SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8
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Amendment to Application or Report
filed Pursuant to Section 12, 13 or 15(d) of
the Securities Exchange Act of 1934
First Cash, Inc.
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(Exact name of registrant as specified in charter)
Amendment No. 1
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The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report filed June 24, 1998
on Form 8-K as set forth in the pages attached hereto:
Current Report on Form 8-K is refiled in its entirety.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: September 22, 1998 FIRST CASH, INC.
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(Registrant)
Rick L. Wessel
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Rick L. Wessel
Chief Accounting Officer
FIRST CASH, INC.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
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Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): June 4, 1998
First Cash, Inc.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
0-19133 75-2237318
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(Commission File Number) (IRS Employer Identification No.)
690 East Lamar, Suite 400, Arlington, Texas 76011
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(Address of principal executive offices, including zip code)
(817)460-3947
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(Registrant's telephone number, including area code)
Item 1 Changes in Control of Registrant
- -----------------------------------------
Inapplicable
Item 2 Acquisition or Disposition of Assets
- ---------------------------------------------
On June 4, 1998, First Cash, Inc. acquired 100% of the capital stock of
Miraglia, Inc., located in Concord, California. Miraglia, Inc. owns eleven
check cashing stores, which do business under the name Cash & Go, in California
and Washington. Miraglia, Inc. also provides proprietary software and operating
systems for check cashing stores, under the name Answers, etc. Miraglia, Inc.
is a non-affiliate of First Cash, Inc. The consideration for the capital stock
of Miraglia, Inc. consisted of 850,000 shares of First Cash, Inc. common stock,
$6.3 million cash, and a five year, $6.0 million note bearing interest at 7%
with quarterly principal and interest payments. The cash used in this
acquisition represented proceeds from an existing line of credit.
Item 3 Bankruptcy or Receivership
- -----------------------------------
Inapplicable
Item 4 Changes in Registrant's Certifying Accountant
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Inapplicable
Item 5 Other Events
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Inapplicable
Item 6 Resignation of Registrant's Directors
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Inapplicable
Item 7 Financial Statements and Exhibits
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(a) Financial statements of business acquired
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Audited Financial Statements of the material acquisition included
herein as Exhibit (1) as required by Regulation S-X, Rule 3-05(b).
(b) Pro forma financial information
-------------------------------
Unaudited pro forma financial information related to the
acquisition listed in Exhibit (1), as required by Regulation S-X,
Article 11, are included on pages 5 to 7 of this Form 8-K.
(c) Exhibits
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(1) Audited Financial Statements of Miraglia, Inc. for the ten
months ended May 31, 1998.
Item 8 Change in Fiscal Year
- ------------------------------
Inapplicable
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: September 22, 1998 FIRST CASH, INC.
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(Registrant)
Rick L. Wessel
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Rick L. Wessel
Chief Accounting Officer
FIRST CASH, INC.
CONSOLIDATED BALANCE SHEET
JULY 31, 1998(a)
(in thousands)
July 31,
1998
ASSETS ----
Cash and cash equivalents.............................. $ 1,582
Service charges receivable............................. 2,436
Loans.................................................. 17,054
Inventories............................................ 13,254
Income taxes receivable................................ 1,517
Prepaid expenses and other current assets.............. 1,268
--------
Total current assets.............................. 37,111
Property and equipment, net............................ 7,890
Intangible assets, net................................. 45,873
Other.................................................. 300
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$ 91,174
========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt and notes payable.... $ 1,587
Accounts payable and accrued expenses.................. 3,283
Income taxes payable................................... 317
--------
Total current liabilities......................... 5,187
Revolving credit facility.............................. 25,450
Long-term debt and notes payable, net of
current portion....................................... 6,367
Deferred income taxes.................................. 2,653
--------
39,657
--------
Stockholders' equity:
Preferred stock; $.01 par value; 10,000,000 shares
authorized; no shares issued or outstanding...... -
Common stock; $.01 par value; 20,000,000 shares
authorized; 8,334,305 shares issued; 7,863,346
shares outstanding............................... 83
Additional paid-in capital......................... 42,412
