Firstcash Holdings, Inc. · NASDAQ:FCFS
Firstcash — Investor Presentation (November 2020)
38 slides from Firstcash's investor presentation, Nov 5, 2020
Slide 1: Investor Presentation November 2020
EXHIBIT 99.1 1 INVESTOR PRESENTATION NOVEMBER 2020
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS 2 THIS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS ABOUT THE BUSINESS, FINANCIAL CONDITION AND PROSPECTS OF FIRSTCASH, INC. AND ITS WHOLLY OWNED SUBSIDIARIES (TOGETHER, THE “COMPANY”). FORWARD-LOOKING STATEMENTS, AS THAT TERM IS DEFINED IN THE PRIVATE SECURITIES LITIG
Slide 3: Who We Are
3 U.S. OPERATIONS – 1,030 STORES IN 24 STATES AND THE DISTRICT OF COLUMBIA WHO WE ARE LEADING INTERNATIONAL PAWN OPERATOR WITH 2,750 RETAIL PAWN LOCATIONS AND APPROXIMATELY 17,000 EMPLOYEES IN 5 COUNTRIES 1,030 PAWN-FOCUSED BUSINESS MODEL SMALL SECURED PAWN LOANS TO UNBANKED AND CENTRAL + SOUTH AMER
Slide 4: Why Invest in FirstCash?
WHY INVEST IN FIRSTCASH? 4 ATTRACTIVE INDUSTRY DYNAMICS – CUSTOMER BASE IS UNDERSERVED – MOST LENDERS DO NOT OFFER LOANS OF $200 OR LESS 1 – STABLE REGULATORY ENVIRONMENT – PAWN LENDING PERFORMED WELL IN PAST CONSUMER CREDIT CONTRACTION CYCLES ROBUST SHAREHOLDER RETURNS – RISING DIVIDEND 3 – SHARE R
Slide 5: FirstCash Timeline
FIRSTCASH TIMELINE 5 1988 – BEGAN 2015 – 2016 PERATIONS IN EXAS O T MAXI PRENDA ACQUISITION – FIRST STORES IN GUATEMALA & EL SALVADOR Q3–2020 U.S. ROLL-UPS STORE COUNT ~ 100 STORES CONTINUED U.S. GROWTH 2,750 2018 – FIRST DE NOVO THROUGH ACQUISITIONS STORES IN COLOMBIA 1988 1999 2015 2019 2020 5 EXP
Slide 6: Largest Pawn Operator in the Americas – Diversified Revenue Stream
LARGEST PAWN OPERATOR IN THE AMERICAS 6 – 2,750 STORE LOCATIONS – DIVERSIFIED REVENUE STREAM —RETAIL SALES AND PAWN FEES 6% 2% 28% 51% TOTAL REVENUE GROSS PROFIT $1.7 BILLION $1.0 BILLION 66% 47% RETAIL SALES PAWN FEES SCRAP JEWELRY SALES TTM results as of 09/30/2020
Slide 7: Pawn Loan Product Overview
PAWN LOAN PRODUCT OVERVIEW 7 PAWN LOANS ARE SMALL AND TYPICAL PAWN TRANSACTION CYCLE AFFORDABLE WITH A SHORT DURATION – TOTAL TRANSACTION TIME LESS THAN 15 MINUTES – TYPICALLY 30 TO 60 DAY TERM CUSTOMER ENTERS STORE – AVERAGE LOAN SIZE: WITH PERSONAL ASSET U.S. $188 ~25% - 30% ~70% - 75% LATAM $
Slide 8: Pawn Collateral and Inventory Composition
PAWN COLLATERAL AND INVENTORY COMPOSITION 8 U.S. SEGMENT LATAM SEGMENT 15% 48% 66% 34% 6% 3% PAWN COLLATERAL 7% PAWN COLLATERAL 3% 2% 2% 12% 2% 11% 42% 58% 8% 40% 3% INVENTORY INVENTORY 17% 3% 11% 3% 2% 2% JEWELRY ELECTRONICS TOOLS SPORTING GOODS MUSICAL INSTRUMENTS OTHER Results as of 09/30/2020
Slide 9: Pawnshops Serve Unbanked and Underbanked Consumers
PAWNSHOPS SERVE UNBANKED AND UNDERBANKED CONSUMERS 9 PAWN LOANS CAN BE EASILY ACCESSED BY CUSTOMERS WITH LIMITED OR NO ACCESS TO TRADITIONAL CREDIT PRODUCTS —NO BANK ACCOUNT OR CREDIT HISTORY NECESSARY —ONLY A VALID GOVERNMENT ISSUED ID AND COLLATERAL REQUIRED TRUE MICROFINANCE PRODUCT —SMALL, AFFOR
