Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 21, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-10960 | |
Entity Registrant Name | FIRSTCASH, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 75-2237318 | |
Entity Address, Address Line One | 1600 West 7th Street | |
Entity Address, City or Town | Fort Worth | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 76102 | |
City Area Code | 817 | |
Local Phone Number | 335-1100 | |
Title of 12(b) Security | Common Stock, par value $.01 per share | |
Trading Symbol | FCFS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 41,440,498 | |
Entity Central Index Key | 0000840489 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
ASSETS | |||
Cash and cash equivalents | $ 75,464 | $ 46,527 | $ 49,663 |
Fees and service charges receivable | 40,121 | 46,686 | 43,993 |
Pawn loans | 314,296 | 369,527 | 345,200 |
Consumer loans, net | 410 | 751 | 11,017 |
Inventories | 227,876 | 265,256 | 257,803 |
Income taxes receivable | 4,279 | 875 | 1,096 |
Prepaid expenses and other current assets | 10,326 | 11,367 | 9,329 |
Total current assets | 672,772 | 740,989 | 718,101 |
Property and equipment, net | 329,066 | 336,167 | 276,397 |
Operating lease right of use asset | 280,840 | 304,549 | 298,167 |
Goodwill | 927,290 | 948,643 | 932,773 |
Intangible assets, net | 84,999 | 85,875 | 87,810 |
Other assets | 9,188 | 11,506 | 10,927 |
Deferred tax assets | 8,718 | 11,711 | 11,608 |
Total assets | 2,312,873 | 2,439,440 | 2,335,783 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||
Accounts payable and accrued liabilities | 74,805 | 72,398 | 77,363 |
Customer deposits | 39,728 | 39,736 | 40,055 |
Income taxes payable | 9,832 | 4,302 | 7,484 |
Lease liability, current | 82,355 | 86,466 | 84,946 |
Total current liabilities | 206,720 | 202,902 | 209,848 |
Revolving unsecured credit facilities | 355,519 | 335,000 | 255,000 |
Senior unsecured notes | 296,744 | 296,568 | 296,053 |
Deferred tax liabilities | 64,728 | 61,431 | 57,496 |
Lease liability, non-current | 181,787 | 193,504 | 188,970 |
Total liabilities | 1,105,498 | 1,089,405 | 1,007,367 |
Stockholders’ equity: | |||
Common stock | 493 | 493 | 493 |
Additional paid-in capital | 1,224,113 | 1,231,528 | 1,225,482 |
Retained earnings | 749,126 | 727,476 | 638,574 |
Accumulated other comprehensive loss | (180,472) | (96,969) | (107,694) |
Common stock held in treasury, at cost | (585,885) | (512,493) | (428,439) |
Total stockholders’ equity | 1,207,375 | 1,350,035 | 1,328,416 |
Total liabilities and stockholders’ equity | $ 2,312,873 | $ 2,439,440 | $ 2,335,783 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue: | ||
Retail merchandise sales | $ 296,629 | $ 284,241 |
Pawn loan fees | 142,115 | 141,192 |
Wholesale scrap jewelry sales | 26,371 | 31,710 |
Consumer loan and credit services fees | 1,375 | 10,461 |
Total revenue | 466,490 | 467,604 |
Cost of revenue: | ||
Cost of retail merchandise sold | 184,695 | 179,349 |
Cost of wholesale scrap jewelry sold | 22,847 | 30,353 |
Total cost of revenue | (361) | 2,103 |
Total cost of revenue | 207,181 | 211,805 |
Net revenue | 259,309 | 255,799 |
Expenses and other income: | ||
Store operating expenses | 153,500 | 146,852 |
Administrative expenses | 32,902 | 32,154 |
Depreciation and amortization | 10,674 | 9,874 |
Interest expense | 8,418 | 8,370 |
Interest income | (185) | (204) |
Merger and other acquisition expenses | 68 | 149 |
Loss (gain) on foreign exchange | 2,685 | (239) |
Write-offs and impairments of certain lease intangibles and other assets | 5,530 | 0 |
Total expenses and other income | 213,592 | 196,956 |
Income (loss) before income taxes | 45,717 | 58,843 |
Provision for income taxes | 12,799 | 16,188 |
Net income | $ 32,918 | $ 42,655 |
Earnings per share: | ||
Basic (USD per share) | $ 0.79 | $ 0.98 |
Diluted (USD per share) | $ 0.78 | $ 0.98 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 32,918 | $ 42,655 |
Other comprehensive income (loss): | ||
Currency translation adjustment | (83,503) | 5,423 |
Comprehensive income (loss) | $ (50,585) | $ 48,078 |
CONDENSED CONSOLIDATED STATEM_3
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, 2018 | 49,276 | 5,673 | ||||
Balance at beginning of period 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 | 0 | (1,441) | $ 1,441 | |||
Shares issued under share-based compensation plan (shares) | (21) | |||||
Share-based compensation expense | 2,315 | 2,315 | ||||
Net income | 42,655 | 42,655 | ||||
Cash dividends | (10,891) | (10,891) | ||||
Currency translation adjustment | 5,423 | 5,423 | ||||
Purchases of treasury stock (shares) | 343 | |||||
Purchases of treasury stock | (29,190) | $ (29,190) | ||||
Balance at end of period (shares) at Mar. 31, 2019 | 49,276 | 5,995 | ||||
Balance at end of period at Mar. 31, 2019 | 1,328,416 | $ 493 | 1,225,482 | 638,574 | (107,694) | $ (428,439) |
Balance at beginning of period (shares) at Dec. 31, 2019 | 49,276 | 6,947 | ||||
Balance at beginning of period at Dec. 31, 2019 | 1,350,035 | $ 493 | 1,231,528 | 727,476 | (96,969) | $ (512,493) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Shares issued under share-based compensation plan | (3,327) | (10,266) | $ 6,939 | |||
Shares issued under share-based compensation plan (shares) | (93) | |||||
Share-based compensation expense | 2,851 | 2,851 | ||||
Net income | 32,918 | 32,918 | ||||
Cash dividends | (11,268) | (11,268) | ||||
Currency translation adjustment | (83,503) | (83,503) | ||||
Purchases of treasury stock (shares) | 981 | |||||
Purchases of treasury stock | (80,331) | $ (80,331) | ||||
Balance at end of period (shares) at Mar. 31, 2020 | 49,276 | 7,835 | ||||
Balance at end of period at Mar. 31, 2020 | $ 1,207,375 | $ 493 | $ 1,224,113 | $ 749,126 | $ (180,472) | $ (585,885) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends (USD per share) | $ 0.27 | $ 0.25 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flow from operating activities: | ||
