Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 23, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | FIRSTCASH, INC. | |
Entity Central Index Key | 0000840489 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 43,127,980 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
ASSETS | |||
Cash and cash equivalents | $ 49,663 | $ 71,793 | $ 110,408 |
Fees and service charges receivable | 43,993 | 45,430 | 40,022 |
Pawn loans | 345,200 | 362,941 | 322,625 |
Consumer loans, net | 11,017 | 15,902 | 17,447 |
Inventories | 257,803 | 275,130 | 254,298 |
Income taxes receivable | 1,096 | 1,379 | 24 |
Prepaid expenses and other current assets | 9,329 | 17,317 | 21,575 |
Total current assets | 718,101 | 789,892 | 766,399 |
Property and equipment, net | 276,397 | 251,645 | 234,126 |
Right of use asset | 298,167 | 0 | 0 |
Goodwill | 932,773 | 917,419 | 844,516 |
Intangible assets, net | 87,810 | 88,140 | 91,764 |
Other assets | 10,927 | 49,238 | 54,392 |
Deferred tax assets | 11,608 | 11,640 | 12,499 |
Total assets | 2,335,783 | 2,107,974 | 2,003,696 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||
Accounts payable and accrued liabilities | 77,363 | 96,928 | 88,328 |
Customer deposits | 40,055 | 35,368 | 35,692 |
Income taxes payable | 7,484 | 749 | 12,266 |
Lease liability, current | 84,946 | 0 | 0 |
Total current liabilities | 209,848 | 133,045 | 136,286 |
Revolving unsecured credit facility | 255,000 | 295,000 | 83,000 |
Senior unsecured notes | 296,053 | 295,887 | 295,400 |
Deferred tax liabilities | 57,496 | 54,854 | 49,063 |
Lease liability, non-current | 188,970 | 0 | 0 |
Other liabilities | 0 | 11,084 | 15,661 |
Total liabilities | 1,007,367 | 789,870 | 579,410 |
Stockholders’ equity: | |||
Preferred stock | 0 | 0 | 0 |
Common stock | 493 | 493 | 493 |
Additional paid-in capital | 1,225,482 | 1,224,608 | 1,220,491 |
Retained earnings | 638,574 | 606,810 | 525,847 |
Accumulated other comprehensive loss | (107,694) | (113,117) | (90,043) |
Common stock held in treasury, at cost | (428,439) | (400,690) | (232,502) |
Total stockholders’ equity | 1,328,416 | 1,318,104 | 1,424,286 |
Total liabilities and stockholders’ equity | $ 2,335,783 | $ 2,107,974 | $ 2,003,696 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue: | ||
Retail merchandise sales | $ 284,241 | $ 269,841 |
Pawn loan fees | 141,192 | 129,793 |
Wholesale scrap jewelry sales | 31,710 | 34,725 |
Consumer loan and credit services fees | 10,461 | 15,441 |
Total revenue | 467,604 | 449,800 |
Cost of revenue: | ||
Cost of retail merchandise sold | 179,349 | 174,497 |
Cost of wholesale scrap jewelry sold | 30,353 | 32,495 |
Consumer loan and credit services loss provision | 2,103 | 3,727 |
Total cost of revenue | 211,805 | 210,719 |
Net revenue | 255,799 | 239,081 |
Expenses and other income: | ||
Store operating expenses | 146,852 | 138,348 |
Administrative expenses | 32,154 | 28,002 |
Depreciation and amortization | 9,874 | 11,283 |
Interest expense | 8,370 | 6,198 |
Interest income | (204) | (981) |
Merger and other acquisition expenses | 149 | 239 |
(Gain) loss on foreign exchange | (239) | 213 |
Total expenses and other income | 196,956 | 183,302 |
Income (loss) before income taxes | 58,843 | 55,779 |
Provision for income taxes | 16,188 | 14,144 |
Net income | $ 42,655 | $ 41,635 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.98 | $ 0.90 |
Diluted (in dollars per share) | $ 0.98 | $ 0.90 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 42,655 | $ 41,635 |
Other comprehensive income: | ||
Currency translation adjustment | 5,423 | 21,834 |
Comprehensive income | $ 48,078 | $ 63,469 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Gain (Loss) on Securities [Line Items] | ||
Net Tax Benefit | $ (16,188) | $ (14,144) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Common Stock Held in Treasury |
Balance at beginning of period (shares) at Dec. 31, 2017 | 49,276 | 2,362 | ||||
Balance at beginning of period (value) at Dec. 31, 2017 | $ 1,475,333 | $ 493 | $ 1,220,356 | $ 494,457 | $ (111,877) | $ (128,096) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Shares issued under share-based compensation plan (shares) | (22) | |||||
Shares issued under share-based compensation plan (value) | 0 | (1,240) | $ 1,240 | |||
Share-based compensation expense (value) | 1,375 | 1,375 | ||||
Net income | 41,635 | 41,635 | ||||
Cash dividends ($0.25 and $0.22 per share, respectively) | (10,245) | (10,245) | ||||
Currency translation adjustment | 21,834 | 21,834 | ||||
Repurchases of treasury stock (shares) | 1,378 | |||||
Repurchases of treasury stock (value) | (105,646) | $ (105,646) | ||||
Balance at end of period (shares) at Mar. 31, 2018 | 49,276 | 3,718 | ||||
Balance at end of period (value) at Mar. 31, 2018 | 1,424,286 | $ 493 | 1,220,491 | 525,847 | (90,043) | $ (232,502) |
Balance at beginning of period (shares) at Dec. 31, 2018 | 49,276 | 5,673 | ||||
Balance at beginning of period (value) at Dec. 31, 2018 | 1,318,104 | $ 493 | 1,224,608 | 606,810 | (113,117) | $ (400,690) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Shares issued under share-based compensation plan (shares) | (21) | |||||
Shares issued under share-based compensation plan (value) | 0 | (1,441) | $ 1,441 | |||
Share-based compensation expense (value) | 2,315 | 2,315 | ||||
Net income | 42,655 | 42,655 | ||||
Cash dividends ($0.25 and $0.22 per share, respectively) | (10,891) | (10,891) | ||||
Currency translation adjustment | 5,423 | 5,423 | ||||
Repurchases of treasury stock (shares) | 343 | |||||
Repurchases of treasury stock (value) | (29,190) | $ (29,190) | ||||
Balance at end of period (shares) at Mar. 31, 2019 | 49,276 | 5,995 | ||||
Balance at end of period (value) at Mar. 31, 2019 | $ 1,328,416 | $ 493 | $ 1,225,482 | $ 638,574 | $ (107,694) | $ (428,439) |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends (in dollars per share) | $ 250 | $ 220 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flow from operating activities: | ||
Net income | $ 42,655 | $ 41,635 |
Adjustments to reconcile net income to net cash flow provided by operating activities: | ||
Non-cash portion of credit loss provision | 1,335 | 1,874 |
Share-based compensation expense | 2,315 | 1,375 |
Depreciation and amortization expense | 9,874 | 11,283 |
Amortization of debt issuance costs | 473 | 480 |
Amortization of favorable/(unfavorable) lease intangibles, net | 0 | (466) |
Deferred income taxes, net | 2,855 | 1,609 |
Changes in operating assets and liabilities, net of business combinations: | ||
Fees and service charges receivable | 2,093 | 3,844 |
Inventories | 5,874 | 7,715 |
Prepaid expenses and other assets | 776 | (3,174) |
Accounts payable, accrued liabilities and other liabilities | (3,560) | (2,478) |
Income taxes | 7,007 | 27,619 |
Net cash flow provided by operating activities | 71,697 | 91,316 |
Cash flow from investing activities: | ||
Loan receivables, net of cash repayments | 42,216 | 56,220 |
Purchases of furniture, fixtures, equipment and improvements | (9,658) | (5,388) |
Purchases of store real property | (22,145) | (3,449) |
Acquisitions of pawn stores, net of cash acquired | (24,520) | (13,364) |
Net cash flow provided by (used in) investing activities | (14,107) | 34,019 |
Cash flow from financing activities: | ||
Borrowings from revolving unsecured credit facility | 43,000 | 61,000 |
