FirstCash Holdings, Inc. (“FirstCash” or the “Company”) (Nasdaq:
FCFS), the leading international operator of retail pawn stores and
a leading provider of retail point-of-sale (“POS”) payment
solutions through American First Finance (“AFF”), today announced
operating results for the three and nine month periods ended
September 30, 2023. The Company also announced that the Board
of Directors declared a quarterly cash dividend of $0.35 per share,
which will be paid in November 2023.
Mr. Rick Wessel, chief executive officer,
stated, “Our third quarter results were outstanding as strong
growth and profitability metrics in the core pawn segments and AFF
resulted in record earning assets, revenues and combined segment
earnings. U.S. pawn has especially strong momentum, with pawn
receivables ending the quarter up 22% in total and 11% on a
same-store basis compared to the third quarter of last year. AFF
further contributed to revenue and earnings growth with continued
strength in originations and improved profitability over last
year.
“We added 104 pawn stores during the third
quarter, including 79 acquired U.S. locations and 25 de novo
stores, mostly in Latin America, and are now on pace to add more
than 150 total pawn stores for the full year. Coupled with strong
demand in existing locations, the significant unit growth in pawn
locations is expected to drive additional revenue and earnings
growth in the fourth quarter and beyond.”
This release contains adjusted financial
measures, which exclude certain non-operating and/or non-cash
expenses, that are non-GAAP financial measures. Please refer to the
descriptions and reconciliations to GAAP of these and other
non-GAAP financial measures at the end of this release.
| |
|
Three Months Ended September 30, |
| |
|
As Reported (GAAP) |
|
Adjusted (Non-GAAP) |
| In thousands, except per share
amounts |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Revenue |
|
$ |
786,301 |
|
$ |
672,143 |
|
$ |
786,301 |
|
$ |
679,254 |
| Net income |
|
$ |
57,144 |
|
$ |
59,316 |
|
$ |
70,775 |
|
$ |
61,064 |
| Diluted earnings per
share |
|
$ |
1.26 |
|
$ |
1.26 |
|
$ |
1.56 |
|
$ |
1.30 |
| EBITDA (non-GAAP measure) |
|
$ |
129,350 |
|
$ |
119,442 |
|
$ |
132,985 |
|
$ |
108,848 |
| Weighted-average diluted
shares |
|
|
45,374 |
|
|
47,022 |
|
|
45,374 |
|
|
47,022 |
| |
|
Nine Months Ended September 30, |
| |
|
As Reported (GAAP) |
|
Adjusted (Non-GAAP) |
| In thousands, except per share
amounts |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Revenue |
|
$ |
2,299,662 |
|
$ |
1,979,598 |
|
$ |
2,299,662 |
|
$ |
2,014,396 |
| Net income |
|
$ |
149,712 |
|
$ |
173,429 |
|
$ |
184,028 |
|
$ |
169,095 |
| Diluted earnings per
share |
|
$ |
3.27 |
|
$ |
3.64 |
|
$ |
4.02 |
|
$ |
3.55 |
| EBITDA (non-GAAP measure) |
|
$ |
348,291 |
|
$ |
349,167 |
|
$ |
350,028 |
|
$ |
306,613 |
| Weighted-average diluted
shares |
|
|
45,747 |
|
|
47,602 |
|
|
45,747 |
|
|
47,602 |
| |
Consolidated Operating Highlights
- Consolidated gross
revenues totaled $786 million in the third quarter, an increase of
17% on a GAAP basis and 16% on an adjusted basis compared to the
prior-year quarter. Year-to-date revenues totaled $2.3 billion, an
increase of 16% on a GAAP basis and 14% on an adjusted basis
compared to the prior-year period.
- Gross margin
expansion helped drive third quarter and year-to-date increases of
20% and 19%, respectively, in consolidated net revenues (gross
revenues less cost of sales and loss provisions) compared to the
prior-year periods. Quarter-to-date and year-to-date net revenues
increased 17% and 14% on an adjusted basis compared to the
respective prior-year periods.
- On a GAAP basis,
prior-year diluted earnings per share included a significant
non-cash gain ($0.34 for the 2022 third quarter and $1.43
year-to-date for 2022, net of tax) on the revaluation of contingent
consideration related to the AFF acquisition. Given the
significance of the prior-year non-cash gains, GAAP-basis diluted
earnings per share for the third quarter of 2023 were flat compared
to the prior-year quarter and decreased 10% for the year-to-date
period.
- Adjusted diluted
earnings per share increased 20% in the third quarter compared to
the prior-year quarter, excluding the non-cash revaluation gain and
certain other adjustments. Year-to-date adjusted diluted earnings
per share increased 13% compared to the prior-year period.
- While GAAP net
income for the third quarter decreased 4% over the prior-year
quarter primarily due to the non-cash revaluation gain in 2022,
adjusted net income, which excludes such non-cash revaluation gain
and certain other adjustments as described herein, increased 16%
compared to the prior-year quarter. Year-to-date net income
decreased 14% on a GAAP basis and increased 9% on an adjusted basis
compared to the prior-year period.
- Adjusted EBITDA
increased 22% in the third quarter compared to the prior-year
quarter. For the twelve month period ended September 30, 2023,
adjusted EBITDA totaled $481 million, an increase of 18% over the
comparable prior-year period.
- Operating cash
flows for the twelve month period ended September 30, 2023 were
$461 million and adjusted free cash flows (a non-GAAP measure) were
$268 million, an increase of 12% and 7%, respectively, compared to
the prior-year period.
Store Base and Platform
Growth
- Pawn
Stores: 104 pawn locations were added in the third quarter
through a combination of acquisitions and store openings.
Year-to-date, a total of 140 stores have been added, bringing the
total number of locations at September 30, 2023 to 2,988
locations.By market, the Company reported the following store
additions:
- U.S.
Pawn: 82 total stores were added in the third quarter
through acquisitions and new store openings. A total of 79 stores
were added through multiple acquisitions, which included locations
in four new states for FirstCash (North Dakota, South Dakota,
Oregon and Iowa). Three de novo locations were opened during the
quarter, including two in Texas and one in Las Vegas,
Nevada.Year-to-date, the Company has added 88 locations and now has
1,181 full-service U.S. pawn locations in 29 states and the
District of Columbia. This represents a 10% increase in the total
number of stores compared to the same point one year ago.The
Company also purchased the underlying real estate at ten of its
existing pawn stores during the third quarter. This brings the
total number of owned U.S. locations to 318.
- Latin
America Pawn: A total of 22 de novo locations were opened
in Latin America during the third quarter of 2023, which included
20 locations in Mexico and two locations in Guatemala.Year-to-date,
52 locations have been opened in Latin America where the Company
now has 1,807 total locations. The 52 de novo stores opened this
year represent an 86% increase in the number of stores opened
during the first nine months of 2022.
- Retail POS
Payment Solutions Merchant Partnerships:
AFF continued to grow market share with approximately 10,800 active
retail and e-commerce merchant partner locations at September 30,
2023, representing a 26% increase in active merchant locations
compared to September 30, 2022.
U.S. Pawn Segment Operating Results
- Segment pre-tax
operating income in the third quarter of 2023 increased $14
million, or 20%, compared to the prior-year quarter. The resulting
segment pre-tax operating margin increased to 25% for the third
quarter of 2023, an improvement over the 23% margin for the
prior-year quarter.
- Year-to-date
segment pre-tax operating income increased by $30 million, or 15%,
compared to the prior-year period. The resulting segment pre-tax
operating margin increased to 24% for the year-to-date period, an
improvement over the 23% margin for the comparable prior-year
period.
- Pawn fee revenue
increased 18% in total and 11% on a same-store basis for the third
quarter of 2023 as compared to the prior-year quarter, reflecting
store growth, continued inflationary pressures driving additional
pawn loan demand and increased portfolio yield driven by improved
customer redemption rates.
- Pawn receivables
were at a record-level, increasing 22% in total at September 30,
2023 compared to the prior year. Same-store pawn receivables
accelerated sequentially to an 11% quarter-over-quarter increase
over the 6% quarter-over-quarter growth in the second quarter of
2023. The increase in total pawn receivables was driven by a 10%
increase in total store count coupled with the strong same-store
increase. The same-store increase was driven by a 7% increase in
average loan size and a 4% increase in the number of loans
outstanding.
- Retail merchandise
sales in the third quarter of 2023 increased 4% compared to the
prior-year quarter and increased 2% for the year-to-date period.
Same-store retail sales decreased 3% compared to the prior-year
quarter, as inventory levels remain relatively constrained due to
strong turn rates and lower than normal pawn forfeiture rates.
- Gross profit from
retail sales increased 9% in the third quarter compared to a year
ago, driven by robust retail sales margins of 43% in the third
quarter of 2023 compared to 41% in the prior-year quarter,
reflecting continued demand for value-priced, pre-owned merchandise
and low levels of aged inventory.
- Annualized
inventory turnover was 2.8 times for the trailing twelve months
ended September 30, 2023, which was an improvement over the
prior-year annualized inventory turnover of 2.7 times. Inventories
aged greater than one year at September 30, 2023 remained extremely
low at 1%.
- Operating expenses
increased 11% in total and 3% on a same-store basis in the third
quarter of 2023 compared to the prior-year quarter, primarily
reflecting higher store counts coupled with slight increases in
wages and certain other operating costs.
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 third quarter of 2023 was 17.1 pesos /
dollar, a favorable change of 15% versus the comparable prior-year
period, and for the nine month period ended September 30, 2023
was 17.8 pesos / dollar, a favorable change of 12% versus the
prior-year period.
- Segment pre-tax
operating income was a record $41 million in the third quarter and
year-to-date was $112 million, both representing increases of 12%
over the comparable prior-year periods. The earnings growth in 2023
reflects meaningful tailwind from the strength of the Mexican peso
so far this year. On a currency adjusted basis, segment income
declined 3% for the quarter, which was due primarily to an
increased pace of store openings resulting in higher costs, along
with higher year-over-year labor and other inflationary-related
operating costs.
-
Pawn loan fees increased 22%, or 4% on a constant currency basis,
in the third quarter of 2023 as compared to the prior-year quarter,
both in total and on a same-store basis, reflecting improved yields
on pawn receivables.