Net income | $ 32,918 | $ 42,655 |
Adjustments to reconcile net income to net cash flow provided by operating activities: | ||
Non-cash portion of credit loss provision | (729) | 1,335 |
Share-based compensation expense | 2,851 | 2,315 |
Depreciation and amortization expense | 10,674 | 9,874 |
Amortization of debt issuance costs | 387 | 473 |
Write-offs and impairments of certain lease intangibles and other assets | 5,530 | 0 |
Deferred income taxes, net | 4,239 | 2,855 |
Changes in operating assets and liabilities, net of business combinations: | ||
Fees and service charges receivable | 3,673 | 2,093 |
Inventories | 6,951 | 5,874 |
Prepaid expenses and other assets | 355 | 776 |
Accounts payable, accrued liabilities and other liabilities | 9,755 | (3,560) |
Income taxes | 781 | 7,007 |
Net cash flow provided by operating activities | 77,385 | 71,697 |
Cash flow from investing activities: | ||
Loan receivables, net of cash repayments | 52,279 | 42,216 |
Purchases of furniture, fixtures, equipment and improvements | (10,581) | (9,658) |
Purchases of store real property | (9,617) | (22,145) |
Acquisitions of pawn stores, net of cash acquired | (5,477) | (24,520) |
Net cash flow provided by (used in) investing activities | 26,604 | (14,107) |
Cash flow from financing activities: | ||
Borrowings from unsecured credit facilities | 106,925 | 43,000 |
Repayments of unsecured credit facilities | (88,000) | (83,000) |
Debt issuance costs paid | (130) | 0 |
Purchases of treasury stock | (80,331) | (29,599) |
Dividends paid | (11,268) | (10,891) |
Net cash flow used in financing activities | (72,804) | (80,490) |
Effect of exchange rates on cash | (2,248) | 770 |
Change in cash and cash equivalents | 28,937 | (22,130) |
Cash and cash equivalents at beginning of the period | 46,527 | 71,793 |
Cash and cash equivalents at end of the period | $ 75,464 | $ 49,663 |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation The accompanying consolidated balance sheet as of December 31, 2019 , 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, 2019 , filed with the Securities and Exchange Commission (the “SEC”) on February 3, 2020 . The consolidated financial statements as of March 31, 2020 and 2019 , and for the three month periods ended March 31, 2020 and 2019 , 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, 2020 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 respective period. The Company also has operations in El Salvador where the reporting and functional currency is the U.S. dollar. Recent Accounting Pronouncements 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. In April 2019, the Financial Accounting Standards Board issued ASU No. 2019-04, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments” (“ASU 2019-04”) which clarifies treatment of certain credit losses. In May 2019, the Financial Accounting Standards Board issued ASU No. 2019-05, “Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief ” (“ASU 2019-05”) which provides an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost. In November 2019, the Financial Accounting Standards Board issued ASU No. 2019-11, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses” (“ASU 2019-11”), which provides guidance around how to report expected recoveries. In February 2020, the Financial Accounting Standards Board issued ASU No. 2020-02, “Financial Instruments - Credit Losses (Topic 326) (“ASU 2020-02”) which provides updated guidance on how an entity should measure credit losses on financial instruments and delayed the effective date of the original pronouncement for smaller reporting companies. ASU 2016-13, ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11 and ASU 2020-02 (collectively, “ASC 326”) are effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted. The adoption of ASC 326 did not have a material impact on the Company’s recognition of financial instruments within the scope of the standard. 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 two from the goodwill impairment test and instead requires an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. 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 and should be adopted on a prospective basis. The adoption of ASU 2017-04 did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures. In August 2018, the Financial Accounting Standards Board issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 modifies the disclosure requirements on fair value measurements. ASU 2018-13 is effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted for any removed or modified disclosures. The adoption of ASU 2018-13 did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures. In December 2019, the Financial Accounting Standards Board issued ASU No 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). ASU 2019-12 removes certain exceptions to the general principles in Topic 740 in Generally Accepted Accounting Principles. ASU 2019-12 is effective for public entities for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company does not expect ASU 2019-12 to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures. In March 2020, the Financial Accounting Standards Board issued ASU 2020-03, “Codification Improvements to Financial Instruments” (“ASU 2020-03”). ASU 2020-03 improves and clarifies various financial instruments topics. ASU 2020-03 includes seven different issues that describe the areas of improvement and the related amendments to GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The Company adopted ASU 2020-03 upon issuance, which did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures. In March 2020, the Financial Accounting Standards Board issued ASU No 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides temporary optional expedients and exceptions to the US GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. ASU 2020-04 is effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. The Company does not expect ASU 2020-04 to 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, 2020 | |
