First Cash Reports 42% Increase In Fourth Quarter Net Income
In addition to record revenue and earnings, the Company achieved other key milestones in 2010. For the first time in Company history, over 50% of total revenues were generated in Mexico. In addition, the full year operating margin reached 20%, which was another first, while the Company also added its 600 th store during the fourth quarter of 2010. According to Mr. Wessel, "We are proud of these accomplishments. They are a credit to our diverse and talented team of managers and store associates and reflect their energy and commitment to excellence."
In looking at fourth quarter results, growth in net income was driven by a combination of strong loan demand, impressive retail sales and increased operating margins. The rate of year-over-year pawn receivable growth, 57% in Mexico and 13% in the U.S., accelerated during the quarter as compared to growth rates at the end of the third quarter. In addition, the important fourth quarter retail sales were up 44% in Mexico and 8% in the U.S. Mr. Wessel noted, "The growth in pawn receivables drove a 30% increase in consolidated fourth quarter pawn service fee revenue, providing visibility for pawn revenue and earnings growth in the first half of 2011. In short, the current operating environment for our pawn stores is robust, given increasing consumer demand for micro-credit and deep-value retail products in both the United States and Mexico."
The Company continues to execute on its growth strategy in Mexico through new store openings and maturation of the existing, but largely immature, store base. The total store count in Mexico now stands at 386 locations, which represents 63% of the Company's consolidated total store count. According to Mr. Wessel, "We believe that First Cash has a significant competitive advantage in Mexico where we are by far the largest operator of full-service pawn stores. The 333 large format stores we have in Mexico allow us to lend on a broader array of products, including many popular consumer electronic items, appliances and power tools. In addition, the size of the stores and their prominent locations attract heavy retail traffic. We opened a total of 58 stores in Mexico this year, and our pipeline of stores slated for opening in 2011 is well-positioned."
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