
Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended ~~September 30, 2021~~March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to ___________

Commission file number 001-10960

FIRSTCASH HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware

~~75-2237318~~87-3920732

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

1600 West 7th Street, Fort Worth, Texas 76102

(Address of principal executive offices) (Zip code)

(817) 335-1100

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.01 per share	FCFS	The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No


Table of Contents

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


☒	Large accelerated filer	☐	Accelerated filer
☐	Non-accelerated filer	☐	Smaller reporting company
		☐	Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of ~~October 19, 2021,~~April 27, 2022, there were ~~40,433,427~~47,464,357 shares of common stock outstanding.


Table of Contents

FIRSTCASH HOLDINGS, INC.

FORM 10-Q FOR THE QUARTER ENDED ~~SEPTEMBER 30, 2021~~MARCH 31, 2022

INDEX


Table of Contents

CAUTIONARY STATEMENT REGARDING RISKS AND UNCERTAINTIES THAT MAY AFFECT FUTURE RESULTS

Forward-Looking Information

This quarterly report contains forward-looking statements about the business, financial condition and prospects of FirstCash Holdings, Inc. and its wholly owned subsidiaries (together, the “Company”). 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,” “plans,” “targets,” “intends,” “could,” “would,” “anticipates,” “potential,” “confident,” “optimistic” or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy, objectives, estimates, guidance, expectations and future plans. Forward-looking statements can also be identified by the fact these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties.

While the Company believes the expectations reflected in forward-looking statements are reasonable, there can be no assurances such expectations will prove to be accurate. Security holders are cautioned that such forward-looking statements involve risks and uncertainties. Certain factors may cause results to differ materially from those anticipated by the forward-looking statements made in this quarterly report. Such factors may include, without limitation, risks associated with the putative shareholder securities class action lawsuit filed against the Company, the Consumer Financial Protection Bureau (the “CFPB”) lawsuit filed against the Company, the California private lawsuits filed against the Company in which the plaintiffs are seeking class certification, and subpoenas seeking information from the Company received from state regulators from time to time, including the incurrence of meaningful expenses, reputational damage, monetary damages and other penalties; risks ~~uncertainties~~relating to the American First Finance (“AFF”) transaction, including the failure of the transaction to deliver the estimated value and ~~regulatory developments: (1)~~benefits expected by the Company, the incurrence of unexpected future costs, liabilities or obligations as a result of the transaction, the effect of the transaction on the ability of the Company to retain and hire personnel and maintain relationships with retail partners, consumers and others with whom the Company and AFF do business; the ability of the Company to successfully integrate AFF’s operations; the ability of the Company to successfully implement its plans, forecasts and other expectations with respect to AFF’s business; risks related to the COVID-19 pandemic, including risks and uncertainties related to the current unknown duration and severity of the COVID-19 pandemic, ~~and~~ the ~~impact of~~ governmental responses that have been, and may in the future be, imposed in response to the ~~pandemic,~~pandemic; potential changes in consumer behavior and ~~(2)~~shopping patterns which could impact demand for the Company’s pawn loan, retail, lease-to-own and retail finance products; labor shortages and increased labor costs; inflation; a deterioration in the economic conditions in the United States and Latin America which potentially could have an impact on discretionary consumer spending; currency fluctuations, primarily involving the Mexican peso; and those other risks discussed and described in the Company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”), including the risks described in Part 1, Item 1A, “Risk Factors” thereof, and other reports filed ~~subsequently by the Company~~ with the SEC. Many of these risks and uncertainties are beyond the ability of the Company to control, nor can the Company predict, in many cases, all of the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. The forward-looking statements contained in this quarterly report speak only as of the date of this quarterly report, and the Company expressly disclaims any obligation or undertaking to report any updates or revisions to any such statement to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.


Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


FIRSTCASH, INC.
FIRSTCASH HOLDINGS, INC.								FIRSTCASH HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS	CONSOLIDATED BALANCE SHEETS							CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)	(unaudited, in thousands)							(unaudited, in thousands)

		September 30,				December 31,			March 31,				December 31,
		2021		2020		2020			2022		2021		2021
ASSETS	ASSETS							ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	49,907	$	78,844	$	65,850	Cash and cash equivalents	$	113,317	$	54,641	$	120,046
Fees and service charges receivable		43,492		36,423		41,110
Accounts receivable, net								Accounts receivable, net	52,017		35,334		55,356
Pawn loans	Pawn loans	348,993		270,619		308,231		Pawn loans	344,101		265,438		347,973

Finance receivables, net								Finance receivables, net	140,481		—		181,021
Inventories	Inventories	254,260		168,664		190,352		Inventories	247,276		185,336		263,311
Income taxes receivable		4,791		7,534		9,634
Leased merchandise, net								Leased merchandise, net	119,147		—		143,944
Prepaid expenses and other current assets	Prepaid expenses and other current assets	10,002		10,647		9,388		Prepaid expenses and other current assets	22,592		16,865		17,707
Total current assets	Total current assets	711,445		572,731		624,565		Total current assets	1,038,931		557,614		1,129,358

Property and equipment, net	Property and equipment, net	411,042		341,827		373,667		Property and equipment, net	471,193		384,617		462,526
Operating lease right of use asset	Operating lease right of use asset	300,040		289,175		298,957		Operating lease right of use asset	303,444		287,418		306,061
Goodwill	Goodwill	1,014,052		932,329		977,381		Goodwill	1,541,424		974,051		1,536,178
Intangible assets, net	Intangible assets, net	83,019		83,837		83,651		Intangible assets, net	373,928		83,229		388,184
Other assets	Other assets	8,413		9,087		9,818		Other assets	8,318		9,365		8,531
Deferred tax assets		5,472		6,509		4,158
Deferred tax assets, net								Deferred tax assets, net	5,930		3,869		5,614
Total assets	Total assets	$	2,533,483	$	2,235,495	$	2,372,197	Total assets	$	3,743,168	$	2,300,163	$	3,836,452

LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY							LIABILITIES AND STOCKHOLDERS’ EQUITY

Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	$	87,629	$	79,979	$	81,917	Accounts payable and accrued liabilities	$	237,164	$	86,714	$	244,327
Customer deposits		46,702		36,189		34,719
Income taxes payable		522		183		1,148
Customer deposits and prepayments								Customer deposits and prepayments	57,874		38,727		57,310
Lease liability, current	Lease liability, current	89,502		84,970		88,622		Lease liability, current	92,091		86,529		90,570
Total current liabilities	Total current liabilities	224,355		201,321		206,406		Total current liabilities	387,129		211,970		392,207

Revolving unsecured credit facilities	Revolving unsecured credit facilities	246,000		40,000		123,000		Revolving unsecured credit facilities	218,000		44,000		259,000

Senior unsecured notes	Senior unsecured notes	493,499		492,775		492,916		Senior unsecured notes	1,034,355		493,108		1,033,904
Deferred tax liabilities		78,191		69,261		71,173
Deferred tax liabilities, net								Deferred tax liabilities, net	126,741		73,020		126,098
Lease liability, non-current	Lease liability, non-current	197,618		188,212		194,887		Lease liability, non-current	198,760		186,972		203,166

Other liabilities								Other liabilities	13,950		—		13,950
Total liabilities	Total liabilities	1,239,663		991,569		1,088,382		Total liabilities	1,978,935		1,009,070		2,028,325

Stockholders’ equity:	Stockholders’ equity:							Stockholders’ equity:

Common stock	Common stock	493		493		493		Common stock	573		493		573
Additional paid-in capital	Additional paid-in capital	1,222,432		1,226,512		1,221,788		Additional paid-in capital	1,726,750		1,218,323		1,724,956
Retained earnings	Retained earnings	849,438		767,683		789,303		Retained earnings	880,138		811,921		866,679
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(125,761)		(164,877)		(118,432)		Accumulated other comprehensive loss	(119,510)		(130,767)		(131,299)
Common stock held in treasury, at cost	Common stock held in treasury, at cost	(652,782)		(585,885)		(609,337)		Common stock held in treasury, at cost	(723,718)		(608,877)		(652,782)
Total stockholders’ equity	Total stockholders’ equity	1,293,820		1,243,926		1,283,815		Total stockholders’ equity	1,764,233		1,291,093		1,808,127
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	2,533,483	$	2,235,495	$	2,372,197	Total liabilities and stockholders’ equity	$	3,743,168	$	2,300,163	$	3,836,452

The accompanying notes are an integral part of these consolidated financial statements.	The accompanying notes are an integral part of these consolidated financial statements.							The accompanying notes are an integral part of these consolidated financial statements.