Retained earnings.................................. 11,287
Common shares held in treasury, at cost,
470,959 shares................................... (2,265)
--------
51,517
--------
$ 91,174
========
FIRST CASH, INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED JULY 31, 1998 (a)
(in thousands, except per share amounts)
(unaudited)
Pro Forma
First ---------------
Cash, Miraglia, Adjus-
Inc. Inc. ment Total
----- --------- ------ -----
Revenues:
Merchandise sales................ $ 37,998 $ 1,903 $ 39,901
Service charges.................. 20,332 2,527 22,859
Check cashing fees............... 255 928 1,183
Other............................ 419 522 941
-------- -------- --------
59,004 5,880 64,884
-------- -------- --------
Cost of goods sold and expenses:
Cost of goods sold............... 25,463 1,129 26,592
Operating expenses............... 19,608 3,775 23,383
Interest expense................. 2,031 49 $ 715 (b) 2,795
Depreciation..................... 922 125 - 1,047
Amortization..................... 783 22 410 (c) 1,215
Administrative expenses.......... 4,134 138 (175)(d) 4,097
-------- -------- ----- --------
52,941 5,238 950 59,129
-------- -------- ----- --------
Income before income taxes............ 6,063 642 (950) 5,755
Provision for income taxes............ 2,265 - (115)(e) 2,150
-------- -------- ----- --------
Net income............................ $ 3,798 $ 642 $(835) $ 3,605
======== ======== ===== ========
Basic earnings per share.............. $ .74 $ .62
Diluted earnings per share............ $ .59 $ .51
(a) The consolidated balance sheet as of July 31, 1998 represents the actual
balances for First Cash, Inc., which includes all July 31, 1998 balance sheet
accounts relating to the purchase of Miraglia, Inc. The pro forma consolidated
statement of income includes the combination of the First Cash, Inc. historical
statement of income for the year ending July 31, 1998 (which includes income
from operations of Miraglia, Inc. from June 4, 1998, the date of acquisition,
through July 31, 1998) and the historical statement of income of Miraglia, Inc.
for the ten months ended May 31, 1998, which represents the results of
operations of Miraglia, Inc. from August 1, 1997 to the date of acquisition.
The acquisition has been accounted for under the purchase method of accounting.
Accordingly, the results of operations of Miraglia, Inc. subsequent to the date
of acquisition has been included in the results of operations of First Cash,
Inc.
The pro forma financial information does not purport to represent what First
Cash, Inc.'s results of operations would have been had the acquisition occurred
as of August 1, 1997, or to project First Cash, Inc.'s results of operations
or financial position for any future period or date, nor does it give
effect to any matters other than those described in the notes hereto.
(b) The acquisition pro forma adjustment to interest expense reflects the
additional amounts that would have been incurred in connection with the
acquisition, if the acquisition had occurred on August 1, 1997.
(c) The acquisition pro forma adjustment to amortization expense relates to the
additional amortization of goodwill resulting from the acquisition, as if such
acquisition was completed as of August 1, 1997.
(d) The acquisition pro forma adjustment to administrative expenses reflects a
reduction to the historical amounts paid for employee compensation by Miraglia,
Inc., and related payroll taxes, related to consolidating certain employment
positions between First Cash, Inc. and Miraglia, Inc.
(e) The acquisition pro forma adjustments to the provision for income taxes
represent those amounts needed to reflect what First Cash, Inc.'s effective tax
rate would have been if the acquisition occurred as of August 1, 1997.
EXHIBIT 1
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
Miraglia, Inc.
We have audited the accompanying balance sheet of Miraglia, Inc. (the
"Company") as of May 31, 1998 and the related statements of income and retained
earnings, and cash flows for the ten months then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provided a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Miraglia, Inc. as of May 31,
1998 and the results of its operations and cash flows for the ten months then
ended in conformity with generally accepted accounting principles.
/s/ TOLLEFSON & CLANCEY
- -----------------------
Tollefson & Clancey
Certified Public Accountants
San Leandro, California
September 17, 1998
MIRAGLIA, INC.
BALANCE SHEET
MAY 31, 1998
(amounts in thousands)
----------------------
ASSETS
Cash........................................ $ 1,491
Loans....................................... 1,116
Trade accounts receivable................... 218
Inventories................................. 97
Other....................................... 5
--------
Total current assets..................... 2,927
Property and equipment, net................. 300
Intangible assets, net...................... 520
Other....................................... 34
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$ 3,781
========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses....... $ 1,178
Notes payable............................... 939
--------
Total liabilities........................ 2,117
--------
Stockholders' equity
Common stock; no par value; 1,100,000
shares authorized; 1,074,703 shares
issued and outstanding................. 161
Retained earnings........................... 1,503
--------
1,664
--------
$ 3,781
========
The accompanying notes are an
integral part of these financial statements
MIRAGLIA, INC.