Slide 10: Environmentally Friendly Business Model
10 ENVIRONMENTALLY FRIENDLY BUSINESS MODEL CIRCULAR ECONOMY NO SUPPLY CHAIN NEIGHBORHOOD-BASED STORES CONTRIBUTE TO THE LOCAL SOURCING OF PRE-OWNED GOODS ELIMINATES NEED FOR MANUFACTURING MODERN “CIRCULAR ECONOMY” – BUY USE RETURN FACILITIES, DISTRIBUTION CENTERS AND TRANSPORTATION SERVICES SAFE
Slide 11: Latin America Overview
11 LATIN AMERICA OVERVIEW
Slide 12: FirstCash LatAm Growth – Revenue and Store Count
FIRSTCASH LATAM GROWTH –REVENUE AND STORE COUNT 12 REVENUE GROWTH STORE COUNT 1,720 1,623 1,379 $803 ACQUISITIONS $771 861 999 828 955 672 DE NOVO OPENINGS $666 737 308 309 130 $573 795 859 607 647 690 707 $485 2015 2016 2017 2018 2019 Q3-2020 $368 $671 STORE ADDITIONS BY YEAR $557 $594 $487 418 $41
Slide 13: Third Quarter Trends – Latin America COVID-19 Update
THIRD QUARTER TRENDS –LATIN AMERICA 13 COVID-19 UPDATE: MEXICO SAME-STORE PAWN RECEIVABLES & LOAN ORIGINATIONS COMPARED TO PRIOR-YEAR –ALL STORES CURRENTLY OPEN AND OPERATING AT THE END OF OCTOBER 100% –EARLY SECOND QUARTER SAW SIGNIFICANT DECLINE IN PAWN 91% ORIGINATIONS DUE TO PANDEMIC RELATED LO
Slide 14: Third Quarter Trends – Latin America: Retail Sales
THIRD QUARTER TRENDS –LATIN AMERICA: 14 RETAIL SALES: LATAM RETURN ON EARNING ASSETS –RETAIL SALES WERE IMPACTED BY A COMBINATION OF LOWER $500 250% SCRAP GP BEGINNING INVENTORY LEVELS AND A MORE LIMITED ECONOMIC 196% $400 185% 178% 186% 200% RECOVERY IN THE THIRD QUARTER VERSUS THE U.S. RETAIL GP
Slide 15: Over 1,700 LatAm Locations; Primary Store Growth Vehicle
OVER 1,700 LATAM LOCATIONS IN 4 COUNTRIES 15 LATIN AMERICA CONTINUES TO BE THE PRIMARY STORE GROWTH VEHICLE -SIGNIFICANT UNTAPPED POTENTIAL IN THE REGION SUBSTANTIAL INFRASTRUCTURE AND CASH FLOWS TO MEXICO OPERATIONS – 1,635 STORES IN 32 STATES ACCOMPLISH NEW ACQUISITIONS AND DE NOVO EXPANSION POP
Slide 16: Proven New Store Opening Process and Rapid Payback Model
PROVEN NEW STORE OPENING PROCESS UNDEVELOPED SITE 16 AND RAPID PAYBACK MODEL NEW STORE TYPICAL MEXICO NEW STORE RAMP 1 ($ IN USD) REVENUE INVESTMENT (USD $) $600 CAP EX $181,000 $500 OPENED FIRST STORES IN MEXICO IN 1999 -LEASEHOLD IMPROVEMENTS & $400 FIXTURES EXPERIENCED REAL ESTATE DEVELOPMENT
Slide 17: United States Overview
UNITED STATES OVERVIEW FirstCasit
Slide 18: Over 1,000 U.S. Locations
OVER 1,000 U.S. LOCATIONS IN 24 STATES 18 AND THE DISTRICT OF COLUMBIA OPERATIONS FOCUSED IN STATES WITH: 31 WA – GROWING POPULATIONS – FAVORABLE DEMOGRAPHICS – STABLE REGULATIONS 1 WY 27 1 OH 3DC NV 6 NE 26 23 65 28 IN 29MD SIGNIFICANT UNDERBANKED UT IL 6 VA CO 24 26 MO KY 41NC DEMOGRAPHICS 27 18
Slide 19: Recent U.S. Acquisitions
RECENT U.S. ACQUISITIONS 19 STORES ACQUIRED BY YEAR STORES ACQUIRED MOST RECENT U.S. ACQUISITION COMPLETED IN LATE OCTOBER 2020: 2020 OCT YTD 12 – 12 STORE CHAIN LOCATED IN HOUSTON, TEXAS AREA 2019 27 – WELL-RUN, PROFITABLE LOCATIONS – EXPECTED TO BE IMMEDIATELY ACCRETIVE TO ADJUSTED EARNINGS MEASU
