SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996]
For the fiscal year ended December 31, 2003
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ____________ to ____________
Commission file number: 0-19133
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
FIRST CASH 401(k) PROFIT SHARING PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
FIRST CASH FINANCIAL SERVICES, INC.
690 East Lamar, Suite 400
Arlington, Texas 76011
FIRST CASH 401(k) PROFIT SHARING PLAN
INDEX
Page
----
Independent Auditor's Report...................................... 1
Financial Statements:
Statements of Net Assets Available for Benefits ................. 2
Statement of Changes in Net Assets Available for Benefits ....... 3
Notes to Financial Statements ................................... 4
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)... S-1
INDEPENDENT AUDITOR'S REPORT
To the Administrative Committee
First Cash 401(k) Profit Sharing Plan
Arlington, Texas
We have audited the accompanying statements of net assets available for
benefits of First Cash 401(k) Profit Sharing Plan as of December 31, 2003
and 2002, the related statement of changes in net assets available for
benefits for the year ended December 31, 2003 and the supplemental schedule.
These financial statements and schedule are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.
We conducted our audits in accordance with the generally accepted auditing
standards as established by the Auditing Standards Board (United States) and
in accordance with the auditing standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and schedule are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements and schedule. 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 our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and schedule referred to above
present fairly in all material respects, the net assets available for
benefits of First Cash 401(k) Profit Sharing Plan as of December 31, 2003
and 2002 and the changes in its net assets available for benefits for the
year ended December 31, 2003 in conformity with the accounting principles
generally accepted in the United States of America.
/S/ HEIN & ASSOCIATES LLP
Dallas, Texas
May 25, 2004
FIRST CASH 401(k) PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31,
-----------------------
2003 2002
---------- ----------
ASSETS:
Investments, at fair value:
Mutual funds $ 1,235,564 $ 749,416
Money market funds 1,127,517 419,769
First Cash Financial Services, Inc. common stock 2,533,275 1,378,766
Participant loans 324,358 188,426
---------- ----------
Total investments 5,220,714 2,736,377
---------- ----------
Contributions receivable:
Participant 57,324 50,497
Employer 16,196 14,664
---------- ----------
Total contributions receivable 73,520 65,161
Cash - 810
Other 2,572 2,543
---------- ----------
Total assets 5,296,806 2,804,891
LIABILITIES:
Refundable contributions 33,207 28,907
---------- ----------
Net assets available for benefits $ 5,263,599 $ 2,775,984
========== ==========
See accompanying notes to these financial statements.
FIRST CASH 401(k) PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2003
ADDITIONS TO NET ASSETS ATTRIBUTABLE TO:
Investment income:
Net appreciation in fair value of investments $ 1,948,480
Interest and dividends 56,170
----------
Net investment income 2,004,650
Contributions:
Employer 213,777
Participant, including rollovers 720,172
Other 2,636
----------
936,585
----------
Total additions 2,941,235
DEDUCTIONS FROM NET ASSETS ATTRIBUTABLE TO:
Benefits paid directly to participants 419,563
Loans paid off as part of a distribution 30,524
Other 3,533
----------
Total deductions 453,620
----------
INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS 2,487,615
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 2,775,984
----------
End of year $ 5,263,599
==========
See accompanying notes to these financial statements.
FIRST CASH 401(k) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
1. DESCRIPTION OF PLAN
-------------------
The following description of the First Cash 401(k) Profit Sharing Plan
(the "Plan") provides only general information. For a more complete
description of the Plan's provisions, participants should refer to the
Plan agreement.
General
-------
The Plan is a salary deferral plan covering substantially all U.S.-based
employees of First Cash Financial Services, Inc. (the "Company" or the
"Employer") who have completed one year of service with the Company. The
Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
Contributions
-------------
Each year, participants may contribute to the Plan an amount up to 15% of
their annual compensation. Each participant's annual contribution shall
not exceed the maximum amount allowed for deferral for U.S. federal
income taxes, which was $12,000 for 2003. The amount of a participant's
annual compensation that may be taken into account for purposes of
determining the Company's matching contribution for any purpose under the
Plan shall not exceed an amount prescribed annually by the IRS. The
Company contributes to the Plan a matching amount equal to 50% of the
first 3% of the participant's annual compensation that is contributed to
the Plan. In addition, a special discretionary contribution as determined
by the Company may be contributed, pro rata, based upon each participating
employee's compensation to the total compensation of all participating
employees. No such contribution was made for 2003.