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, 2020 2019 Numerator: Net income $ 32,918 $ 42,655 Denominator: Weighted-average common shares for calculating basic earnings per share 41,912 43,518 Effect of dilutive securities: Stock options and restricted stock unit awards 95 140 Weighted-average common shares for calculating diluted earnings per share 42,007 43,658 Earnings per share: Basic $ 0.79 $ 0.98 Diluted $ 0.78 $ 0.98 |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2020 | |
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, 2020 , the Company acquired a 36 -store chain of pawn stores from an independent operator in Mexico. The purchase price totaled $7.0 million , net of cash acquired and subject to future post-closing adjustments. The aggregate purchase price was composed of $3.7 million in cash paid at the closing date on March 31, 2020 and remaining short-term amounts payable to the seller of approximately $3.3 million . The purchase price of the 2020 acquisition was allocated to assets acquired and liabilities assumed based upon the estimated fair market values at the date of acquisition. The excess purchase price over the estimated fair market value of the net assets acquired has been recorded as goodwill. The goodwill arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of the Company and the pawn stores acquired. This acquisition was not material to the Company’s consolidated financial statements. |
Operating Leases
Operating Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Operating Leases | Operating Leases 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 operating lease 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. Leased facilities are generally leased for a term of three to five years with one or more options to renew for an additional three to five years , 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 operating lease right of use asset and lease liability until such certainty exists. The weighted-average remaining lease term for operating leases as of March 31, 2020 and 2019 was 3.9 years and 4.0 years , respectively. The operating lease right of use 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, 2020 and 2019 was 7.8% and 7.2% , respectively. 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 each reporting period into the functional currency (Mexican pesos) using reporting date exchange rates. The remeasurement results in the recognition of foreign currency exchange gains or losses each reporting period, which can produce a certain level of earnings volatility. The Company recognized a foreign currency loss of $4.4 million and a gain of $0.3 million during the three months ended March 31, 2020 and 2019 , respectively, related to the remeasurement of these U.S. dollar denominated operating leases, which is included in loss (gain) 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, 2020 and 2019 (in thousands): Three Months Ended March 31, 2020 2019 Operating lease expense $ 31,210 $ 30,980 Variable lease expense (1) 3,545 2,075 Total operating lease expense $ 34,755 $ 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, 2020 (in thousands): Nine months ending December 31, 2020 $ 76,393 2021 84,670 2022 62,293 2023 43,372 2024 23,004 Thereafter 15,886 Total $ 305,618 Less amount of lease payments representing interest (41,476 ) Total present value of lease payments $ 264,142 The following table details supplemental cash flow information related to operating leases for the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended March 31, 2020 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 28,835 $ 28,840 Leased assets obtained in exchange for new operating lease liabilities $ 24,983 $ 2,551 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2020 | |
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, As of December 31, 2020 2019 2019 Revolving unsecured credit facility, maturing 2024 (1) $ 330,000 $ 255,000 $ 335,000 Revolving unsecured uncommitted credit facility, maturing 2023 (1) 25,519 — — 5.375% senior unsecured notes due 2024 (2) 296,744 296,053 296,568 Total long-term debt $ 652,263 $ 551,053 $ 631,568 (1) Debt issuance costs related to the Company’s revolving unsecured credit facilities are included in other assets in the accompanying consolidated balance sheets. (2) As of March 31, 2020 , 2019 and December 31, 2019 , deferred debt issuance costs of $3.3 million , $3.9 million and $3.4 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, 2020 , the Company maintained an unsecured line of credit with a group of U.S. based commercial lenders (the “Credit Facility”) in the amount of $500.0 million . The Credit Facility matures on December 19, 2024 , which would accelerate to 90 days prior to the maturity of the Company’s senior unsecured notes due June 1, 2024 if the Company’s senior unsecured notes have not been refinanced or otherwise extended past December 19, 2024 by such date. As of March 31, 2020 , the Company had $330.0 million in outstanding borrowings and $3.3 million in outstanding letters of credit under the Credit Facility, leaving $166.7 million available for future borrowings. The Credit Facility is unsecured and bears interest, at the Company’s option, of 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, 2020 was 3.16% 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, 2020 . During the three months ended March 31, 2020 , the Company made net payments of $5.0 million pursuant to the Credit Facility. Revolving Unsecured Uncommitted Credit Facility During March 2020, the Company’s primary subsidiary in Mexico, First Cash S.A. de C.V., entered into an unsecured and uncommitted line of credit guaranteed by FirstCash, Inc. with