Slide 20: Third Quarter Trends – U.S. Operations COVID-19 Update
THIRD QUARTER TRENDS – U.S. OPERATIONS 20 U.S. SAME-STORE PAWN RECEIVABLES & COVID-19 UPDATE: LOAN ORIGINATIONS COMPARED TO PRIOR-YEAR – ALL STORES CURRENTLY OPEN AND OPERATING AT THE END OF OCTOBER START OF CARES ACT – COVID-19 LOCK-DOWNS AND SUBSEQUENT FEDERAL STIMULUS RESPONSE 100% 97% STIMULUS
Slide 21: Third Quarter Trends – U.S. Operations Retail Sales
THIRD QUARTER TRENDS – U.S. OPERATIONS 21 RETAIL SALES GROSS PROFIT GROWTH: RETURN ON EARNING ASSETS –GROSS PROFIT FROM RETAIL SALES INCREASED 4% $1,000 172% 180% 148% SCRAP GP 138% –GROWTH IN RETAIL GROSS PROFIT DESPITE A DECLINE IN $750 122% RETAIL GP TOP-LINE RETAIL SALES 120% $500 PAWN FEES RE
Slide 22: Stable Regulatory Climate for Pawn
STABLE REGULATORY CLIMATE FOR PAWN 22 PAWN LOANS ARE DIFFERENT FROM TRADITIONAL CONSUMER LOAN PRODUCTS AND NOT SUBJECT TO THE CFPB SMALL DOLLAR LOAN RULES BECAUSE THEY: — ARE COLLATERALIZED WITH A TANGIBLE ASSET — ARE NON-RECOURSE LOANS — HAVE SIGNIFICANTLY SMALLER AVERAGE LOAN SIZES — DO NOT INVOL
Slide 23: Wind-Down of Non-Core Consumer Lending Products and Stores
WIND-DOWN OF NON-CORE CONSUMER LENDING PRODUCTS AND STORES 23 PRO FORMA INCLUDING CASH AMERICA ($ IN MILLIONS) CONSUMER LOAN REVENUE CONSUMER LOAN LOCATIONS $140 10% 600 531 $118 9% $120 500 8% 82 448 434 $100 $93 7% 64 400 114 63 7% $77 6% $80 113 5% 300 113 279 $60 5% $56 8 4% 4% 200 113 $40 3% 33
Slide 24: Financial Highlights
FINANCIAL HIGHLIGHTS sii FirstCasit
Slide 25: Revenue and Earnings History
REVENUE AND EARNINGS HISTORY 25 ($ IN MILLIONS) REVENUE PROFITABILITY $1,864 $1,780 $1,781 $168 $304 $20 $1,737 $165 $158 $284 $77 $56 $153 $4 $273 $144 $265 $144 $131 $128 $1,088 $44 $1,844 $1,725 $1,734 $705 $1,703 $28 $1,045 $677 2015 2016 2017 2018 2019 TTM NET INCOME ADJUSTED NET INCOME1 ADJUST
Slide 26: Earnings Per Share
EARNINGS PER SHARE 26 $4.50 $4.00 $3.81 $3.89 $3.53 $3.50 $3.41 $3.43 $3.00 $3.03 $3.00 $2.74 $2.50 $2.44 $2.00 $1.72 $1.50 $1.00 $0.50 $0.00 2016 2017 2018 2019 TTM Q3-2020 EARNINGS PER SHARE ADJUSTED EARNINGS PER SHARE1 1 Non-GAAP financial measure. See reconciliation of non-GAAP financial measure
Slide 27: Cash Dividend History
CASH DIVIDEND HISTORY 27 $1.20 $1.08 $1.02 $1.00 $0.91 $0.27 $0.27 $0.80 $0.77 $0.25 $0.20 $0.27 $0.60 $0.57 $0.25 $0.22 $0.19 $0.19 $0.40 $0.27 $0.25 $0.125 $0.22 $0.19 $0.20 $0.125 $0.25 $0.27 $0.19 $0.22 $0.125 $0.00 2016 2017 2018 2019 2020 QTR 1 QTR 2 QTR 3 QTR 4
Slide 28: Active Share Repurchase Program
ACTIVE SHARE REPURCHASE PROGRAM 28 SINCE MERGER REPRESENTS 15% OF SHARE COUNT AT MERGER $300 7.2 8.0 $275 MILLION SHARES 7.0 $250 6.3 MILLION SHARES 6.0 ) ) $200 ILLIONS M ( ILLIONS 5.0 5.0 M ( MILLION SHARES OUNT C $150 4.0 EPURCHASES R EPURCHASE $114 R HARE 3.0 S $100 $93 $80 UMULATIVE 2.0 C 1.6 $
