FIRST CASH FINANCIAL SERVICES, INC. · 01/08/2016 · FIRST CASH FINANCIAL SERVICES, INC. Investor Presentation June 2015 Investor Presentation August 2016

FIRST CASH FINANCIAL SERVICES, INC.

Investor Presentation June 2015

Investor PresentationAugust 2016

SAFE HARBOR STATEMENT

This presentation contains “forward-looking statements,” asdefined by the Private Securities Litigation Reform Act of 1995,that can be identified by words such as “believes,” “expects,”“projects,” and similar expressions and involve numerous risksand uncertainties. The Company’s actual results could differmaterially from those anticipated in such forward-lookingstatements as a result of certain factors, including those set forthin the Company’s filings with the Securities and ExchangeCommission.

2

PAWNSHOP PROFILE

• Neighborhood-based stores serving cash-constrained customers

• Buy and sell popular pre-owned consumerproducts including:

◦ Consumer electronics & appliances

◦ Jewelry, diamonds & watches

◦ Power tools, musical instruments & sportinggoods

• Ready and immediate source of cashfor customers looking to sell items

• Source of small, short-term loans◦ Fully collateralized

◦ No collections/credit reporting

3

SIGNIFICANT STORE GROWTHDriven primarily by organic growth coupled with strategic acquisitions

U.S. store count Latin America store count

Store Count Growth

1,400

1,200

1,000

800

600

400

200

0

Stor

eCo

unt

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 As of6/30/16

153 181 193 196 200 209 224 276 309 331 338 324130

157207 269 329

386447

538597

674737

947

4

283 338

400 465

529 595

671

814 906

1,005 1,075

11 Year 6 Month CAGR:U.S. - 8% Latin America - 22% Total - 16%

1,271

COMPOSITION OF PAWN COLLATERALAs of June 30, 2016

U.S. reflects historical mix; Latin America focused on general merchandise, where competition is limited

Note: Historically, over 75% of all pawn loans are redeemed, and the collateral is returned to the customer

General Merchandise Jewelry

United States

53% 47%

18%

82%

35%

65%

Latin America Consolidated

5

FOCUSED ON RETAIL OPPORTUNITY

• Merchandise sales (including retail andscrap) accounted for 69% of totalrevenues for the trailing twelve monthsended June 30, 2016

• Merchandise primarily acquired through:◦ Forfeiture of pawn loan collateral◦ Direct buys from customers

• Rapid inventory turnover (3.4x for thetrailing twelve months ended June 30,2016)

• Gross retail margins exceed those ofcompetitors

◦ FCFS retail margin of 38% for 2015 ◦ Other two public pawn operators

average 2015* retail margin of 33%

6* Includes Cash America for fiscal 2015 and EZCORP, Inc. for the twelve months ended September 30, 2015

INVENTORY MIX

Electronics & Appliances Jewelry

Tools Sporting goods

Other

39%

12%

9%

31%

As of June 30, 2016

6

9%

• Proprietary sales andtransaction histories driveindustry leading yields &sales margins

◦ Merchandise sales databaseprovides real-time pricing,turnover & margin data

◦ Pawn transaction databaseprovides product &customer performancehistories

PROPRIETARY IT SYSTEMSDRIVE MARGINS

7

Pawn Receivables• Average loan size as of June 30, 2016:

◦ $160 in U.S.◦ $62 in Latin America

• Term: 30 days• Typical monthly service charge:

◦ 4% to 25%◦ Varies with size of loan

• All loans fully collateralized: non-performing pawns become retailstore inventory

PAWN OPERATING METRICSTrailing Twelve Months Ended June 30, 2016

8

• Retail sales margin, TTM 38%

• Effective monthly yield on pawn receivables 13.3%

• Inventory turnover, annualized 3.4x

• Store operating profit margin, TTM 24%

STABLE PAWN REGULATORY ENVIRONMENT

MEXICOUNITED STATES

• Pawn regulated primarily at statelevel

◦ First Cash operates in states withfavorable regulations

◦ Significant regulations in all statesto prevent stolen propertytransactions

◦ No material changes to statepawn regulations in 30+ years

• Pawn seen as more customer friendlythan payday loan products

◦ Affordable, small dollar product◦ No obligation to repay loan or

fees = no debt cycle◦ No collections

• Pawn regulated at the federal levelby federal consumer protectionagency (“PROFECO”)