If a participant makes a contribution during any year in an amount which
exceeds the maximum amount allowed under IRS rules pertaining to highly
compensated employees, the contribution is refunded and the matching
Company contribution on such additional participant contribution may be
forfeited by the participant and applied to reduce the employer's
matching contribution to the Plan for the following year. Management
believes that the Plan is in compliance with the funding requirements of
ERISA.
Participant Accounts
--------------------
Each participant's account is credited with the participant's
contribution, allocations of the Company's matching contributions and
Profit Sharing contributions, if applicable. Forfeitures of the non-
vested portion of terminated participants' accounts may be applied first
to payment of plan administrative expenses and any remaining forfeitures
will be allocated to the remaining Plan participants. The various
participant allocations are based on a percentage of the participant's
elective deferral or compensation in relation to total compensation of
participants, as defined in the Plan agreement.
Vesting
-------
Participants are immediately vested in their contributions (including
rollovers) plus actual earnings thereon. Vesting in the remainder of
their accounts is generally based on years of continuous service with the
Company. Effective January 1, 2001, the Plan was amended and defined a
year of service for vesting purposes to be a twelve consecutive month
period ending on each anniversary of a participant's date of hire. A
participant is 100% vested after six years of credited service. A
participant is also 100% vested upon reaching retirement age or if
employment is terminated by reason of total and permanent disability or
death.
Investment Options
------------------
Upon enrollment into the Plan, a participant may direct his or her
employee contributions in any increment to the Company's common stock or
any of the mutual fund investment options offered by Frontier Trust
Company, the custodian of the Plan. Participants may change the
allocation of their existing funds and future contributions at any time.
Employer contributions are invested in the same percentages as the
employee contributions for 2003 and 2002.
Payment of Benefits
-------------------
Participants whose employment terminates for any reason (except death)
are generally entitled to receive the vested portion of their account in
the form of a lump sum or installment distribution payable in cash or
property. Certain participants may be eligible to receive benefits in
the form of annuity payments. Amounts allocated to withdrawing
participants at December 31, 2003 were immaterial.
Participant Loans
-----------------
A participant may apply to the plan administrator for a loan under the
Plan. All loans made by the trustees shall be subject to the terms
and conditions set forth in the Plan Document and Trust Agreement.
Participants may borrow up to one-half of the participant's vested
account balance or $50,000, whichever is less. The loans will bear a
reasonable rate of interest based upon prevailing commercial rates for
loans of similar types. Repayments of the loan balance, plus interest,
are made bi-weekly through after-tax payroll deductions, not to exceed
five years, unless the loan was obtained to acquire a home, then over a
reasonable period of time as determined by the trustee. A participant
may have up to two loans outstanding at any one time. Participant loans
are collateralized by the respective participant accounts.
Forfeitures
-----------
Participants who terminate employment prior to being fully vested in
Company matching contributions forfeit non-vested amounts. At December
31, 2003, there were approximately $49,000 of forfeited non-vested
accounts. Forfeitures of Company matching contributions are used to
reduce future Company contributions to the Plan. In 2003, Company
matching contributions were reduced by approximately $31,000 from
forfeited, non-vested accounts. Forfeitures of discretionary Company
contributions are reallocated among all remaining participants.
Administrative Fees
-------------------
The Company has paid, at its discretion, the administrative expenses of
the Plan. Administrative expenses incurred in 2003 were approximately
$38,000.
Tax Status
----------
The Internal Revenue Service ("IRS") has determined and informed the
Company by a letter dated February 13, 1997, that the Plan is designed in
accordance with applicable sections of the Internal Revenue Code.
2. SUMMARY OF ACCOUNTING POLICIES
------------------------------
Basis of Accounting
-------------------
The financial statements and supplemental schedules are prepared on an
accrual basis of accounting.
Valuation of Investments
------------------------
Shares of registered investment companies are valued at quoted market
prices which represent the net asset value of shares held by the Plan at
year-end. Equity securities are valued at fair value using quoted market
prices. Participant loans and investments in money market funds are
stated at cost, which approximates fair value. Reinvested income,
accrued interest and dividends are reflected as additions to the cost
basis of the investments. Investment transactions are recorded on a
trade-date basis.
Payment of Benefits
-------------------
Benefits are recorded when paid. Benefits due to participants who have
elected to withdraw from the Plan but have not been paid, are included in
net assets available for benefits. Amounts allocated to withdrawing
participants at December 31, 2003 were immaterial.
Use of Estimates
----------------
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America as applied
to defined contribution employee benefit plans requires the Plan's
management to make estimates and assumptions that affect the amounts
reported in these financial statements and accompanying notes. Actual
results could differ from those estimates.
