Market Overview

FirstCash Reports Record Fourth Quarter and Full Year Results; Increases Quarterly Dividend and Issues 2018 Earnings Outlook

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FirstCash, Inc. (the "Company") (NYSE:FCFS), a leading international
operator of over 2,100 retail pawn stores in the U.S. and Latin America,
today announced record revenue, net income and earnings per share for
the fourth quarter and full year ended December 31, 2017. In addition,
the Company announced that the Board of Directors increased the
annualized dividend to $0.88 per share, or $0.22 per share quarterly,
beginning with the dividend to be paid in February 2018, which
represents a 16% increase over the $0.19 per share dividend paid in the
first quarter of 2017.

Mr. Rick Wessel, chief executive officer, stated, "Our full year and
fourth quarter results were outstanding, as FirstCash posted a record
$1.8 billion in consolidated revenues for the year and record single
quarter revenues of $480 million. Strong year end momentum was driven by
a 22% year-over-year increase in fourth quarter revenue in Latin America
(16% on a constant currency basis), coupled with solid domestic holiday
sales results and better than expected cost savings in our U.S.
operations. The passage of the Tax Cuts and Jobs Act ("Tax Act") at the
end of the year provided an estimated one-time net tax benefit of $27
million, or $0.57 per share. More importantly, we will benefit from the
significant reduction in the effective U.S. tax rate beginning in 2018."

Adjusted earnings measures for 2017 exclude the impact of the Tax
Act, merger and acquisition related expenses and the loss on
extinguishment of debt from the senior notes refinancing, which are
further described, along with the adjustments for 2016 results, in the
detailed reconciliations of adjusted earnings provided elsewhere in this
release.

 
Three Months Ended December 31,
2017   2016
In thousands, except per share amounts As Reported   Adjusted As Reported   Adjusted
(GAAP) * (Non-GAAP) (GAAP) * (Non-GAAP)
Revenue $ 480,205 $ 480,205 $ 462,042 $ 462,042
Net income $ 67,734 $ 44,181 $ 36,692 $ 37,448
Diluted earnings per share $ 1.43 $ 0.94 $ 0.76 $ 0.77
EBITDA (non-GAAP measure) $ 75,213 $ 81,111 $ 77,163 $ 78,404
Weighted average diluted shares 47,212 47,212 48,532 48,532
 
 
Twelve Months Ended December 31,
2017   2016
In thousands, except per share amounts As Reported   Adjusted As Reported   Adjusted
(GAAP) * (Non-GAAP) (GAAP) * (Non-GAAP)
Revenue $ 1,779,822 $ 1,779,822 $ 1,088,377 $ 1,088,377
Net income $ 143,892 $ 131,225 $ 60,127 $ 85,332
Diluted earnings per share $ 3.00 $ 2.74 $ 1.72 $ 2.44
EBITDA (non-GAAP measure) $ 249,983 $ 273,159 $ 144,881 $ 180,252
Weighted average diluted shares 47,888 47,888 35,004 35,004
 
*   Other than EBITDA, which is a non-GAAP financial measure. See the
detailed reconciliation of non-GAAP financial measures provided
elsewhere in this release.
 

In the fourth quarter of 2017, the Company recorded an estimated net
income tax benefit of $27 million, or $0.57 per share, as a result of
the Tax Act, consisting of an estimated $29 million, or $0.61 per share,
income tax benefit resulting from the re-measurement of the Company's
U.S. net deferred tax liability as of December 31, 2017 based on the new
lower corporate income tax rate and an estimated $2 million, or $0.04
per share, one-time income tax expense relating to the tax impact of the
deemed repatriation of the Company's previously undistributed foreign
earnings of approximately $155 million. As a result, the full year 2017
effective income tax rate was 16.5%. Excluding the impact of the Tax
Act, the effective tax rate was 32.3% in fiscal 2017. The provisional
tax estimates are based on our initial analysis of the Tax Act. Given
the significant complexity of the Tax Act, anticipated guidance from the
U.S. Treasury and various U.S. states about implementing the Tax Act and
the potential for additional accounting standards guidance related to
the Tax Act, the estimates may be refined in the future. The Company has
excluded the non-recurring net tax benefit realized as a result of the
Tax Act in its adjusted earnings measures.

Earnings Highlights

  • Net income for the fourth quarter of 2017 increased 85% compared to
    the fourth quarter of 2016, while on an adjusted basis, net income for
    the quarter increased 18%. For the full year of 2017, net income
    increased 139% while adjusted income increased 54%.
  • Diluted earnings per share increased 88% in the fourth quarter and 74%
    for all of 2017. On a non-GAAP adjusted basis, diluted earnings per
    share increased 22% in the fourth quarter and 12% for the full year.
  • Adjusted EBITDA, a non-GAAP measure, totaled $273 million and
    increased 52% in fiscal 2017 versus the prior year.
  • Cash flow from operating activitie
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