Repayments of revolving unsecured credit facility | (83,000) | (85,000) |
Purchases of treasury stock | (29,599) | (100,019) |
Dividends paid | (10,891) | (10,245) |
Net cash flow used in financing activities | (80,490) | (134,264) |
Effect of exchange rates on cash | 770 | 4,914 |
Change in cash and cash equivalents | (22,130) | (4,015) |
Cash and cash equivalents at beginning of the period | 71,793 | 114,423 |
Cash and cash equivalents at end of the period | $ 49,663 | $ 110,408 |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation The accompanying consolidated balance sheet as of December 31, 2018 , which is derived from audited financial statements, and the unaudited consolidated financial statements, including the notes thereto, include the accounts of FirstCash, Inc. and its wholly-owned subsidiaries (together, the “Company”). The Company regularly makes acquisitions and the results of operations for the acquired stores have been consolidated since the acquisition dates. All significant intercompany accounts and transactions have been eliminated. These unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the rules and regulations for reporting on Form 10-Q. Accordingly, they do not include certain information and disclosures required for comprehensive financial statements. These interim period financial statements should be read in conjunction with the Company’s consolidated financial statements, which are included in the Company’s annual report on Form 10-K for the year ended December 31, 2018 , filed with the Securities and Exchange Commission (the “SEC”) on February 5, 2019 . The consolidated financial statements as of March 31, 2019 and 2018 , and for the three month periods ended March 31, 2019 and 2018 , are unaudited, but in management’s opinion include all adjustments (consisting of only normal recurring adjustments) considered necessary to present fairly the financial position, results of operations and cash flow for such interim periods. Operating results for the period ended March 31, 2019 are not necessarily indicative of the results that may be expected for the full year. The Company has significant operations in Latin America, where in Mexico, Guatemala and Colombia the functional currency is the Mexican peso, Guatemalan quetzal and Colombian peso, respectively. Accordingly, the assets and liabilities of these subsidiaries are translated into U.S. dollars at the exchange rate in effect at each balance sheet date, and the resulting adjustments are accumulated in other comprehensive income (loss) as a separate component of stockholders’ equity. Revenues and expenses are translated at the average exchange rates occurring during the three month periods ended March 31, 2019 and 2018 . The Company also has operations in El Salvador where the reporting and functional currency is the U.S. dollar. Reclassifications A loss on foreign exchange of $0.2 million for the three months ended March 31, 2018 was reclassified on the consolidated statements of income in order to conform with the presentation for the three months ended March 31, 2019. The loss on foreign exchange was reclassified from store operating expenses and reported separately on the consolidated statements of income. Purchases of store real property of $3.4 million for the three months ended March 31, 2018 were reclassified on the consolidated statements of cash flows in order to conform with the presentation for the three months ended March 31, 2019. Purchases of store real property were reclassified from purchases of furniture, fixtures, equipment and improvements and reported separately on the consolidated statements of cash flows. As a result, purchases of furniture, fixtures, equipment and improvements include expenditures for improvements to existing stores, de novo store openings and corporate assets, and excludes discretionary store real property purchases. Recent Accounting Pronouncements On January 1, 2019, the Financial Accounting Standards Board’s lease accounting standard (“ASC 842”) became effective requiring lessees to recognize, in the statement of financial position, a liability for the present value of future minimum lease payments (the lease liability) and an asset representing its right to use the underlying leased property for the lease term (the right of use “ROU” asset). Leases will be classified as either financing or operating, with classification affecting the pattern of expense recognition in the income statement. Lessor accounting remains largely unchanged. ASC 842 provides for a modified retrospective transition approach, which requires lessees to recognize and measure leases on the balance sheet at the beginning of the earliest period presented, or a cumulative effect adjustment transition approach, which requires prospective application from the adoption date. The Company adopted ASC 842 prospectively as of January 1, 2019 using the cumulative effect adjustment approach. As a result of the transition method used, ASC 842 was not applied to periods prior to adoption and the adoption of ASC 842 had no impact on the Company’s comparative prior periods presented. ASC 842 provides a number of optional practical expedients in transition. The Company elected the package of practical expedients, which permit it to not reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs but did not elect any other practical expedient available under ASC 842. The adoption of ASC 842 resulted in a material increase in the assets and liabilities reflected on the Company’s consolidated balance sheets, but did not have a material impact on its consolidated statements of income or consolidated statements of cash flows. See Note 4 . In June 2016, the Financial Accounting Standards Board issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. In November 2018, the Financial Accounting Standards Board issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses” (“ASU 2018-19”) which clarifies that receivables arising from operating leases are accounted for using lease guidance and not as financial instruments. ASU 2016-13 and ASU 2018-19 are effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently assessing the potential impact of ASU 2016-13 and ASU 2018-19 on its consolidated financial statements. In January 2017, the Financial Accounting Standards Board issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”), which eliminates step 2 from the goodwill impairment test. ASU 2017-04 also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The guidance is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017 and should be adopted on a prospective basis. The Company does not expect ASU 2017-04 to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures. In June 2018, the Financial Accounting Standards Board issued ASU No. 2018-07, “Compensation-Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting” (“ASU 2018-07”). ASU 2018-07 simplifies the accounting for nonemployee share-based payment transactions. