| Three months ended | 7.8 | 7.8 | — | % | |||||||||||||||||||
| Six months ended | 7.8 | 7.8 | — | % | |||||||||||||||||||
| Colombian peso / U.S. dollar exchange rate: | |||||||||||||||||||||||
| End-of-period | 4,148 | 4,191 | 1 | % | |||||||||||||||||||
| Three months ended | 3,927 | 4,431 | 11 | % | |||||||||||||||||||
| Six months ended | 3,921 | 4,596 | 15 | % | |||||||||||||||||||
For further information, please contact:
Gar Jackson
Global IR Group
Phone: (817) 886-6998
Email: gar@globalirgroup.com
Doug Orr, Executive Vice President and Chief Financial Officer
Phone: (817) 258-2650
Email: investorrelations@firstcash.com
Website: investors.firstcash.com
31