UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
Current
Report
Pursuant
to Section 13 or 15(d) of The Securities Exchange Act of 1934
September
5, 2006
(Date
of
Report - Date of Earliest Event Reported)
First
Cash Financial Services, Inc.
(Exact
name of registrant as specified in its charter)
Delaware
(State
or
other jurisdiction of incorporation)
|
0-19133
(Commission
File Number)
|
75-2237318 (IRS Employer Identification No.) |
|
690
East Lamar Blvd., Suite 400, Arlington, Texas 76011
(Address
of principal executive offices, including zip code)
(817)
460-3947
(Registrant's
telephone number, including area code)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
| q |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
| q |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
| q |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
| q |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
|
Item
8.01 Other Events
First
Cash
Financial Services, Inc. has made available on its corporate website
(www.firstcash.com)
its most
recent investor presentation. This presentation is included herein as Exhibit
99.1.
The
information provided in this Item 8.01 shall not be deemed “filed” for purposes
of the Securities Act of 1934, as amended, or otherwise subject to the
liabilities of that section, nor shall such information be deemed incorporated
by reference in any filing under the Securities Act of 1933, as amended, except
as shall be expressly set forth by the specific reference in such filing.
Item
9.01 Financial
Statements and Exhibits
(d)
Exhibits:
| 99.1 |
First
Cash Financial Services, Inc. Investor
Presentation
|
SIGNATURES
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 5, 2006
|
FIRST
CASH FINANCIAL SERVICES, INC.
(Registrant) |
|
/s/
R. DOUGLAS ORR
R.
Douglas Orr
|
|
|
Chief
Accounting Officer
|
EXHIBIT
INDEX
|
Exhibit
Number
|
Document
|
|
99.1
|
First
Cash Financial Services, Inc. Investor
Presentation
|
F
I R S T C A S H F I N A N C I A L S E R V I C E S I N V E S T O R P R E S
E N T
A T I O N - S E P T E M B E R 2 0 0 6 F I R S T C A S H F I N A N C I A L
S E R
V I C E S
Safe
Harbor Statement • Certain statements included in this presentation which are
not historical in nature, including statements regarding the Company’s and/or
management’s strategies, beliefs, expectations, plans for new stores,
projections of earnings and revenues, expected effect of regulatory
pronouncements, potential legislation, or other predictions of the future
are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, and are intended to be covered by the Safe
Harbor
provisions for forward-looking statements contained in such Act. •
Forward-looking statements are made based on assumptions involving certain
known
and unknown risks and uncertainties, many of which are beyond the Company’s
control, and other important factors that could cause actual results,
performance or achievements to differ materially from expectations expressed
or
implied by such forward-looking statements. These risk factors and uncertainties
are listed from time to time in the Company’s filings with the Securities and
Exchange Commission, including, but not limited to, our annual reports on
Form
10-K for the years ending December 31, 2004 and 2005, our reports on Form
10-Q
for the periods ended March 31 and June 30, 2006, and on various Form 8-K
filings in 2006. F I R S T C A S H F I N A N C I A L S E R V I C E S
F
I R S T C A S H F I N A N C I A L S E R V I C E S First Cash Financial Services