◦ Regulates store-front operations◦ No rate-setting authority

• Current law (2013) provides for:◦ Registration and inspection of

pawn locations◦ Approval of customer contracts

and required disclosures◦ Customer identification

procedures and reporting ofsuspicious transactions

• Failure to meet requirements maylead to suspension or closure of non-compliant operators

9

9

• In June 2016, the U.S. Consumer Financial Protection Bureau ("CFPB")published rules significantly affecting payday loans, vehicle title loansand various other small consumer loan products (not likely to becomeeffective until 2018)

• The proposed rules included, among other things:◦ Additional underwriting requirements

◦ Cooling-off periods between certain loans◦ Limitations to prevent the sustained use of certain loans such as capping

the number of rollovers◦ Restrictions on collection practices

• Proposed rules do not impose new regulatory requirements on non-recourse pawn loans

NEW U.S. PAYDAY REGULATIONSIMPACTS LESS THAN 3% OF REVENUES

10

LATIN AMERICAN OPERATIONS

SIGNIFICANT GROWTH OPPORTUNITY

11

MAXI PRENDA ACQUISITION

• Multi-Stage Acquisition of 211 Pawn Stores in Latin America

◦ 32 stores in Guatemala (December 2015)

◦ 166 stores in Mexico (January 2016)

◦ 13 stores in El Salvador (February 2016)

◦ First stores in Central America

◦ Opportunity for additional store expansion

• Strategic Highlights◦ Includes 3 new states in Mexico – now operating in all states in the

country◦ First stores in Central America – two countries with opportunity for

expansion in both markets◦ Full service model with over 60% of pawns collateralized with general

merchandise◦ Purchase funded entirely with available cash generated in Mexico

12

CONSISTENT STORE GROWTH

New stores Acquired stores

First Cash Latin American Store Additions by Year

200

175

150

125

100

75

50

25

0

Stor

eA

ddit

ions

2011 2012 2013 2014 2015 YTD6/30/16

61 62 6031 38 31

298

47 32

179

13

• Pawn industry has long standing history in Mexico

• Pawn market remains bifurcated ▪ Approximately 5,500 small format, gold jewelry-focused stores

◦ Significant contraction across the industry

◦ Limited operators have demonstrated the ability to diversify awayfrom gold

▪ Approximately 1,500 large format, full-service stores ◦ First Cash has well over 50% market share

◦ Operational capacity to open approximately 60 de novo stores peryear

◦ Only one other U.S. public pawn company operates in Mexico andthey are not currently expanding pawn operations in Mexico

◦ Locally-based competition remains fragmented and limited

MEXICO GROWTH STRATEGY

14

MEXICO OPERATIONSAs of June 30, 2016

Chihuahua

Queretaro

Aguascalientes

Puebla

Guanajuato

Coahuila

Tamaulipas

Nuevo Leon

Sonora

Durango

Jalisco

San Luis Potosi

MorelosGuerrero

MichoacanEstado de Mexico

Hidalgo

Estado deCiudad de

Mexico

VeracruzZacatecas

Colima

Sinaloa

901 Stores – all 32 states ▪ 873 Pawn stores▪ 28 Consumer loan stores

Quintana Roo

Baja California

Yucatan

Baja CaliforniaSur

Nayarit

Chiapas

Tabasco

15

Campeche

Oaxaca

Tlaxcala

CONSISTENT REVENUE GROWTH

16

Core revenues* Non-core revenues**

Constant currency revenues***

Total Latin America Revenues

$500

$400

$300

$200

$100

$0

$(M

illio

ns)

2011 2012 2013 2014 2015

$224$272

$330$365 $353

$57

$50

$33

$23$15

16

• Core revenue growth (cc) -2010 - 2015:

◦ 201% growth◦ 25% 5-year CAGR

• Second quarter 2016highlights:

◦ Retail merchandise salesgrowth (cc): 31%

◦ Pawn fee revenue growth(cc): 37%

◦ Same-store core revenuegrowth (cc): 10%

◦ Pawn loans receivablegrowth (cc): 43%

$281

$322

$363$388

$368

* Includes retail merchandise sales and pawn loan fees** Includes consumer loan and credit services fees and wholesale scrap jewelry sales*** Calculated using the 2011 Mexican peso / U.S. dollar exchange rate

MEXICO NEW STORE INVESTMENT – PROVEN RAPID PAYBACK MODEL

Typical Mexico New Store RampNew Store Cash FlowStore Investment

Cap Ex- Leasehold improvements & fixtures- Computer & security equipment

$170,000

Start-up Losses - Pre-opening- First six months of operation

$25,000

Total Store Investment $195,000

Working CapitalFirst Year for New Store- Operating cash- Loan funding - Inventory