a bank in Mexico (the “Mexico Credit Facility”) in the amount of $600.0 million Mexican pesos. The Mexico Credit Facility matures on March 9, 2023 and, as of March 31, 2020 , was fully drawn, leaving no availability for future borrowings. The Mexico Credit Facility bears interest at the Mexican Central Bank’s interbank equilibrium rate (“TIIE”) plus a fixed spread of 2.5% . The interest rate on the amount outstanding under the Mexico Credit Facility at March 31, 2020 was 9.71% . Under the terms of the Mexico Credit Facility, the Company is required to maintain certain financial ratios and comply with certain financial covenants. The Company was in compliance with the covenants of the Mexico Credit Facility as of March 31, 2020 . During the three months ended March 31, 2020 , the Company received net proceeds of $600.0 million Mexican pesos from borrowings pursuant to the Mexico 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 . The Net Debt Ratio is defined generally in the indenture governing the Notes as the ratio of (1) the total consolidated debt of the Company minus cash and cash equivalents of the Company to (2) the Company’s consolidated trailing twelve months EBITDA, as adjusted to exclude certain non-recurring expenses and giving pro forma effect to operations acquired during the measurement period. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
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, 2020 , 2019 and December 31, 2019 , the Company did not have any financial assets or liabilities measured at fair value on a recurring basis. Fair Value Measurements on a Non-Recurring Basis The Company measures non-financial assets and liabilities, such as property and equipment and intangible assets, at fair value on a non-recurring basis or when events or circumstances indicate that the carrying amount of the assets may be impaired. During the three months ended March 31, 2020, the Company recorded $1.9 million impairment related to a non-financial, non-operating asset that was included in other assets in the consolidated balance sheets. Financial Assets and Liabilities Not Measured at Fair Value The Company’s financial assets and liabilities as of March 31, 2020 , 2019 and December 31, 2019 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 2020 2020 Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 75,464 $ 75,464 $ 75,464 $ — $ — Fees and service charges receivable 40,121 40,121 — — 40,121 Pawn loans 314,296 314,296 — — 314,296 Consumer loans, net 410 410 — — 410 $ 430,291 $ 430,291 $ 75,464 $ — $ 354,827 Financial liabilities: Revolving unsecured credit facilities $ 355,519 $ 355,519 $ — $ 355,519 $ — Senior unsecured notes (outstanding principal) 300,000 276,000 — 276,000 — $ 655,519 $ 631,519 $ — $ 631,519 $ — 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 December 31, December 31, Fair Value Measurements Using 2019 2019 Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 46,527 $ 46,527 $ 46,527 $ — $ — Fees and service charges receivable 46,686 46,686 — — 46,686 Pawn loans 369,527 369,527 — — 369,527 Consumer loans, net 751 751 — — 751 $ 463,491 $ 463,491 $ 46,527 $ — $ 416,964 Financial liabilities: Revolving unsecured credit facility $ 335,000 $ 335,000 $ — $ 335,000 $ — Senior unsecured notes (outstanding principal) 300,000 310,000 — 310,000 — $ 635,000 $ 645,000 $ — $ 645,000 $ — 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 unsecured credit facilities approximate fair value as of March 31, 2020 , 2019 and December 31, 2019 . The fair value of the unsecured credit facilities are estimated based on market values for debt issuances with similar characteristics or rates currently available for debt with similar terms. In addition, the unsecured credit facilities have a variable interest rate based on a fixed spread over LIBOR or TIIE and reprice with any changes in LIBOR or TIIE. The fair value of the senior unsecured notes is estimated based on quoted prices in markets that are not active. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2020 | |
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 operations in Latin America, which includes operations in Mexico, Guatemala, El Salvador and Colombia. Corporate expenses, which include administrative expenses, corporate depreciation and amortization, interest expense, interest income, merger and other acquisition expenses and loss (gain) on foreign exchange, are incurred or earned in both the U.S. and Latin America, but presented on a consolidated basis and are not allocated between the U.S. operations segment and Latin America operations segment. The following tables present reportable segment information for the three month period ended March 31, 2020 and 2019 (in thousands): Three Months Ended March 31, 2020 U.S. Operations Latin America Operations Corporate Consolidated Revenue: Retail merchandise sales $ 195,966 $ 100,663 $ — $ 296,629 Pawn loan fees 97,857 44,258 — 142,115 Wholesale scrap jewelry sales 15,478 10,893 — 26,371 Consumer loan and credit services fees 1,375 — — 1,375 Total revenue 310,676 155,814 — 466,490 Cost of revenue: Cost of retail merchandise sold 119,529 65,166 — 184,695 Cost of wholesale scrap jewelry sold 14,006 8,841 — 22,847 Consumer loan and credit services loss provision (361 ) — — (361 ) Total cost of revenue 133,174 74,007 — 207,181 Net revenue 177,502 81,807 — 259,309 Expenses and other income: Store operating expenses 107,706 45,794 — 153,500 Administrative expenses — — 32,902 32,902 Depreciation and amortization 5,401 4,063 1,210 10,674 Interest expense — — 8,418 8,418 Interest income — — (185 ) (185 ) Merger and other acquisition expenses — — 68 68 Loss on foreign exchange — — 2,685 2,685 Write-offs and impairments of certain lease intangibles and other assets — — 5,530 5,530 Total expenses and other income 113,107 49,857 50,628 213,592 Income (loss) before income taxes $ 