FirstCash(US:FCFS)2022-07-31 16:00Pawn Operations - As of June 30, 2022, the Company operated 2,834 pawn store locations, including 1,076 in the U.S. and 1,758 in Latin America[123] - The U.S. pawn segment reported a 33% increase in pawn loans, totaling $271.3 million as of June 30, 2022, compared to $203.8 million in the prior year[132] - U.S. pawn loan receivables increased by 33% as of June 30, 2022, compared to June 30, 2021, driven by recovery in pawn lending demand[139] - Latin America pawn loan receivables increased by 6% (7% on a constant currency basis) as of June 30, 2022, compared to June 30, 2021[152] - The average outstanding pawn loan amount in Latin America remained stable at $80 as of June 30, 2022[145] Financial Performance - Total revenue for the U.S. pawn segment increased by 21% to $298.8 million for the three months ended June 30, 2022, up from $247.0 million in the same period of 2021[135] - Consolidated net income for the three months ended June 30, 2022, was $86.108 million, a 203% increase from $28.427 million in the prior year[164] - The company reported a net income of $114.1 million for the six months ended June 30, 2022, an 84% increase from $62.1 million in the prior year[193] - The company’s total revenue as reported for the six months ended June 30, 2022, was $1,307,455 thousand, compared to $797,517 thousand in 2021, representing a 64% increase[242] Revenue and Sales Growth - Retail merchandise sales in the U.S. rose 13% to $195.4 million during the second quarter of 2022, with same-store sales increasing by 10%[136] - Latin America retail merchandise sales increased by 11% to $102.9 million in Q2 2022, driven by strong demand for deep value goods[150] - U.S. retail merchandise sales rose by 10% to $400.311 million, with same-store sales increasing by 7%[175] - Total revenue for the Latin America pawn segment was $313.0 million, reflecting a 14% increase compared to the prior year[184] Operating Income and Margins - Segment pre-tax operating income for the U.S. pawn segment increased by 36% to $64.0 million for the three months ended June 30, 2022, compared to $47.1 million in the same period of 2021[135] - U.S. segment pre-tax operating income for Q2 2022 was $64.0 million, with a pre-tax operating margin of 21%, compared to $47.1 million and 19% in the prior year[142] - Segment pre-tax operating income for Latin America was $33.2 million in Q2 2022, with a pre-tax operating margin of 21%, up from $28.1 million and 20% in the prior year[155] Expenses and Costs - Administrative expenses increased by 35% to $37.068 million, but as a percentage of revenue, they decreased from 7% to 6%[165] - Operating expenses in Latin America increased by 5% to $48.1 million in Q2 2022, reflecting inflationary pressures and store growth[154] - Interest expense increased 125% to $32.5 million, attributed to higher outstanding senior unsecured notes and interest rates[197] Cash Flow and Capital Management - Cash flow provided by operating activities increased by $113.0 million, or 99%, from $113.7 million for the six months ended June 30, 2021, to $226.8 million for the same period in 2022[214] - The company had working capital of $728.7 million as of June 30, 2022, compared to $401.2 million in the prior year[213] - The company repurchased 1,349,000 shares of common stock at an aggregate cost of $92.7 million during the six months ended June 30, 2022, compared to 536,000 shares for $38.0 million in the same period of 2021[208] Adjusted Financial Metrics - Adjusted net income for the three months ended June 30, 2022, was $51.2 million, or $1.08 per diluted share, compared to $29.0 million, or $0.71 per diluted share for the same period in 2021[227] - Adjusted EBITDA for the trailing twelve months ended June 30, 2022, was $197,765 thousand, compared to $123,125 thousand for the same period in 2021, reflecting a 60% increase[235] - Adjusted free cash flow for the six months ended June 30, 2022, was $152,023 thousand, compared to $85,174 thousand in the same period of 2021, reflecting an increase of 78%[239] Strategic Initiatives - The company plans to expand pawn operations by adding up to 60 full-service pawn locations in 2022, contingent on identifying suitable markets and locations[203] - The company intends to continue investments in its technology platforms and proprietary decisioning systems to support the expansion of retail POS payment solutions operations[206] Tax and Accounting - The effective income tax rate decreased to 21.5% from 26.7% due to an increase in U.S. sourced income and a permanent domestic tax benefit[171] - The consolidated effective income tax rates for the six months ended June 30, 2022, and 2021 were 22.2% and 27.0%, respectively, primarily due to an increase in U.S. sourced income and a $3.4 million permanent domestic tax benefit related to a $63.0 million gain on revaluation of contingent consideration from the AFF Acquisition[200]