3. INVESTMENTS
-----------
Investments, at fair value, consisted of the following as of December 31:
2003 2002
---------- ----------
Mutual Funds:
Merrill Lynch Fundamental Growth Fund Class B (a) $ 267,041 $ 172,691
Merrill Lynch Basic Value Fund Class B 242,420 167,444
Merrill Lynch Global Allocation Fund Class B (a) 304,775 152,336
Merrill Lynch FD Core Bond Class B 192,075 116,591
MFS Massachusetts Investors Trust Class B 86,760 70,590
Davis New York Venture Fund Class B 142,493 69,764
---------- ----------
1,235,564 749,416
Money Market Fund:
Merrill Lynch Retirement Preservation Trust (a) 1,127,517 419,769
First Cash Financial Services, Inc. common stock (a) 2,533,275 1,378,766
Participant loans (a) 324,358 188,426
---------- ----------
$ 5,220,714 $ 2,736,377
========== ==========
(a) Represents 5% or more of the Plan's net assets.
During 2003, the Plan's investments (including gains and losses on
investments, bought and sold, as well as held during the year)
appreciated in value by $1,948,480 as follows:
Mutual Funds $ 232,817
First Cash Financial Services, Inc. common stock 1,715,663
----------
$ 1,948,480
==========
4. PLAN TERMINATION
----------------
Although it has not expressed any intent to do so, the Company has the
right under the Plan agreement to terminate the Plan subject to the
provisions of ERISA. In the event of Plan termination, participants
become 100% vested in their accounts.
FIRST CASH 401(k) PROFIT SHARING PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
EIN: 75-2237318 Plan Number: 001
DECEMBER 31, 2003
(a) (b) (c) (d) (e)
DESCRIPTION OF INVESTMENT
INCLUDING MATURITY DATE,
IDENTITY OF ISSUER, RATE OF INTEREST,
BORROWER, LESSOR OR COLLATERAL PAR OR CURRENT
SIMILAR PARTY MATURITY VALUE COST VALUE
-------------------- ---------------------------- ---- ----------
Mutual Funds:
Merrill Lynch Fundamental Growth Fund ** $ 267,041
Merrill Lynch Basic Value Fund ** 242,420
Merrill Lynch Global Allocation Fund ** 304,775
Merrill Lynch FD Core Bond Portfolio ** 192,075
MFS Massachusetts Investors Trust ** 86,760
Davis New York Venture Fund ** 142,493
Money Market Fund:
Merrill Lynch Retirement Preservation Trust ** 1,127,517
* First Cash Financial
Services, Inc. Common stock ** 2,533,275
* Loans to participants 5.5% - 9.5% interest and
varying maturities 324,358
----------
Total investments $ 5,220,714
==========
(a) This column will have an asterisk on each line which is identified as
a party-in-interest to the Plan. Frontier Trust Company acted as the
Plan's custodian through December 31, 2003.
(d) This column will have two asterisks on each line to indicate historical
cost information omitted as permitted for participant directed
transactions under an individual account plan.
See Independent Auditor's Report.
FIRST CASH 401(k) PROFIT SHARING PLAN
REQUIRED INFORMATION
ITEM 1 Not Applicable.
ITEM 2 Not Applicable.
ITEM 3 Not Applicable.
ITEM 4 Financial Statements and Exhibits
(a) Financial Statements
Financial statements and supplemental schedule prepared in accordance
with the financial reporting requirements of ERISA filed hereunder
are listed on page 2 hereof in the Table of Contents, in lieu of the
requirements of Items 1 to 3 above.
(b) Exhibits:
23 Consent of Independent Auditors
32.1 Certification of Plan Administrator
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan Administrative Committee that administers the Plan has duly caused
this Annual Report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: June 25, 2004
FIRST CASH 401(k) PROFIT SHARING PLAN
By: /s/ Rick Wessel
------------------
Plan Administrator
EXHIBIT 23
Consent of Hein & Associates LLP, Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 333-106881) pertaining to the First Cash 401(k) Profit Sharing
Plan of our report dated May 25, 2004, with respect to the financial
statements and schedule of the First Cash 401(k) Profit Sharing Plan
included in this Annual Report (Form 11-K) for the year ended December 31,
2003.
/s/ Hein & Associates LLP
Dallas, Texas
June 25, 2004
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
FIRST CASH 401(k) PROFIT SHARING PLAN
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of the First Cash 401(k) Profit Sharing
Plan (the "Plan") on Form 11-K for the year ended December 31, 2003, as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, Rick Wessel, Plan Administrator of the Plan, certify, pursuant
to 18 U.S.C. S 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002, that to the best of my knowledge:
A. The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
B. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Plan
as of and for the period covered by the Report.
/s/ Rick Wessel
------------------
Plan Administrator
June 25, 2004