Table of Contents


FIRSTCASH, INC.
FIRSTCASH HOLDINGS, INC.										FIRSTCASH HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME	CONSOLIDATED STATEMENTS OF INCOME									CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands, except per share amounts)	(unaudited, in thousands, except per share amounts)									(unaudited, in thousands, except per share amounts)

		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30,				September 30,					March 31,
		2021		2020		2021		2020			2022		2021
Revenue:	Revenue:									Revenue:
Retail merchandise sales	Retail merchandise sales	$	268,726	$	234,982	$	806,335	$	819,011	Retail merchandise sales	$	302,819	$	272,042
Pawn loan fees	Pawn loan fees	121,365		99,570		346,796		343,675		Pawn loan fees	131,819		115,522
Leased merchandise income										Leased merchandise income	149,947		—
Interest and fees on finance receivables										Interest and fees on finance receivables	42,449		—
Wholesale scrap jewelry sales	Wholesale scrap jewelry sales	9,583		25,281		44,060		74,437		Wholesale scrap jewelry sales	32,805		20,375
Consumer loan and credit services fees		—		57		—		2,003
Total revenue	Total revenue	399,674		359,890		1,197,191		1,239,126		Total revenue	659,839		407,939

Cost of revenue:	Cost of revenue:									Cost of revenue:
Cost of retail merchandise sold	Cost of retail merchandise sold	158,057		137,230		468,634		493,436		Cost of retail merchandise sold	182,214		157,153
Depreciation of leased merchandise										Depreciation of leased merchandise	93,706		—
Provision for lease losses										Provision for lease losses	39,820		—
Provision for loan losses										Provision for loan losses	24,697		—
Cost of wholesale scrap jewelry sold	Cost of wholesale scrap jewelry sold	8,528		19,818		37,657		61,022		Cost of wholesale scrap jewelry sold	28,215		17,197
Consumer loan and credit services loss provision		—		104		—		(480)
Total cost of revenue	Total cost of revenue	166,585		157,152		506,291		553,978		Total cost of revenue	368,652		174,350

Net revenue	Net revenue	233,089		202,738		690,900		685,148		Net revenue	291,187		233,589

Expenses and other income:	Expenses and other income:									Expenses and other income:
Store operating expenses		138,619		132,061		415,071		426,612
Operating expenses										Operating expenses	173,296		137,324
Administrative expenses	Administrative expenses	30,208		24,354		88,605		85,642		Administrative expenses	36,863		30,999
Depreciation and amortization	Depreciation and amortization	11,217		10,426		32,731		31,424		Depreciation and amortization	25,542		10,612
Interest expense	Interest expense	7,961		6,561		22,389		21,953		Interest expense	16,221		7,230
Interest income	Interest income	(143)		(499)		(420)		(1,209)		Interest income	(676)		(158)
(Gain) loss on foreign exchange										(Gain) loss on foreign exchange	(480)		267
Merger and acquisition expenses	Merger and acquisition expenses	12		7		1,264		209		Merger and acquisition expenses	665		166
Loss (gain) on foreign exchange		558		(432)		248		1,639
Write-off of certain Cash America merger related lease intangibles		361		837		1,640		4,649
Loss on extinguishment of debt		—		11,737		—		11,737
Impairment of certain other assets		—		—		—		1,900
Loss on revaluation of contingent acquisition consideration										Loss on revaluation of contingent acquisition consideration	2,570		—
Impairments and dispositions of certain other assets										Impairments and dispositions of certain other assets	177		878

Total expenses and other income	Total expenses and other income	188,793		185,052		561,528		584,556		Total expenses and other income	254,178		187,318

Income before income taxes	Income before income taxes	44,296		17,686		129,372		100,592		Income before income taxes	37,009		46,271

Provision for income taxes	Provision for income taxes	10,900		2,624		33,834		26,739		Provision for income taxes	9,004		12,556

Net income	Net income	$	33,396	$	15,062	$	95,538	$	73,853	Net income	$	28,005	$	33,715

Earnings per share:	Earnings per share:									Earnings per share:
Basic	Basic	$	0.83	$	0.36	$	2.34	$	1.78	Basic	$	0.58	$	0.82
Diluted	Diluted	$	0.82	$	0.36	$	2.34	$	1.77	Diluted	$	0.58	$	0.82

The accompanying notes are an integral part of these consolidated financial statements.	The accompanying notes are an integral part of these consolidated financial statements.									The accompanying notes are an integral part of these consolidated financial statements.


