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

Free Cash Flow

For purposes of its internal liquidity assessments, the Company considers free cash flow, which is defined as cash flow from the operating activities of continuing and discontinued operations reduced by purchases of property and equipment and net cash outflow from pawn and short-term/payday loan customer receivables. Free cash flow is commonly used by investors as a measure of cash generated by business operations that will be used to repay scheduled debt maturities and can be used to invest in future growth through new business development activities or acquisitions, repurchase stock, or repay debt obligations prior to their maturities. These metrics can also be used to evaluate the Company's ability to generate cash flow from business operations and the impact that this cash flow has on the Company's liquidity. The following table reconciles "net cash flow from operating activities" to "free cash flow" (unaudited, in thousands):

   
  Trailing Twelve Months Ended June 30,
  2010 2009
Cash flow from operating activities  $78,521  $67,207
Cash flow from investing activities:    
Pawn and short-term loan receivables  (7,702)  (11,478)
Purchases of property and equipment  (15,347)  (17,485)
Free cash flow  $55,472  $38,244

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

EBITDA

EBITDA is commonly used by investors to assess a company's leverage capacity, liquidity and financial performance. The following table provides a reconciliation of income from continuing operations to EBITDA (unaudited, in thousands): 

   
  Trailing Twelve Months Ended June 30,
  2010 2009
     
Income from continuing operations  $45,737  $37,195
Adjustments:    
Income taxes  27,126  21,945
Depreciation and amortization  10,329  9,910
Interest expense  610  795
Interest income  (33)  (82)
     
Earnings from continuing operations before interest, taxes, depreciation and amortization  $83,769 $69,763
     
EBITDA margin calculated as follows:    
Total revenue from continuing operations  $398,412  $332,026
Earnings from continuing operations before interest, taxes, depreciation and amortization  83,769  69,763
EBITDA as a percent of revenue 21% 21%

Constant Currency Results

Certain performance metrics discussed in this release are presented on a "constant currency" basis, which may be considered a non-GAAP financial measurement of financial performance under GAAP. The Company's management uses constant currency results to evaluate operating results of certain business operations in Mexico, which are transacted primarily in Mexican pesos. Pawn scrap jewelry in Mexico is sold in U.S. dollars and, accordingly, does not require a constant currency adjustment. Constant currency results reported herein are calculated by translating certain balance sheet and income statement items denominated in Mexican pesos using the exchange rate from the prior-year comparable period, as opposed to the current comparable period, in order to exclude the effects of foreign currency rate fluctuations for purposes of evaluating period-over-period comparisons. For balance sheet items, the closing exchange rate at the end of the applicable prior-year period (June 30, 2009) of 13.2 to 1 was used, compared to the current end of period (June 30, 2010) exchange rate of 12.8 to 1. For income statement items, the average closing daily exchange rate for the appropriate period was used. The average exchange rate for the prior-year quarter ended June 30, 2009 was 13.3 to 1, compared to the current quarter rate of 12.6 to 1. The average exchange rate for the prior-year six-month period ended June 30, 2009 was 13.9 to 1, compared to the current year-to-date rate of 12.7 to 1. 

CONTACT:  First Cash Financial Services, Inc.
          Rick Wessel, Vice Chairman and Chief Executive Officer
          Doug Orr, Executive Vice President and 
           Chief Financial Officer
          (817) 505-3199
          investorrelations@firstcash.com
          www.firstcash.com

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