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE TEN MONTHS ENDED MAY 31, 1998
(amounts in thousands)
------------------------------------------
Revenues:
Sales............................ $ 1,903
Service charges.................. 2,527
Check cashing fees............... 928
Other............................ 522
--------
5,880
--------
Cost of goods sold and expenses:
Cost of goods sold............... 1,129
Operating expenses............... 3,775
Interest expense................. 49
Depreciation..................... 125
Amortization..................... 22
Administrative expenses.......... 138
--------
5,238
--------
Net income before income taxes......... 642
Retained earnings at the beginning
of the period........................ 861
--------
Retained earnings at the end of the
period............................... $ 1,503
========
The accompanying notes are an
integral part of these financial statements.
MIRAGLIA, INC.
STATEMENT OF CASH FLOWS
FOR THE TEN MONTHS ENDED MAY 31, 1998
(amounts in thousands)
-------------------------------------
Cash flows from operating activities:
Net income....................................... $ 642
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization.................... 147
(Increase) decrease in:
Trade accounts receivable........................ 157
Inventories...................................... (32)
Other............................................ (30)
Increase (decrease) in:
Accounts payable and accrued expenses............ 941
--------
Net cash flows provided by operating activities....... 1,825
--------
Cash flows from investing activities:
Net increase in loans............................ (548)
Purchases of property and equipment.............. (94)
Purchases of existing stores..................... (554)
--------
Net cash flows used for investing activities.......... (1,196)
--------
Cash flows from for financing activities:
Proceeds from debt............................... 573
Shareholder distributions........................ (647)
--------
Net cash flows used for financing activities.......... (74)
--------
Increase in cash...................................... 555
Cash at beginning of the period....................... 936
--------
Cash at end of the period............................. $ 1,491
========
The accompanying notes are an
integral part of these financial statements.
MIRAGLIA, INC.
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1 - ORGANIZATION AND NATURE OF THE COMPANY
- -----------------------------------------------
Miraglia, Inc. ("the Company") was organized June 29, 1995, and is a Subchapter
S Corporation for income tax purposes. The Company is engaged in operating a
chain of eleven check cashing outlets in California and Washington which do
business under the name Cash & Go. These outlets provide a wide range of
financial services including check cashing, money order sales, wire transfers
and short term lending. The Company also owns Answers, etc., which is a
provider of computer operating systems to other third-party check cashing
businesses.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
The following is a summary of significant accounting policies followed in the
preparation of these financial statements.
Principles of consolidation - The accompanying consolidated financial statements
of the Company include the accounts of Miraglia, Inc., Vanraglia I, Inc.,
Vanraglia II, Inc., Vanraglia III, Inc. and Vanraglia IV, Inc. All significant
intercompany accounts and transactions have been eliminated.
Loans and income recognition - Consumer loans ("loans") are generally made for
periods ranging from one to fourteen days. Service charges relating to such
loans are recognized as service charge income when the loan is made. Bad debts
relating to such loans are recognized as bad debt expense in the period these
items are returned by the bank, and subsequent collections of bad debts are
credited to the same expense account in the period of recovery. Revenue
associated with the sale of computer systems is recognized when installation of
such systems is substantially completed.
Inventories - Inventories represent computer equipment held by Answers, etc.
awaiting setup and installation under existing sales contracts to third parties.
The cost of inventory is determined based upon specific identification, and is
stated at the lower of cost or market.
Property and equipment - Property and equipment are recorded at cost.
Depreciation is calculated based upon accelerated methods using estimated useful
lives of five to thirty-nine years. Maintenance and repairs are charged to
expense as incurred; renewals and betterments are charged to the appropriate
property and equipment accounts. Upon sale or retirement of depreciable assets,
the cost and related accumulated depreciation is removed from the accounts, and
the resulting gain or loss is included in the results of operations in the
period retired.
Intangible assets - Intangible assets consist of the excess of purchase price
over net assets acquired and non-compete agreements. Excess purchase price over
net assets acquired is being amortized on a straight-line basis over an
estimated useful life of forty years, and payments relative to non-compete
agreements are amortized over their estimated useful lives.
Returned checks - The Company charges operations for losses on returned checks
in the period such checks are returned, since ultimate collection of these items
is uncertain. Recoveries on returned checks are credited in the period when the
recovery is received.
Operating expenses - Direct costs incurred in operating the stores and the
software company have been classified as operating expenses. Operating expenses
include salaries, rent and other occupancy costs, bank charges, security costs,
net returned checks and other costs.