Table of Contents


FIRSTCASH, INC.
FIRSTCASH HOLDINGS, INC.										FIRSTCASH HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME									CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited, in thousands)	(unaudited, in thousands)									(unaudited, in thousands)

		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30,				September 30,					March 31,
		2021		2020		2021		2020			2022		2021
Net income	Net income	$	33,396	$	15,062	$	95,538	$	73,853	Net income	$	28,005	$	33,715
Other comprehensive income:	Other comprehensive income:									Other comprehensive income:
Currency translation adjustment	Currency translation adjustment	(9,971)		7,273		(7,329)		(67,908)		Currency translation adjustment	11,789		(12,335)
Comprehensive income	Comprehensive income	$	23,425	$	22,335	$	88,209	$	5,945	Comprehensive income	$	39,794	$	21,380

The accompanying notes are an integral part of these consolidated financial statements.	The accompanying notes are an integral part of these consolidated financial statements.									The accompanying notes are an integral part of these consolidated financial statements.


Table of Contents


FIRSTCASH, INC.
FIRSTCASH HOLDINGS, INC.																		FIRSTCASH HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY	CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY												CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(unaudited, in thousands, except per share amounts)	(unaudited, in thousands, except per share amounts)												(unaudited, in thousands, except per share amounts)

Nine Months Ended September 30, 2021
Three Months Ended March 31, 2022																		Three Months Ended March 31, 2022
		Common Stock		Additional Paid-In Capital		Retained Earnings		Accum- ulated Other Compre- hensive Loss		Common Stock Held in Treasury				Total Stock- holders’ Equity					Common Stock	Additional Paid-In Capital	Retained Earnings		Accum- ulated Other Compre- hensive Loss		Common Stock Held in Treasury				Total Stock- holders’ Equity
			Shares	Amount								Shares		Amount						Shares	Amount								Shares	Amount
As of 12/31/2020			49,276	$	493	$	1,221,788	$	789,303	$	(118,432)	8,238		$	(609,337)	$	1,283,815
Shares issued under share-based compensation plan, net of 28 shares net-settled			—	—		(7,090)		—		—		(73)		5,427		(1,663)

Share-based compensation expense			—	—		3,625		—		—		—		—		3,625
Net income			—	—		—		33,715		—		—		—		33,715
Cash dividends ($0.27 per share)			—	—		—		(11,097)		—		—		—		(11,097)
Currency translation adjustment			—	—		—		—		(12,335)		—		—		(12,335)
Purchases of treasury stock			—	—		—		—		—		84		(4,967)		(4,967)

As of 3/31/2021			49,276	$	493	$	1,218,323	$	811,921	$	(130,767)	8,249		$	(608,877)	$	1,291,093

As of 12/31/2021																		As of 12/31/2021		57,322	$	573	$	1,724,956	$	866,679	$	(131,299)	8,843	$	(652,782)	$	1,808,127
Shares issued under share-based compensation plan																		Shares issued under share-based compensation plan		—	—		(1,281)		—		—		(17)	1,281		—

Share-based compensation expense	Share-based compensation expense		—	—		1,625		—		—		—		—		1,625		Share-based compensation expense		—	—		3,075		—		—		—	—		3,075
Net income	Net income		—	—		—		28,427		—		—		—		28,427		Net income		—	—		—		28,005		—		—	—		28,005
Cash dividends ($0.30 per share)	Cash dividends ($0.30 per share)		—	—		—		(12,308)		—		—		—		(12,308)		Cash dividends ($0.30 per share)		—	—		—		(14,546)		—		—	—		(14,546)
Currency translation adjustment	Currency translation adjustment		—	—		—		—		14,977		—		—		14,977		Currency translation adjustment		—	—		—		—		11,789		—	—		11,789
Purchases of treasury stock	Purchases of treasury stock		—	—		—		—		—		452		(32,998)		(32,998)		Purchases of treasury stock		—	—		—		—		—		1,048	(72,217)		(72,217)

