Firstcash Holdings, Inc. · NASDAQ:FCFS
Firstcash — Merger or Acquisition (December 2021)
37 slides from Firstcash's merger presentation, Dec 7, 2021
Slide 1: Investor Presentation December 2021
Investor Presentation December 2021 Nasdaq: FCFS Fort Worth, Texas USA Exhibit 99.8
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, can be identified by the use of forward-looking terminology such as “believes,” “projects,” “expects,” “may,” “estimates,” “should,” “pla
Slide 3: Forward-Looking Statements (Continued)
Forward-Looking Statements (Continued) Uncertainties and regulatory developments related to the COVID-19 pandemic, which include risks and uncertainties related to the current unknown duration of the COVID-19 pandemic, the impact of governmental responses that have been, and may in the future be, im
Slide 4: Non-GAAP Financial Information
Non-GAAP Financial Information The Company uses certain financial calculations such as adjusted net income, adjusted diluted earnings per share, EBITDA, adjusted EBITDA, free cash flow, adjusted free cash flow and constant currency results as factors in the measurement and evaluation of the Company’
Slide 5: Announced acquisition of American First Finance
On October 28, 2021, FirstCash announced that it entered into a definitive agreement to acquire American First Finance Inc. (“AFF” or the “Target”, and together with FirstCash the “Combined Company”), which was amended on December 6, 2021. Total consideration for AFF at closing is approximately $922
Slide 6: Company Overview
Company Overview Corpus Christi, Texas USA
Slide 7: Pawn industry, mission and business strategy
Pawn stores are neighborhood-based retail locations that buy and sell pre-owned consumer products such as jewelry, electronics, tools, appliances, sporting goods and musical instruments, and make small consumer pawn loans Pawn Industry Grow revenues and income by opening new retail pawn locations, a
Slide 8: FirstCash History
First Acquired Store Suitland, MD USA First Store 1988 Haltom City, TX USA 100+ Stores in Mexico Over 260 De Novo Stores Openings 500th LatAm Store Opened Despite the Challenges of 2020 Latin America: 75 De Novo and 40 Acquired Domestic: 22 Acquired in Texas and the Carolinas Long-term business plan
Slide 9: Pawn Loan Overview
Pawn Loan Overview Non-Recourse Loans Fully Collateralized with Personal Property Retail Sales Typical Margin: 35% - 45% Pawn Service Fees Monthly Yield: 12% - 13% Customer Does Not Repay Loan or Fee Customer Repays Loan & Pawn Service Fee ~25% - 30% ~70% - 75% Customer Enters Store With Personal As
Slide 10: Diversified Revenue Stream
Diversified Revenue Stream Retail Sales and Pawn Lending Pawn Fees 29% Retail Sales 67% Scrap Jewelry Sales 4% Pawn Fees 50% Scrap Jewelry Gross Profit 1% Retail Gross Profit 49% $1.6B Total Revenue $0.9B Net Revenue TTM results as of 9/30/2021
Slide 11: Pawn Collateral and Inventory Composition
Jewelry Electronics Tools Sporting Goods Musical Instruments Other Pawn Collateral Inventory U.S. Segment Pawn Collateral Inventory LatAm Segment Pawn Collateral Inventory Consolidated 64% 32% 54% 15% 26% 50% 52% 33% 46% 14% 25% 50% As of 9/30/2021 Pawn Collateral and Inventory Composition
Slide 12: ESG: Sustainability is Core to FirstCash
ESG: Sustainability is Core to FirstCash Replacing Take à Make à Dispose with Buy à Use à Return Neighborhood-based stores contribute to the modern “Circular Economy” Pawnshops Pioneered Circular Economy Inventory is pre-owned merchandise which is sourced and then recycled within each store’s geogra
Slide 13: ESG: Commitment to Social Responsibility
