First Cash Financial Services Reports Significant Increases in First Quarter Earnings

Apr 24, 2001, 01:00 ET from First Cash Financial Services, Inc.

    ARLINGTON, Texas, April 24 /PRNewswire Interactive News Release/ --
 First Cash Financial Services, Inc. (Nasdaq:   FCFS) today announced revenues,
 net income and earnings per share for the three months ended March 31, 2001.
 
      Highlights
 
     --  First quarter 2001 diluted earnings per share increased 71% to
         $0.29, before a one-time charge of $0.05 per share for potential
         settlement of a lawsuit, which may or may not be covered by
         insurance, compared to $0.17 diluted earnings per share, before a
         cumulative effect of a change in accounting charge, for the first
         quarter of 2000.
     --  First Cash's net earnings before income taxes, interest, depreciation
         and amortization ("EBITDA") were $1.79 per share for the trailing
         twelve months ended March 31, 2001 and $0.55 per share during the
         first quarter of 2001.
     --  First Cash's diluted earnings per share for the trailing twelve
         months ended March 31, 2001 were $0.62.
     --  Net income increased 35% to $2,126,000 for the three months ended
         March 31, 2001, compared with $1,579,000 for the three months ended
         March 31, 2000.
     --  First quarter revenues rose 4% to approximately $28.7 million for the
         three months ended March 31, 2001, compared with revenues of
         $27.6 million in the first quarter of 2000.
     --  The Company's retail margins increased from 33% during the first
         quarter of 2000 to 35% during the first quarter of 2001.  Scrap
         jewelry sales increased from $892,000 to $1,480,000 during these same
         two comparative periods.  Excluding jewelry scrap sales, the
         Company's margins increased from 36% in 2000 to 41% in 2001.  The
         Company reduced its inventory balances over $3 million during the
         first three months of 2001.
     --  Reflecting strong cash flows during the first quarter of 2001, the
         Company retired over $9 million of interest bearing debt during the
         first quarter of 2001.  The Company has reduced the outstanding
         balance on its line-of-credit $17 million in the past 15 months, from
         $47 million on December 31, 1999 to $30 million on March 31, 2001.
     --  During the first quarter of 2001, the Company repurchased
         129,340 shares of its common stock at an average price per share of
         $3.87.
     --  Under a new agreement consummated during the first quarter of 2001,
         and beginning May 1, 2001, the Company will become a loan servicer
         for County Bank, Rehoboth Beach, Delaware.  County Bank, a state
         chartered bank, will replace the Company's relationship with WebBank
         of Utah and offer short-term loans to the Company's customers.
     --  The volume of short-term loans originated in the Company's pawnshops
         continues to grow rapidly and is a significant driving force behind
         the Company's strong first quarter 2001 earnings.
     --  The Company's joint venture, Cash & Go, Ltd., continues to add check
         cashing and payday advance kiosks inside existing convenience stores.
         The Company's joint venture currently has 40 such kiosks in
         operation, with approximately 15 to 20 additional units anticipated
         at the current rate to be opened during the remainder of 2001.
     --  The Company has begun opening "First Cash Advance" stores in free
         standing buildings and strip centers offering check cashing and
         service short-term loans for customers of WebBank and now County
         Bank.
     --  The Company continues to realize financial benefits from the recent
         reductions in interest rates.  Its $50 million line-of-credit bears
         interest at LIBOR plus 1%, with current LIBOR rates at approximately
         4.5%.
 
