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First Cash Reports Record Second Quarter Earnings Per Share Of $0.36; Operating Income Increases 22%, Raising 2010 Guidance

First Cash is also an equal partner in Cash & Go, Ltd., a joint venture, which owns and operates 39 check cashing and financial services kiosks located inside convenience stores in the United States. 

FIRST CASH FINANCIAL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
         
  Three Months Ended June 30, Six Months Ended June 30,
  2010 2009 2010 2009
  (in thousands, except per share amounts)
Revenue:        
Pawn merchandise sales $59,598  $50,457  $120,372  $100,063
Pawn service fees  23,518  18,840  46,340  36,448
Short-term loan and credit services fees  14,290  12,434  27,552  25,230
Other  270  278  625  690
   97,676  82,009  194,889  162,431
Cost of revenue:        
Cost of goods sold  36,022  29,962  73,550  58,506
Short-term loan and credit services loss provision  3,761  3,426  5,859  5,649
Other  48  49  82  82
   39,831  33,437  79,491  64,237
Net revenue  57,845  48,572  115,398  98,194
         
Expenses and other income:        
Store operating expenses  28,293  23,866  56,042  48,227
Administrative expenses  9,325  7,597  18,928  15,683
Depreciation and amortization  2,580  2,436  5,114  4,858
Interest expense  133  192  273  428
Interest income  (19)  (7)  (23)  (57)
   40,312  34,084  80,334  69,139
         
Income from continuing operations before income taxes  17,533  14,488  35,064  29,055
         
Provision for income taxes  6,336  5,340  12,823  10,700
Income from continuing operations  11,197  9,148  22,241  18,355
         
Income from discontinued operations, net of tax  586  2,402  1,624  4,438
Net income  $11,783  $11,550  $23,865  $22,793
         
Basic income per share:        
Income from continuing operations  $0.37  $0.31  $0.74  $0.63
Income from discontinued operations  0.02  0.08  0.05  0.15
Net income per basic share  $0.39  $0.39  $0.79  $0.78
         
Diluted income per share:        
Income from continuing operations  $0.36  $0.30  $0.72  $0.61
Income from discontinued operations   0.02  0.08  0.06  0.15
Net income per diluted share  $0.38  $0.38  $0.78  $0.76
         
Weighted average shares outstanding:        
Basic  30,121  29,338  30,051  29,298
Diluted  30,791  30,117  30,762  30,011
FIRST CASH FINANCIAL SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
       
  June 30, December 31,
  2010 2009 2009
    (in thousands)
ASSETS      
       
Cash and cash equivalents  $45,838  $22,206  $26,777
Service fees receivable  9,386  7,907  8,263
Pawn receivables  60,964  52,685  53,719
Short-term loan receivables, net of allowance  2,792  2,772  3,076
Inventories  34,871  30,748  34,437
Other  6,130  12,890  10,314
Total current assets  159,981  129,208  136,586
       
Property and equipment, net  51,433  44,777  47,980
Goodwill and intangible assets, net  70,582  76,530  70,252
Other  1,597  15,175  1,467
Total assets  $283,593  $265,690  $256,285
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
       
Current portion of notes payable  $3,057  $4,612  $4,111
Revolving credit facility  --   43,500  -- 
Accounts payable and accrued liabilities  24,704  18,921  19,984
Income taxes payable and deferred tax liabilities  7,568  5,744  10,958
Other  --   819  238
Total current liabilities  35,329  73,596  35,291
       
Notes payable, net of current portion  4,008  7,067  5,265
Deferred tax liabilities  3,641  1,328  3,290
Total liabilities  42,978  81,991  43,846
       
Stockholders' equity  240,615  183,699  212,439
Total liabilities and stockholders' equity  $283,593  $265,690  $256,285

FIRST CASH FINANCIAL SERVICES, INC. OPERATING INFORMATION (UNAUDITED)

The following table details the components of revenue for the three months ended June 30, 2010, as compared to the three months ended June 30, 2009 (in thousands). Constant currency results exclude the effects of foreign currency translation and are calculated by translating current year results at prior year average exchange rates, which is more fully described elsewhere in this release. 

         
  Three Months Ended June 30,     Increase/(Decrease) Constant Currency
  2010 2009 Increase/(Decrease) Basis
Domestic revenue:          
Pawn retail merchandise sales  $15,380  $15,016  $364 2 % 2 %
Pawn scrap jewelry sales  8,339  6,550  1,789 27 % 27 %
Pawn service fees  9,802  8,468  1,334 16 % 16 %
Short-term loan and credit services fees  13,155  11,558  1,597 14 % 14 %
Other  266  267  (1) -- --
   46,942  41,859  5,083 12 % 12 %
           
Foreign revenue:          
Pawn retail merchandise sales  26,366  19,032  7,334 39 % 30 %
Pawn scrap jewelry sales  9,513  9,859  (346) (4)% (4)%
Pawn service fees  13,716  10,372  3,344 32 % 24 %
Short-term loan fees  1,135  876  259 30 % 22 %
Other  4  11  (7) (64)% (66)%
   50,734  40,150  10,584 26 % 20 %
           