64,395 $ 31,950 $ (50,628 ) $ 45,717 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 |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event In December 2019, a novel strain of coronavirus (“COVID-19”) surfaced in China, which has and is continuing to spread throughout the world. In March of 2020, the World Health Organization declared the outbreak as a pandemic. The extent to which COVID-19 impacts the Company’s operations, results of operations, liquidity and financial condition will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration, severity and scope of the outbreak, and the actions taken to contain its impact, as well as actions taken to limit the resulting economic impact, among others. The health and safety of customers and employees of the Company are of the utmost importance. The operation of the Company’s stores is critically dependent on the ability of customers and employees to safely conduct transactions in each location. The Company has taken, and will continue to take, temporary precautionary measures in accordance with the guidelines of the Centers for Disease Control and other federal, state and local authorities. This includes the adoption of strict social distancing and hygiene protocols within all of the Company’s store locations intended to help minimize the risk of COVID-19 to its customers and employees. Also, in an effort to improve social distancing, the Company has temporarily allowed the majority of its work force at its corporate offices to work remotely. The global impact of the pandemic has been rapidly evolving and many countries, states and other local government officials have reacted by instituting quarantines, shelter-in-place and other orders mandating non-essential business closures and restricting travel. The Company’s business depends heavily on the uninterrupted operation of its stores. In general, in most jurisdictions where the Company has stores, pawnshops have been designated an essential service by federal guidelines and/or local regulations and are allowed to remain open. However, there can be no assurance that pawnshops will remain designated as an essential service or that government officials will not expand business closures to include pawnshops, which would have a material adverse effect on the Company’s operations and financial condition. In addition, consumer fears about becoming ill with COVID-19 may continue, and consumer behavior may change as a result of COVID-19, which could materially and adversely affect traffic to the Company’s stores. Consumer spending and loan demand generally may also be impacted by general macroeconomic conditions and consumer confidence, including the impacts of any recession and other uncertainties from the effects of government stimulus programs resulting from the COVID-19 pandemic. The economic global uncertainty resulting from COVID-19 has also resulted in increased currency volatility that has resulted in adverse currency rate fluctuations, especially with respect to the Mexican peso. There is no guarantee these adverse currency rate fluctuations will not continue or accelerate in the future. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying consolidated balance sheet as of December 31, 2019 , 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, 2019 , filed with the Securities and Exchange Commission (the “SEC”) on February 3, 2020 . The consolidated financial statements as of March 31, 2020 and 2019 , and for the three month periods ended March 31, 2020 and 2019 , 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, 2020 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 respective period. The Company also has operations in El Salvador where the reporting and functional currency is the U.S. dollar. |
Recent Accounting Pronouncements | 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. In April 2019, the Financial Accounting Standards Board issued ASU No. 2019-04, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments” (“ASU 2019-04”) which clarifies treatment of certain credit losses. In May 2019, the Financial Accounting Standards Board issued ASU No. 2019-05, “Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief ” (“ASU 2019-05”) which provides an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost. In November 2019, the Financial Accounting Standards Board issued ASU No. 2019-11, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses” (“ASU 2019-11”), which provides guidance around how to report expected recoveries. In February 2020, the Financial Accounting Standards Board issued ASU No. 2020-02, “Financial Instruments - Credit Losses (Topic 326) (“ASU 2020-02”) which provides updated guidance on how an entity should measure credit losses on financial instruments and delayed the effective date of the original pronouncement for smaller reporting companies. ASU 2016-13, ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11 and ASU 2020-02 (collectively, “ASC 326”) are effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted. The adoption of ASC 326 did not have a material impact on the Company’s recognition of financial instruments within the scope of the standard. 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 two from the goodwill impairment test and instead requires an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. 