As of 6/30/2021			49,276	$	493	$	1,219,948	$	828,040	$	(115,790)	8,701		$	(641,875)	$	1,290,816
As of 3/31/2022																		As of 3/31/2022		57,322	$	573	$	1,726,750	$	880,138	$	(119,510)	9,874	$	(723,718)	$	1,764,233

Exercise of stock options			—	—		(358)		—		—		(10)		738		380

Share-based compensation expense			—	—		2,842		—		—		—		—		2,842
Net income			—	—		—		33,396		—		—		—		33,396
Cash dividends ($0.30 per share)			—	—		—		(11,998)		—		—		—		(11,998)
Currency translation adjustment			—	—		—		—		(9,971)		—		—		(9,971)
Purchases of treasury stock			—	—		—		—		—		152		(11,645)		(11,645)

As of 9/30/2021			49,276	$	493	$	1,222,432	$	849,438	$	(125,761)	8,843		$	(652,782)	$	1,293,820

The accompanying notes are an integral part of these consolidated financial statements.	The accompanying notes are an integral part of these consolidated financial statements.												The accompanying notes are an integral part of these consolidated financial statements.


Table of Contents


FIRSTCASH, INC.
FIRSTCASH HOLDINGS, INC.																		FIRSTCASH HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY	CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY												CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
CONTINUED	CONTINUED												CONTINUED
(unaudited, in thousands, except per share amounts)	(unaudited, in thousands, except per share amounts)												(unaudited, in thousands, except per share amounts)

Nine Months Ended September 30, 2020
Three Months Ended March 31, 2021																		Three Months Ended March 31, 2021
		Common Stock		Additional Paid-In Capital		Retained Earnings		Accum- ulated Other Compre- hensive Loss		Common Stock Held in Treasury				Total Stock- holders’ Equity					Common Stock	Additional Paid-In Capital	Retained Earnings		Accum- ulated Other Compre- hensive Loss		Common Stock Held in Treasury				Total Stock- holders’ Equity
			Shares	Amount								Shares		Amount						Shares	Amount								Shares	Amount
As of 12/31/2019			49,276	$	493	$	1,231,528	$	727,476	$	(96,969)	6,947		$	(512,493)	$	1,350,035
Shares issued under share-based compensation plan, net of 46 shares net-settled			—	—		(10,266)		—		—		(93)		6,939		(3,327)
As of 12/31/2020																		As of 12/31/2020		49,276	$	493	$	1,221,788	$	789,303	$	(118,432)	8,238	$	(609,337)	$	1,283,815
Shares issued under share-based compensation plan, net of 28 shares net-settled																		Shares issued under share-based compensation plan, net of 28 shares net-settled		—	—		(7,090)		—		—		(73)	5,427		(1,663)

Share-based compensation expense	Share-based compensation expense		—	—		2,851		—		—		—		—		2,851		Share-based compensation expense		—	—		3,625		—		—		—	—		3,625
Net income	Net income		—	—		—		32,918		—		—		—		32,918		Net income		—	—		—		33,715		—		—	—		33,715
Cash dividends ($0.27 per share)	Cash dividends ($0.27 per share)		—	—		—		(11,268)		—		—		—		(11,268)		Cash dividends ($0.27 per share)		—	—		—		(11,097)		—		—	—		(11,097)
Currency translation adjustment	Currency translation adjustment		—	—		—		—		(83,503)		—		—		(83,503)		Currency translation adjustment		—	—		—		—		(12,335)		—	—		(12,335)
Purchases of treasury stock	Purchases of treasury stock		—	—		—		—		—		981		(80,331)		(80,331)		Purchases of treasury stock		—	—		—		—		—		84	(4,967)		(4,967)

As of 3/31/2020			49,276	$	493	$	1,224,113	$	749,126	$	(180,472)	7,835		$	(585,885)	$	1,207,375