     Rick Powell, Chairman and Chief Executive Officer of First Cash Financial
 Services commented, "The first quarter of 2001 was one of the best quarters in
 the history of the Company, reflecting the cumulative impact of a number of
 key strategic initiatives implemented over the past 18 months; a focus on
 company-wide efficiencies and cost reductions, diversification of product
 lines in existing and free standing store units, and improved utilization of
 cash.  Based upon our recent operating results, we have great expectations for
 the remainder of 2001 and believe that 2001 will be an exceptional year in
 terms of both operating results and earnings per share.  We expect loan growth
 to continue to improve into 2001, while recent decreases in interest rates
 will further reduce the Company's cost of funds."
     The Company's pawn operations continue to generate positive operating
 income.  The favorable change in the operating results of the pawn division is
 due primarily to the introduction of payday advances and other new products,
 and implementation of cost efficiencies throughout the Company's store system.
 The daily volume of such payday advances is higher than management originally
 projected, which continues to validate the 1998 decision to enter the payday
 advance and check cashing industry as a very positive strategic move.  Not
 only have the Company's free standing payday advance locations in all markets
 continued to generate profits that exceed management's projections, and which
 are above results of the prior year, the Company now generates significant
 operating profits from its payday advance products offered in its pawnshops.
 Further growth and improvement is anticipated.
     The Company's joint venture check cashing and payday advance kiosks
 located inside convenience stores continue to grow, with 40 locations now in
 operation in Circle K stores in Corpus Christi and South Texas.  The operating
 results of this joint venture during the past year exceeded management's
 expectations for its first full year of operation and are now consistently
 reporting monthly operating profits.  Management believes these convenience
 store kiosks will be another key component to future growth and profitability
 of the Company.
 
     Closing Statement
     In closing, Mr. Powell stated, "Our recent focus has been on
 diversification of the product lines in our stores to enhance their earnings
 potential and reduce vulnerability to general economic conditions and other
 factors.  Additionally, we have implemented stringent cost efficiencies in all
 our divisions to further enhance earnings, focused on improving our use of
 cash to minimize our cost of capital and improve our return on investment.
 The excellent results this quarter reflect the benefits of these efforts."
 
     Business Description
     First Cash Financial Services, Inc. is engaged in the operation of pawn
 stores which lend money on the collateral of pledged personal property, and
 which retail previously-owned merchandise acquired through loan forfeitures.
 The Company also operates check cashing stores, provides software to
 third-party operators in the check cashing industry, and owns "firstcash.com",
 a website offering for sale previously owned jewelry, electronics and other
 products.  The Company currently owns 145 pawn and check cashing stores in
 11 states and Mexico.  First Cash Financial Services is also an equal partner
 in Cash & Go, Ltd., a joint venture, which currently owns and operates
 40 financial services kiosks located inside convenience stores.  First Cash
 manages the operations of this joint venture.  Its common stock is traded on
 the Nasdaq Stock Market under the ticker symbol "FCFS".
 
     Forward-Looking Statements
     This release may contain forward-looking statements about the business,
 financial condition and prospects of First Cash Financial Services, Inc.
 Forward-looking statements can be identified by the use of forward-looking
 terminology such as "believes," "expects," "may," "estimates," "will,"
 "should," "plans," "intends," or "anticipates" or the negative thereof, or
 other variations thereon, or comparable terminology, or by discussions of
 strategy.  These statements are made to provide the public with management's
 assessment of the Company's business.  Although the Company believes that the
 expectations reflected in forward-looking statements are reasonable, there can
 be no assurances that such expectations will prove to be accurate.  Security
 holders are cautioned that such forward-looking statements involve risks and
 uncertainties.  The forward-looking statements contained in this report speak
 only as of the date of this report, and the Company expressly disclaims any
 obligation or undertaking to release any updates or revisions to any such
 statement to reflect any change in the Company's expectations or any change in
 events, conditions or circumstance on which any such statement is based.
 Certain factors may cause results to differ materially from those anticipated
 by some of the statements made in this report.  Such factors are difficult to
 predict and many are beyond the control of the Company.
 