• Leading provider of specialty consumer finance products - Pawn Loans &
Related Retail - Short-term/Payday Advances - Buy-Here/Pay-Here Automotive
Retail & Finance • Superior earnings performance and financial position •
Significant future growth through store expansion F I R S T C A S H F I N
A N C
I A L S E R V I C E S
Company
History 1988 Early 90’s Late 90’s 2001 to present 2006 Founded - 3 pawn stores
in Texas Goes public; multi-state pawn store roll-up acquisitions Payday
lending
acquisitions; introduction of payday product in pawn stores First pawn stores
opened in Mexico Expansion through new store openings: U.S. payday & Mexico
pawn Auto Master Buy-Here/Pay-Here automotive acquisition F I R S T C A S
H F I
N A N C I A L S E R V I C E S
Store
Count Growth 108 102 96 95 4 60 100 130 152 46 59 75 87 102 128 8 97 100
29 2001
2002 2003 2004 2005 Aug 06 Buy-Here/Pay-Here Dealerships Payday Advance Stores
Mexico Pawn Stores U.S. Pawn Stores 158 190 235 284 328 383 F I R S T C A
S H F
I N A N C I A L S E R V I C E S
Geographic
Markets & Product Offerings D.C. Locations in: • 13 states in the U.S. • 8
states in Mexico Pawn stores Pawn stores with payday advance/credit services
Payday advance/credit services stores As of August 2006 152 21 3 3 7 15 10
7 2
81 58 6 3 2 D.C. 5 Buy-Here/Pay-Here auto dealerships 5 2 1 F I R S T C A
S H F
I N A N C I A L S E R V I C E S
Revenue
Mix Trailing Twelve Months (Including Pro Forma Revenues from Auto Master
Acquisition) 42% 24% 15% 19% U.S. Pawn Storess Mexico Pawn Stores Payday
Advance
Stores Buy-Here/Pay-Here Auto Dealerships As of June 30, 2006, unaudited
F I R S
T C A S H F I N A N C I A L S E R V I C E S
Pawn
Loan Product • Short-term loan secured by pledged personal property - No credit
check - No bank account required • Regulations vary by state - typically provide
for: - 30 day term - 10% to 20% monthly service fee F I R S T C A S H F I
N A N
C I A L S E R V I C E S
Pawn
Customer Demographics • Many un-banked or under-banked customers • Both in the
U.S. and… • In Mexico, where: - 88% of retail transactions are in cash - An
estimated 80% of the population is un-banked First Cash Pawn Loan Growth
$0 $5
$10 $15 $20 $25 $30 2001 2002 2003 2004 2005 Millions Mexico Pawn U.S. Pawn
F I
R S T C A S H F I N A N C I A L S E R V I C E S
Pawn-Related
Retail Sales Retail Metrics (most recent trailing 12 Months) • Total merchandise
margins 40% • Retail margins (excludes scrap jewelry sales) 44% • Inventory
turns 3.2x Electronics 27% Tools 7% Gold Jewelry 55% Other 11% Composition
of
Retail Inventories • Retail inventories are primarily acquired via forfeited
pawn loan collateral • Gold jewelry represents 55% of the retail inventory F I R
S T C A S H F I N A N C I A L S E R V I C E S
Pawn
Growth - Focused in Mexico F I R S T C A S H F I N A N C I A L S E R V I
C E
S
Short-term/Payday
Advance Products • Loan size: $100 to $1,000 • Term: 7 to 31 days • Typical
service charge per advance: 15% • Proof of employment and active bank account
required • Advance secured by personal check held until due date F I R S T C A S
H F I N A N C I A L S E R V I C E S
Short-term/Payday
Advance Expansion • Accelerated new store openings - First Cash Advance
mono-line format - 26 stores opened YTD thru August 2006 compared to 15 opened
all of 2005 • Expansion Markets - Continued expansion in all Texas markets -
First stores opened in Michigan opened in Q2 of 2006 F I R S T C A S H F
I N A N
C I A L S E R V I C E S
Auto