Share-based compensation expense			—	—		2,399		—		—		—		—		2,399
Net income			—	—		—		25,873		—		—		—		25,873
Cash dividends ($0.27 per share)			—	—		—		(11,189)		—		—		—		(11,189)
Currency translation adjustment			—	—		—		—		8,322		—		—		8,322

As of 6/30/2020			49,276	$	493	$	1,226,512	$	763,810	$	(172,150)	7,835		$	(585,885)	$	1,232,780
As of 3/31/2021																		As of 3/31/2021		49,276	$	493	$	1,218,323	$	811,921	$	(130,767)	8,249	$	(608,877)	$	1,291,093

Net income			—	—		—		15,062		—		—		—		15,062
Cash dividends ($0.27 per share)			—	—		—		(11,189)		—		—		—		(11,189)
Currency translation adjustment			—	—		—		—		7,273		—		—		7,273

As of 9/30/2020			49,276	$	493	$	1,226,512	$	767,683	$	(164,877)	7,835		$	(585,885)	$	1,243,926

The accompanying notes are an integral part of these consolidated financial statements.	The accompanying notes are an integral part of these consolidated financial statements.												The accompanying notes are an integral part of these consolidated financial statements.


Table of Contents


FIRSTCASH, INC.
FIRSTCASH HOLDINGS, INC.						FIRSTCASH HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS	CONSOLIDATED STATEMENTS OF CASH FLOWS					CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)	(unaudited, in thousands)					(unaudited, in thousands)
		Nine Months Ended					Three Months Ended
		September 30,					March 31,
		2021		2020			2022		2021
Cash flow from operating activities:	Cash flow from operating activities:					Cash flow from operating activities:
Net income	Net income	$	95,538	$	73,853	Net income	$	28,005	$	33,715
Adjustments to reconcile net income to net cash flow provided by operating activities:	Adjustments to reconcile net income to net cash flow provided by operating activities:					Adjustments to reconcile net income to net cash flow provided by operating activities:
Non-cash portion of consumer loan credit loss provision		—		(829)
Depreciation of leased merchandise						Depreciation of leased merchandise	93,706		—
Provision for lease losses						Provision for lease losses	39,820		—
Provision for loan losses						Provision for loan losses	24,697		—
Share-based compensation expense	Share-based compensation expense	8,092		5,250		Share-based compensation expense	3,075		3,625
Depreciation and amortization expense	Depreciation and amortization expense	32,731		31,424		Depreciation and amortization expense	25,542		10,612
Amortization of debt issuance costs	Amortization of debt issuance costs	1,223		1,219		Amortization of debt issuance costs	732		395

Write-off of certain Cash America merger related lease intangibles		1,640		4,649
Loss on extinguishment of debt		—		11,737
Impairment of certain other assets		—		1,900
Net amortization of premiums, discounts and unearned origination fees on finance receivables						Net amortization of premiums, discounts and unearned origination fees on finance receivables	15,782		—
Loss on revaluation of contingent acquisition consideration						Loss on revaluation of contingent acquisition consideration	2,570		—
Impairments and dispositions of certain other assets						Impairments and dispositions of certain other assets	177		878

Deferred income taxes, net	Deferred income taxes, net	5,622		11,401		Deferred income taxes, net	493		2,010
Changes in operating assets and liabilities, net of business combinations:	Changes in operating assets and liabilities, net of business combinations:					Changes in operating assets and liabilities, net of business combinations:
Fees and service charges receivable		(2,302)		8,291
Accounts receivable, net						Accounts receivable, net	3,746		5,394
Inventories purchased directly from customers, wholesalers or manufacturers	Inventories purchased directly from customers, wholesalers or manufacturers	(25,592)		26,628		Inventories purchased directly from customers, wholesalers or manufacturers	7,075		1,442
Leased merchandise, net						Leased merchandise, net	(108,729)		—
Prepaid expenses and other assets	Prepaid expenses and other assets	229		75		Prepaid expenses and other assets	(1,165)		868
Accounts payable, accrued liabilities and other liabilities	Accounts payable, accrued liabilities and other liabilities	16,538		12,971		Accounts payable, accrued liabilities and other liabilities	(14,707)		3,122
Income taxes	Income taxes	4,131		(11,203)		Income taxes	(674)		7,113
Net cash flow provided by operating activities	Net cash flow provided by operating activities	137,850		177,366		Net cash flow provided by operating activities	120,145		69,174
Cash flow from investing activities:	Cash flow from investing activities:					Cash flow from investing activities:
Loan receivables, net		(70,637)		145,930
Pawn loans, net (1)						Pawn loans, net (1)	17,383		42,394
Finance receivables, net						Finance receivables, net	61		—
Purchases of furniture, fixtures, equipment and improvements	Purchases of furniture, fixtures, equipment and improvements	(31,608)		(27,853)		Purchases of furniture, fixtures, equipment and improvements	(7,028)		(9,491)
Purchases of store real property	Purchases of store real property	(38,256)		(20,946)		Purchases of store real property	(10,233)		(14,441)