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 and should be adopted on a prospective basis. The adoption of ASU 2017-04 did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures. In August 2018, the Financial Accounting Standards Board issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 modifies the disclosure requirements on fair value measurements. ASU 2018-13 is effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted for any removed or modified disclosures. The adoption of ASU 2018-13 did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures. In December 2019, the Financial Accounting Standards Board issued ASU No 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). ASU 2019-12 removes certain exceptions to the general principles in Topic 740 in Generally Accepted Accounting Principles. ASU 2019-12 is effective for public entities for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company does not expect ASU 2019-12 to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures. In March 2020, the Financial Accounting Standards Board issued ASU 2020-03, “Codification Improvements to Financial Instruments” (“ASU 2020-03”). ASU 2020-03 improves and clarifies various financial instruments topics. ASU 2020-03 includes seven different issues that describe the areas of improvement and the related amendments to GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The Company adopted ASU 2020-03 upon issuance, which did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures. In March 2020, the Financial Accounting Standards Board issued ASU No 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides temporary optional expedients and exceptions to the US GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. ASU 2020-04 is effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. The Company does not expect ASU 2020-04 to 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. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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, 2020 2019 Numerator: Net income $ 32,918 $ 42,655 Denominator: Weighted-average common shares for calculating basic earnings per share 41,912 43,518 Effect of dilutive securities: Stock options and restricted stock unit awards 95 140 Weighted-average common shares for calculating diluted earnings per share 42,007 43,658 Earnings per share: Basic $ 0.79 $ 0.98 Diluted $ 0.78 $ 0.98 |
Operating Leases (Tables)
Operating Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of Lease Expense and Supplemental Cash Flow Information | 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, 2020 and 2019 (in thousands): Three Months Ended March 31, 2020 2019 Operating lease expense $ 31,210 $ 30,980 Variable lease expense (1) 3,545 2,075 Total operating lease expense $ 34,755 $ 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 supplemental cash flow information related to operating leases for the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended March 31, 2020 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 28,835 $ 28,840 Leased assets obtained in exchange for new operating lease liabilities $ 24,983 $ 2,551 |
Schedule of Maturity of Lease Liabilities | The following table details the maturity of lease liabilities for all operating leases as of March 31, 2020 (in thousands): Nine months ending December 31, 2020 $ 76,393 2021 84,670 2022 62,293 2023 43,372 2024 23,004 Thereafter 15,886 Total $ 305,618 Less amount of lease payments representing interest (41,476 ) Total present value of lease payments $ 264,142 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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, As of December 31, 2020 2019 2019 Revolving unsecured credit facility, maturing 2024 (1) $ 330,000 $ 255,000 $ 335,000 Revolving unsecured uncommitted credit facility, maturing 2023 (1) 25,519 — — 5.375% senior unsecured notes due 2024 (2) 296,744 296,053 296,568 Total long-term debt $ 652,263 $ 551,053 $ 631,568 (1) Debt issuance costs related to the Company’s revolving unsecured credit facilities are included in other assets in the accompanying consolidated balance sheets. (2) As of March 31, 2020 , 2019 and December 31, 2019 , deferred debt issuance costs of $3.3 million , $3.9 million and $3.4 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, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value by Balance Sheet Grouping | The Company’s financial assets and liabilities as of March 31, 2020 , 2019 and December 31, 2019 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 2020 2020 Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 75,464 $ 75,464 $ 75,464 $ — $ — Fees and service charges receivable 40,121 40,121 — — 40,121 Pawn loans 314,296 314,296 — — 314,296 Consumer loans, net 410 410 — — 410 $ 430,291 $ 430,291 $ 75,464 $ — $ 354,827 Financial liabilities: Revolving unsecured credit facilities $ 355,519 $ 355,519 $ — $ 355,519 $ — Senior unsecured notes (outstanding principal) 300,000 276,000 — 276,000 — $ 655,519 $ 631,519 $ — $ 631,519 $ — 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 December 31, December 31, Fair Value Measurements Using 2019 2019 Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 46,527 $ 46,527 $ 46,527 $ — $ — Fees and service charges receivable 46,686 46,686 — — 46,686 Pawn loans 369,527 369,527 — — 369,527 Consumer loans, net 751 751 — — 751 $ 463,491 $ 463,491 $ 46,527 $ — $ 416,964 Financial liabilities: Revolving unsecured credit facility $ 335,000 $ 335,000 $ — $ 335,000 $ — Senior unsecured notes (outstanding principal) 300,000 310,000 — 310,000 — $ 635,000 $ 645,000 $ — $ 645,000 $ — |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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, 2020 and 2019 (in thousands): Three Months Ended March 31, 2020 U.S. Operations Latin America Operations Corporate Consolidated Revenue: Retail merchandise sales $ 195,966 $ 100,663 $ — $ 296,629 Pawn loan fees 97,857 44,258 — 142,115 Wholesale scrap jewelry sales 15,478 10,893 — 26,371 Consumer loan and credit services fees 1,375 — — 1,375 Total revenue 310,676 155,814 — 466,490 Cost of revenue: Cost of retail merchandise sold 119,529 65,166 — 184,695 Cost of wholesale scrap jewelry sold 14,006 8,841 — 22,847 Consumer loan and credit services loss provision (361 ) — — (361 ) Total cost of revenue 133,174 74,007 — 207,181 Net revenue 177,502 81,807 — 259,309 Expenses and other income: Store operating expenses 107,706 45,794 — 153,500 Administrative expenses — — 32,902 32,902 Depreciation and amortization 5,401 4,063 1,210 10,674 Interest expense — — 8,418 8,418 Interest income — — (185 ) (185 ) Merger and other acquisition expenses — — 68 68 Loss on foreign exchange — — 2,685 2,685 Write-offs and impairments of certain lease intangibles and other assets — — 5,530 5,530 Total expenses and other income 113,107 49,857 50,628 213,592 Income (loss) before income taxes $ 64,395 $ 31,950 $ (50,628 ) $ 45,717 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 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Net income | $ 32,918 | $ 42,655 |