                         SELECTED OPERATING INFORMATION
 
                                                          Quarter Ended
                                                     March 31,      March 31,
                                                       2001           2000
     Revenues:                                 (in thousands, except per share)
      Merchandise sales                               $14,817        $15,275
      Service charges                                  12,699         11,059
      Check cashing fees                                  625            608
      Other                                               562            623
                                                       28,703         27,565
     Cost of goods sold                                 9,561         10,299
     Operating expenses                                11,529         11,340
     Interest expense                                     489            763
     Depreciation                                         584            512
     Amortization                                         382            379
     Administrative expenses                            2,836          1,745
                                                       25,381         25,038
     Income before income taxes                         3,322          2,527
     Provision for income taxes                         1,196            948
     Income before cumulative effect of change
      in accounting principle                           2,126          1,579
     Cumulative effect on prior years of change in
      accounting principle (A)                            ---         (2,287)
     Net income                                        $2,126          $(708)
 
     Net income per share:
      Basic
       Income before cumulative effect of
        change in accounting principle                  $0.24          $0.18
       Cumulative effect of change in
        accounting principle                              ---          (0.26)
       Net income                                       $0.24         $(0.08)
      Diluted
       Income before cumulative effect of
        change in accounting principle                  $0.24          $0.17
       Cumulative effect of change in
        accounting principle                              ---          (0.25)
       Net income                                       $0.24         $(0.08)
 
     (A)  The Company changed its method of accounting for pawn loans during
 the quarter ended March 31, 2000.  The Company now accrues pawn service charge
 revenue on a constant yield basis over the life of the loan for all pawn loans
 that the Company deems collection to be probable based on historical loan
 redemption statistics.  For loans not repaid, the cost of forfeited collateral
 (inventory) is the cash amount originally loaned.  The Company believes this
 change in accounting principle provides a better matching of revenues and
 expenses.  Prior to this change, the Company recognized service charge income
 on a constant yield basis over the initial loan period.  Service charges
 applicable to the extension periods or additional loan periods were not
 recognized as income until the loan was repaid or renewed.  If the loan was
 not repaid, the principal amount loaned plus accrued service charges became
 the carrying value of the forfeited collateral (inventory) recovered through
 sale.  The cumulative effect of the accounting change on periods prior to
 January 1, 2000 is included as a reduction to net income for the quarter ended
 March 31, 2000.  Operating results for the three months ended March 31, 2001
 and 2000 have been calculated using the new method of accounting.
 
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SOURCE First Cash Financial Services, Inc.
    ARLINGTON, Texas, April 24 /PRNewswire Interactive News Release/ --
 First Cash Financial Services, Inc. (Nasdaq:   FCFS) today announced revenues,
 net income and earnings per share for the three months ended March 31, 2001.
 
      Highlights
 
     --  First quarter 2001 diluted earnings per share increased 71% to
         $0.29, before a one-time charge of $0.05 per share for potential
         settlement of a lawsuit, which may or may not be covered by
         insurance, compared to $0.17 diluted earnings per share, before a
         cumulative effect of a change in accounting charge, for the first
         quarter of 2000.
     --  First Cash's net earnings before income taxes, interest, depreciation
         and amortization ("EBITDA") were $1.79 per share for the trailing
         twelve months ended March 31, 2001 and $0.55 per share during the
         first quarter of 2001.
     --  First Cash's diluted earnings per share for the trailing twelve
         months ended March 31, 2001 were $0.62.
     --  Net income increased 35% to $2,126,000 for the three months ended
         March 31, 2001, compared with $1,579,000 for the three months ended
         March 31, 2000.
     --  First quarter revenues rose 4% to approximately $28.7 million for the
         three months ended March 31, 2001, compared with revenues of
         $27.6 million in the first quarter of 2000.
     --  The Company's retail margins increased from 33% during the first
         quarter of 2000 to 35% during the first quarter of 2001.  Scrap
         jewelry sales increased from $892,000 to $1,480,000 during these same
         two comparative periods.  Excluding jewelry scrap sales, the
         Company's margins increased from 36% in 2000 to 41% in 2001.  The
         Company reduced its inventory balances over $3 million during the
         first three months of 2001.
     --  Reflecting strong cash flows during the first quarter of 2001, the
         Company retired over $9 million of interest bearing debt during the
         first quarter of 2001.  The Company has reduced the outstanding
         balance on its line-of-credit $17 million in the past 15 months, from
         $47 million on December 31, 1999 to $30 million on March 31, 2001.
     --  During the first quarter of 2001, the Company repurchased
         129,340 shares of its common stock at an average price per share of
         $3.87.
     --  Under a new agreement consummated during the first quarter of 2001,
         and beginning May 1, 2001, the Company will become a loan servicer
         for County Bank, Rehoboth Beach, Delaware.  County Bank, a state
         chartered bank, will replace the Company's relationship with WebBank
         of Utah and offer short-term loans to the Company's customers.
     --  The volume of short-term loans originated in the Company's pawnshops
         continues to grow rapidly and is a significant driving force behind
         the Company's strong first quarter 2001 earnings.
     --  The Company's joint venture, Cash & Go, Ltd., continues to add check
         cashing and payday advance kiosks inside existing convenience stores.
         The Company's joint venture currently has 40 such kiosks in
         operation, with approximately 15 to 20 additional units anticipated
         at the current rate to be opened during the remainder of 2001.
     --  The Company has begun opening "First Cash Advance" stores in free
         standing buildings and strip centers offering check cashing and
         service short-term loans for customers of WebBank and now County
         Bank.
     --  The Company continues to realize financial benefits from the recent
         reductions in interest rates.  Its $50 million line-of-credit bears
         interest at LIBOR plus 1%, with current LIBOR rates at approximately
         4.5%.
 