-
Pawn receivables at September 30, 2023 increased 15% while
remaining flat on a constant currency basis compared to the prior
year. On a same-store basis, pawn receivables increased 14%, or
flat on a constant currency basis, compared to the prior year. The
Company believes the flattening in local currency pawn receivable
growth reflects the typically short-term impact of
government-mandated minimum wage and benefit increases in 2023 in
Mexico which have benefited many cash-constrained consumers.
- Retail merchandise
sales in the third quarter of 2023 increased 23%, or 5% on a
constant currency basis, compared to the prior-year quarter and
increased 23% and 9%, respectively, for the year-to-date period.
Same-store retail merchandise sales in the third quarter of 2023
were also up 23%, or 5% on a constant currency basis, compared to
the prior-year quarter, reflective of greater liquidity for
cash-constrained customers.
-
Retail margins were 36% for the third quarter of 2023 which was
consistent with last year while representing a slight increase over
the previous sequential quarter. Annualized inventory turnover was
4.3 times for the trailing twelve months ended September 30, 2023,
while inventories aged greater than one year at September 30, 2023
remained extremely low at 1%.
- Operating expenses
increased 33% in total and 31% on a same-store basis compared to
the prior-year quarter. On a constant currency basis, they
increased 14% in total and 13% on a same-store basis, primarily
driven by general inflationary impacts and increases in the
federally mandated minimum wage and other required benefit programs
and increased store openings.
Retail POS Payment Solutions Segment - American First
Finance (AFF) Operating Results
Note: The reconciliations of GAAP revenues and
earnings for this segment to adjusted revenues and earnings are
provided and described in more detail in the Retail POS Payment
Solutions Segment Results section of this release.
- Third quarter
segment pre-tax operating income totaled $39 million, an increase
of 96% on a GAAP basis and 41% on an adjusted basis, which excludes
the non-cash impacts of fair value purchase accounting requirements
in the 2022 results, over the prior-year quarter. Year-to-date
segment pre-tax operating income was $88 million, an increase of
141% on a GAAP basis and 13% on an adjusted basis 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 21% on a GAAP
basis and 17% on an adjusted basis, which excludes the non-cash
impacts of fair value purchase accounting requirements in the 2022
results. Revenues for the year-to-date period increased 25% on a
GAAP basis and 18% on an adjusted basis compared to the prior-year
period.
- Gross transaction
volume from originated LTO and POS financing transactions totaled
$251 million for the third quarter and $756 million year-to-date,
representing an increase of 14% over the third quarter of last year
despite a slight decline of 4.9% in same-door originations.
Year-to-date gross transaction volumes were up 24% in total over
the prior-year period.
- Combined gross
leased merchandise and finance receivables outstanding at September
30, 2023, excluding the impacts of purchase accounting, increased
15% compared to the September 30, 2022 balances.
- AFF continues to
provide significant up front expected lifetime loss provisioning on
leased merchandise and finance receivable originations. The
resulting combined loss provision on leased merchandise and finance
receivables increased 13% for the quarter and 20% year-to-date,
reflecting strong origination growth coupled with slightly
increased provisioning rates on most products given ongoing
macroeconomic uncertainties.
- The average monthly
net charge-off (“NCO”) rate for combined leased merchandise and
finance receivable products was 5.4% in the third quarter, which
was slightly above the prior-year of 5.1%, but in line with the
Company's targeted range for NCO's which are seasonally higher in
the third quarter compared to other quarters. The combined NCO rate
for the year-to-date period was 4.9% compared to the prior-year
rate of 4.7%.
- Operating expenses
decreased 4% compared to the prior-year quarter, primarily due to
lower receivable acquisition costs and the realization of
information technology cost synergies from the Company’s
acquisition of AFF.
Cash Flow and Liquidity
- All of the
Company’s business segments continue to generate significant
operating cash flows. For the twelve month period ended September
30, 2023, consolidated operating cash flows totaled $461 million
and adjusted free cash flows (a non-GAAP measure) were $268
million, increases of 12% and 7%, respectively, compared to the
prior-year period.
- In October 2023,
the Company obtained a $50 million increase in lender commitments
under its U.S. revolving commercial bank credit facility,
increasing the size of the facility from $590 million to $640
million. The August 2027 maturity date and all financial covenants
remained unchanged under the expanded U.S. facility. Coupled with
its Mexico bank line of credit, which was recently renewed and
extended into 2027, the Company has total lender commitments under
its bank credit facilities of approximately $675 million, providing
ample funding for continued growth investments and shareholder
returns.
- The majority (over
$1 billion) of the Company’s long-term financing remains fixed rate
debt with favorable interest rates ranging from 4.625% to 5.625%
and maturity dates not until 2028 and 2030.
- The Company’s net
debt to trailing twelve months adjusted EBITDA ratio was 3.2x at
September 30, 2023, which increased slightly compared to 3.1x at
September 30, 2022, as increased borrowings as a result of the
third quarter pawn acquisition activity was mostly offset by
the 18% increase in trailing twelve months adjusted EBITDA.
Shareholder Returns
- The Company
repurchased 95,000 shares of common stock during the third quarter
at an aggregate cost of $9 million and an average cost per share of
$92.79. For the nine months ended September 30, 2023, the Company
repurchased 1,248,000 shares of common stock at an aggregate cost
of $114 million and an average cost per share of $91.58. The
Company has $200 million available under the 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 Board of
Directors declared a $0.35 per share fourth quarter cash dividend,
which will be paid on November 30, 2023 to stockholders of
record as of November 15, 2023. This represents an annualized
dividend of $1.40 per share. Any future dividends are subject to
approval by the Company’s Board of Directors.
- The Company
generated a 12% return on equity over the twelve months ended
September 30, 2023 while the return on assets for the twelve months
ended September 30, 2023 was 6%.
2023 Outlook
Based on strong third quarter results coupled
with the recent pawn acquisitions and continued growth in earning
assets, the Company’s outlook for the remainder of 2023 remains
highly positive which should result in further growth in revenue
and earnings across all segments for the fourth quarter and
full-year. Pawn operations are expected to remain the primary
earnings driver in 2023 as the Company expects segment income from
the combined U.S. and Latin America pawn segments to be
approximately 80% of total segment level pre-tax income for the
full year.
Anticipated conditions and trends for the
remainder of 2023 include the following:
Pawn Operations:
- Expected fourth
quarter results in the U.S. should benefit in particular from the
addition of 88 U.S. locations year-to-date, of which 82 were added
in the third quarter and provided limited contribution to the
reported third quarter results.
- Pawn receivables at
September 30, 2023 were up 22% in the U.S. and 15% in Latin
America. U.S. pawn receivables continue to trend even higher thus
far in October, and are now up by over 24% in total and over
12% on a same-store basis compared to the same point a year ago.
The growth in pawn receivables would imply similarly expected
growth in pawn fee revenue during the fourth quarter.
- Given the strong
growth in store counts year-to-date, fourth quarter and full year
retail sales are expected to grow in both markets as well. Retail
margins are anticipated to remain strong at 42% to 43% in the U.S.
and 35% to 36% in Latin America.
- While operating
expenses are expected to rise in both the U.S. and Latin America in
2023 due to increased store counts along with continued
inflationary impacts (primarily in Latin America), the Company
anticipates continued operating leverage from the expected revenue
growth from its pawn segments.
- In addition to the
acquired U.S. stores, the Company expects to add approximately 65
total new locations in 2023. Management continues to see a solid
pipeline of further new store openings and potential acquisition
opportunities in both the U.S. and Latin America.
POS Payment Solutions (AFF)
Operations:
- Transaction
volumes, or originations, are now expected to increase 8% to 10% in
the fourth quarter and 18% to 20% for the full year as compared to
the respective prior-year periods. Resulting adjusted revenues are
now forecast to grow in a range of 11% to 13% in the fourth quarter
and 15% to 17% for the full year as compared to the respective
prior-year periods.
- The Company expects
AFF's estimated lease and loan loss provisioning rates for the
remainder of 2023 will continue to reflect a conservative approach
with provisioning above historical pre-pandemic loss rates for most
vintages. Full year provision expense is expected to increase
consistently with the expected increase in originations. Operating
expenses for the full year are expected to increase in the 10% to
12% range in 2023 as well, primarily due to the expected increase
in origination activity.
Additional Commentary and
Analysis
Mr. Wessel provided additional insights on the
Company’s third quarter results, “The strong operating performance
in the third quarter, highlighted by the continued
acceleration of revenue growth this year, reflected outstanding
performance across all business segments and the continued
execution of our long-term growth strategies.
“The pawn business remains especially resilient
as we continue to see increasing demand, especially in our U.S.
markets, that we believe to be driven by continued inflationary
pressure and signs of increased credit tightening at the subprime
level. To put this in context, during 2023 same-store U.S. pawn
receivables were up 5% at March 31, up 6% at June 30, and were up
11% at September 30. Of note, the pawn receivable growth in the
U.S. is being driven by both the size and number of pawn loans.
Furthermore, our retail inventory turns remain high with sales
margins at or near record levels as our deep value pricing model
and interest-free layaway programs allow us to effectively serve
cash-constrained consumers in uncertain economic environments.
“We continue to invest significantly in growing
our core pawn operations in both the U.S. and Latin America through
both acquisitions, at reasonable purchase multiples, and new store
openings. We believe both markets remain attractive for continued
long-term growth based on the large addressable markets and
favorable consumer demographic trends.
“Year-to-date for 2023 we have added 140 pawn
locations, and in the third quarter alone grew our store base by
104 units, which included locations in four new U.S. states which
should provide further opportunities for growth in those markets
through additional tuck-in openings and acquisitions. The stores
acquired in the third quarter should be immediately accretive to
earnings and are expected to produce over $20 million in annualized
store-level EBITDA. Latin America expansion continues to
re-accelerate as well, with the opening of 22 stores in the third
quarter, 52 stores year-to-date and projected full year openings of
60 stores or more.
“We believe the robust store growth thus far in
2023 will provide further revenue and earnings momentum for the
fourth quarter of this year and all of 2024. In addition, we
continue to see meaningful opportunities to add additional
locations through continued new store openings and acquisition
opportunities. We also continue to strategically acquire the
underlying real estate at many of our U.S. pawn locations.
Year-to-date, we have acquired 24 locations and now own 318 of our
U.S. locations which is EBITDA accretive and provides surety to
protect from future rent increases and provides us greater
strategic control of our store base.