$120,000

Cumulative Break-even point = approximately 2.75 years1 Revenue reflects peso exchange rate of 13.5:1 (trailing five year monthly average)2 Store-level operating profit before administrative expense & taxes

17

Revenue Store-level Profit *

$800

$600

$400

$200

$0

Reve

nue

$(T

hous

ands

)

$400

$300

$200

$100

$0

Stor

e-le

velp

rofit

$(T

hous

ands

)

Year 1 Year 2 Year 3 Year 4 Year 5

NEW LAT AM MARKET OPPORTUNITIES

• We believe the First Cash full-service pawn model can bereplicated in other Latin American markets

• Still significant runway in Mexico, but lookingopportunistically for expansion opportunities in othermarkets with:

◦ Large unbanked and under-banked populations

◦ Limited competition in full-service model

• First Cash has strong LatAm cash flows to funddevelopment in other Latin American markets

◦ Recent 211-store acquisition in Mexico, Guatemala & ElSalvador funded entirely with cash on hand generated inMexico

18

U.S. OPERATIONS

19

U.S. OPERATIONSJune 30, 2016

Consumer Loan Stores

324 STORES – 14 STATES

3

D.C.

Pawn Stores

31

136 31

1

4

8

3

15

10

21

6

28

20

24

MD

3

SIGNIFICANT REVENUE GROWTH

21

U.S. core revenues* U.S. non-core revenues**

Total U.S. Revenues

$400

$300

$200

$100

$0

$(M

illio

ns)

2011 2012 2013 2014 2015

$135$168

$219$263

$292

$98

$102

$79

$62$45

21

• Core revenue growth -2010 - 2015:

◦ 152% growth◦ 20% 5-year CAGR

• Second quarter 2016highlights:

◦ Core revenue growth of4% year-over-year

◦ Retail sales growth of 6%year-over-year

◦ Same-store revenuesdown 1%, which is asequential improvement

* Includes retail merchandise sales and pawn loan fees** Includes consumer loan and credit services fees and wholesale scrap jewelry sales

$233

$270

$298 $325

$337

CONSOLIDATED OPERATIONS

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• Adjusted net income(2) of $14.3 million, or $0.51 per share • Core pawn revenues (pawn fees & retail sales) increased 20% compared to

the prior-year quarter• Retail sales increased 21% compared to the prior-year quarter

◦ Up 6% in U.S.◦ Up 31% in Latin America

• Retail margins and turns remained strong at 38% and 3.4x, respectively• Same-store revenue from core pawn operations (excluding scrap jewelry

sales and consumer loan fees) increased 10% in Latin America and 5%overall compared to the prior-year period

• Total pawn loans receivable increased 43% in Latin America compared tothe prior-year period

(1) All revenue and pawn loan receivable amounts are presented on a constant currency basis, which is a non-GAAP measurement. See Non-GAAP Financial Information in the Appendix.

(2) Adjusted net income and earnings per share are non-GAAP measures reconciled in the detailedreconciliation of non-GAAP financial measures provided in the Appendix.

2nd QUARTER 2016 OPERATING RESULTS(1)

23

REVENUE GROWTH

24

Retail merchandise sales (Core) Pawn loan fees (Core)

Consumer loan and credit services fees (Non-Core) Wholesale scrap jewelry revenue (Non-Core)

Constant currency revenue*

Total Revenues by Type

$900

$800

$700

$600

$500

$400

$300

$200

$100

$0

$(M

illio

ns)

2011 2012 2013 2014 2015

$237 $287$367

$428 $449$122

$152

$182$199 $196

$47

$49

$44$37 $28

$108

$104

$68$49 $32

24

92% of2015Revenueswere Core

* Calculated using the 2011 Mexican peso / U.S. dollar average exchange rate

OVER $1 BILLION IN CUMULATIVEINVESTMENTS & SHAREHOLDER PAYOUTS

Outstanding Debt Capital Expenditures Acquisitions

Stock Repurchases & Dividends

$1,100

$1,000

$900

$800

$700

$600

$500

$400

$300

$200

$100

$0

$M

illio

ns

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q2

CumulativeTotal

$ Millions

$411

$252

25

Stock Repurchases & Dividends:▪ 12,051,669 split-adjusted shares repurchased▪ Dividend policy implemented Q1 2016▪ $7.1 million dividends paid year-to-date

Acquisitions:▪ 158 stores acquired in U.S.▪ 311 stores acquired in Latin America

Capital Expenditures:▪ Includes 717 De Novo store openings

$345

2016 GUIDANCE*

Full-year 2016 adjusted earnings guidance is anticipated to be $2.35 to $2.45 per dilutedshare

▪ The 2016 outlook for adjusted earnings per share and store growth does not include anyassumptions regarding earnings or store additions related to the announced merger withCash America International, Inc.