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. ASU 2018-07 is effective for public entities for fiscal years beginning after December 15, 2018. The adoption of ASU 2018-07 did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures. In July 2018, the Financial Accounting Standards Board issued ASU No. 2018-09, “Codification Improvements” (“ASU 2018-09”). ASU 2018-09 does not prescribe any new accounting guidance, but instead makes minor improvements and clarifications of several different Financial Accounting Standards Board Accounting Standards Codification areas based on comments and suggestions made by various stakeholders. Certain updates are applicable immediately while others provide for a transition period to adopt in fiscal years beginning after December 15, 2018. The adoption of ASU 2018-09 did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts): Three Months Ended March 31, 2019 2018 Numerator: Net income $ 42,655 $ 41,635 Denominator: Weighted-average common shares for calculating basic earnings per share 43,518 46,426 Effect of dilutive securities: Stock options and restricted stock unit awards 140 53 Weighted-average common shares for calculating diluted earnings per share 43,658 46,479 Earnings per share: Basic $ 0.98 $ 0.90 Diluted $ 0.98 $ 0.90 |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Consistent with the Company’s strategy to continue its expansion of pawn stores in selected markets, during the three months ended March 31, 2019 , the Company acquired 118 pawn stores in Mexico in two separate transactions and 10 pawn stores located in the U.S. in two separate transactions. The aggregate purchase prices for these acquisitions totaled $23.5 million , net of cash acquired and subject to future post-closing adjustments. The aggregate purchase price was comprised of $20.7 million in cash paid during the three months ended March 31, 2019 and remaining short-term amounts payable to the sellers of approximately $2.8 million . |
Operating Leases Operating Leas
Operating Leases Operating Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Operating Leases | Operating Leases As described in Note 1, the Company adopted ASC 842 prospectively as of January 1, 2019. The Company leases the majority of its pawnshop locations under operating leases and determines if an arrangement is or contains a lease at inception. Many leases include both lease and non-lease components, which the Company accounts for separately. Lease components include rent, taxes and insurance costs while non-lease components include common area or other maintenance costs. Operating leases are included in right of use assets, lease liability, current and lease liability, non-current in the consolidated balance sheets. The Company does not have any finance leases. The following table details the components of the ROU asset and lease liability recognized upon adoption of ASC 842 on January 1, 2019 (in thousands): Initial measurement of right of use asset (present value of the future minimum lease payments) $ 295,063 Accrued straight-line rent liability (4,237 ) Amounts previously recognized in respect of business combinations: Favorable lease intangible asset 45,596 Unfavorable lease intangible liability (17,275 ) Total initial right of use asset $ 319,147 Lease liability, current $ (87,608 ) Lease liability, non-current (207,455 ) Total initial lease liability (present value of the future minimum lease payments) $ (295,063 ) Leased facilities are generally leased for a term of three to five years with one or more options to renew, typically at the Company’s sole discretion. In addition, the majority of these leases can be terminated early upon an adverse change in law which negatively affects the store’s profitability. The Company regularly evaluates renewal and termination options to determine if the Company is reasonably certain to exercise the option, and excludes these options from the lease term included in the recognition of the ROU asset and lease liability until such certainty exists. The weighted-average remaining lease term for operating leases as of March 31, 2019 was 4.0 years . The ROU asset and lease liability is recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The Company’s leases do not provide an implicit rate and therefore, it uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. The Company utilizes a portfolio approach for determining the incremental borrowing rate to apply to groups of leases with similar characteristics. The weighted-average discount rate used to measure the lease liability as of March 31, 2019 was 7.2% . The Company has certain operating leases in Mexico which are denominated in U.S. dollars. The liability related to these leases is considered a monetary liability, and requires remeasurement into the functional currency (Mexican pesos) using reporting date exchange rates. The remeasurement results in the recognition of foreign currency exchange gains or losses, producing a certain level of earnings volatility. The Company recognized a foreign currency gain of $0.3 million during the three months ended March 31, 2019 related to the remeasurement of these U.S. dollar denominated operating leases, which is included in (gain) loss on foreign exchange in the accompanying consolidated statements of income. Lease expense is recognized on a straight-line basis over the lease term, with variable lease expense recognized in the period such payments are incurred. The following table details the components of lease expense included in store operating expenses in the consolidated statements of income during the three months ended March 31, 2019 (in thousands): Operating lease expense $ 30,980 Variable lease expense (1) 2,075 Total operating lease expense $ 33,055 (1) Variable lease costs consist primarily of taxes, insurance and common area or other maintenance costs paid based on actual costs incurred by the lessor and can therefore vary over the lease term. The following table details the maturity of lease liabilities for all operating leases as of March 31, 2019 (in thousands): Nine months ending December 31, 2019 $ 78,583 2020 85,863 2021 65,433 2022 42,233 2023 23,021 Thereafter 20,221 Total $ 315,354 Less amount of lease payments representing interest (41,438 ) Total present value of lease payments $ 273,916 The following table details supplemental cash flow information related to operating leases for the three months ended March 31, 2019 (in thousands): Cash paid for amounts included in the measurement of operating lease liabilities $ 28,840 Leased assets obtained in exchange for new operating lease liabilities $ 2,551 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt The following table details the Company’s long-term debt at the respective principal amounts, net of unamortized debt issuance costs on the senior unsecured notes (in thousands): As of March 31, 2019 As of December 31, 2019 2018 2018 Revolving unsecured credit facility, maturing 2023 (1) $ 255,000 $ 83,000 $ 295,000 5.375% senior unsecured notes due 2024 (2) 296,053 295,400 295,887 Total long-term debt $ 551,053 $ 378,400 $ 590,887 (1) Debt issuance costs related to the Company’s revolving unsecured credit facility are included in other assets in the accompanying consolidated balance sheets. (2) As of March 31, 2019 , 2018 and December 31, 2018 , deferred debt issuance costs of $3.9 million , $4.6 million and $4.1 million , respectively, are included as a direct deduction from the carrying amount of the senior unsecured notes in the accompanying consolidated balance sheets. Revolving Unsecured Credit Facility As of March 31, 2019 , the Company maintained an unsecured line of credit with a group of U.S. based commercial lenders (the “Credit