“AFF’s third quarter results were also
outstanding, driven by continued growth in new merchant doors and
origination activity which drove increased revenue and
profitability. While combined lease and loan charge-offs are
running below internal expectations, we continue to reserve for
lease and loan losses using upfront provisioning based on
historical pre-pandemic loss curves coupled with overlays
reflecting the current macro environment. We remain highly
optimistic on AFF’s runway for long-term growth in what we believe
is still an under-penetrated retail POS payment solutions
market.
“With the strong operating performance to date
from all segments, cash flows continue to be robust as evidenced by
the $461 million of operating cash flows and $268 million of
consolidated free cash flows generated over the trailing twelve
months. Enabled by our dependable and growing cash flows, we
recently increased the size of our U.S. bank credit facility and
extended the term of the Mexico credit facility which provides
further long-term capacity for strategic investments to drive
shareholder returns.
“Our commitment to shareholder returns remains a
key focus. Over the last twelve months, we have bought back
1,417,000 shares of common stock at a price of $128 million or
$89.94 per share. In addition, we continue to pay a cash dividend
which has increased every year for the past eight years.
“In summary, we believe our strong operating
performance coupled with growth investments and shareholder returns
will continue to drive long-term shareholder value,” 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 2,900 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 10,800 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.
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”). Forward-looking statements, as that term
is defined in the Private Securities Litigation Reform Act of 1995,
can be identified by the use of forward-looking terminology such as
“believes,” “projects,” “expects,” “may,” “estimates,” “should,”
“plans,” “targets,” “intends,” “could,” “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 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; potential changes in consumer behavior and shopping patterns
which could impact demand for the Company’s pawn loan, retail,
lease-to-own and retail finance products, including, as a result
to, changes in the general economic conditions; 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 and rising interest rates, 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; 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.
|
FIRSTCASH HOLDINGS, INC. |
|
CONSOLIDATED STATEMENTS OF
INCOME |
|
(unaudited, in thousands) |
| |
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30, |
|
September 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Revenue: |
|
|
|
|
|
|
|
|
Retail merchandise sales |
$ |
335,081 |
|
|
$ |
300,899 |
|
|
$ |
983,860 |
|
|
$ |
901,975 |
|
|
Pawn loan fees |
|
174,560 |
|
|
|
145,727 |
|
|
|
480,298 |
|
|
|
411,613 |
|
|
Leased merchandise income |
|
189,382 |
|
|
|
158,089 |
|
|
|
562,625 |
|
|
|
455,736 |
|
|
Interest and fees on finance receivables (1) |
|
61,413 |
|
|
|
48,846 |
|
|
|
174,247 |
|
|
|
135,039 |
|
|
Wholesale scrap jewelry sales |
|
25,865 |
|
|
|
18,582 |
|
|
|
98,632 |
|
|
|
75,235 |
|
|
Total revenue |
|
786,301 |
|
|
|
672,143 |
|
|
|
2,299,662 |
|
|
|
1,979,598 |
|
| |
|
|
|
|
|
|
|
| Cost of revenue: |
|
|
|
|
|
|
|
|
Cost of retail merchandise sold |
|
199,719 |
|
|
|
182,199 |
|
|
|
590,991 |
|
|
|
543,722 |
|
|
Depreciation of leased merchandise (1) |
|
103,698 |
|
|
|
86,519 |
|
|
|
307,824 |
|
|
|
262,830 |
|
|
Provision for lease losses |
|
39,736 |
|
|
|
31,916 |
|
|
|
141,674 |
|
|
|
109,771 |
|
|
Provision for loan losses |
|
33,096 |
|
|
|
31,956 |
|
|
|
90,571 |
|
|
|
83,453 |
|
|
Cost of wholesale scrap jewelry sold |
|
21,405 |
|
|
|
16,261 |
|
|
|
79,012 |
|
|
|
64,371 |
|
|
Total cost of revenue |
|
397,654 |
|
|
|
348,851 |
|
|
|
1,210,072 |
|
|
|
1,064,147 |
|
| |
|
|
|
|
|
|
|
| Net revenue |
|
388,647 |
|
|
|
323,292 |
|
|
|
1,089,590 |
|
|
|
915,451 |
|
| |
|
|
|
|
|
|
|
| Expenses and other
income: |
|
|
|
|
|
|
|
|
Operating expenses |
|
211,524 |
|
|
|
185,547 |
|
|
|
615,366 |
|
|
|
539,398 |
|
|
Administrative expenses |
|
45,056 |
|
|
|
36,951 |
|
|
|
124,428 |
|
|
|
110,882 |
|
|
Depreciation and amortization |
|
27,365 |
|
|
|
25,971 |
|
|
|
81,526 |
|
|
|
77,495 |
|
|
Interest expense |
|
24,689 |
|
|
|
18,282 |
|
|
|
66,657 |
|
|
|
50,749 |
|
|
Interest income |
|
(328 |
) |
|
|
(206 |
) |
|
|
(1,253 |
) |
|
|
(1,104 |
) |
|
(Gain) loss on foreign exchange |
|
(286 |
) |
|
|
255 |
|
|
|
(1,905 |
) |
|
|
(198 |
) |
|
Merger and acquisition expenses |
|
3,387 |
|
|
|
733 |
|
|
|
3,670 |
|
|
|
1,712 |
|
|
Gain on revaluation of contingent acquisition consideration |
|
— |
|
|
|
(19,800 |
) |
|
|
— |
|
|
|
(82,789 |
) |
|
Other expenses (income), net |
|
(384 |
) |
|
|
164 |
|
|
|
(260 |
) |
|
|
(2,721 |
) |
|
Total expenses and other income |
|
311,023 |
|
|
|
247,897 |
|
|
|
888,229 |
|
|
|
693,424 |
|
| |
|
|
|
|
|
|
|
| Income before income
taxes |
|
77,624 |
|
|
|
75,395 |
|
|
|
201,361 |
|
|
|
222,027 |
|
| |
|
|
|
|
|
|
|
|
Provision for income taxes |
|
20,480 |
|
|
|
16,079 |
|
|
|
51,649 |
|
|
|
48,598 |
|
| |
|
|
|
|
|
|
|
| Net income |
$ |
57,144 |
|
|
$ |
59,316 |
|
|
$ |
149,712 |
|
|
$ |
173,429 |
|
|
(1) |
As
a result of purchase accounting, AFF’s as reported amounts for the
three and nine months ended September 30, 2022 contain
significant fair value adjustments. See reconciliation of reported
amounts to adjusted amounts excluding the impacts of purchase
accounting in the “Retail POS Payment Solutions Segment Results”
section elsewhere in this release. |
|
|
|
|
FIRSTCASH HOLDINGS, INC. |
|
CONSOLIDATED BALANCE SHEETS |
|
(unaudited, in thousands) |
| |
| |
September 30, |
|
December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2022 |
|
|
ASSETS |
|
|
|
|
|
| Cash and cash equivalents |
$ |
86,547 |
|
|
$ |
100,620 |
|
|
$ |
117,330 |
|
| Accounts receivable, net |
|
72,336 |
|
|
|
58,435 |
|
|
|
57,792 |
|
| Pawn loans |
|
483,785 |
|
|
|
404,227 |
|
|
|
390,617 |
|
| Finance receivables, net
(1) |
|
113,307 |
|
|
|
111,945 |
|
|
|
103,494 |
|
| Inventories |
|
314,382 |
|
|
|
295,428 |
|
|
|
288,339 |
|
| Leased merchandise, net
(1) |
|
143,169 |
|
|
|
132,097 |
|
|
|
153,302 |
|
| Prepaid expenses and other
current assets |
|
21,114 |
|
|
|
38,322 |
|
|
|
19,788 |
|
|
Total current assets |
|
1,234,640 |
|
|
|
1,141,074 |
|
|
|
1,130,662 |
|
| |
|
|
|
|
|
| Property and equipment,
net |
|
604,673 |
|
|
|
535,584 |
|
|
|
538,681 |
|
| Operating lease right of use
asset |
|
312,097 |
|
|
|
299,052 |
|
|
|
307,009 |
|
| Goodwill |
|
1,713,354 |
|
|
|
1,523,699 |
|
|
|
1,581,381 |
|
| Intangible assets, net |
|
291,690 |
|
|
|
345,512 |
|
|
|
330,338 |
|
| Other assets |
|
10,057 |
|
|
|
9,133 |
|
|
|
9,415 |
|
| Deferred tax assets, net |
|
8,052 |
|
|
|
6,906 |
|
|
|
7,381 |
|
|
Total assets |
$ |
4,174,563 |
|
|
$ |
3,860,960 |
|
|
$ |
3,904,867 |
|
| |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
| Accounts payable and accrued
liabilities |
$ |
146,873 |
|
|
$ |
175,964 |
|
|
$ |
139,460 |
|
| Customer deposits and
prepayments |
|
71,752 |
|
|
|
63,066 |
|
|
|
63,125 |
|
| Lease liability, current |
|
98,745 |
|
|
|
91,115 |
|
|
|
92,944 |
|
|
Total current liabilities |
|
317,370 |
|
|
|
330,145 |
|
|
|
295,529 |
|
| |
|
|
|
|
|
| Revolving unsecured credit
facilities |
|
560,229 |
|
|
|
338,000 |
|
|
|
339,000 |
|
| Senior unsecured notes |
|
1,037,151 |
|
|
|
1,035,226 |
|
|
|
1,035,698 |
|
| Deferred tax liabilities,
net |
|
139,713 |
|
|
|
155,263 |
|
|
|
151,759 |
|
| Lease liability,
non-current |
|
202,516 |
|
|
|
197,171 |
|
|
|
203,115 |
|
|
Total liabilities |
|
2,256,979 |
|
|
|
2,055,805 |
|
|
|
2,025,101 |
|
| |
|
|
|
|
|
| Stockholders’ equity: |
|
|
|
|
|
|
Common stock |
|
573 |
|
|
|
573 |
|
|
|
573 |
|
|
Additional paid-in capital |
|
1,737,497 |
|
|
|
1,732,500 |
|
|
|
1,734,528 |
|
|
Retained earnings |
|
1,164,228 |
|
|
|
995,669 |
|
|
|
1,060,603 |
|
|
Accumulated other comprehensive loss |
|
(64,521 |
) |
|
|
(127,366 |
) |
|
|
(106,573 |
) |
|
Common stock held in treasury, at cost |
|
(920,193 |
) |
|
|
(796,221 |
) |
|
|
(809,365 |
) |
|
Total stockholders’ equity |
|
1,917,584 |
|
|
|
1,805,155 |
|
|
|
1,879,766 |
|
|
Total liabilities and stockholders’ equity |
$ |
4,174,563 |
|
|
$ |
3,860,960 |
|
|
$ |
3,904,867 |
|
|
(1) |
As
a result of purchase accounting, AFF’s September 30, 2022 as
reported earning asset balances contain significant fair value
adjustments, which were fully amortized during 2022. See
reconciliation of reported AFF earning asset balances to AFF
earning asset balances adjusted to exclude the impacts of purchase
accounting in the “Retail POS Payment Solutions Segment Results”
section elsewhere in this release. |
|
|
|
|
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.