Total revenue:          
Pawn retail merchandise sales  41,746  34,048  7,698 23 % 18 %
Pawn scrap jewelry sales  17,852  16,409  1,443 9 % 9 %
Pawn service fees  23,518  18,840  4,678 25 % 21 %
Short-term loan and credit services fees  14,290  12,434  1,856 15 % 14 %
Other  270  278  (8) (3)% (3)%
   $97,676  $82,009  $15,667 19 % 16 %

FIRST CASH FINANCIAL SERVICES, INC. OPERATING INFORMATION (CONTINUED) (UNAUDITED)

The following table details the components of revenue for the six months ended June 30, 2010, as compared to the six months ended June 30, 2009 (in thousands). Constant currency results exclude the effects of foreign currency translation and are calculated by translating current year results at prior year average exchange rates, which is more fully described elsewhere in this release. 

         
  Six Months Ended June 30,     Increase/(Decrease) Constant Currency
  2010 2009 Increase/(Decrease) Basis
Domestic revenue:          
Pawn retail merchandise sales  $33,838  $32,073  $1,765 6 % 6 %
Pawn scrap jewelry sales  18,405  13,318  5,087 38 % 38 %
Pawn service fees  20,574  17,165  3,409 20 % 20 %
Short-term loan and credit services fees  25,357  23,543  1,814 8 % 8 %
Other  614  672  (58) (9)% (9)%
   98,788  86,771  12,017 14 % 14 %
           
Foreign revenue:          
Pawn retail merchandise sales  48,676  35,676  13,000 36 % 25 %
Pawn scrap jewelry sales  19,453  18,996  457 2 % 2 %
Pawn service fees  25,766  19,283  6,483 34 % 22 %
Short-term loan fees  2,195  1,687  508 30 % 19 %
Other  11  18  (7) (39)% (44)%
   96,101  75,660  20,441 27 % 18 %
           
Total revenue:          
Pawn retail merchandise sales  82,514  67,749  14,765 22 % 16 %
Pawn scrap jewelry sales  37,858  32,314  5,544 17 % 17 %
Pawn service fees  46,340  36,448  9,892 27 % 21 %
Short-term loan and credit services fees  27,552  25,230  2,322 9 % 8 %
Other  625  690  (65) (9)% (10)%
   $194,889  $162,431  $32,458 20 % 16 %

FIRST CASH FINANCIAL SERVICES, INC. OPERATING INFORMATION (CONTINUED) (UNAUDITED)

The following table details pawn receivables, short-term loan receivables, and active CSO loans outstanding from an independent third-party lender as of June 30, 2010, as compared to June 30, 2009 (in thousands).  Constant currency results exclude the effects of foreign currency translation and are calculated by translating current year balances at the prior year end-of-period exchange rate, which is more fully described elsewhere in this release. 

         
  Balance at June 30,     Increase/(Decrease) Constant Currency
   2010  2009 Increase/(Decrease) Basis
Domestic customer receivables:          
Pawn receivables  $29,939  $28,056  $1,883 7 % 7 %
Short-term loan receivables, net of allowance  1,901  1,937  (36) (2)% (2)%
CSO short-term loans held by independent third-party (1)  12,833  10,910  1,923 18 % 18 %
   44,673  40,903  3,770 9 % 9 %
           
Foreign customer receivables:          
Pawn receivables  31,025  24,629  6,396 26 % 22 %
Short-term loan receivables, net of allowance  891  835  56 7 % 4 %
   31,916  25,464  6,452 25 % 22 %
           
Total customer receivables:          
Pawn receivables  60,964  52,685  8,279 16 % 14 %
Short-term loan receivables, net of allowance  2,792  2,772  20 1 % --
CSO short-term loans held by independent third-party (1)  12,833  10,910  1,923 18 % 18 %
   $76,589  $66,367  $10,222 15 % 14 %
           
(1) CSO short-term loans outstanding are comprised of the principal portion of active CSO loans outstanding from an independent third-party lender, which are not included on the Company's balance sheet, net of the Company's estimated fair value of its liability under the letters of credit guaranteeing the loans.

FIRST CASH FINANCIAL SERVICES, INC. UNAUDITED NON-GAAP FINANCIAL INFORMATION

The Company uses certain financial calculations, such as free cash flow, EBITDA and constant currency results, which are not considered measures of financial performance under U.S. generally accepted accounting principles ("GAAP"). Items excluded from the calculation of free cash flow, EBITDA and constant currency results are significant components in understanding and assessing the Company's financial performance. Since free cash flow, EBITDA and constant currency results are not measures determined in accordance with GAAP and are thus susceptible to varying calculations, free cash flow, EBITDA and constant currency results, as presented, may not be comparable to other similarly titled measures of other companies. Free cash flow, EBITDA and constant currency results should not be considered as alternatives to net income, cash flow provided by or used in operating, investing or financing activities or other financial statement data presented in the Company's consolidated financial statements as indicators of financial performance or liquidity. Non-GAAP measures should be evaluated in conjunction with, and are not a substitute for, GAAP financial measures. 

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