Facility”) in the amount of $425.0 million , which matures on October 4, 2023 . As of March 31, 2019 , the Company had $255.0 million in outstanding borrowings and $3.7 million in outstanding letters of credit under the Credit Facility, leaving $166.3 million available for future borrowings. The Credit Facility bears interest, at the Company’s option, at either (1) the prevailing London Interbank Offered Rate (“LIBOR”) (with interest periods of 1 week or 1, 2, 3 or 6 months at the Company’s option) plus a fixed spread of 2.5% or (2) the prevailing prime or base rate plus a fixed spread of 1.5% . The agreement has a LIBOR floor of 0% . Additionally, the Company is required to pay an annual commitment fee of 0.50% on the average daily unused portion of the Credit Facility commitment. The weighted-average interest rate on amounts outstanding under the Credit Facility at March 31, 2019 was 4.94% based on 1 week LIBOR. Under the terms of the Credit Facility, the Company is required to maintain certain financial ratios and comply with certain financial covenants. The Credit Facility also contains customary restrictions on the Company’s ability to incur additional debt, grant liens, make investments, consummate acquisitions and similar negative covenants with customary carve-outs and baskets. The Company was in compliance with the covenants of the Credit Facility as of March 31, 2019 . During the three months ended March 31, 2019 , the Company made net payments of $40.0 million pursuant to the Credit Facility. Senior Unsecured Notes On May 30, 2017, the Company issued $300.0 million of 5.375% senior unsecured notes due on June 1, 2024 (the “Notes”), all of which are currently outstanding. Interest on the Notes is payable semi-annually in arrears on June 1 and December 1. The Notes are fully and unconditionally guaranteed on a senior unsecured basis jointly and severally by all of the Company's existing and future domestic subsidiaries that guarantee its Credit Facility. The Notes will permit the Company to make restricted payments, such as purchasing shares of its stock and paying cash dividends, in an unlimited amount if, after giving pro forma effect to the incurrence of any indebtedness to make such payment, the Company's consolidated total debt ratio (“Net Debt Ratio”) is less than 2.25 to 1 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 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. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The three fair value levels are (from highest to lowest): Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. Recurring Fair Value Measurements As of March 31, 2019 , 2018 and December 31, 2018 , the Company did not have any financial assets or liabilities measured at fair value on a recurring basis. Fair Value Measurements on a Nonrecurring Basis The Company measures non-financial assets and liabilities, such as property and equipment and intangible assets, at fair value on a nonrecurring basis or when events or circumstances indicate that the carrying amount of the assets may be impaired. Financial Assets and Liabilities Not Measured at Fair Value The Company’s financial assets and liabilities as of March 31, 2019 , 2018 and December 31, 2018 that are not measured at fair value in the consolidated balance sheets are as follows (in thousands): Carrying Value Estimated Fair Value March 31, March 31, Fair Value Measurements Using 2019 2019 Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 49,663 $ 49,663 $ 49,663 $ — $ — Fees and service charges receivable 43,993 43,993 — — 43,993 Pawn loans 345,200 345,200 — — 345,200 Consumer loans, net 11,017 11,017 — — 11,017 $ 449,873 $ 449,873 $ 49,663 $ — $ 400,210 Financial liabilities: Revolving unsecured credit facility $ 255,000 $ 255,000 $ — $ 255,000 $ — Senior unsecured notes (outstanding principal) 300,000 306,000 — 306,000 — $ 555,000 $ 561,000 $ — $ 561,000 $ — Carrying Value Estimated Fair Value March 31, March 31, Fair Value Measurements Using 2018 2018 Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 110,408 $ 110,408 $ 110,408 $ — $ — Fees and service charges receivable 40,022 40,022 — — 40,022 Pawn loans 322,625 322,625 — — 322,625 Consumer loans, net 17,447 17,447 — — 17,447 $ 490,502 $ 490,502 $ 110,408 $ — $ 380,094 Financial liabilities: Revolving unsecured credit facility $ 83,000 $ 83,000 $ — $ 83,000 $ — Senior unsecured notes (outstanding principal) 300,000 305,000 — 305,000 — $ 383,000 $ 388,000 $ — $ 388,000 $ — Carrying Value Estimated Fair Value December 31, December 31, Fair Value Measurements Using 2018 2018 Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 71,793 $ 71,793 $ 71,793 $ — $ — Fees and service charges receivable 45,430 45,430 — — 45,430 Pawn loans 362,941 362,941 — — 362,941 Consumer loans, net 15,902 15,902 — — 15,902 $ 496,066 $ 496,066 $ 71,793 $ — $ 424,273 Financial liabilities: Revolving unsecured credit facility $ 295,000 $ 295,000 $ — $ 295,000 $ — Senior unsecured notes (outstanding principal) 300,000 293,000 — 293,000 — $ 595,000 $ 588,000 $ — $ 588,000 $ — As cash and cash equivalents have maturities of less than three months, the carrying value of cash and cash equivalents approximates fair value. Due to their short-term maturities, the carrying value of pawn loans and fees and service charges receivable approximate fair value. Consumer loans, net are carried net of the allowance for estimated loan losses, which is calculated by applying historical loss rates combined with recent default trends to the gross consumer loan balance. Therefore, the carrying value approximates the fair value. The carrying value of the revolving unsecured credit facility approximates fair value as of March 31, 2019 , 2018 and December 31, 2018 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company organizes its operations into two reportable segments as follows: • U.S. operations - Includes all pawn and consumer loan operations in the U.S. • Latin America operations - Includes all pawn and consumer loan operations in Latin America, which includes operations in Mexico, Guatemala, El Salvador and Colombia. The following tables present reportable segment information for the three month period ended March 31, 2019 and 2018 (in thousands): Three Months Ended March 31, 2019 U.S. Operations Latin America Operations Corporate Consolidated Revenue: Retail merchandise sales $ 186,815 $ 97,426 $ — $ 284,241 Pawn loan fees 97,876 43,316 — 141,192 Wholesale scrap jewelry sales 22,785 8,925 — 31,710 Consumer loan and credit services fees 10,461 — — 10,461 Total revenue 317,937 149,667 — 467,604 Cost of revenue: Cost of retail merchandise sold 117,744 61,605 — 179,349 Cost of wholesale scrap jewelry sold 21,270 9,083 — 30,353 Consumer loan and credit services loss provision 2,103 — — 2,103 Total cost of revenue 141,117 70,688 — 211,805 Net revenue 176,820 78,979 — 255,799 Expenses and other income: Store operating expenses 103,884 42,968 — 146,852 Administrative expenses — — 32,154 32,154 Depreciation and amortization 5,045 3,305 1,524 9,874 Interest expense — — 8,370 8,370 Interest income — — (204 ) (204 ) Merger and other acquisition expenses — — 149 149 Gain on foreign exchange — — (239 ) (239 ) Total expenses and other income 108,929 46,273 41,754 196,956 Income (loss) before income taxes $ 67,891 $ 32,706 $ (41,754 ) $ 58,843 Three