Denominator: | ||
Weighted-average common shares for calculating basic earnings per share (shares) | 41,912 | 43,518 |
Stock options and nonvested stock awards (shares) | 95 | 140 |
Weighted-average common shares for calculating diluted earnings per share (shares) | 42,007 | 43,658 |
Earnings per share: | ||
Basic (USD per share) | $ 0.79 | $ 0.98 |
Diluted (USD per share) | $ 0.78 | $ 0.98 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($)store | |
Entity Location [Line Items] | |
Aggregate purchase price | $ 7 |
Cash paid in aggregate purchase price | 3.7 |
Liabilities incurred in aggregate purchase price | $ 3.3 |
Mexico | |
Entity Location [Line Items] | |
Number of stores acquired | store | 36 |
Operating Leases - Narrative (D
Operating Leases - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Weighted average remaining lease term | 3 years 10 months 24 days | 4 years |
Weighted average discount rate (as a percent) | 7.80% | 7.20% |
Foreign Currency Transaction Loss, before Tax | $ (4.4) | |
Foreign Currency Transaction Gain, before Tax | $ 0.3 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
General term of leased facilities | 3 years | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
General term of leased facilities | 5 years |
Operating Leases - Lease Cost (
Operating Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Operating lease expense | $ 31,210 | $ 30,980 |
Variable lease expense | 3,545 | 2,075 |
Total operating lease expense | $ 34,755 | $ 33,055 |
Operating Leases - Lease Maturi
Operating Leases - Lease Maturities (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Leases [Abstract] | |
Nine months ending December 31, 2020 | $ 76,393 |
2021 | 84,670 |
2022 | 62,293 |
2023 | 43,372 |
2024 | 23,004 |
Thereafter | 15,886 |
Total | 305,618 |
Less amount of lease payments representing interest | (41,476) |
Total present value of lease payments | $ 264,142 |
Operating Leases - Supplemental
Operating Leases - Supplemental Cash Flow (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 28,835 | $ 28,840 |
Leased assets obtained in exchange for new operating lease liabilities | $ 24,983 | $ 2,551 |
Long-Term Debt - Summary (Detai
Long-Term Debt - Summary (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | May 30, 2017 |
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 652,263 | $ 631,568 | $ 551,053 | |
Deferred finance costs, net | 3,300 | 3,400 | 3,900 | |
Revolving Unsecured Credit Facility due 2024 | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | 330,000 | 335,000 | 255,000 | |
Revolving Unsecured Uncommitted Credit Facility due 2023 | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | 25,519 | 0 | 0 | |
5.375% senior unsecured notes due 2024 | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 296,744 | $ 296,568 | $ 296,053 | |
Stated interest rate (as a percent) | 5.375% | 5.375% |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | May 30, 2017 | |
Revolving Unsecured Credit Facility due 2024 | Line of Credit | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 500,000,000 | |
Amount outstanding | 330,000,000 | |
Letters of credit outstanding | 3,300,000 | |
Remaining borrowing capacity | $ 166,700,000 | |
Commitment fee (as a percent) | 0.50% | |
Interest rate at end of period (as a percent) | 3.16% | |
Net proceeds | $ (5,000,000) | |
Revolving Unsecured Credit Facility due 2024 | Line of Credit | 30-day LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 2.50% | |
Revolving Unsecured Credit Facility due 2024 | Line of Credit | 30-day LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 0.00% | |
Revolving Unsecured Credit Facility due 2024 | Line of Credit | Prime Rate | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 1.50% | |
Revolving Unsecured Uncommitted Credit Facility due 2023 | Line of Credit | ||
Debt Instrument [Line Items] | ||
Amount outstanding | $ 600,000,000 | |
Interest rate at end of period (as a percent) | 9.71% | |
Revolving Unsecured Uncommitted Credit Facility due 2023 | Line of Credit | Mexican Central Bank Interbank Equilibrium Rate (TIIE) | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 2.50% | |
5.375% senior unsecured notes due 2024 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 5.375% | 5.375% |
Face amount | $ 300,000,000 | |
Debt ratio | 2.25 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Financial Assets and Liabilities Not Measured at Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Other asset impairment charges | $ 1,900 | ||
Carrying Value | |||
Financial assets: | |||
Cash and cash equivalents | 75,464 | $ 46,527 | $ 49,663 |
Fees and service charges receivable | 40,121 | 46,686 | 43,993 |
Total assets | 430,291 | 463,491 | 449,873 |
Financial liabilities: | |||
Total liabilities | 655,519 | 635,000 | 555,000 |
Carrying Value | Revolving unsecured credit facilities | |||
Financial liabilities: | |||
Debt | 355,519 | 335,000 | 255,000 |
Carrying Value | Senior unsecured notes (outstanding principal) | |||
Financial liabilities: | |||
Debt | 300,000 | 300,000 | 300,000 |
Carrying Value | Pawn loans | |||
Financial assets: | |||
Loans receivable | 314,296 | 369,527 | 345,200 |
Carrying Value | Consumer loans, net | |||
Financial assets: | |||