U.S. Pawn Segment Results
U.S. Pawn Operating Results and Margins (dollars in
thousands)
| |
|
|
|
|
|
| |
Three Months Ended |
|
|
|
|
| |
September 30, |
|
|
| |
2023 |
|
2022 |
|
Increase |
| Revenue: |
|
|
|
|
|
|
|
|
|
|
Retail merchandise sales |
$ |
203,769 |
|
|
$ |
195,854 |
|
|
|
4 |
% |
|
|
Pawn loan fees |
|
114,022 |
|
|
|
96,222 |
|
|
|
18 |
% |
|
|
Wholesale scrap jewelry sales |
|
17,140 |
|
|
|
12,956 |
|
|
|
32 |
% |
|
|
Total revenue |
|
334,931 |
|
|
|
305,032 |
|
|
|
10 |
% |
|
| |
|
|
|
|
|
|
|
|
|
| Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
Cost of retail merchandise sold |
|
115,670 |
|
|
|
114,899 |
|
|
|
1 |
% |
|
|
Cost of wholesale scrap jewelry sold |
|
14,297 |
|
|
|
11,338 |
|
|
|
26 |
% |
|
|
Total cost of revenue |
|
129,967 |
|
|
|
126,237 |
|
|
|
3 |
% |
|
| |
|
|
|
|
|
|
|
|
|
| Net revenue |
|
204,964 |
|
|
|
178,795 |
|
|
|
15 |
% |
|
| |
|
|
|
|
|
|
|
|
|
| Segment expenses: |
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
113,976 |
|
|
|
102,508 |
|
|
|
11 |
% |
|
|
Depreciation and amortization |
|
6,586 |
|
|
|
5,806 |
|
|
|
13 |
% |
|
|
Total segment expenses |
|
120,562 |
|
|
|
108,314 |
|
|
|
11 |
% |
|
| |
|
|
|
|
|
|
|
|
|
| Segment pre-tax operating
income |
$ |
84,402 |
|
|
$ |
70,481 |
|
|
|
20 |
% |
|
| |
|
|
|
|
|
|
|
|
|
| Operating metrics: |
|
|
|
|
|
|
|
|
|
|
Retail merchandise sales margin |
43 |
% |
|
41 |
% |
|
|
|
|
|
Net revenue margin |
61 |
% |
|
59 |
% |
|
|
|
|
|
Segment pre-tax operating margin |
25 |
% |
|
23 |
% |
|
|
|
|
|
FIRSTCASH HOLDINGS, INC. |
|
OPERATING INFORMATION (CONTINUED) |
|
(UNAUDITED) |
| |
| |
Nine Months Ended |
|
|
|
|
| |
September 30, |
|
|
| |
2023 |
|
2022 |
|
Increase |
| Revenue: |
|
|
|
|
|
|
|
|
|
|
Retail merchandise sales |
$ |
610,493 |
|
|
$ |
596,165 |
|
|
|
2 |
% |
|
|
Pawn loan fees |
|
315,679 |
|
|
|
274,304 |
|
|
|
15 |
% |
|
|
Wholesale scrap jewelry sales |
|
61,108 |
|
|
|
45,153 |
|
|
|
35 |
% |
|
|
Total revenue |
|
987,280 |
|
|
|
915,622 |
|
|
|
8 |
% |
|
| |
|
|
|
|
|
|
|
|
|
| Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
Cost of retail merchandise sold |
|
349,138 |
|
|
|
349,007 |
|
|
|
— |
% |
|
|
Cost of wholesale scrap jewelry sold |
|
49,604 |
|
|
|
39,150 |
|
|
|
27 |
% |
|
|
Total cost of revenue |
|
398,742 |
|
|
|
388,157 |
|
|
|
3 |
% |
|
| |
|
|
|
|
|
|
|
|
|
| Net revenue |
|
588,538 |
|
|
|
527,465 |
|
|
|
12 |
% |
|
| |
|
|
|
|
|
|
|
|
|
| Segment expenses: |
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
331,916 |
|
|
|
302,572 |
|
|
|
10 |
% |
|
|
Depreciation and amortization |
|
18,786 |
|
|
|
17,261 |
|
|
|
9 |
% |
|
|
Total segment expenses |
|
350,702 |
|
|
|
319,833 |
|
|
|
10 |
% |
|
| |
|
|
|
|
|
|
|
|
|
| Segment pre-tax operating
income |
$ |
237,836 |
|
|
$ |
207,632 |
|
|
|
15 |
% |
|
| |
|
|
|
|
|
|
|
|
|
| Operating metrics: |
|
|
|
|
|
|
|
|
|
|
Retail merchandise sales margin |
43 |
% |
|
41 |
% |
|
|
|
|
|
Net revenue margin |
60 |
% |
|
58 |
% |
|
|
|
|
|
Segment pre-tax operating margin |
24 |
% |
|
23 |
% |
|
|
|
|
|
FIRSTCASH HOLDINGS, INC. |
|
OPERATING INFORMATION (CONTINUED) |
|
(UNAUDITED) |
|
|
U.S. Pawn Earning Assets and Portfolio
Metrics (dollars in thousands, except as otherwise
noted)
| |
| |
As of September 30, |
|
|
| |
2023 |
|
2022 |
|
Increase |
| Earning assets: |
|
|
|
|
|
|
|
|
|
|
Pawn loans |
$ |
341,123 |
|
|
$ |
279,645 |
|
|
|
22 |
% |
|
|
Inventories |
|
217,406 |
|
|
|
204,359 |
|
|
|
6 |
% |
|
| |
$ |
558,529 |
|
|
$ |
484,004 |
|
|
|
15 |
% |
|
| |
|
|
|
|
|
|
|
|
|
| Average outstanding pawn loan
amount (in ones) |
$ |
245 |
|
|
$ |
232 |
|
|
|
6 |
% |
|
| |
|
|
|
|
|
|
|
|
|
| Composition of pawn
collateral: |
|
|
|
|
|
|
|
|
|
|
General merchandise |
31 |
% |
|
32 |
% |
|
|
|
|
|
Jewelry |
69 |
% |
|
68 |
% |
|
|
|
|
| |
100 |
% |
|
100 |
% |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Composition of
inventories: |
|
|
|
|
|
|
|
|
|
|
General merchandise |
45 |
% |
|
43 |
% |
|
|
|
|
|
Jewelry |
55 |
% |
|
57 |
% |
|
|
|
|
| |
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) |
2.8 times |
|
2.7 times |
|
|
|
|
|
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 |
|
|
|
|
September 30, |
|
Increase / |
| |
September 30, |
|
|
|
|
2023 |
|
|
(Decrease) |
| |
|
2023 |
|
|
|
2022 |
|
|
Increase |
|
(Non-GAAP) |
|
(Non-GAAP) |
| Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Retail merchandise sales |
$ |
132,784 |
|
|
$ |
107,591 |
|
|
|
23 |
% |
|
$ |
113,130 |
|
|
|
5 |
% |
|
Pawn loan fees |
|
60,538 |
|
|
|
49,505 |
|
|
|
22 |
% |
|
|
51,468 |
|
|
|
4 |
% |
|
Wholesale scrap jewelry sales |
|
8,725 |
|
|
|
5,626 |
|
|
|
55 |
% |
|
|
8,725 |
|
|
|
55 |
% |
|
Total revenue |
|
202,047 |
|
|
|
162,722 |
|
|
|
24 |
% |
|
|
173,323 |
|
|
|
7 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of retail merchandise sold |
|
84,816 |
|
|
|
68,642 |
|
|
|
24 |
% |
|
|
72,336 |
|
|
|
5 |
% |
|
Cost of wholesale scrap jewelry sold |
|
7,108 |
|
|
|
4,923 |
|
|
|
44 |
% |
|
|
6,023 |
|
|
|
22 |
% |
|
Total cost of revenue |
|
91,924 |
|
|
|
73,565 |
|
|
|
25 |
% |
|
|
78,359 |
|
|
|
7 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Net revenue |
|
110,123 |
|
|
|
89,157 |
|
|
|
24 |
% |
|
|
94,964 |
|
|
|
7 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Segment expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
63,907 |
|
|
|
47,979 |
|
|
|
33 |
% |
|
|
54,807 |
|
|
|
14 |
% |
|
Depreciation and amortization |
|
5,236 |
|
|
|
4,566 |
|
|
|
15 |
% |
|
|
4,508 |
|
|
|
(1 |
)% |
|
Total segment expenses |
|
69,143 |
|
|
|
52,545 |
|
|
|
32 |
% |
|
|
59,315 |
|
|
|
13 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Segment pre-tax operating
income |
$ |
40,980 |
|
|
$ |
36,612 |
|
|
|
12 |
% |
|
$ |
35,649 |
|
|
|
(3 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Operating metrics: |
|
|
|
|
|
|
|
|
|
|
|
|
Retail merchandise sales margin |
36 |
% |
|
36 |
% |
|
|
|
36 |
% |
|
|
|
|
Net revenue margin |
55 |
% |
|
55 |
% |
|
|
|
55 |
% |
|
|
|
|
Segment pre-tax operating margin |
20 |
% |
|
22 |
% |
|
|
|
21 |
% |
|
|
|
|
FIRSTCASH HOLDINGS, INC. |
|
OPERATING INFORMATION (CONTINUED) |
|
(UNAUDITED) |
| |
| |
|
|
|
|
|
|
|
Constant Currency Basis |
| |
|
|
|
|
|
|
|
Nine Months |
|
|
|
| |
|
|
|
|
|
Ended |
|
|
|
| |
Nine Months Ended |
|
|
|
|
September 30, |
|
|
| |
September 30, |
|
|
|
|
2023 |
|
|
Increase |
| |
|
2023 |
|
|
|
2022 |
|
|
Increase |
|
(Non-GAAP) |
|
(Non-GAAP) |
| Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Retail merchandise sales |
$ |
378,302 |
|
|
$ |
308,356 |
|
|
|
23 |
% |
|
$ |
335,675 |
|
|
|
9 |
% |
|
Pawn loan fees |
|
164,619 |
|
|
|
137,309 |
|
|
|
20 |
% |
|
|
145,876 |
|
|
|
6 |
% |
|
Wholesale scrap jewelry sales |
|
37,524 |
|
|
|
30,082 |
|
|
|
25 |
% |
|
|
37,524 |
|
|
|
25 |
% |
|
Total revenue |
|
580,445 |
|
|
|
475,747 |
|
|
|
22 |
% |
|
|
519,075 |
|
|
|
9 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of retail merchandise sold |
|
244,439 |
|
|
|
196,057 |
|
|
|
25 |
% |
|
|
217,075 |
|
|
|
11 |
% |
|
Cost of wholesale scrap jewelry sold |
|
29,408 |
|
|
|
25,221 |
|
|
|
17 |
% |
|
|
25,945 |
|
|
|
3 |
% |
|
Total cost of revenue |
|
273,847 |
|
|
|
221,278 |
|
|
|
24 |
% |
|
|
243,020 |
|
|
|
10 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Net revenue |
|
306,598 |
|
|
|
254,469 |
|
|
|
20 |
% |
|
|
276,055 |
|
|
|
8 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Segment expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
179,170 |
|
|
|
141,574 |
|
|
|
27 |
% |
|
|
160,068 |
|
|
|
13 |
% |
|
Depreciation and amortization |
|
15,884 |
|
|
|
13,520 |
|
|
|
17 |
% |
|
|
14,306 |
|
|
|
6 |
% |
|
Total segment expenses |
|
195,054 |
|
|
|
155,094 |
|
|
|
26 |
% |
|
|
174,374 |
|
|
|
12 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
Segment pre-tax operating income |
$ |
111,544 |
|
|
$ |
99,375 |
|
|
|
12 |
% |
|
$ |
101,681 |
|
|
|
2 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Operating metrics: |