Months Ended March 31, 2018 U.S. Operations Latin America Operations Corporate Consolidated Revenue: Retail merchandise sales $ 186,052 $ 83,789 $ — $ 269,841 Pawn loan fees 96,242 33,551 — 129,793 Wholesale scrap jewelry sales 29,457 5,268 — 34,725 Consumer loan and credit services fees 15,039 402 — 15,441 Total revenue 326,790 123,010 — 449,800 Cost of revenue: Cost of retail merchandise sold 120,616 53,881 — 174,497 Cost of wholesale scrap jewelry sold 27,653 4,842 — 32,495 Consumer loan and credit services loss provision 3,644 83 — 3,727 Total cost of revenue 151,913 58,806 — 210,719 Net revenue 174,877 64,204 — 239,081 Expenses and other income: Store operating expenses (1) 104,383 33,965 — 138,348 Administrative expenses — — 28,002 28,002 Depreciation and amortization 5,555 2,709 3,019 11,283 Interest expense — — 6,198 6,198 Interest income — — (981 ) (981 ) Merger and other acquisition expenses — — 239 239 Loss on foreign exchange (1) — — 213 213 Total expenses and other income 109,938 36,674 36,690 183,302 Income (loss) before income taxes $ 64,939 $ 27,530 $ (36,690 ) $ 55,779 (1) The loss on foreign exchange for the Latin America operations segment of $0.2 million for the three months ended March 31, 2018 was reclassified on the consolidated statements of income in order to conform with the presentation for the three months ended March 31, 2019 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying consolidated balance sheet as of December 31, 2018 , which is derived from audited financial statements, and the unaudited consolidated financial statements, including the notes thereto, include the accounts of FirstCash, Inc. and its wholly-owned subsidiaries (together, the “Company”). The Company regularly makes acquisitions and the results of operations for the acquired stores have been consolidated since the acquisition dates. All significant intercompany accounts and transactions have been eliminated. These unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the rules and regulations for reporting on Form 10-Q. Accordingly, they do not include certain information and disclosures required for comprehensive financial statements. These interim period financial statements should be read in conjunction with the Company’s consolidated financial statements, which are included in the Company’s annual report on Form 10-K for the year ended December 31, 2018 , filed with the Securities and Exchange Commission (the “SEC”) on February 5, 2019 . The consolidated financial statements as of March 31, 2019 and 2018 , and for the three month periods ended March 31, 2019 and 2018 , are unaudited, but in management’s opinion include all adjustments (consisting of only normal recurring adjustments) considered necessary to present fairly the financial position, results of operations and cash flow for such interim periods. Operating results for the period ended March 31, 2019 are not necessarily indicative of the results that may be expected for the full year. The Company has significant operations in Latin America, where in Mexico, Guatemala and Colombia the functional currency is the Mexican peso, Guatemalan quetzal and Colombian peso, respectively. Accordingly, the assets and liabilities of these subsidiaries are translated into U.S. dollars at the exchange rate in effect at each balance sheet date, and the resulting adjustments are accumulated in other comprehensive income (loss) as a separate component of stockholders’ equity. Revenues and expenses are translated at the average exchange rates occurring during the three month periods ended March 31, 2019 and 2018 |
Recent Accounting Pronouncements | On January 1, 2019, the Financial Accounting Standards Board’s lease accounting standard (“ASC 842”) became effective requiring lessees to recognize, in the statement of financial position, a liability for the present value of future minimum lease payments (the lease liability) and an asset representing its right to use the underlying leased property for the lease term (the right of use “ROU” asset). Leases will be classified as either financing or operating, with classification affecting the pattern of expense recognition in the income statement. Lessor accounting remains largely unchanged. ASC 842 provides for a modified retrospective transition approach, which requires lessees to recognize and measure leases on the balance sheet at the beginning of the earliest period presented, or a cumulative effect adjustment transition approach, which requires prospective application from the adoption date. The Company adopted ASC 842 prospectively as of January 1, 2019 using the cumulative effect adjustment approach. As a result of the transition method used, ASC 842 was not applied to periods prior to adoption and the adoption of ASC 842 had no impact on the Company’s comparative prior periods presented. ASC 842 provides a number of optional practical expedients in transition. The Company elected the package of practical expedients, which permit it to not reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs but did not elect any other practical expedient available under ASC 842. The adoption of ASC 842 resulted in a material increase in the assets and liabilities reflected on the Company’s consolidated balance sheets, but did not have a material impact on its consolidated statements of income or consolidated statements of cash flows. See Note 4 . In June 2016, the Financial Accounting Standards Board issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. In November 2018, the Financial Accounting Standards Board issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses” (“ASU 2018-19”) which clarifies that receivables arising from operating leases are accounted for using lease guidance and not as financial instruments. ASU 2016-13 and ASU 2018-19 are effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently assessing the potential impact of ASU 2016-13 and ASU 2018-19 on its consolidated financial statements. In January 2017, the Financial Accounting Standards Board issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”), which eliminates step 2 from the goodwill impairment test. ASU 2017-04 also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The guidance is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017 and should be adopted on a prospective basis. The Company does not expect ASU 2017-04 to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures. In June 2018, the Financial Accounting Standards Board issued ASU No. 2018-07, “Compensation-Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting” (“ASU 2018-07”). ASU 2018-07 simplifies the accounting for nonemployee share-based payment transactions. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. ASU 2018-07 is effective for public entities for fiscal years beginning after December 15, 2018. The adoption of ASU 2018-07 did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures. In July 2018, the Financial Accounting Standards Board issued ASU No. 2018-09, “Codification Improvements” (“ASU 2018-09”). ASU 2018-09 does not prescribe any new accounting guidance, but instead makes minor improvements and clarifications of several different Financial Accounting Standards Board Accounting Standards Codification areas based on comments and suggestions made by various stakeholders. Certain updates are applicable immediately while others provide for a transition period to adopt in fiscal years beginning after December 15, 2018. The adoption of ASU 2018-09 did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures. |