Customer and Employee Protections Strict COVID-19 safety protocols Robust consumer and corporate compliance programs Privacy and data protection policies ESG: Commitment to Social Responsibility Employee Empowerment Employee-training programs that promote customer service and professionalism Special
Slide 14: Company Overview United States
Company Overview United States Over 1,000 U.S. Locations in 25 States and the District of Columbia Operations Focused in States With: Growing populations Favorable demographics Stable regulations Significant Underbanked Demographics Continued Opportunities for Acquisitions in Existing Markets Highly
Slide 15: U.S. Operations — Over 1,000 Locations
U.S. Operations — Over 1,000 Locations NV AK WA LA UT NE AZ CO TX MO OK IL IN OH GA AL FL KY TN NC VA WY SC 31 27 27 449 6 1 6 27 1 18 25 29 23 23 63 50 43 9 87 50 24 6 28 MD 29 DC 3 Fort Worth, TX FirstCash Headquarters Recent U.S. Acquisitions 1,087 Retail Pawn Store Locations 46 Pawn Stores Year-
Slide 16: Lending Trends – United States
U.S. Same-Store Pawn Receivables and Loan Originations (Compared to Year 2019) Lending Trends – United States Continued Recovery in Q4; Nominal impact from Advanced Child Tax Credit Payments 12/05/21 Q1 2020 Q2 2020 Q3 2021 Q4 2020 Q1 2021 Q2 2021 Q3 2020 CARES Act — 1st Round of Stimulus $1,200 per
Slide 17: CFPB lawsuit
The CFPB does not directly regulate FirstCash’s pawn business, which is primarily regulated at the state level in the U.S. Traditional possessory, non-recourse pawn loans are not subject to the CFPB’s Small Dollar Lending rule The CFPB’s ability to review FirstCash’s pawn business is limited and doe
Slide 18: Company Overview Latin America
Company Overview Latin America Over 1,700 Latin America Locations in Four Countries Latin America Continues to be the Primary Store Growth Vehicle Substantial infrastructure and cash flows to accomplish new acquisitions and de novo expansion Runway for continued store openings and strategic acquisit
Slide 19: FirstCash LatAm Growth — Revenue and Store Count
FirstCash LatAm Growth — Revenue and Store Count Revenue Growth Store Count Store Additions by Year 16% CAGR 22% CAGR 2015 to 2019 As of 9/30/2021. Presented constant currency results are non-GAAP financial measures and are calculated by translating 2016, 2017, 2018, 2019 and 2020 amounts using the
Slide 20: Lending Trends – Latin America
Lending Trends – Latin America Mexico Segment Margin by Quarter Mexico Total Pawn Receivables (Pesos $ in Billions) Mexico Same-Store Pawn Receivables and Loan Originations (Compared to Year 2019) 12/05/21 Q1 2020 Q2 2020 Q3 2021 Q4 2020 Q1 2021 Q2 2021 Q3 2020
Slide 21: AFF Overview & Acquisition Rationale
AFF Overview & Acquisition Rationale
Slide 22: American First Finance at a glance
6.5K+ Nationwide network of merchant partner stores & ecommerce platforms 50 State coverage, including D.C. and Puerto Rico 4 Top 4 Provider 700+ Total Employees & Representatives 26 Verticals served and growing, including furniture and mattress, appliances, jewelry, electronics and auto products an
Slide 23: AFF Product Overview
Up to $5,000 Typically 12-month terms Early buyout option Annualized return of 2x+ American First Finance offers retail transaction financing options in the form of Lease-to-own: merchandise is owned by AFF and leased to consumer Retail installment sales: contract between the consumer and merchant i
Slide 24: AFF investment highlights
2. Platform Built for Scale Key initiatives including the use of data analytics and implementation for auto decisioning systems undertaken since 2015 Significant scalability for growing number of applications and outstanding portfolio; automated decisions for over 93% of applications 3. Attractive a
Slide 25: Acquisition Rationale