Master Acquisition • FCFS has acquired Auto Master, a Buy-Here/Pay-Here
automotive dealer - Transaction closed on August 25, 2006 • Transaction details
(unaudited) - Purchase price of $33.7 million - Purchase price and retirement
of
existing Auto Master debt ($15 million) funded through: • Cash on balance sheet
($12 million) • Note payable to sellers ($10 million) • FCFS credit-facility
($26 million) F I R S T C A S H F I N A N C I A L S E R V I C E S
Buy-Here/Pay-Here
Automotive Industry • Large Buy-Here/Pay-Here Market - Estimated $100 Billion
Market - 45 Million consumers with credit scores < 600 • Fragmented
Competition - Thousands of operators, one or two locations each •
Nondiscretionary Customer Base - Need-driven purchases, rather than price
driven
- Price negotiation is rarely a part of the typical transaction F I R S T
C A S
H F I N A N C I A L S E R V I C E S
Auto
Master Overview • Founded 1989 • Based in Northwest Arkansas, near Bentonville •
Eight current dealership locations: - Arkansas (5) - Missouri (2) - Oklahoma
(1)
• Seasoned, professional management team - Fully retained with acquisition
Joplin, MO Springfield, MO Rogers, AR Springdale, AR Fayetteville, AR Fort
Smith, AR (2 locations) Tulsa, OK STORE LOCATIONS F I R S T C A S H F I N
A N C
I A L S E R V I C E S
Auto
Master - Centralized Vehicle Acquisition and Reconditioning • Vehicle
acquisition - Full-time purchasing staff - Purchase from auctions, wholesalers
and new vehicle dealers in 10- state area • Reconditioning Center - All vehicles
sent to central facility in NW Arkansas - In-house inspection, repairs and
detailing F I R S T C A S H F I N A N C I A L S E R V I C E S
Auto
Master Operating Metrics (unaudited) • Average retail price per vehicle $9,000 •
Typical gross profit % per vehicle, net of loss provision 30% • Typical yield %
on net receivables 9% to 11% • Revenues - Calendar 2005 $44 million - Projected
calendar 2006 $53 to $55 million F I R S T C A S H F I N A N C I A L S E
R V I C
E S
Auto
Master - Future Growth • Expand footprint within 300-mile radius of Bentonville
hub - Five-state market - Capacity for up to 30 lots • 3 to 5 total lot openings
for remainder of 2006 & 2007 • Future hubs in other regions F I R S T C A S
H F I N A N C I A L S E R V I C E S
Financial
& Growth Metrics • Operating Results - Industry leading performance metrics
- Long-term, consistent growth - Increasing profit margins • Financial Position
- Strong cash flows - Strong balance sheet - Continued investment in stock
repurchases & new stores F I R S T C A S H F I N A N C I A L S E R V I C E S
Revenue
& EBITDA Growth EBITDA $0 $10 $20 $30 $40 $50 $60 2002 2003 2004 2005 TTM
June 2006 Millions Revenues $0 $50 $100 $150 $200 $250 2002 2003 2004 2005
TTM
June 2006 Millions F I R S T C A S H F I N A N C I A L S E R V I C E S
2006
- Second Quarter Highlights • Q2 diluted EPS of $0.20 - Up 25% over prior year -
22nd consecutive quarter of double-digit EPS growth • Other highlights: -
Quarterly revenues up 22%, to $56 million - Same-store revenues up 15% -
23 new
stores opened, a record number for a single quarter; 43 stores opened YTD
F I R
S T C A S H F I N A N C I A L S E R V I C E S
Earnings
Per Share Growth $0.08 $0.10 $0.12 $0.15 $0.18 $0.23 $0.06 $0.08 $0.10 $0.12
$0.16 $0.20 $0.07 $0.09 $0.12 $0.15 $0.19 $0.09 $0.11 $0.14 $0.18 $0.23 2001
2002 2003 2004 2005 2006 Q 4 Q 3 Q 2 Q 1 $0.29 $0.38 $0.49 $0.61 $0.76 Reflects
two-for-one stock split effective February 6, 2006 2006 Estimate: $0.96 to
$0.97
F I R S T C A S H F I N A N C I A L S E R V I C E S