Fair Value Measurement | The fair value of financial instruments is determined by reference to various market data and other valuation techniques, as appropriate. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The three fair value levels are (from highest to lowest): Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. |
Reclassifications | oss on foreign exchange of $0.2 million for the three months ended March 31, 2018 was reclassified on the consolidated statements of income in order to conform with the presentation for the three months ended March 31, 2019. The loss on foreign exchange was reclassified from store operating expenses and reported separately on the consolidated statements of income. Purchases of store real property of $3.4 million for the three months ended March 31, 2018 were reclassified on the consolidated statements of cash flows in order to conform with the presentation for the three months ended March 31, 2019. Purchases of store real property were reclassified from purchases of furniture, fixtures, equipment and improvements and reported separately on the consolidated statements of cash flows. As a result, purchases of furniture, fixtures, equipment and improvements include expenditures for improvements to existing stores, de novo store openings and corporate assets, and excludes discretionary store real property purchases. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings per Share | The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts): Three Months Ended March 31, 2019 2018 Numerator: Net income $ 42,655 $ 41,635 Denominator: Weighted-average common shares for calculating basic earnings per share 43,518 46,426 Effect of dilutive securities: Stock options and restricted stock unit awards 140 53 Weighted-average common shares for calculating diluted earnings per share 43,658 46,479 Earnings per share: Basic $ 0.98 $ 0.90 Diluted $ 0.98 $ 0.90 |
Operating Leases (Tables)
Operating Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Assets And Liabilities, Lessee | The following table details the components of the ROU asset and lease liability recognized upon adoption of ASC 842 on January 1, 2019 (in thousands): Initial measurement of right of use asset (present value of the future minimum lease payments) $ 295,063 Accrued straight-line rent liability (4,237 ) Amounts previously recognized in respect of business combinations: Favorable lease intangible asset 45,596 Unfavorable lease intangible liability (17,275 ) Total initial right of use asset $ 319,147 Lease liability, current $ (87,608 ) Lease liability, non-current (207,455 ) Total initial lease liability (present value of the future minimum lease payments) $ (295,063 ) |
Lease, Cost | The following table details supplemental cash flow information related to operating leases for the three months ended March 31, 2019 (in thousands): Cash paid for amounts included in the measurement of operating lease liabilities $ 28,840 Leased assets obtained in exchange for new operating lease liabilities $ 2,551 three months ended March 31, 2019 (in thousands): Operating lease expense $ 30,980 Variable lease expense (1) 2,075 Total operating lease expense $ 33,055 (1) |
Lessee, Operating Lease, Liability, Maturity | The following table details the maturity of lease liabilities for all operating leases as of March 31, 2019 (in thousands): Nine months ending December 31, 2019 $ 78,583 2020 85,863 2021 65,433 2022 42,233 2023 23,021 Thereafter 20,221 Total $ 315,354 Less amount of lease payments representing interest (41,438 ) Total present value of lease payments $ 273,916 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table details the Company’s long-term debt at the respective principal amounts, net of unamortized debt issuance costs on the senior unsecured notes (in thousands): As of March 31, 2019 As of December 31, 2019 2018 2018 Revolving unsecured credit facility, maturing 2023 (1) $ 255,000 $ 83,000 $ 295,000 5.375% senior unsecured notes due 2024 (2) 296,053 295,400 295,887 Total long-term debt $ 551,053 $ 378,400 $ 590,887 (1) Debt issuance costs related to the Company’s revolving unsecured credit facility are included in other assets in the accompanying consolidated balance sheets. (2) As of March 31, 2019 , 2018 and December 31, 2018 , deferred debt issuance costs of $3.9 million , $4.6 million and $4.1 million , respectively, are included as a direct deduction from the carrying amount of the senior unsecured notes in the accompanying consolidated balance sheets. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value by Balance Sheet Grouping | The Company’s financial assets and liabilities as of March 31, 2019 , 2018 and December 31, 2018 that are not measured at fair value in the consolidated balance sheets are as follows (in thousands): Carrying Value Estimated Fair Value March 31, March 31, Fair Value Measurements Using 2019 2019 Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 49,663 $ 49,663 $ 49,663 $ — $ — Fees and service charges receivable 43,993 43,993 — — 43,993 Pawn loans 345,200 345,200 — — 345,200 Consumer loans, net 11,017 11,017 — — 11,017 $ 449,873 $ 449,873 $ 49,663 $ — $ 400,210 Financial liabilities: Revolving unsecured credit facility $ 255,000 $ 255,000 $ — $ 255,000 $ — Senior unsecured notes (outstanding principal) 300,000 306,000 — 306,000 — $ 555,000 $ 561,000 $ — $ 561,000 $ — Carrying Value Estimated Fair Value March 31, March 31, Fair Value Measurements Using 2018 2018 Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 110,408 $ 110,408 $ 110,408 $ — $ — Fees and service charges receivable 40,022 40,022 — — 40,022 Pawn loans 322,625 322,625 — — 322,625 Consumer loans, net 17,447 17,447 — — 17,447 $ 490,502 $ 490,502 $ 110,408 $ — $ 380,094 Financial liabilities: Revolving unsecured credit facility $ 83,000 $ 83,000 $ — $ 83,000 $ — Senior unsecured notes (outstanding principal) 300,000 305,000 — 305,000 — $ 383,000 $ 388,000 $ — $ 388,000 $ — Carrying Value Estimated Fair Value December 31, December 31, Fair Value Measurements Using 2018 2018 Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 71,793 $ 71,793 $ 71,793 $ — $ — Fees and service charges receivable 45,430 45,430 — — 45,430 Pawn loans 362,941 362,941 — — 362,941 Consumer loans, net 15,902 15,902 — — 15,902 $ 496,066 $ 496,066 $ 71,793 $ — $ 424,273 Financial liabilities: Revolving unsecured credit facility $ 295,000 $ 295,000 $ — $ 295,000 $ — Senior unsecured notes (outstanding principal) 300,000 293,000 — 293,000 — $ 595,000 $ 588,000 $ — $ 588,000 $ — |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Reconciliation of Operating Profit (Loss) from Segments to Consolidated | The following tables present reportable segment information for the three month period ended March 31, 2019 and 2018 (in thousands): Three Months Ended March 31, 2019 U.S. Operations Latin America Operations Corporate Consolidated Revenue: Retail merchandise sales $ 186,815 $ 97,426 $ — $ 284,241 Pawn loan fees 97,876 43,316 — 141,192 Wholesale scrap jewelry sales 22,785 8,925 — 31,710 Consumer loan and credit services fees 10,461 — — 10,461 Total revenue 317,937 149,667 — 467,604 Cost of revenue: Cost of retail merchandise sold 117,744 61,605 — 179,349 Cost of wholesale scrap jewelry sold 21,270 9,083 — 30,353 Consumer loan and credit services loss provision 2,103 — — 2,103 Total cost of revenue 141,117 70,688 — 211,805 Net revenue 176,820 78,979 — 255,799 Expenses and other income: Store operating expenses 103,884 42,968 — 146,852 Administrative expenses — — 32,154 32,154 Depreciation and amortization 5,045 3,305 1,524 9,874 Interest expense — — 8,370 8,370 Interest income — — (204 ) (204 ) Merger and other acquisition expenses — — 149 149 Gain on foreign exchange — — (239 ) (239 ) Total expenses and other income 108,929 46,273 41,754 196,956 Income (loss) before income taxes $ 67,891 $ 32,706 $ (41,754 ) $ 58,843 Three Months Ended March 31, 2018 U.S. Operations Latin America Operations Corporate Consolidated Revenue: Retail merchandise sales $ 186,052 $ 83,789 $ — $ 269,841 Pawn loan fees 96,242 33,551 — 129,793 Wholesale scrap jewelry sales 29,457 5,268 — 34,725 Consumer loan and credit services fees 15,039 402 — 15,441 Total revenue 326,790 123,010 — 449,800 Cost of revenue: Cost of retail merchandise sold 120,616 53,881 — 174,497 Cost of wholesale scrap jewelry sold 27,653 4,842 — 32,495 Consumer loan and credit services loss provision 3,644 83 — 3,727 Total cost of revenue 151,913 58,806 — 210,719 Net revenue 174,877 64,204 — 239,081 Expenses and other income: Store operating expenses (1) 104,383 33,965 — 138,348 Administrative expenses — — 28,002 28,002 Depreciation and amortization 5,555 2,709 3,019 11,283 Interest expense — — 6,198 6,198 Interest income — — (981 ) (981 ) Merger and other acquisition expenses — — 239 239 Loss on foreign exchange (1) — — 213 213 Total expenses and other income 109,938 36,674 36,690 183,302 Income (loss) before income taxes $ 64,939 $ 27,530 $ (36,690 ) $ 55,779 (1) The loss on foreign exchange for the Latin America operations segment of $0.2 million for the three months ended March 31, 2018 was reclassified on the consolidated statements of income in order to conform with the presentation for the three months ended March 31, 2019 |
Significant Accounting Polici_3
Significant Accounting Policies Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Accounting Policies [Abstract] | ||
(Gain) loss on foreign exchange | $ 239 | $ (213) |
Purchases of store real property | $ 22,145 | $ 3,449 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Net income | $ 42,655 | $ 41,635 |
Denominator: | ||
Weighted-average common shares for calculating basic earnings per share (shares) | 43,518 | 46,426 |
Stock options and nonvested stock awards (shares) | 140 | 53 |
Weighted-average common shares for calculating diluted earnings per share (shares) | 43,658 | 46,479 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.98 | $ 0.90 |
Diluted (in dollars per share) | $ 0.98 | $ 0.90 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019USD ($)store | Dec. 31, 2018USD ($) | Mar. 31, 2018USD ($) | |
Entity Location [Line Items] | |||
Goodwill | $ | $ 932,773 | $ 917,419 | $ 844,516 |
Purchase price | $ | 23,500 | ||
Payments to Acquire Businesses, Net of Cash Acquired | $ | 20,700 | ||
Business Combination, Consideration Transferred, Liabilities Incurred | $ | $ 2,800 | ||
Latin America Acquisition | |||
Entity Location [Line Items] | |||
Number of stores acquired | store | 118 | ||
Number of acquisitions | store | 2 | ||
U.S. Acquisition | |||
Entity Location [Line Items] | |||
Number of stores acquired | store | 10 | ||
Number of acquisitions | store | 2 |
Acquisitions - Purchase Price A
Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 932,773 | $ 917,419 | $ 844,516 |
Operating Leases - Supplemental
Operating Leases - Supplemental Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Leases [Abstract] | ||||
Initial measurement of right of use asset (present value of the future minimum lease payments) | $ 295,063 | |||
Accrued straight-line rent liability | (4,237) | |||
Favorable lease intangible asset | 45,596 | |||
Total initial right of use asset | (17,275) | |||
Total initial right of use asset | $ 298,167 | 319,147 | $ 0 | $ 0 |
Lease liability, current | (84,946) | (87,608) | 0 | 0 |
Lease liability, non-current | (188,970) | (207,455) | $ 0 | $ 0 |
Total initial lease liability (present value of the future minimum lease payments) | $ (273,916) | $ (295,063) |
Operating Leases - Narrative (D
Operating Leases - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Weighted average remaining lease term | 4 years |
Weighted average discount rate | 7.20% |
Foreign currency gain | $ 0.3 |
Operating Leases - Lease Cost (
Operating Leases - Lease Cost (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease expense | $ 30,980 |
Variable lease expense | 2,075 |
Total operating lease expense | $ 33,055 |
Operating Leases - Lease Maturi
Operating Leases - Lease Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
Nine months ending December 31, 2019 | $ 78,583 | |
2020 | 85,863 | |
2021 | 65,433 | |
2022 | 42,233 | |
2023 | 23,021 | |
Thereafter | 20,221 | |
Total | 315,354 | |
Less amount of lease payments representing interest | (41,438) | |
Total present value of lease payments | $ 273,916 | $ 295,063 |
Operating Leases - Supplement_2
Operating Leases - Supplemental Cash Flow (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 28,840 |
Leased assets obtained in exchange for new operating lease liabilities | $ 2,551 |
Long-Term Debt - Summary (Detai
Long-Term Debt - Summary (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | May 30, 2017 | |
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 551,053,000 | $ 590,887,000 | $ 378,400,000 | |
Deferred finance costs, net | $ 3,900,000 | 4,100,000 | 4,600,000 | |
Debt ratio | 2.25 | |||
Senior notes 2024 | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate (percent) | 5.375% | |||
Face amount | $ 300,000,000 | |||
Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Amount outstanding | $ 255,000,000 | 295,000,000 | 83,000,000 | |
Maximum borrowing capacity | 425,000,000 | |||
Letters of credit outstanding, amount | 3,700,000 | |||
Remaining borrowing capacity | $ 166,300,000 | |||
Unused capacity, commitment fee (percent) | 0.50% | |||
Interest rate at end of period (percent) | 4.94% | |||
Net proceeds | $ (40,000,000) | |||
Line of Credit | 30-day LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (percent) | 2.50% | |||
Line of Credit | Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (percent) | 1.50% | |||
Line of Credit | Minimum | 30-day LIBOR | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate (percent) | 0.00% | |||
Senior notes 2024 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 296,053,000 | $ 295,887,000 | $ 295,400,000 | |
Stated interest rate (percent) | 5.375% |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Financial Assets and Liabilities Not Measured at Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Carrying Value | |||
Financial assets: | |||
Cash and cash equivalents | $ 49,663 | $ 71,793 | $ 110,408 |
Fees and service charges receivable | 43,993 | 45,430 | 40,022 |
Total assets | 449,873 | 496,066 | 490,502 |
Financial liabilities: | |||
Total liabilities | 555,000 | 595,000 | 383,000 |
Carrying Value | Revolving unsecured credit facility | |||
Financial liabilities: | |||