Facilitates FirstCash’s Entrance into Large and Growing Point-of-Sale Payments Market Expands Product Offerings Enhancing FirstCash’s Core Pawn Business Leverages Integrated Technology, Data, e-Commerce and Mobile Capabilities to Accelerate Omnichannel Strategy Provides Significant Revenue and Earni
Slide 26: Tapping into a $600B Addressable Market
Tapping into a $600B* Addressable Market Positioning FirstCash as a leader in highly complementary market focused on similar customers Retail POS financing is one of the fastest growing portions of the financial services sector FirstCash has a proven track record in retail-based operations focused o
Slide 27: Expanded Product Offerings Enhance Core Pawn Business
Adding new POS payment options including LTO and AFF originated retail financing to existing pawn retail payment options AFF LTO customers can return leased merchandise at FirstCash pawn locations Longer term, FirstCash expects to explore opportunities for potential LTO and retail finance products i
Slide 28: Accelerating Digitization
AFF’s integrated POS payments technology is easily incorporated into its merchant partners’ systems Compelling opportunities include those in furniture and mattresses, appliances, jewelry, electronics and automotive products and repair services Addition of enhanced technology, data, e-commerce and m
Slide 29: AFF regulatory overview by product
Lease-To-Own 48 states have lease-to-own laws. Each state has its own unique set of state laws and a different consumer contract form AFF offers in 44 states + District of Columbia and Puerto Rico AFF has used the Progressive FTC case as a guide to check its own product Retail Installment Sale Agree
Slide 30: Pro Forma Financial Overview
Pro Forma Financial Overview Merida, Yucatan Mexico
Slide 31: Pro Forma Financial Overview
Pro Forma Financial Overview $ in Millions 1. Adjusted EBITDA is a non-GAAP financial measure. See reconciliation of non-GAAP financial measures elsewhere in this presentation 2. Excludes purchases of store real property as the Company considers such purchases to be discretionary in nature and not r
Slide 32: Pro Forma EBITDA Reconciliation
Pro Forma EBITDA Reconciliation LTM 2020 9/30/21 Net Income $62.6 $96.8 Income taxes 24.0 34.8 Depreciation and amortization 108.2 128.2 Interest expense 54.0 54.5 Interest income (2.0) (0.8) EBITDA $246.8 $313.5 Adjustments: Merger and acquisition expenses 1.3 2.4 Non-cash foreign currency loss (ga
Slide 33: Appendix
Appendix Corpus Christi, Texas USA
Slide 34: AFF Standalone EBITDA Reconciliation
AFF Standalone EBITDA Reconciliation LTM 2019 2020 9/30/21 Net Income $53.5 $58.6 $79.2 Income taxes - - - Depreciation and amortization of Property and Equipment, Net 1.1 2.3 3.6 Interest expense 10.4 9.8 13.6 Bank Interest income (0.4) (0.4) (0.0) EBITDA $64.5 $70.3 $96.3 Adjustments: Merger and a
Slide 35: Reconciliations of Non-GAAP Financial Measures to GAAP
FirstCash - Reconciliations of Non-GAAP Financial Measures to GAAP Financial Measures $ in Millions Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Net income $35 $54 $33 $26 $15 $33 $34 $28 $33 Income taxes 14 17 13 11 3 10 13 10 11 Depreciation and amortization 11 11 11 10
Slide 36: Reconciliations of Non-GAAP Financial Measures (continued)
FirstCash - Reconciliations of Non-GAAP Financial Measures to GAAP Financial Measures (continued) Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 $ in Millions Dollars Per Share Dollars Per Share Dollars Per Share Dollars Per Share Dollars Per Share Dollars Per Share Dollars
Slide 37: Constant Currency
Constant Currency Certain performance metrics discussed in this presentation are presented on a “constant currency” basis, which is considered a non-GAAP financial measure. The Company’s management uses constant currency results to evaluate operating results of business operations in Latin America,