▪ The Company is raising the lower end of its guidance range by $0.10 per share and expects itsfiscal full-year 2016 guidance for adjusted earnings, which excludes non-recurring mergertransactions costs, to be in the range of $2.35 to $2.45 per diluted share. The previousguidance range provided on April 28, 2016, was $2.25 to $2.45 per share. These revisedestimates reflect the following assumptions:

▪ An estimated foreign exchange rate of approximately 18.5 Mexican pesos / U.S. dollarfor the balance of fiscal 2016.

▪ The estimate excludes the impact of non-recurring transaction expenses of $0.10 pershare in the first half of 2016 and excludes any such transaction or restructuringexpenses that will be incurred during the remainder of fiscal 2016, which are primarilyrelated to the pending merger with Cash America International, Inc.

▪ Excluding the impact of the merger or additional acquisitions, the Company expects to addapproximately 220 to 225 new stores in 2016.

* As provided by the Company on July 28, 2016

26

INVESTMENT RECAP

• International pawn-focused business model

◦ Focused on small secured loans to underbanked consumerswith limited access to traditional credit products

◦ Focus on large format, full-service model is a significantcompetitive advantage across the region

◦ Strong margins & cash flows

• Proven growth strategy

◦ Long-runway for growth in Latin America where competitionis limited

• Strong balance sheet to fund future growth, acquisitions, stockbuybacks and pay dividends

27

APPENDIX

TOP 10 FCFS SHAREHOLDERS

Institution Name Shares * (FCFS) % S/O (FCFS)

Genesis Asset Managers, LP 2,708,766 9.59

BlackRock Fund Advisors 2,516,007 8.91

The Vanguard Group, Inc. 2,125,062 7.52

William Blair & Company, LLC (Asset Management) 1,607,714 5.69

GIC Asset Management Pte., LTD 1,433,605 5.08

Vaughan Nelson Investment Management, L.P. 1,325,416 4.69

Fiduciary Management, Inc. 1,125,800 3.99

NewSouth Capital Management, Inc. 1,075,101 3.81

Fidelity Management & Research Company 986,716 3.49

Cooke & Bieler, L.P. 936,755 3.32

*Holdings are as of 3/31/201629

REVENUE DETAIL(Unaudited)

Constant Currency BasisThree Months Ended Increase /

June 30, Increase / 2016 (Decrease)

2016 2015 (Decrease) (Non-GAAP) (Non-GAAP)

Domestic revenue:

Retail merchandise sales $ 47,065 $ 44,323 6 % $ 47,065 6 %

Pawn loan fees 21,844 22,060 (1)% 21,844 (1)%

Consumer loan and credit services fees 4,419 6,174 (28)% 4,419 (28)%

Wholesale scrap jewelry revenue 6,070 4,410 38 % 6,070 38 %

79,398 76,967 3 % 79,398 3 %

International revenue:

Retail merchandise sales 68,478 61,302 12 % 80,278 31 %

Pawn loan fees 30,034 25,523 18 % 35,065 37 %

Consumer loan and credit services fees 497 536 (7)% 586 9 %


102,581 90,656 13 % 119,501 32 %

Total revenue:


Pawn loan fees 51,878 47,583 9 % 56,909 20 %



$ 181,979 $ 167,623 9 % $ 198,899 19 %

30

REVENUE DETAIL(Unaudited)

Constant Currency BasisSix Months Ended Increase /

June 30, Increase / 2016 (Decrease)

2016 2015 (Decrease) (Non-GAAP) (Non-GAAP)

Domestic revenue:

Retail merchandise sales $ 102,126 $ 96,329 6 % $ 102,126 6 %

Pawn loan fees 46,089 45,966 — % 46,089 — %



168,707 165,681 2 % 168,707 2 %

International revenue:


Pawn loan fees 57,222 50,271 14 % 67,584 34 %

Consumer loan and credit services fees 974 1,067 (9)% 1,162 9 %

Wholesale scrap jewelry revenue 6,086 6,877 (12)% 6,086 (12)%

196,475 177,965 10 % 231,586 30 %

Total revenue:


Pawn loan fees 103,311 96,237 7 % 113,673 18 %


Wholesale scrap jewelry revenue 16,950 17,025 — % 16,950 — %

$ 365,182 $ 343,646 6 % $ 400,293 16 %

31

Adjusted EBITDASee discussion of non-GAAP financial information herein

Trailing Twelve Months Ended

June 30,

2016 2015

Net income $ 55,430 $ 76,596

Income taxes 25,338 31,797

Depreciation and amortization (1) 18,545 17,664

Interest expense 17,527 16,327

Interest income (1,327) (1,076)Non-recurring restructuring expenses related to U.S. consumer

loan operations 8,439 439

Non-recurring acquisition expenses 6,179 2,117

Adjusted EBITDA $ 130,131 $ 143,864

Adjusted EBITDA margin calculated as follows:

Total revenue $ 726,138 $ 721,420

Adjusted EBITDA $ 130,131 $ 143,864

Adjusted EBITDA as a percentage of revenue 18% 20%

32

(1) For the trailing twelve months ended June 30, 2015, excludes $229,000 of depreciation and amortization and for the trailing twelve monthsended June 30, 2016, excludes $264,000 of depreciation and amortization, which are included in the non-recurring restructuring expenses relatedto U.S. consumer loan operations.

FREE CASH FLOWSee discussion of non-GAAP financial information herein

Trailing Twelve Months Ended

June 30,

2016 2015

Cash flow from operating activities, including discontinued operations $ 90,413 $ 91,049

Cash flow from investing activities:

Loan receivables (9,211) 1,517

Purchases of property and equipment (29,546) (20,495)

Free cash flow $ 51,656 $ 72,071

33

Adjusted Net Income and Net Income Per ShareSee discussion of non-GAAP financial information herein

Three Months Ended June 30, Six Months Ended June 30,

2016 2015 2016 2015

InThousands

PerShare

InThousands

PerShare

InThousands

PerShare

InThousands

PerShare

Net income, as reported $ 11,673 $ 0.41 $ 13,339 $ 0.47 $ 24,847 $ 0.88 $ 30,127 $ 1.06

Adjustments, net of tax:Non-recurring

restructuringexpenses related toU.S. consumer loanoperations — — 208 0.01 — — 299 0.01

Non-recurringacquisition expenses 2,651 0.10 754 0.03 2,911 0.10 799 0.03

Adjusted net income $ 14,324 $ 0.51 $ 14,301 $ 0.51 $ 27,758 $ 0.98 $ 31,225 $ 1.10

34

The Company uses certain financial calculations, such as adjusted net income, adjustednet income per share, adjusted EBITDA, free cash flow and constant currency results(collectively "Non-GAAP Measures"), which are not considered measures of financialperformance under U.S. generally accepted accounting principles ("GAAP"). Itemsexcluded from the calculation of Non-GAAP Measures are significant components inunderstanding and assessing the Company’s financial performance. Since Non-GAAPMeasures are not measures determined in accordance with GAAP and are thus susceptibleto varying calculations, Non-GAAP Measures, as presented, may not be comparable toother similarly titled measures of other companies. Non-GAAP Measures should not beconsidered as alternatives to net income, cash flow provided by or used in operating,investing or financing activities or other financial statement data presented in theCompany’s consolidated financial statements as indicators of financial performance orliquidity. Non-GAAP Measures should be evaluated in conjunction with, and are not asubstitute for, GAAP financial measures.

NON-GAAP FINANCIAL INFORMATION

35

RESEARCH ANALYSTS

The following is a list of analysts who provide research:

Industry Focus

Company Analyst Phone Latin America Retail/Consumer

SpecialtyFinance

Bank of America/Merrill Lynch Carlos Peyrelongue (52) 55-5201-3276 x

Bradesco BBI Richard Cathcart (55) 11 98162-7853 x x

CL King & Associates William Armstrong (518) 431-3259 x

Janney Capital Markets John Rowan (212) 940-6981 x

Jefferies & Company, Inc. John Hecht (415) 229-1569 x

J.P. Morgan Nur Cristiani (52) 55-5540-9374 x

JMP Securities David Scharf (415) 835-8942 x

Wells Fargo Securities, LLC Joel Houck (443) 263-6521 x

36

Investor Contact InformationInvestor Relations Gar [email protected] Global IR Groupwww.firstcash.com/investors [email protected](817) 505-3199 (949) 873-2789

37

Documents

FIRST CASH FINANCIAL SERVICES, INC. · 01/08/2016 · FIRST CASH FINANCIAL SERVICES, INC. Investor Presentation June 2015 Investor Presentation August 2016