Debt | 255,000 | 295,000 | 83,000 |
Carrying Value | Senior unsecured notes (outstanding principal) | |||
Financial liabilities: | |||
Debt | 300,000 | 300,000 | 300,000 |
Carrying Value | Pawn loans | |||
Financial assets: | |||
Loans receivable | 345,200 | 362,941 | 322,625 |
Carrying Value | Consumer loans, net | |||
Financial assets: | |||
Loans receivable | 11,017 | 15,902 | 17,447 |
Estimated Fair Value | |||
Financial assets: | |||
Cash and cash equivalents | 49,663 | 71,793 | 110,408 |
Fees and service charges receivable | 43,993 | 45,430 | 40,022 |
Total assets | 449,873 | 496,066 | 490,502 |
Financial liabilities: | |||
Total liabilities | 561,000 | 588,000 | 388,000 |
Estimated Fair Value | Revolving unsecured credit facility | |||
Financial liabilities: | |||
Debt | 255,000 | 295,000 | 83,000 |
Estimated Fair Value | Senior unsecured notes (outstanding principal) | |||
Financial liabilities: | |||
Debt | 306,000 | 293,000 | 305,000 |
Estimated Fair Value | Pawn loans | |||
Financial assets: | |||
Loans receivable | 345,200 | 362,941 | 322,625 |
Estimated Fair Value | Consumer loans, net | |||
Financial assets: | |||
Loans receivable | 11,017 | 15,902 | 17,447 |
Estimated Fair Value | Level 1 | |||
Financial assets: | |||
Cash and cash equivalents | 49,663 | 71,793 | 110,408 |
Fees and service charges receivable | 0 | 0 | 0 |
Total assets | 49,663 | 71,793 | 110,408 |
Financial liabilities: | |||
Total liabilities | 0 | 0 | 0 |
Estimated Fair Value | Level 1 | Revolving unsecured credit facility | |||
Financial liabilities: | |||
Debt | 0 | 0 | 0 |
Estimated Fair Value | Level 1 | Senior unsecured notes (outstanding principal) | |||
Financial liabilities: | |||
Debt | 0 | 0 | 0 |
Estimated Fair Value | Level 1 | Pawn loans | |||
Financial assets: | |||
Loans receivable | 0 | 0 | 0 |
Estimated Fair Value | Level 1 | Consumer loans, net | |||
Financial assets: | |||
Loans receivable | 0 | 0 | 0 |
Estimated Fair Value | Level 2 | |||
Financial assets: | |||
Cash and cash equivalents | 0 | 0 | 0 |
Fees and service charges receivable | 0 | 0 | 0 |
Total assets | 0 | 0 | 0 |
Financial liabilities: | |||
Total liabilities | 561,000 | 588,000 | 388,000 |
Estimated Fair Value | Level 2 | Revolving unsecured credit facility | |||
Financial liabilities: | |||
Debt | 255,000 | 295,000 | 83,000 |
Estimated Fair Value | Level 2 | Senior unsecured notes (outstanding principal) | |||
Financial liabilities: | |||
Debt | 306,000 | 293,000 | 305,000 |
Estimated Fair Value | Level 2 | Pawn loans | |||
Financial assets: | |||
Loans receivable | 0 | 0 | 0 |
Estimated Fair Value | Level 2 | Consumer loans, net | |||
Financial assets: | |||
Loans receivable | 0 | 0 | 0 |
Estimated Fair Value | Level 3 | |||
Financial assets: | |||
Cash and cash equivalents | 0 | 0 | 0 |
Fees and service charges receivable | 43,993 | 45,430 | 40,022 |
Total assets | 400,210 | 424,273 | 380,094 |
Financial liabilities: | |||
Total liabilities | 0 | 0 | 0 |
Estimated Fair Value | Level 3 | Revolving unsecured credit facility | |||
Financial liabilities: | |||
Debt | 0 | 0 | 0 |
Estimated Fair Value | Level 3 | Senior unsecured notes (outstanding principal) | |||
Financial liabilities: | |||
Debt | 0 | 0 | 0 |
Estimated Fair Value | Level 3 | Pawn loans | |||
Financial assets: | |||
Loans receivable | 345,200 | 362,941 | 322,625 |
Estimated Fair Value | Level 3 | Consumer loans, net | |||
Financial assets: | |||
Loans receivable | $ 11,017 | $ 15,902 | $ 17,447 |
Segment Information - Summary (
Segment Information - Summary (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)segment | Mar. 31, 2018USD ($) | |
Revenue: | ||
Retail merchandise sales | $ 284,241 | $ 269,841 |
Number of reportable segments | segment | 2 | |
Pawn loan fees | $ 141,192 | 129,793 |
Wholesale scrap jewelry sales | 31,710 | 34,725 |
Consumer loan and credit services fees | 10,461 | 15,441 |
Total revenue | 467,604 | 449,800 |
Cost of revenue: | ||
Cost of retail merchandise sold | 179,349 | 174,497 |
Cost of wholesale scrap jewelry sold | 30,353 | 32,495 |
Consumer loan and credit services loss provision | 2,103 | 3,727 |
Total cost of revenue | 211,805 | 210,719 |
Net revenue | 255,799 | 239,081 |
Expenses and other income: | ||
Store operating expenses | 146,852 | 138,348 |
Administrative expenses | 32,154 | 28,002 |
Depreciation and amortization | 9,874 | 11,283 |
Interest expense | 8,370 | 6,198 |
Interest income | (204) | (981) |
Merger and other acquisition expenses | 149 | 239 |
(Gain) loss on foreign exchange | (239) | 213 |
Total expenses and other income | 196,956 | 183,302 |
Income (loss) before income taxes | 58,843 | 55,779 |
U.S. Operations | ||
Revenue: | ||
Retail merchandise sales | 186,815 | 186,052 |
Pawn loan fees | 97,876 | 96,242 |
Wholesale scrap jewelry sales | 22,785 | 29,457 |
Consumer loan and credit services fees | 10,461 | 15,039 |
Total revenue | 317,937 | 326,790 |
Cost of revenue: | ||
Cost of retail merchandise sold | 117,744 | 120,616 |
Cost of wholesale scrap jewelry sold | 21,270 | 27,653 |
Consumer loan and credit services loss provision | 2,103 | 3,644 |
Total cost of revenue | 141,117 | 151,913 |
Net revenue | 176,820 | 174,877 |
Expenses and other income: | ||
Store operating expenses | 103,884 | 104,383 |
Administrative expenses | 0 | 0 |
Depreciation and amortization | 5,045 | 5,555 |
Interest expense | 0 | 0 |
Interest income | 0 | 0 |
Merger and other acquisition expenses | 0 | 0 |
(Gain) loss on foreign exchange | 0 | 0 |
Total expenses and other income | 108,929 | 109,938 |
Income (loss) before income taxes | 67,891 | 64,939 |
Latin America Operations | ||
Revenue: | ||
Retail merchandise sales | 97,426 | 83,789 |
Pawn loan fees | 43,316 | 33,551 |
Wholesale scrap jewelry sales | 8,925 | 5,268 |
Consumer loan and credit services fees | 0 | 402 |
Total revenue | 149,667 | 123,010 |
Cost of revenue: | ||
Cost of retail merchandise sold | 61,605 | 53,881 |
Cost of wholesale scrap jewelry sold | 9,083 | 4,842 |
Consumer loan and credit services loss provision | 0 | 83 |
Total cost of revenue | 70,688 | 58,806 |
Net revenue | 78,979 | 64,204 |
Expenses and other income: | ||
Store operating expenses | 42,968 | 33,965 |
Administrative expenses | 0 | 0 |
Depreciation and amortization | 3,305 | 2,709 |
Interest expense | 0 | 0 |
Interest income | 0 | 0 |
Merger and other acquisition expenses | 0 | 0 |
(Gain) loss on foreign exchange | 0 | 0 |
Total expenses and other income | 46,273 | 36,674 |
Income (loss) before income taxes | 32,706 | 27,530 |
Corporate | ||
Revenue: | ||
Retail merchandise sales | 0 | 0 |
Pawn loan fees | 0 | 0 |
Wholesale scrap jewelry sales | 0 | 0 |
Consumer loan and credit services fees | 0 | 0 |
Total revenue | 0 | 0 |
Cost of revenue: | ||
Cost of retail merchandise sold | 0 | 0 |
Cost of wholesale scrap jewelry sold | 0 | 0 |
Consumer loan and credit services loss provision | 0 | 0 |
Total cost of revenue | 0 | 0 |
Net revenue | 0 | 0 |
Expenses and other income: | ||
Store operating expenses | 0 | 0 |
Administrative expenses | 32,154 | 28,002 |
Depreciation and amortization | 1,524 | 3,019 |
Interest expense | 8,370 | 6,198 |
Interest income | (204) | (981) |
Merger and other acquisition expenses | 149 | 239 |
(Gain) loss on foreign exchange | (239) | 213 |
Total expenses and other income | 41,754 | 36,690 |
Income (loss) before income taxes | $ (41,754) | $ (36,690) |