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
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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
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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
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• 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
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• 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
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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
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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
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• 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)
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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
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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
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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
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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
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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 %
Wholesale scrap jewelry revenue 3,572 3,295 8 % 3,572 8 %
102,581 90,656 13 % 119,501 32 %
Total revenue:
Retail merchandise sales 115,543 105,625 9 % 127,343 21 %
Pawn loan fees 51,878 47,583 9 % 56,909 20 %
Consumer loan and credit services fees 4,916 6,710 (27)% 5,005 (25)%
Wholesale scrap jewelry revenue 9,642 7,705 25 % 9,642 25 %
$ 181,979 $ 167,623 9 % $ 198,899 19 %
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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 — %
Consumer loan and credit services fees 9,628 13,238 (27)% 9,628 (27)%
Wholesale scrap jewelry revenue 10,864 10,148 7 % 10,864 7 %
168,707 165,681 2 % 168,707 2 %
International revenue:
Retail merchandise sales 132,193 119,750 10 % 156,754 31 %
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:
Retail merchandise sales 234,319 216,079 8 % 258,880 20 %
Pawn loan fees 103,311 96,237 7 % 113,673 18 %
Consumer loan and credit services fees 10,602 14,305 (26)% 10,790 (25)%
Wholesale scrap jewelry revenue 16,950 17,025 — % 16,950 — %
$ 365,182 $ 343,646 6 % $ 400,293 16 %
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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%
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(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
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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
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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
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Investor Contact InformationInvestor Relations Gar [email protected] Global IR Groupwww.firstcash.com/investors [email protected](817) 505-3199 (949) 873-2789
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