|
|
|
|
|
|
|
|
|
|
|
|
Retail merchandise sales margin |
35 |
% |
|
36 |
% |
|
|
|
35 |
% |
|
|
|
|
Net revenue margin |
53 |
% |
|
53 |
% |
|
|
|
53 |
% |
|
|
|
|
Segment pre-tax operating margin |
19 |
% |
|
21 |
% |
|
|
|
20 |
% |
|
|
|
|
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 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
September 30, |
|
Increase / |
| |
As of September 30, |
|
|
|
2023 |
|
(Decrease) |
| |
2023 |
|
2022 |
|
Increase |
|
(Non-GAAP) |
|
(Non-GAAP) |
| Earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pawn loans |
$ |
142,662 |
|
|
$ |
124,582 |
|
|
|
15 |
% |
|
$ |
124,622 |
|
|
— |
% |
|
Inventories |
|
96,976 |
|
|
|
91,069 |
|
|
|
6 |
% |
|
|
84,711 |
|
|
(7 |
)% |
| |
$ |
239,638 |
|
|
$ |
215,651 |
|
|
|
11 |
% |
|
$ |
209,333 |
|
|
(3 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average outstanding pawn loan
amount (in ones) |
$ |
89 |
|
|
$ |
79 |
|
|
|
13 |
% |
|
$ |
78 |
|
|
(1 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Composition of pawn
collateral: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General merchandise |
66 |
% |
|
69 |
% |
|
|
|
|
|
|
|
|
|
Jewelry |
34 |
% |
|
31 |
% |
|
|
|
|
|
|
|
|
| |
100 |
% |
|
100 |
% |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Composition of
inventories: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General merchandise |
68 |
% |
|
71 |
% |
|
|
|
|
|
|
|
|
|
Jewelry |
32 |
% |
|
29 |
% |
|
|
|
|
|
|
|
|
| |
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 |
|
4.0 times |
|
|
|
|
|
|
|
|
|
FIRSTCASH HOLDINGS, INC. |
|
OPERATING INFORMATION (CONTINUED) |
|
(UNAUDITED) |
|
|
Retail POS Payment Solutions Segment
Results
Retail POS Payment Solutions
Operating Results (dollars in thousands)
| |
| |
|
|
|
|
|
|
|
Adjusted (1) |
| |
|
|
|
|
|
|
|
Three Months |
|
|
|
| |
|
|
|
|
|
Ended |
|
|
|
| |
Three Months Ended |
|
|
|
|
September 30, |
|
Increase / |
| |
September 30, |
|
Increase / |
|
2022 |
|
(Decrease) |
| |
2023 |
|
2022 |
|
(Decrease) |
|
(Non-GAAP) |
|
(Non-GAAP) |
| Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Leased merchandise income |
$ |
189,382 |
|
$ |
158,089 |
|
|
20 |
% |
|
$ |
158,089 |
|
|
20 |
% |
|
Interest and fees on finance receivables |
|
61,413 |
|
|
48,846 |
|
|
26 |
% |
|
|
55,957 |
|
|
10 |
% |
|
Total revenue |
|
250,795 |
|
|
206,935 |
|
|
21 |
% |
|
|
214,046 |
|
|
17 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of leased merchandise |
|
104,198 |
|
|
86,703 |
|
|
20 |
% |
|
|
85,864 |
|
|
21 |
% |
|
Provision for lease losses |
|
39,640 |
|
|
32,350 |
|
|
23 |
% |
|
|
32,350 |
|
|
23 |
% |
|
Provision for loan losses |
|
33,096 |
|
|
31,956 |
|
|
4 |
% |
|
|
31,956 |
|
|
4 |
% |
|
Total cost of revenue |
|
176,934 |
|
|
151,009 |
|
|
17 |
% |
|
|
150,170 |
|
|
18 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Net revenue |
|
73,861 |
|
|
55,926 |
|
|
32 |
% |
|
|
63,876 |
|
|
16 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Segment expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
33,641 |
|
|
35,060 |
|
|
(4 |
)% |
|
|
35,060 |
|
|
(4 |
)% |
|
Depreciation and amortization |
|
771 |
|
|
775 |
|
|
(1 |
)% |
|
|
775 |
|
|
(1 |
)% |
|
Total segment expenses |
|
34,412 |
|
|
35,835 |
|
|
(4 |
)% |
|
|
35,835 |
|
|
(4 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Segment pre-tax operating
income |
$ |
39,449 |
|
$ |
20,091 |
|
|
96 |
% |
|
$ |
28,041 |
|
|
41 |
% |
|
(1) |
As
a result of purchase accounting, AFF’s as reported amounts for the
three months ended September 30, 2022 contain significant fair
value adjustments. The adjusted amounts for the three months ended
September 30, 2022 exclude these fair value purchase
accounting adjustments. |
|
|
|
|
FIRSTCASH HOLDINGS, INC. |
|
OPERATING INFORMATION (CONTINUED) |
|
(UNAUDITED) |
| |
| |
|
|
|
|
|
|
|
Adjusted (1) |
| |
|
|
|
|
|
|
|
Nine Months |
|
|
|
| |
|
|
|
|
|
Ended |
|
|
|
| |
Nine Months Ended |
|
|
|
|
September 30, |
|
|
| |
September 30, |
|
|
|
2022 |
|
Increase |
| |
2023 |
|
2022 |
|
Increase |
|
(Non-GAAP) |
|
(Non-GAAP) |
| Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Leased merchandise income |
$ |
562,625 |
|
$ |
455,736 |
|
|
23 |
% |
|
$ |
455,736 |
|
|
23 |
% |
|
Interest and fees on finance receivables |
|
174,247 |
|
|
135,039 |
|
|
29 |
% |
|
|
169,837 |
|
|
3 |
% |
|
Total revenue |
|
736,872 |
|
|
590,775 |
|
|
25 |
% |
|
|
625,573 |
|
|
18 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of leased merchandise |
|
309,432 |
|
|
263,014 |
|
|
18 |
% |
|
|
256,218 |
|
|
21 |
% |
|
Provision for lease losses |
|
141,854 |
|
|
110,205 |
|
|
29 |
% |
|
|
110,205 |
|
|
29 |
% |
|
Provision for loan losses |
|
90,571 |
|
|
83,453 |
|
|
9 |
% |
|
|
83,453 |
|
|
9 |
% |
|
Total cost of revenue |
|
541,857 |
|
|
456,672 |
|
|
19 |
% |
|
|
449,876 |
|
|
20 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Net revenue |
|
195,015 |
|
|
134,103 |
|
|
45 |
% |
|
|
175,697 |
|
|
11 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Segment expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
104,280 |
|
|
95,252 |
|
|
9 |
% |
|
|
95,252 |
|
|
9 |
% |
|
Depreciation and amortization |
|
2,258 |
|
|
2,156 |
|
|
5 |
% |
|
|
2,156 |
|
|
5 |
% |
|
Total segment expenses |
|
106,538 |
|
|
97,408 |
|
|
9 |
% |
|
|
97,408 |
|
|
9 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Segment pre-tax operating
income |
$ |
88,477 |
|
$ |
36,695 |
|
|
141 |
% |
|
$ |
78,289 |
|
|
13 |
% |
|
(1) |
As
a result of purchase accounting, AFF’s as reported amounts for the
nine months ended September 30, 2022 contain significant fair
value adjustments. The adjusted amounts for the nine months ended
September 30, 2022 exclude these fair value purchase
accounting adjustments. |
|
|
|
|
FIRSTCASH HOLDINGS, INC. |
|
OPERATING INFORMATION (CONTINUED) |
|
(UNAUDITED) |
Retail POS Payment Solutions Gross
Transaction Volumes (dollars in thousands)
| |
Three Months Ended |
|
|
|
|
| |
September 30, |
|
|
| |
2023 |
|
2022 |
|
Increase |
|
Leased merchandise |
$ |
147,513 |
|
$ |
136,219 |
|
|
8 |
% |
|
| Finance receivables |
|
103,183 |
|
|
84,552 |
|
|
22 |
% |
|
|
Total gross transaction volume |
$ |
250,696 |
|
$ |
220,771 |
|
|
14 |
% |
|
| |
Nine Months Ended |
|
|
|
|
| |
September 30, |
|
|
| |
2023 |
|
2022 |
|
Increase |
|
Leased merchandise |
$ |
452,792 |
|
$ |
371,935 |
|
|
22 |
% |
|
| Finance receivables |
|
303,485 |
|
|
239,618 |
|
|
27 |
% |
|
|
Total gross transaction volume |
$ |
756,277 |
|
$ |
611,553 |
|
|
24 |
% |
|
|
|
Retail POS Payment Solutions Earning
Assets (dollars in thousands)
| |
|
|
|
|
|
|
|
Adjusted (2) |
| |
|
|
|
|
|
As of |
|
|
|
| |
|
|
|
|
|
September 30, |
|
|
| |
As of September 30, |
|
|
|
|
2022 |
|
|
Increase |
| |
|
2023 |
|
|
|
2022 |
|
|
Increase |
|
(Non-GAAP) |
|
(Non-GAAP) |
| Leased merchandise, net: |
|
|
|
|
|
|
|
|
|
|
|
|
Leased merchandise, before allowance for lease losses |
$ |
250,298 |
|
|
$ |
210,703 |
|
|
|
19 |
% |
|
$ |
217,412 |
|
|
|
15 |
% |
|
Less allowance for lease losses |
|
(105,472 |
) |
|
|
(78,020 |
) |
|
|
35 |
% |
|
|
(85,630 |
) |
|
|
23 |
% |
|
Leased merchandise, net (1) |
$ |
144,826 |
|
|
$ |
132,683 |
|
|
|
9 |
% |
|
$ |
131,782 |
|
|
|
10 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Finance receivables, net: |
|
|
|
|
|
|
|
|
|
|
|
|
Finance receivables, before allowance for loan losses |
$ |
209,991 |
|
|
$ |
190,358 |
|
|
|
10 |
% |
|
$ |
182,500 |
|
|
|
15 |
% |
|
Less allowance for loan losses |
|
(96,684 |
) |
|
|
(78,413 |
) |
|
|
23 |
% |
|
|
(78,413 |
) |
|
|
23 |
% |
|
Finance receivables, net |
$ |
113,307 |
|
|
$ |
111,945 |
|
|
|
1 |
% |
|
$ |
104,087 |
|
|
|
9 |
% |
|
(1) |
Includes $1.7 million and $0.6 million of intersegment transactions
as of September 30, 2023 and 2022, respectively, related to
the Company offering AFF’s LTO payment solution as a payment option
in its U.S. pawn stores that are eliminated upon consolidation.