Slide 29: Record Free Cash Flows in 2020; Bond Refinancing Strengthens Balance Sheet
RECORD FREE CASH FLOWS IN 2020; 29 RECENT BOND REFINANCING STRENGTHENS BALANCE SHEET CASH FLOW FROM OPERATING ACTIVITIES 1 OUTSTANDING DEBT AND FREE CASH FLOW CASH FLOW FROM OPERATING ACTIVITIES FREE CASH FLOW LINES OF CREDIT 2024 SENIOR NOTES 2028 SENIOR NOTES $350 $800 4.5 $295 $700 4.0 $300 $640
Slide 30: $2.0 Billion in Growth Investments and Shareholder Payouts
$2.0 BILLION IN GROWTH INVESTMENTS & SHAREHOLDER PAYOUTS 30 THE LAST 10 YEARS (SINCE 2009) ($ IN MILLIONS) CUMULATIVE TOTAL $2.0 BILLION $2,000 STOCK REPURCHASES & DIVIDENDS: ACQUISITIONS: - 12,456,087 SPLIT-ADJUSTED SHARES REPURCHASED - 215 STORES ACQUIRED IN U.S. $1,800 - $175 MILLION IN CUMULATIV
Slide 31: Investment Recap
31 INVESTMENT RECAP PAWN EXCLUSIVE BUSINESS MODEL ‒ SMALL SECURED PAWN LOANS TO UNBANKED AND UNDERBANKED CONSUMERS WITH LIMITED OR NO ACCESS TO TRADITIONAL CREDIT PRODUCTS ‒ FULL-SERVICE LENDING AND RETAIL MODEL IS A SIGNIFICANT COMPETITIVE ADVANTAGE WITH STRONG MARGINS AND CASH FLOWS ‒ RESILIENT BU
Slide 32: Appendix
32 APPENDIX
Slide 33: Non-GAAP Financial Information
NON-GAAP FINANCIAL INFORMATION 33 THE COMPANY USES CERTAIN FINANCIAL CALCULATIONS SUCH AS ADJUSTED NET INCOME, ADJUSTED DILUTED EARNINGS PER SHARE, EBITDA, ADJUSTED EBITDA, FREE CASH FLOW, ADJUSTED FREE CASH FLOW AND CONSTANT CURRENCY RESULTS AS FACTORS IN THE MEASUREMENT AND EVALUATION OF THE COMPA
Slide 34: Reconciliation of Net Income to Adjusted Net Income
RECONCILIATION OF NET INCOME TO ADJUSTED 34 NET INCOME ($ IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) YEAR ENDED DECEMBER 31, TRAILING NINE MONTHS TRAILING TWELVE MONTHS 2017 2018 2019 SEPTEMBER 30, 2020 SEPTEMBER 30, 2020 IN THOUSANDS PER SHARE IN THOUSANDS PER SHARE IN THOUSANDS PER SHARE IN THOUSANDS
Slide 35: Reconciliation of Net Income to EBITDA and Adjusted EBITDA
RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA 35 ($ IN THOUSANDS) YEAR ENDED DECEMBER 31, TTM 2017 2018 2019 Q3-2020 NET INCOME $143,892 $153,206 $164,618 $128,007 INCOME TAXES 28,420 52,103 59,993 44,103 DEPRECIATION AND AMORTIZATION 55,233 42,961 41,904 42, 270 INTEREST EXPENSE 24,035
Slide 36: Reconciliation of Cash Flow from Operating Activities to Free Cash Flow
36 RECONCILIATION OF CASH FLOW FROM OPERATING ACTIVITIES TO FREE CASH FLOW & ADJUSTED FREE CASH FLOW ($ IN THOUSANDS) THREE MONTHS ENDED NINE MONTHS ENDED TTM ENDED YEAR ENDED DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, 2017 2018 2019 2019 2020 2019 2020 2019 2020 CASH FLOW FROM OPERATING
Slide 37: Constant Currency
CONSTANT CURRENCY 37 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 AMERIC
Slide 38: Get in Touch With Us
38 GET IN TOUCH WITH US INVESTOR RELATIONS INVESTORRELATIONS@FIRSTCASH.COM INVESTORS.FIRSTCASH.COM 817 258 2650 GAR JACKSON GLOBAL IR GROUP GAR@GLOBALIRGROUP.COM 817 886 6998