     Rick Powell, Chairman and Chief Executive Officer of First Cash Financial
 Services commented, "The first quarter of 2001 was one of the best quarters in
 the history of the Company, reflecting the cumulative impact of a number of
 key strategic initiatives implemented over the past 18 months; a focus on
 company-wide efficiencies and cost reductions, diversification of product
 lines in existing and free standing store units, and improved utilization of
 cash.  Based upon our recent operating results, we have great expectations for
 the remainder of 2001 and believe that 2001 will be an exceptional year in
 terms of both operating results and earnings per share.  We expect loan growth
 to continue to improve into 2001, while recent decreases in interest rates
 will further reduce the Company's cost of funds."
     The Company's pawn operations continue to generate positive operating
 income.  The favorable change in the operating results of the pawn division is
 due primarily to the introduction of payday advances and other new products,
 and implementation of cost efficiencies throughout the Company's store system.
 The daily volume of such payday advances is higher than management originally
 projected, which continues to validate the 1998 decision to enter the payday
 advance and check cashing industry as a very positive strategic move.  Not
 only have the Company's free standing payday advance locations in all markets
 continued to generate profits that exceed management's projections, and which
 are above results of the prior year, the Company now generates significant
 operating profits from its payday advance products offered in its pawnshops.
 Further growth and improvement is anticipated.
     The Company's joint venture check cashing and payday advance kiosks
 located inside convenience stores continue to grow, with 40 locations now in
 operation in Circle K stores in Corpus Christi and South Texas.  The operating
 results of this joint venture during the past year exceeded management's
 expectations for its first full year of operation and are now consistently
 reporting monthly operating profits.  Management believes these convenience
 store kiosks will be another key component to future growth and profitability
 of the Company.
 
     Closing Statement
     In closing, Mr. Powell stated, "Our recent focus has been on
 diversification of the product lines in our stores to enhance their earnings
 potential and reduce vulnerability to general economic conditions and other
 factors.  Additionally, we have implemented stringent cost efficiencies in all
 our divisions to further enhance earnings, focused on improving our use of
 cash to minimize our cost of capital and improve our return on investment.
 The excellent results this quarter reflect the benefits of these efforts."
 
     Business Description
     First Cash Financial Services, Inc. is engaged in the operation of pawn
 stores which lend money on the collateral of pledged personal property, and
 which retail previously-owned merchandise acquired through loan forfeitures.
 The Company also operates check cashing stores, provides software to
 third-party operators in the check cashing industry, and owns "firstcash.com",
 a website offering for sale previously owned jewelry, electronics and other
 products.  The Company currently owns 145 pawn and check cashing stores in
 11 states and Mexico.  First Cash Financial Services is also an equal partner
 in Cash & Go, Ltd., a joint venture, which currently owns and operates
 40 financial services kiosks located inside convenience stores.  First Cash
 manages the operations of this joint venture.  Its common stock is traded on
 the Nasdaq Stock Market under the ticker symbol "FCFS".
 