Excluding the intersegment transactions, consolidated net leased
merchandise as of September 30, 2023 and 2022 totaled $143.2
million and $132.1 million, respectively. |
|
|
|
| (2) |
As a result of purchase
accounting, AFF’s September 30, 2022 as reported earning
assets contain significant fair value adjustments, which were fully
amortized during 2022. The adjusted amounts as of
September 30, 2022 exclude these fair value purchase
accounting adjustments. |
| |
|
|
FIRSTCASH HOLDINGS, INC. |
|
OPERATING INFORMATION (CONTINUED) |
|
(UNAUDITED) |
| |
Allowance for Lease and Loan Losses and
Other Portfolio Metrics (dollars in thousands)
| |
| |
|
|
|
|
|
|
|
Adjusted (5) |
|
|
|
| |
|
|
|
|
|
|
|
Three Months |
|
|
|
| |
|
|
|
|
|
Ended |
|
|
|
| |
Three Months Ended |
|
|
|
|
September 30, |
|
|
| |
September 30, |
|
|
|
|
2022 |
|
|
Increase |
| |
|
2023 |
|
|
|
2022 |
|
|
Increase |
|
(Non-GAAP) |
|
(Non-GAAP) |
| Allowance for lease
losses: |
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning of period |
$ |
110,964 |
|
|
$ |
69,101 |
|
|
|
61 |
% |
|
$ |
86,014 |
|
|
|
29 |
% |
|
Provision for lease losses (1) |
|
39,640 |
|
|
|
32,350 |
|
|
|
23 |
% |
|
|
32,350 |
|
|
|
23 |
% |
|
Charge-offs |
|
(46,794 |
) |
|
|
(24,551 |
) |
|
|
91 |
% |
|
|
(33,854 |
) |
|
|
38 |
% |
|
Recoveries |
|
1,662 |
|
|
|
1,120 |
|
|
|
48 |
% |
|
|
1,120 |
|
|
|
48 |
% |
|
Balance at end of period |
$ |
105,472 |
|
|
$ |
78,020 |
|
|
|
35 |
% |
|
$ |
85,630 |
|
|
|
23 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Leased merchandise portfolio
metrics: |
|
|
|
|
|
|
|
|
|
|
|
|
Provision expense as percentage of originations (2) |
27 |
% |
|
|
|
|
|
24 |
% |
|
|
|
|
Average monthly net charge-off rate (3) |
5.9 |
% |
|
|
|
|
|
5.2 |
% |
|
|
|
|
Delinquency rate (4) |
21.1 |
% |
|
|
|
|
|
18.9 |
% |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Allowance for loan
losses: |
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning of period |
$ |
93,054 |
|
|
$ |
73,936 |
|
|
|
26 |
% |
|
|
|
|
|
|
Provision for loan losses |
|
33,096 |
|
|
|
31,956 |
|
|
|
4 |
% |
|
|
|
|
|
|
Charge-offs |
|
(30,890 |
) |
|
|
(28,642 |
) |
|
|
8 |
% |
|
|
|
|
|
|
Recoveries |
|
1,424 |
|
|
|
1,163 |
|
|
|
22 |
% |
|
|
|
|
|
|
Balance at end of period |
$ |
96,684 |
|
|
$ |
78,413 |
|
|
|
23 |
% |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Finance receivables portfolio
metrics: |
|
|
|
|
|
|
|
|
|
|
|
|
Provision expense as a percentage of originations (2) |
32 |
% |
|
38 |
% |
|
|
|
|
|
|
|
|
|
Average monthly net charge-off rate (3) |
4.7 |
% |
|
5.0 |
% |
|
|
|
|
|
|
|
|
|
Delinquency rate (4) |
19.4 |
% |
|
19.2 |
% |
|
|
|
|
|
|
|
|
|
(1) |
Includes $0.1 million of provision reduction and $0.4 million of
provision increase from intersegment transactions for the three
months ended September 30, 2023 and 2022, respectively,
related to the Company offering AFF’s LTO payment solution as a
payment option in its U.S. pawn stores that are eliminated upon
consolidation. Excluding the intersegment transactions, the
provision for lease losses for the three months ended
September 30, 2023 and 2022 totaled $39.7 million and $31.9
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 (adjusted to
exclude any fair value purchase accounting adjustments, as
applicable). |
| |
|
| (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). |
| |
|
| (5) |
As a result of purchase
accounting, AFF’s as reported allowance for lease losses for the
three months ended September 30, 2022 contains significant
fair value adjustments. The adjusted amounts for the three months
ended September 30, 2022 exclude these fair value purchase
accounting adjustments. As a result of the significance of these
accounting adjustments, the Company does not believe that the
unadjusted leased merchandise portfolio metrics for the three
months ended September 30, 2022 provide a useful comparison
against the September 30, 2023 amounts. |
| |
|
|
FIRSTCASH HOLDINGS, INC. |
|
OPERATING INFORMATION (CONTINUED) |
|
(UNAUDITED) |
| |
| |
|
|
|
|
|
|
|
Adjusted (5) |
|
|
|
| |
|
|
|
|
|
|
|
Nine Months |
|
|
|
| |
|
|
|
|
|
Ended |
|
|
|
| |
Nine Months Ended |
|
|
|
|
September 30, |
|
|
| |
September 30, |
|
Increase / |
|
|
2022 |
|
|
Increase |
| |
|
2023 |
|
|
|
2022 |
|
|
(Decrease) |
|
(Non-GAAP) |
|
(Non-GAAP) |
| Allowance for lease
losses: |
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning of period |
$ |
79,576 |
|
|
$ |
5,442 |
|
|
|
1,362 |
% |
|
$ |
66,968 |
|
|
|
19 |
% |
|
Provision for lease losses (1) |
|
141,854 |
|
|
|
110,205 |
|
|
|
29 |
% |
|
|
110,205 |
|
|
|
29 |
% |
|
Charge-offs |
|
(120,966 |
) |
|
|
(40,872 |
) |
|
|
196 |
% |
|
|
(94,788 |
) |
|
|
28 |
% |
|
Recoveries |
|
5,008 |
|
|
|
3,245 |
|
|
|
54 |
% |
|
|
3,245 |
|
|
|
54 |
% |
|
Balance at end of period |
$ |
105,472 |
|
|
$ |
78,020 |
|
|
|
35 |
% |
|
$ |
85,630 |
|
|
|
23 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Leased merchandise portfolio
metrics: |
|
|
|
|
|
|
|
|
|
|
|
|
Provision expense as percentage of originations (2) |
31 |
% |
|
|
|
|
|
30 |
% |
|
|
|
|
Average monthly net charge-off rate (3) |
5.3 |
% |
|
|
|
|
|
4.8 |
% |
|
|
|
|
Delinquency rate (4) |
21.1 |
% |
|
|
|
|
|
18.9 |
% |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Allowance for loan
losses: |
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning of period |
$ |
84,833 |
|
|
$ |
75,574 |
|
|
|
12 |
% |
|
|
|
|
|
|
Provision for loan losses |
|
90,571 |
|
|
|
83,453 |
|
|
|
9 |
% |
|
|
|
|
|
|
Charge-offs |
|
(83,281 |
) |
|
|
(84,629 |
) |
|
|
(2 |
)% |
|
|
|
|
|
|
Recoveries |
|
4,561 |
|
|
|
4,015 |
|
|
|
14 |
% |
|
|
|
|
|
|
Balance at end of period |
$ |
96,684 |
|
|
$ |
78,413 |
|
|
|
23 |
% |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Finance receivables portfolio
metrics: |
|
|
|
|
|
|
|
|
|
|
|
|
Provision expense as a percentage of originations (2) |
30 |
% |
|
35 |
% |
|
|
|
|
|
|
|
|
|
Average monthly net charge-off rate (3) |
4.4 |
% |
|
4.5 |
% |
|
|
|
|
|
|
|
|
|
Delinquency rate (4) |
19.4 |
% |
|
19.2 |
% |
|
|
|
|
|
|
|
|
|
(1) |
Includes $0.2 million and $0.4 million of provision increase from
intersegment transactions for the nine months ended
September 30, 2023 and 2022, respectively, related to the
Company offering AFF’s LTO payment solution as a payment option in
its U.S. pawn stores that are eliminated upon consolidation.