2006
Earnings Estimate Increased; Guidance Initiated for 2007 $0.00 $0.25 $0.50
$0.75
$1.00 $1.25 $1.50 2003 2004 2005 2006 2007 $0.49 $0.61 $0.76 24% 25% 26-28%
2007
Estimate: $1.25 To $1.30 Updated 2006 Estimate: $0.96 to $0.97 29-34% F I
R S T
C A S H F I N A N C I A L S E R V I C E S
Consistency
of Growth & Earnings Trailing 12 Months Diluted Earnings per Share $0.00
$0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90 Sep 01 Dec 01 Mar 02
Jun
02 Sep 02 Dec 02 Mar 03 Jun 03 Sep 03 Dec 03 Mar 04 Jun 04 Sep 04 Dec 04
Mar 05
Jun 05 Sep 05 Dec 05 Mar 06 Jun 06 Forbes 200 Best Small Companies 4 straight
years Fortune Small Business 100 2 straight years Reflects two-for-one stock
split effective February 6, 2006 F I R S T C A S H F I N A N C I A L S E
R V I C
E S
Balance
Sheet Strength $74 $87 $117 $144 $163 $158 $49 $44 $23 $18 $23 $21 $123 $131
$140 $162 $186 $179 2001 2002 2003 2004 2005 Jun-06 Assets Liabilities Equity
Millions F I R S T C A S H F I N A N C I A L S E R V I C E S
Utilization
of Cash Flows • All store openings funded from current cash flows - Loan growth
at new & existing stores - Capital expenditures for new stores - Start-up
costs for new stores • Stock repurchases of $48 million over past two years •
Auto Master acquisition New location under construction in Tijuana, Mexico
F I R
S T C A S H F I N A N C I A L S E R V I C E S
Net
Cash Position -$44 -$35 -$30 -$6 $7 $11 $13 $16 $26 $43 $29 -$50 -$40 -$30
-$20
-$10 $0 $10 $20 $30 $40 $50 $60 2000 2001 2002 2003 2004 2005 Q2 2006 Millions
Cash Interest Bearing Debt F I R S T C A S H F I N A N C I A L S E R V I
C E S
Diversified
Growth Strategy • New store openings in multiple markets - United States -
Mexico • Diversified product line - Pawn loans & related retail - Payday
advances/Credit services - Buy-Here/Pay-Here auto sales & finance F I R S T
C A S H F I N A N C I A L S E R V I C E S
New
Store Openings 0 10 20 30 40 50 60 New Stores 4th Qtr 11 14 13 12 16 3rd
Qtr 3
10 12 13 9 2nd Qtr 3 6 11 13 10 23 1st Qtr 1 8 11 14 15 20 2001 2002 2003
2004
2005 2006 18 38 47 52 50 2006 Projection: 60 to 70 New Stores (equal pawn
&
payday) 2007 Projection: 70 to 75 New Stores 3 to 5 Dealerships 2006 Projection:
60 to 70 New Stores (equal pawn & payday) 2007 Projection: 70 to 75 New
Stores 3 to 5 Dealerships F I R S T C A S H F I N A N C I A L S E R V I C
E S
New
Store Financial Model Payday MX Pawn $200,000 to $360,000 Totals $40,000
to
$60,000 Start-up Losses - Pre-opening - First six months of operation $80,000
to
$150,000 Working Capital (first year) - Operating cash - Loan funding -
Inventory (pawn only) $80,000 to $150,000 Cap Ex - Leasehold improvements
-
Computer & security equipment F I R S T C A S H F I N A N C I A L S E R V I
C E S
Summary
• Industry leader in a growth sector - Constant-demand products: pawn, payday
advance and buy-here/pay-here auto - Superior financial metrics - 22 consecutive
quarters (over five years) of double-digit EPS growth - Strong balance sheet
& cash flows • Well-defined expansion strategy - Diversified growth
platform: Multiple products in multiple markets - Significant opportunity
&
headroom for new locations F I R S T C A S H F I N A N C I A L S E R V I
C E S
F
I R S T C A S H F I N A N C I A L S E R V I C E S I
N V E S T O R P R E S E N T A T I O N - S E P T E M B E R 2 0 0 6 F
I R S T C A S H F I N A N C I A L S E R V I C E S Investor
contact information: •Phone:
817.505.3199 •Email:
investorrelations@firstcash.com •Website:
www.firstcash.com