Loans receivable | 410 | 751 | 11,017 |
Estimated Fair Value | |||
Financial assets: | |||
Cash and cash equivalents | 75,464 | 46,527 | 49,663 |
Fees and service charges receivable | 40,121 | 46,686 | 43,993 |
Total assets | 430,291 | 463,491 | 449,873 |
Financial liabilities: | |||
Total liabilities | 631,519 | 645,000 | 561,000 |
Estimated Fair Value | Revolving unsecured credit facilities | |||
Financial liabilities: | |||
Debt | 355,519 | 335,000 | 255,000 |
Estimated Fair Value | Senior unsecured notes (outstanding principal) | |||
Financial liabilities: | |||
Debt | 276,000 | 310,000 | 306,000 |
Estimated Fair Value | Pawn loans | |||
Financial assets: | |||
Loans receivable | 314,296 | 369,527 | 345,200 |
Estimated Fair Value | Consumer loans, net | |||
Financial assets: | |||
Loans receivable | 410 | 751 | 11,017 |
Estimated Fair Value | Level 1 | |||
Financial assets: | |||
Cash and cash equivalents | 75,464 | 46,527 | 49,663 |
Fees and service charges receivable | 0 | 0 | 0 |
Total assets | 75,464 | 46,527 | 49,663 |
Financial liabilities: | |||
Total liabilities | 0 | 0 | 0 |
Estimated Fair Value | Level 1 | Revolving unsecured credit facilities | |||
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 | 631,519 | 645,000 | 561,000 |
Estimated Fair Value | Level 2 | Revolving unsecured credit facilities | |||
Financial liabilities: | |||
Debt | 355,519 | 335,000 | 255,000 |
Estimated Fair Value | Level 2 | Senior unsecured notes (outstanding principal) | |||
Financial liabilities: | |||
Debt | 276,000 | 310,000 | 306,000 |
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 | 40,121 | 46,686 | 43,993 |
Total assets | 354,827 | 416,964 | 400,210 |
Financial liabilities: | |||
Total liabilities | 0 | 0 | 0 |
Estimated Fair Value | Level 3 | Revolving unsecured credit facilities | |||
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 | 314,296 | 369,527 | 345,200 |
Estimated Fair Value | Level 3 | Consumer loans, net | |||
Financial assets: | |||
Loans receivable | $ 410 | $ 751 | $ 11,017 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)segment | Mar. 31, 2019USD ($) | |
Schedule of Revenues from External Customers [Line Items] | ||
Number of reportable segments | segment | 2 | |
Revenue: | ||
Retail merchandise sales | $ 296,629 | $ 284,241 |
Pawn loan fees | 142,115 | 141,192 |
Wholesale scrap jewelry sales | 26,371 | 31,710 |
Consumer loan and credit services fees | 1,375 | 10,461 |
Total revenue | 466,490 | 467,604 |
Cost of revenue: | ||
Cost of retail merchandise sold | 184,695 | 179,349 |
Cost of wholesale scrap jewelry sold | 22,847 | 30,353 |
Total cost of revenue | (361) | 2,103 |
Total cost of revenue | 207,181 | 211,805 |
Net revenue | 259,309 | 255,799 |
Expenses and other income: | ||
Store operating expenses | 153,500 | 146,852 |
Administrative expenses | 32,902 | 32,154 |
Depreciation and amortization | 10,674 | 9,874 |
Interest expense | 8,418 | 8,370 |
Interest income | (185) | (204) |
Merger and other acquisition expenses | 68 | 149 |
Loss (gain) on foreign exchange | 2,685 | (239) |
Write-offs and impairments of certain lease intangibles and other assets | 5,530 | 0 |
Total expenses and other income | 213,592 | 196,956 |
Income (loss) before income taxes | 45,717 | 58,843 |
U.S. Operations | ||
Revenue: | ||
Retail merchandise sales | 195,966 | 186,815 |
Pawn loan fees | 97,857 | 97,876 |
Wholesale scrap jewelry sales | 15,478 | 22,785 |
Consumer loan and credit services fees | 1,375 | 10,461 |
Total revenue | 310,676 | 317,937 |
Cost of revenue: | ||
Cost of retail merchandise sold | 119,529 | 117,744 |
Cost of wholesale scrap jewelry sold | 14,006 | 21,270 |
Total cost of revenue | (361) | 2,103 |
Total cost of revenue | 133,174 | 141,117 |
Net revenue | 177,502 | 176,820 |
Expenses and other income: | ||
Store operating expenses | 107,706 | 103,884 |
Administrative expenses | 0 | 0 |
Depreciation and amortization | 5,401 | 5,045 |
Interest expense | 0 | 0 |
Interest income | 0 | 0 |
Merger and other acquisition expenses | 0 | 0 |
Loss (gain) on foreign exchange | 0 | 0 |
Write-offs and impairments of certain lease intangibles and other assets | 0 | |
Total expenses and other income | 113,107 | 108,929 |
Income (loss) before income taxes | 64,395 | 67,891 |
Latin America Operations | ||
Revenue: | ||
Retail merchandise sales | 100,663 | 97,426 |
Pawn loan fees | 44,258 | 43,316 |
Wholesale scrap jewelry sales | 10,893 | 8,925 |
Consumer loan and credit services fees | 0 | 0 |
Total revenue | 155,814 | 149,667 |
Cost of revenue: | ||
Cost of retail merchandise sold | 65,166 | 61,605 |
Cost of wholesale scrap jewelry sold | 8,841 | 9,083 |
Total cost of revenue | 0 | 0 |
Total cost of revenue | 74,007 | 70,688 |
Net revenue | 81,807 | 78,979 |
Expenses and other income: | ||
Store operating expenses | 45,794 | 42,968 |
Administrative expenses | 0 | 0 |
Depreciation and amortization | 4,063 | 3,305 |
Interest expense | 0 | 0 |
Interest income | 0 | 0 |
Merger and other acquisition expenses | 0 | 0 |
Loss (gain) on foreign exchange | 0 | 0 |
Write-offs and impairments of certain lease intangibles and other assets | 0 | |
Total expenses and other income | 49,857 | 46,273 |
Income (loss) before income taxes | 31,950 | 32,706 |
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 |
Total cost of revenue | 0 | 0 |
Total cost of revenue | 0 | 0 |
Net revenue | 0 | 0 |
Expenses and other income: | ||
Store operating expenses | 0 | 0 |
Administrative expenses | 32,902 | 32,154 |
Depreciation and amortization | 1,210 | 1,524 |
Interest expense | 8,418 | 8,370 |
Interest income | (185) | (204) |
Merger and other acquisition expenses | 68 | 149 |
Loss (gain) on foreign exchange | 2,685 | (239) |
Write-offs and impairments of certain lease intangibles and other assets | 5,530 | |
Total expenses and other income | 50,628 | 41,754 |
Income (loss) before income taxes | $ (50,628) | $ (41,754) |