Excluding the intersegment transactions, the provision for lease
losses for the nine months ended September 30, 2023 and 2022
totaled $141.7 million and $109.8 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 (adjusted to
exclude any fair value purchase accounting adjustments, as
applicable). |
| |
|
| (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). |
| |
|
| (5) |
As a result of purchase
accounting, AFF’s as reported allowance for lease losses for the
nine months ended September 30, 2022 contains significant fair
value adjustments. The adjusted amounts for the nine months ended
September 30, 2022 exclude these fair value purchase
accounting adjustments. As a result of the significance of these
accounting adjustments, the Company does not believe that the
unadjusted leased merchandise portfolio metrics for the nine months
ended September 30, 2022 provide a useful comparison against
the September 30, 2023 amounts. |
| |
|
|
FIRSTCASH HOLDINGS, INC. |
|
PAWN STORE LOCATIONS AND MERCHANT PARTNER
LOCATIONS |
|
|
Pawn Operations
As of September 30, 2023, the Company
operated 2,988 pawn store locations comprised of 1,181 stores in 29
U.S. states and the District of Columbia, 1,715 stores in 32 states
in Mexico, 64 stores in Guatemala, 14 stores in Colombia and 14
stores in El Salvador.
The following tables detail pawn store count
activity for the three and nine months ended September 30,
2023:
| |
| |
|
Three Months Ended September 30, 2023 |
| |
|
U.S. |
|
Latin America |
|
Total |
|
Total locations, beginning of period |
|
1,101 |
|
|
1,788 |
|
|
2,889 |
|
|
New locations opened (1) |
|
3 |
|
|
22 |
|
|
25 |
|
|
Locations acquired |
|
79 |
|
|
— |
|
|
79 |
|
|
Consolidation of existing pawn locations (2) |
|
(2 |
) |
|
(3 |
) |
|
(5 |
) |
|
Total locations, end of period |
|
1,181 |
|
|
1,807 |
|
|
2,988 |
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
Nine Months Ended September 30, 2023 |
| |
|
U.S. |
|
Latin America |
|
Total |
| Total locations, beginning of
period |
|
1,101 |
|
|
1,771 |
|
|
2,872 |
|
|
New locations opened (1) |
|
5 |
|
|
52 |
|
|
57 |
|
|
Locations acquired |
|
83 |
|
|
— |
|
|
83 |
|
|
Consolidation of existing pawn locations (2) |
|
(8 |
) |
|
(16 |
) |
|
(24 |
) |
|
Total locations, end of period |
|
1,181 |
|
|
1,807 |
|
|
2,988 |
|
|
(1) |
In
addition to new store openings, the Company strategically relocated
one store in the U.S. during the three months ended
September 30, 2023. During the nine months ended
September 30, 2023, the Company strategically relocated three
stores in the U.S. and two stores in Latin America. |
| |
|
| (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. |
| |
|
POS Payment Solutions
As of September 30, 2023, AFF provided LTO
and retail POS payment solutions for consumer goods and services
through a network of approximately 10,800 active retail merchant
partner locations located in all 50 U.S. states, the District of
Columbia and Puerto Rico.
|
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 retail POS payment solutions segment metrics 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,
including the Company’s transaction expenses incurred in connection
with its acquisition of AFF and the impacts of purchase accounting
with respect to the AFF acquisition, 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.
In conjunction with the Cash America merger in
2016, the Company recorded certain lease intangibles related to
above- or below-market lease liabilities of Cash America, which are
included in the operating lease right of use asset on the
consolidated balance sheets. As the Company continues to
opportunistically purchase real estate from landlords at certain
Cash America stores, the associated lease intangible, if any, is
written off and gain or loss is recognized. The Company has
adjusted the applicable financial measures to exclude these gains
or losses given the variability in size and timing of these
transactions and because they are non-cash, non-operating gains or
losses. The Company believes this improves comparability of
operating results for current periods presented with prior
periods.
|
|
|
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 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 table provides 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):
| |
| |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
| |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| |
In Thousands |
|
Per Share |
|
In Thousands |
|
Per Share |
|
In Thousands |
|
Per Share |
|
In Thousands |
|
Per Share |
|
Net income and diluted earnings per share, as reported |
$ |
57,144 |
|
|
$ |
1.26 |
|
|
$ |
59,316 |
|
|
$ |
1.26 |
|
|
$ |
149,712 |
|
|
$ |
3.27 |
|
|
$ |
173,429 |
|
|
$ |
3.64 |
|
| Adjustments, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger and acquisition expenses |
|
2,605 |
|
|
|
0.06 |
|
|
|
564 |
|
|
|
0.01 |
|
|
|
2,818 |
|
|
|
0.06 |
|
|
|
1,317 |
|
|
|
0.03 |
|
|
Non-cash foreign currency loss (gain) related to lease
liability |
|
442 |
|
|
|
0.01 |
|
|
|
251 |
|
|
|
0.01 |
|
|
|
(1,171 |
) |
|
|
(0.03 |
) |
|
|
(245 |
) |
|
|
(0.01 |
) |
|
AFF purchase accounting adjustments (1) |
|
10,880 |
|
|
|
0.24 |
|
|
|
17,036 |
|
|
|
0.36 |
|
|
|
32,869 |
|
|
|
0.72 |
|
|
|
64,772 |
|
|
|
1.36 |
|
|
Gain on revaluation of contingent acquisition consideration |
|
— |
|
|
|
— |
|
|
|
(16,229 |
) |
|
|
(0.34 |
) |
|
|
— |
|
|
|
— |
|
|
|
(68,083 |
) |
|
|
(1.43 |
) |
|
Other expenses (income), net |
|
(296 |
) |
|
|
(0.01 |
) |
|
|
126 |
|
|
|
— |
|
|
|
(200 |
) |
|
|
— |
|
|
|
(2,095 |
) |
|
|
(0.04 |
) |
| Adjusted net income and
diluted earnings per share |
$ |
70,775 |
|
|
$ |
1.56 |
|
|
$ |
61,064 |
|
|
$ |
1.30 |
|
|
$ |
184,028 |
|
|
$ |
4.02 |
|
|
$ |
169,095 |
|
|
$ |
3.55 |
|
| (1) |
See detail of
the AFF purchase accounting adjustments in tables below. |
| |
|
|
FIRSTCASH HOLDINGS, INC. |
|
RECONCILIATIONS OF NON-GAAP FINANCIAL
MEASURES |
| TO
GAAP FINANCIAL MEASURES (CONTINUED) |
|
(UNAUDITED) |
|
|
The following tables provide a reconciliation of
the gross amounts, the impact of income taxes and the net amounts
for the adjustments included in the table above (in thousands):
| |
| |
Three Months Ended September 30, |
| |
|
2023 |
|
|
|
2022 |
|
| |
Pre-tax |
|
Tax |
|
After-tax |
|
Pre-tax |
|
Tax |
|
After-tax |
|
Merger and acquisition expenses |
$ |
3,387 |
|
|
$ |
782 |
|
|
$ |
2,605 |
|
|
$ |
733 |
|
|
$ |
169 |
|
|
$ |
564 |
|
| Non-cash foreign currency loss
related to lease liability |
|
632 |
|
|
|
190 |
|
|
|
442 |
|
|
|
359 |
|
|
|
108 |
|
|
|
251 |
|
| AFF purchase accounting
adjustments (1) |
|
14,130 |
|
|
|
3,250 |
|
|
|
10,880 |
|
|
|
22,125 |
|
|
|
5,089 |
|
|
|
17,036 |
|
| Gain on revaluation of
contingent acquisition consideration |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(19,800 |
) |
|
|
(3,571 |
) |
|
|
(16,229 |
) |
| Other expenses (income),
net |
|
(384 |
) |
|
|
(88 |
) |
|
|
(296 |
) |
|
|
164 |
|
|
|
38 |
|
|
|
126 |
|
|
Total adjustments |
$ |
17,765 |
|
|
$ |
4,134 |
|
|
$ |
13,631 |
|
|
$ |
3,581 |
|
|
$ |
1,833 |
|
|
$ |
1,748 |
|
| |
Nine Months Ended September 30, |
| |
|
2023 |
|
|
|
2022 |
|
| |
Pre-tax |
|
Tax |
|
After-tax |
|
Pre-tax |
|
Tax |
|
After-tax |
|
Merger and acquisition expenses |
$ |
3,670 |
|
|
$ |
852 |
|
|
$ |
2,818 |
|
|
$ |
1,712 |
|
|
$ |
395 |
|
|
$ |
1,317 |
|
| Non-cash foreign currency gain
related to lease liability |
|
(1,673 |
) |
|
|
(502 |
) |
|
|
(1,171 |
) |
|
|
(350 |
) |
|
|
(105 |
) |
|
|
(245 |
) |
| AFF purchase accounting
adjustments (1) |
|
42,688 |
|
|
|
9,819 |
|
|
|
32,869 |
|
|
|
84,120 |
|
|
|
19,348 |
|
|
|
64,772 |
|
| Gain on revaluation of
contingent acquisition consideration |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(82,789 |
) |
|
|
(14,706 |
) |
|
|
(68,083 |
) |
| Other expenses (income),
net |
|
(260 |
) |
|
|
(60 |
) |
|
|
(200 |
) |
|
|
(2,721 |
) |
|
|
(626 |
) |
|
|
(2,095 |
) |
|
Total adjustments |
$ |
44,425 |
|
|
$ |
10,109 |
|
|
$ |
34,316 |
|
|
$ |
(28 |
) |
|
$ |
4,306 |
|
|
$ |
(4,334 |
) |
|
(1) |
The following table details AFF purchase accounting adjustments (in
thousands): |
| |
Three Months Ended September 30, |
| |
2023 |
|
2022 |
| |
Pre-tax |
|
Tax |
|
After-tax |
|