Income taxes - No provision for income taxes is made in the accompanying
financial statements of the Company because it is not subject to income tax due
to the fact that the Company is a subchapter S corporation for federal income
tax purposes. The taxable income or loss and other tax attributes of the
Company's activities flow through to the shareholders and are reportable in
their respective tax returns.
Long lived assets - Long-lived assets (i.e., property, plant and equipment and
intangible assets) are reviewed for impairment whenever events or changes in
circumstances indicate that the net book value of the asset may not be
recoverable. An impairment loss would be recognized if the sum of the expected
future cash flows (undiscounted and before interest) from the use of the asset
is less than the net book value of the asset. Generally, the amount of the
impairment loss is measured as the difference between the net book value of the
assets and the estimated fair value of the related assets.
Fair value of financial instruments - The fair value of financial instruments is
determined by reference to various market data and other valuation techniques,
as appropriate. Unless otherwise disclosed, the fair values of financial
instruments approximate their recorded values, due primarily to their short-term
nature.
Advertising - The Company expenses the costs of advertising the first time the
advertising takes place.
Pervasiveness of estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities, and related revenues and expenses and disclosure of gain and loss
contingencies at the date of the financial statements. Such estimates and
assumptions are subject to a number of risks and uncertainties which may cause
actual results to differ materially from the Company's estimates.
NOTE 3 - BUSINESS ACQUISITIONS
- ------------------------------
During the ten months ended May 31, 1998 the Company acquired three individual
check cashing stores in Northern California for an aggregate purchase price of
$300,000. These acquisitions were financed primarily with cash generated
through operations of the Company.
NOTE 4 - PROPERTY AND EQUIPMENT
- -------------------------------
Property and equipment consist of the following as of May 31, 1998 (amounts in
thousands):
Furniture, fixtures and equipment.......... $ 424
Leasehold improvements..................... 139
--------
563
Less: accumulated depreciation............ (263)
--------
$ 300
========
NOTE 5 - NOTES PAYABLE
- ----------------------
Notes payable at May 31, 1998 consist of the following (amounts in thousands):
Demand note payable to a corporation; unsecured;
bearing interest at prime plus 1%; interest
and principal due on demand, or at maturity
no later than January 31, 2001................. $ 400
Demand note payable to a corporation; unsecured;
bearing interest at 9.5%; interest payable
monthly, with principal due upon demand........ 375
Demand note payable to an individual; unsecured;
bearing no interest............................ 42
Demand note payable to an individual; unsecured;
bearing no interest............................ 67
Demand note payable to an individual; unsecured;
bearing no interest............................ 55
--------
$ 939
========
NOTE 6 - COMMITMENTS
- --------------------
The Company leases certain of its facilities under operating leases with terms
ranging from three to ten years. Some facility leases contain renewal options,
the exercise of which is dependent on the level of business conducted at the
facility. Remaining future minimum rentals due under non-cancelable leases are
as follows (amounts in thousands):
Year ending May 31,
-------------------
1999...................... $ 428
2000...................... 417
2001...................... 369
2002...................... 311
2003...................... 228
Thereafter................ 753
--------
$ 2,506
========
NOTE 7 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES
- ----------------------------------------------
Accounts payable and accrued expenses consist of the following at May 31, 1998
(in thousands):
Accounts payable................ $ 448
Money orders payable............ 567
Wire transfers payable.......... 163
--------
$ 1,178
========
NOTE 8 - RELATED PARTIES
- ------------------------
The Company leases space for its corporate office and for one of its stores in
buildings partially owned by Blake Miraglia, president of Miraglia, Inc. In
addition, the Company has, from time to time, borrowed funds from its
shareholders. Such shareholder loans are included in notes payable as of May
31, 1998.
NOTE 9 - SUBSEQUENT EVENT
- -------------------------
On June 4, 1998, First Cash, Inc., a Delaware corporation which maintains its
headquarters in Arlington, Texas, acquired 100% of the outstanding capital stock
of the Company in exchange for 850,000 shares of First Cash, Inc. common stock,
$6,300,000 cash, and a $6,000,000 note payable bearing interest at 7%.
Subsequent to this acquisition, the Company became a wholly owned subsidiary of
First Cash, Inc. First Cash, Inc. acquired all assets of the Company and
assumed all outstanding liabilities. The Company's majority shareholder, Blake
Miraglia, subsequently entered into an employment agreement with First Cash,
Inc.
