ARLINGTON, Texas, July 19 /PRNewswire-FirstCall/ -- First Cash Financial Services, Inc. today announced revenues, net income and earnings per share for the three months ended June 30, 2005. In addition to reporting record-setting operating results, this marked the Company's 18th consecutive quarter of achieving double-digit earnings per share growth. The Company also announced that it is increasing its Fiscal 2005 earnings estimate.
* Second quarter 2005 diluted earnings per share were $0.32, an increase
of 28% compared to $0.25 diluted earnings per share for the second
quarter of 2004.
* For the six months ended June 30, 2005, diluted earnings per share
were $0.68, an increase of 24% over $0.55 earnings per share for the
same period in 2004.
* Net income for the second quarter of 2005 was $5.2 million. This
represents a 23% increase over 2004 second quarter net income of
* Year-to-date net income was $11.3 million, compared to $9.4 million
for the first half of 2004, which represents a 20% increase.
* Diluted earnings per share from continuing operations for the trailing
twelve months ended June 30, 2005 were $1.35, an increase of 24% over
$1.09 for the trailing twelve months ended June 30, 2004.
* Total revenues for the second quarter of 2005 were $46.3 million, an
increase of 15% compared to $40.3 million for the second quarter of
2004. Year-to-date revenues were $93.3 million, up from $82.2 million
in the comparative period last year, which represents a 14% increase.
* Merchandise sales for the quarter increased by 21%, from $18.6 million
last year to $22.5 million in the current year. A significant
component of merchandise sales is non-retail sales of scrap jewelry,
especially in the Company's newer pawn stores. Such scrap sales
increased from $3.0 million in the second quarter of 2004 to
$4.0 million the second quarter of 2005.
* Same-store revenues for the second quarter of 2005 increased by 9%
over the comparable prior-year period. For the six months ended
June 30, 2005, same-store revenues increased by 7% compared to the
same period last year. Same-store sales increases, which include
merchandise sales, pawn service charges and payday advance service
charges, were realized across all major product lines.
Growth & Expansion
* The Company opened 25 new stores during the first half of 2005,
bringing the total store count to 307 units at June 30, 2005. In
addition, the Company operates 40 financial services kiosks located
inside convenience stores.
* Total pawn receivables increased 17% from $23.1 million at
June 30, 2004, to $26.9 million at June 30, 2005. Pawn receivables in
the Company's Mexico stores increased by 37% over the past twelve
months, while pawn receivables in its U.S. stores increased by 9% over
the same period.
* Payday advance receivables increased from $13.1 million at
June 30, 2004 to $14.1 million at June 30, 2005, an increase of 8%.
* The operating margin, calculated as income before taxes as a
percentage of revenues, was 17.8% for the quarter, compared to 16.8%
for the same period last year.
* Return on stockholders' equity for the trailing twelve months ended
June 30, 2005, was 15.8%, compared to 14.8% for the comparable period
* Inventory turns for the trailing twelve months improved from 2.9 times
at the end of the second quarter of 2004 to 3.3 times as of
June 30, 2005.
* The payday advance loss provision decreased from 23.9% of payday
advance service fees in the second quarter of 2004 to 22.8% in the
second quarter of 2005.
* Gross profit margins on total merchandise sales, both retail and non-
retail, for the second quarter of 2005 were 41%, compared to 43% in
the prior year. Retail merchandise margins, which do not include bulk
jewelry scrap sales, were 45% for the second quarter of 2005, compared
to 46% for the same quarter last year.
Financial Position & Liquidity
* Cash balances as of June 30, 2005, totaled $19 million, of which
$12 million was required for daily store and administrative
operations; the remaining $7 million represented excess cash reserves
* During the second quarter of 2005, the Company repurchased 576,000
shares of common stock at an average price of $19.74 per share. An
additional 401,000 shares are authorized under a 1.6 million share
stock repurchase plan as directed by the Board of Directors in
* For the six months ended June 30, 2005, the Company had no interest-
bearing debt outstanding. All store opening expenditures and
receivables growth have been funded from free cash flows. In
addition, the Company has utilized free cash flows to repurchase stock
at a cost of $24 million over the past twelve months.
* With total assets of $161 million and total liabilities of $16 million
as of June 30, 2005, the ratio of total assets to liabilities was
10 to 1. The current ratio, current assets divided by current
liabilities, at quarter end was also 10 to 1.
* The Company previously forecast fiscal 2005 diluted earnings per share
to be in a range of $1.46 to $1.52. Based on first-half results and
projected operating trends for the remainder of the year, the Company
has revised its 2005 earnings estimate upward to $1.49 to $1.53 per
* With 25 new stores opened through June 30, the Company remains on pace
to meet its previously announced target of approximately 60 new stores
during 2005. Costs associated with these new store openings are
treated as an operating expense during the quarter they are incurred.
Commentary & Analysis
Mr. Alan Barron, Chief Executive Officer and Chief Operating Officer, commented on the second quarter highlights, "We have many reasons to be pleased with the second quarter and are excited about the prospect for continued record revenue and profit growth for the balance of the year. Our operating results for the quarter were strong due to high quality results in all key geographic markets, with all major product lines delivering increased profitability. During the quarter, we continued to add new stores and reached a significant milestone with the opening of our 300th store. In addition, we recently announced a new credit services product in our Texas markets, which we believe will generate incremental revenues and profitability in those markets."
The Company's most significant growth engine continues to be its pawn operations. At June 30, 2005, pawn receivables totaled $26.9 million, which represents 66% of the Company's combined consumer finance receivables. Pawn service charge revenues for the second quarter of 2005 grew by 19%, while pawn-related merchandise sales improved by 21% over the same period compared to the prior year. First Cash has opened a total of 115 new pawn stores over the past three and a half years, which has resulted in almost a doubling of the number of pawn stores over that time period.
As previously announced, effective July 1 First Cash began marketing a fee-based credit services package in all of its Texas locations, which includes access to a short-term loan funded by an independent consumer finance lender operating under existing Texas laws. First Cash Credit, Ltd. ("FCC"), a wholly owned subsidiary of the Company, has registered as a "Credit Services Organization" in order to provide, for a fee, credit services to help consumers in obtaining credit and improving their credit rating. As part of these services, FCC will assist customers in applying for loans from an independent, Texas-based consumer lending company. First Cash anticipates that its Texas-based subsidiaries will continue to offer pawn loans and bank- funded payday advances, as well as the new credit services product. By offering consumers access to credit from multiple lending sources, the Company believes it can better serve its customers' needs, while at the same time increasing the Company's transaction and revenue volume per store. The Company currently has 58 First Cash Pawn stores, 51 First Cash Advance stores and 40 Cash & Go, Ltd. kiosks located in Texas.
First Cash also continues to provide its payday advance product in six other markets, including California, Washington, Oregon, Illinois, District of Columbia and Oklahoma. In each of these jurisdictions, the Company is the direct issuer of payday or short-term advances under existing state and/or local regulations.