Pre-tax |
|
Tax |
|
After-tax |
|
Amortization of fair value adjustment on acquired finance
receivables |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
7,111 |
|
$ |
1,635 |
|
$ |
5,476 |
|
Amortization of fair value adjustment on acquired leased
merchandise |
|
— |
|
|
— |
|
|
— |
|
|
839 |
|
|
194 |
|
|
645 |
|
Amortization of acquired intangible assets |
|
14,130 |
|
|
3,250 |
|
|
10,880 |
|
|
14,175 |
|
|
3,260 |
|
|
10,915 |
|
Total AFF purchase accounting adjustments |
$ |
14,130 |
|
$ |
3,250 |
|
$ |
10,880 |
|
$ |
22,125 |
|
$ |
5,089 |
|
$ |
17,036 |
|
|
|
FIRSTCASH HOLDINGS, INC. |
|
RECONCILIATIONS OF NON-GAAP FINANCIAL
MEASURES |
|
TO GAAP FINANCIAL MEASURES (CONTINUED) |
|
(UNAUDITED) |
| |
| |
Nine Months Ended September 30, |
| |
2023 |
|
2022 |
| |
Pre-tax |
|
Tax |
|
After-tax |
|
Pre-tax |
|
Tax |
|
After-tax |
|
Amortization of fair value adjustment on acquired finance
receivables |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
34,798 |
|
$ |
8,004 |
|
$ |
26,794 |
|
Amortization of fair value adjustment on acquired leased
merchandise |
|
— |
|
|
— |
|
|
— |
|
|
6,796 |
|
|
1,564 |
|
|
5,232 |
|
Amortization of acquired intangible assets |
|
42,688 |
|
|
9,819 |
|
|
32,869 |
|
|
42,526 |
|
|
9,780 |
|
|
32,746 |
|
Total AFF purchase accounting adjustments |
$ |
42,688 |
|
$ |
9,819 |
|
$ |
32,869 |
|
$ |
84,120 |
|
$ |
19,348 |
|
$ |
64,772 |
|
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 |
|
Nine Months Ended |
|
Months Ended |
| |
|
September 30, |
|
September 30, |
|
September 30, |
| |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Net income |
|
$ |
57,144 |
|
|
$ |
59,316 |
|
|
$ |
149,712 |
|
|
$ |
173,429 |
|
|
$ |
229,778 |
|
|
$ |
202,800 |
|
|
Provision for income taxes |
|
|
20,480 |
|
|
|
16,079 |
|
|
|
51,649 |
|
|
|
48,598 |
|
|
|
73,189 |
|
|
|
56,357 |
|
|
Depreciation and amortization |
|
|
27,365 |
|
|
|
25,971 |
|
|
|
81,526 |
|
|
|
77,495 |
|
|
|
107,863 |
|
|
|
90,670 |
|
|
Interest expense |
|
|
24,689 |
|
|
|
18,282 |
|
|
|
66,657 |
|
|
|
50,749 |
|
|
|
86,616 |
|
|
|
60,746 |
|
|
Interest income |
|
|
(328 |
) |
|
|
(206 |
) |
|
|
(1,253 |
) |
|
|
(1,104 |
) |
|
|
(1,462 |
) |
|
|
(1,380 |
) |
| EBITDA |
|
|
129,350 |
|
|
|
119,442 |
|
|
|
348,291 |
|
|
|
349,167 |
|
|
|
495,984 |
|
|
|
409,193 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger and acquisition expenses |
|
|
3,387 |
|
|
|
733 |
|
|
|
3,670 |
|
|
|
1,712 |
|
|
|
5,697 |
|
|
|
15,897 |
|
|
Non-cash foreign currency loss (gain) related to lease
liability |
|
|
632 |
|
|
|
359 |
|
|
|
(1,673 |
) |
|
|
(350 |
) |
|
|
(2,652 |
) |
|
|
(72 |
) |
|
AFF purchase accounting adjustments (1) |
|
|
— |
|
|
|
7,950 |
|
|
|
— |
|
|
|
41,594 |
|
|
|
8,760 |
|
|
|
87,956 |
|
|
Gain on revaluation of contingent acquisition consideration |
|
|
— |
|
|
|
(19,800 |
) |
|
|
— |
|
|
|
(82,789 |
) |
|
|
(26,760 |
) |
|
|
(100,660 |
) |
|
Other expenses (income), net |
|
|
(384 |
) |
|
|
164 |
|
|
|
(260 |
) |
|
|
(2,721 |
) |
|
|
(270 |
) |
|
|
(3,412 |
) |
| Adjusted EBITDA |
|
$ |
132,985 |
|
|
$ |
108,848 |
|
|
$ |
350,028 |
|
|
$ |
306,613 |
|
|
$ |
480,759 |
|
|
$ |
408,902 |
|
|
(1) |
Excludes $14 million, $43 million and $57 million of amortization
expense related to identifiable intangible assets as a result of
the AFF acquisition for the three months, nine months and trailing
twelve months ended September 30, 2023, respectively, which is
included in the add back of depreciation and amortization to net
income used to calculate EBITDA. Excludes $14 million, $43 million
and $45 million of amortization expense related to identifiable
intangible assets as a result of the AFF acquisition for the three
months, nine months and trailing twelve months ended
September 30, 2022, respectively, which is included in the add
back of depreciation and amortization to net income used to
calculate EBITDA. |
| |
|
|
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 |
|
Nine Months Ended |
|
Months Ended |
| |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Cash flow from operating
activities |
|
$ |
111,368 |
|
|
$ |
99,031 |
|
|
$ |
317,037 |
|
|
$ |
325,798 |
|
|
$ |
460,544 |
|
|
$ |
411,252 |
|
| Cash flow from certain
investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pawn loans, net (1) |
|
|
(59,614 |
) |
|
|
(42,442 |
) |
|
|
(59,426 |
) |
|
|
(74,707 |
) |
|
|
(20,536 |
) |
|
|
(77,410 |
) |
|
Finance receivables, net |
|
|
(30,869 |
) |
|
|
(26,088 |
) |
|
|
(87,994 |
) |
|
|
(49,634 |
) |
|
|
(123,713 |
) |
|
|
(55,478 |
) |
|
Purchases of furniture, fixtures, equipment and improvements |
|
|
(18,375 |
) |
|
|
(9,944 |
) |
|
|
(46,723 |
) |
|
|
(29,630 |
) |
|
|
(52,679 |
) |
|
|
(40,044 |
) |
|
Free cash flow |
|
|
2,510 |
|
|
|
20,557 |
|
|
|
122,894 |
|
|
|
171,827 |
|
|
|
263,616 |
|
|
|
238,320 |
|
|
Merger and acquisition expenses paid, net of tax benefit |
|
|
2,605 |
|
|
|
564 |
|
|
|
2,818 |
|
|
|
1,317 |
|
|
|
4,379 |
|
|
|
12,239 |
|
| Adjusted free cash flow |
|
$ |
5,115 |
|
|
$ |
21,121 |
|
|
$ |
125,712 |
|
|
$ |
173,144 |
|
|
$ |
267,995 |
|
|
$ |
250,559 |
|
|
(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. |
| |
|
|
FIRSTCASH HOLDINGS, INC. |
|
RECONCILIATIONS OF NON-GAAP FINANCIAL
MEASURES |
| TO
GAAP FINANCIAL MEASURES (CONTINUED) |
|
(UNAUDITED) |
|
|
Retail POS Payment Solutions Segment
Purchase Accounting Adjustments
Management believes the presentation of certain
retail POS payment solutions segment metrics, adjusted to exclude
the impacts of purchase accounting, provides investors with greater
transparency and provides a more complete understanding of AFF’s
financial performance and prospects for the future by excluding the
impacts of purchase accounting, which management believes is
non-operating in nature and not representative of AFF’s core
operating performance. See the retail POS payment solutions segment
tables elsewhere in this release for additional reconciliation of
certain amounts adjusted to exclude the impacts of purchase
accounting to as reported GAAP amounts.
Additionally, the following table provides
reconciliations of total revenue and total net revenue, presented
in accordance with GAAP, to adjusted total revenue and adjusted net
revenue, which excludes the impacts of purchase accounting (in
thousands):
| |
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30, |
|
September 30, |
| |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Total revenue, as reported |
$ |
786,301 |
|
$ |
672,143 |
|
$ |
2,299,662 |
|
$ |
1,979,598 |
| AFF purchase accounting
adjustments (1) |
|
— |
|
|
7,111 |
|
|
— |
|
|
34,798 |
|
Adjusted total revenue |
$ |
786,301 |
|
$ |
679,254 |
|
$ |
2,299,662 |
|
$ |
2,014,396 |
| |
|
|
|
|
|
|
|
| Total net revenue, as
reported |
$ |
388,647 |
|
$ |
323,292 |
|
$ |
1,089,590 |
|
$ |
915,451 |
| AFF purchase accounting
adjustments (1) |
|
— |
|
|
7,950 |
|
|
— |
|
|
41,594 |
|
Adjusted total net revenue |
$ |
388,647 |
|
$ |
331,242 |
|
$ |
1,089,590 |
|
$ |
957,045 |
|
(1) |
As
a result of purchase accounting, AFF’s as reported amounts for the
three and nine months ended September 30, 2022 contain
significant fair value adjustments. The adjusted amounts for the
three and nine months ended September 30, 2022 exclude these
fair value purchase accounting adjustments. |
|
|
|
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.
|
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
| |
| |
September 30, |
|
Favorable / |
| |
2023 |
|
2022 |
|
(Unfavorable) |
| Mexican peso / U.S. dollar
exchange rate: |
|
|
|
|
|
|
|
End-of-period |
17.6 |
|
20.3 |
|
|
13 |
% |
|
Three months ended |
17.1 |
|
20.2 |
|
|
15 |
% |
|
Nine months ended |
17.8 |
|
20.3 |
|
|
12 |
% |
| |
|
|
|
|
|
|
| Guatemalan quetzal / U.S.
dollar exchange rate: |
|
|
|
|
|
|
|
End-of-period |
7.9 |
|
7.9 |
|
|
— |
% |
|
Three months ended |
7.9 |
|
7.8 |
|
|
(1 |
)% |
|
Nine months ended |
7.8 |
|
7.7 |
|
|
(1 |
)% |
| |
|
|
|
|
|
|
| Colombian peso / U.S. dollar
exchange rate: |
|
|
|
|
|
|
|
End-of-period |
4,054 |
|
4,532 |
|
|
11 |
% |
|
Three months ended |
4,048 |
|
4,375 |
|
|
7 |
% |
|
Nine months ended |
4,413 |
|
4,068 |
|
|
(8 |
)% |
|
|
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 |
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