     Forward-Looking Statements
     This release may contain forward-looking statements about the business,
 financial condition and prospects of First Cash Financial Services, Inc.
 Forward-looking statements can be identified by the use of forward-looking
 terminology such as "believes," "expects," "may," "estimates," "will,"
 "should," "plans," "intends," or "anticipates" or the negative thereof, or
 other variations thereon, or comparable terminology, or by discussions of
 strategy.  These statements are made to provide the public with management's
 assessment of the Company's business.  Although the Company believes that the
 expectations reflected in forward-looking statements are reasonable, there can
 be no assurances that such expectations will prove to be accurate.  Security
 holders are cautioned that such forward-looking statements involve risks and
 uncertainties.  The forward-looking statements contained in this report speak
 only as of the date of this report, and the Company expressly disclaims any
 obligation or undertaking to release any updates or revisions to any such
 statement to reflect any change in the Company's expectations or any change in
 events, conditions or circumstance on which any such statement is based.
 Certain factors may cause results to differ materially from those anticipated
 by some of the statements made in this report.  Such factors are difficult to
 predict and many are beyond the control of the Company.
 
                         SELECTED OPERATING INFORMATION
 
                                                          Quarter Ended
                                                     March 31,      March 31,
                                                       2001           2000
     Revenues:                                 (in thousands, except per share)
      Merchandise sales                               $14,817        $15,275
      Service charges                                  12,699         11,059
      Check cashing fees                                  625            608
      Other                                               562            623
                                                       28,703         27,565
     Cost of goods sold                                 9,561         10,299
     Operating expenses                                11,529         11,340
     Interest expense                                     489            763
     Depreciation                                         584            512
     Amortization                                         382            379
     Administrative expenses                            2,836          1,745
                                                       25,381         25,038
     Income before income taxes                         3,322          2,527
     Provision for income taxes                         1,196            948
     Income before cumulative effect of change
      in accounting principle                           2,126          1,579
     Cumulative effect on prior years of change in
      accounting principle (A)                            ---         (2,287)
     Net income                                        $2,126          $(708)
 
     Net income per share:
      Basic
       Income before cumulative effect of
        change in accounting principle                  $0.24          $0.18
       Cumulative effect of change in
        accounting principle                              ---          (0.26)
       Net income                                       $0.24         $(0.08)
      Diluted
       Income before cumulative effect of
        change in accounting principle                  $0.24          $0.17
       Cumulative effect of change in
        accounting principle                              ---          (0.25)
       Net income                                       $0.24         $(0.08)
 
     (A)  The Company changed its method of accounting for pawn loans during
 the quarter ended March 31, 2000.  The Company now accrues pawn service charge
 revenue on a constant yield basis over the life of the loan for all pawn loans
 that the Company deems collection to be probable based on historical loan
 redemption statistics.  For loans not repaid, the cost of forfeited collateral
 (inventory) is the cash amount originally loaned.  The Company believes this
 change in accounting principle provides a better matching of revenues and
 expenses.  Prior to this change, the Company recognized service charge income
 on a constant yield basis over the initial loan period.  Service charges
 applicable to the extension periods or additional loan periods were not
 recognized as income until the loan was repaid or renewed.  If the loan was
 not repaid, the principal amount loaned plus accrued service charges became
 the carrying value of the forfeited collateral (inventory) recovered through
 sale.  The cumulative effect of the accounting change on periods prior to
 January 1, 2000 is included as a reduction to net income for the quarter ended
 March 31, 2000.  Operating results for the three months ended March 31, 2001
 and 2000 have been calculated using the new method of accounting.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X45986228
 
 SOURCE  First Cash Financial Services, Inc.