Acquisitions of pawn stores, net of cash acquired	Acquisitions of pawn stores, net of cash acquired	(49,434)		(9,340)		Acquisitions of pawn stores, net of cash acquired	—		(1,204)

Net cash flow (used in) provided by investing activities		(189,935)		87,791
Net cash flow provided by investing activities						Net cash flow provided by investing activities	183		17,258
Cash flow from financing activities:	Cash flow from financing activities:					Cash flow from financing activities:
Borrowings from unsecured credit facilities	Borrowings from unsecured credit facilities	338,000		221,925		Borrowings from unsecured credit facilities	39,000		45,000
Repayments of unsecured credit facilities	Repayments of unsecured credit facilities	(215,000)		(520,433)		Repayments of unsecured credit facilities	(80,000)		(124,000)

Issuance of senior unsecured notes due 2028		—		500,000
Redemption of senior unsecured notes due 2024		—		(300,000)
Redemption premium and other redemption costs on senior unsecured notes due 2024		—		(8,781)

Debt issuance costs paid	Debt issuance costs paid	—		(5,285)		Debt issuance costs paid	(132)		—
Purchases of treasury stock	Purchases of treasury stock	(49,610)		(80,331)		Purchases of treasury stock	(72,217)		(4,967)
Proceeds from exercise of stock options		380		—

Payment of withholding taxes on net share settlements of restricted stock awards		(1,663)		(3,327)

Payment of withholding taxes on net share settlements of restricted stock unit awards and stock options exercised						Payment of withholding taxes on net share settlements of restricted stock unit awards and stock options exercised	—		(1,663)
Dividends paid	Dividends paid	(35,403)		(33,646)		Dividends paid	(14,546)		(11,097)
Net cash flow provided by (used in) financing activities		36,704		(229,878)
Effect of exchange rates on cash		(562)		(2,962)
Change in cash and cash equivalents		(15,943)		32,317
Cash and cash equivalents at beginning of the period		65,850		46,527
Cash and cash equivalents at end of the period		$	49,907	$	78,844
Net cash flow used in financing activities						Net cash flow used in financing activities	(127,895)		(96,727)


Table of Contents


FIRSTCASH HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
CONTINUED
(unaudited, in thousands)
	Three Months Ended
	March 31,
	2022		2021
Effect of exchange rates on cash	838		(914)
Change in cash and cash equivalents	(6,729)		(11,209)
Cash and cash equivalents at beginning of the period	120,046		65,850
Cash and cash equivalents at end of the period	$	113,317	$	54,641

(1)Includes the funding of new pawn loans net of cash repayments and recovery of principal through the sale of inventories acquired from forfeiture of pawn collateral.

The accompanying notes are an integral part of these consolidated financial statements.


Table of Contents

FIRSTCASH HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 1 - General

Basis of Presentation

The accompanying consolidated balance sheet as of December 31, ~~2020,~~2021, which is derived from audited consolidated financial statements, and the unaudited consolidated financial statements, including the notes thereto, ~~include~~includes the accounts of FirstCash Holdings, Inc. and its wholly-owned subsidiaries (together, the “Company”). The Company regularly makes acquisitions, and the results of operations for the acquired stores have been consolidated since the acquisition dates. All significant intercompany accounts and transactions have been eliminated.

These unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the rules and regulations for reporting on Form 10-Q. Accordingly, they do not include certain information and disclosures required for comprehensive financial statements. These interim period financial statements should be read in conjunction with the Company’s audited consolidated financial statements, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, filed with the Securities and Exchange Commission (the “SEC”) on February ~~1, 2021.~~28, 2022. The consolidated financial statements as of ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ and for the three month ~~and nine month~~ periods ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ are unaudited, but in management’s opinion include all adjustments (consisting of only normal recurring adjustments) considered necessary to present fairly the financial position, results of operations and cash flow for such interim periods. Operating results for the ~~periods~~period ended ~~September 30, 2021~~March 31, 2022 are not necessarily indicative of the results that may be expected for the full year.

On December 17, 2021, the Company completed the acquisition (the “AFF Acquisition”) of American First Finance (“AFF”), which is a leading technology-driven retail point-of-sale (“POS”) payment solutions platform primarily focused on providing lease-to-own (“LTO”) products.

The Company has operations in Latin America, where in Mexico, Guatemala and Colombia, the functional currency is the Mexican peso, Guatemalan quetzal and Colombian peso. Accordingly, the assets and liabilities of these subsidiaries are translated into U.S. dollars at the exchange rate in effect at each balance sheet date, and the resulting adjustments are accumulated in other comprehensive income (loss) as a separate component of stockholders’ equity. Revenues and expenses are translated at the average exchange rates occurring during the respective period. The Company also has operations in El Salvador where the reporting and functional currency is the U.S. dollar.

~~Continuing Impact of COVID-19~~

The Company continues to monitor the impact of the COVID-19 pandemic on all aspects of its business. The extent to which COVID-19 continues to impact the Company’s operations, results of operations, liquidity and financial condition will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the unknown duration and severity of the COVID-19 pandemic, which may be impacted by variants of the COVID-19 virus and the adoption rate of the COVID-19 vaccines in the jurisdictions in which the Company operates, and the actions taken to contain the impact of COVID-19, as well as further actions taken to limit the resulting economic impact. In particular, government stimulus and other transfer programs have and may continue to have a material adverse impact on demand for pawn loans in future periods.

Use of Estimates

The preparation of interim financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and related revenue and expenses, and the disclosure of gain and loss contingencies at the date of the financial statements. Such estimates and assumptions are subject to a number of risks and uncertainties, which may cause actual results to differ materially from the Company’s estimates.

Reclassification

Certain amounts in the consolidated balance sheets as of March 31, 2021 and December 31, 2021 and the consolidated statements of income and consolidated statements of cash flows for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 have been reclassified in order to conform to the ~~2021~~2022 presentation.


~~Table of Contents~~

Recent Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board issued ASU No 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). ASU 2019-12 removes certain exceptions to the general principles in Topic 740 in Generally Accepted Accounting Principles. ASU 2019-12 is effective for public entities for fiscal years beginning after December 15, 2020, with early adoption permitted. The adoption of ASU 2019-12 did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.

In March 2020, the Financial Accounting Standards Board issued ASU No 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other ~~interbank offered~~interbank-offered rates to alternative reference rates. ASU 2020-04 was effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. The Company does not expect ASU 2020-04 to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.


Table of Contents

In ~~August 2021,~~March 2022, the Financial Accounting Standards Board issued ASU No ~~2021-06, “Presentation of Financial Statements~~2022-02, “Financial Instruments—Credit Losses (Topic ~~205), Financial Services—Depository~~326): Troubled Debt Restructurings and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946): Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures About Acquired and Disposed Businesses, and No.33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants”Vintage Disclosures” (“ASU ~~2021-06”~~2022-02”). ASU ~~2021-06 amends~~2022-02 eliminates the accounting guidance for troubled debt restructurings by creditors while enhancing disclosure requirements for certain ~~SEC~~loan refinancing and restructurings by creditors made to borrowers experiencing financial difficulty. In addition, the amendments require disclosure ~~guidance that is included~~of current period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. ASU 2022-02 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years for entities. Early adoption is permitted if an entity has adopted the CECL accounting ~~standards codification~~standard. Except for expanded disclosures to ~~reflect~~its vintage disclosures, the ~~SEC’s recent issuance of rules intended~~Company does not expect ASU 2022-02 to ~~modernize and streamline disclosure requirements. The Company adopted ASU 2021-06 upon issuance, which did not~~ have a material effect on the Company’s current financial position, results of operations or financial ~~statement disclosures.~~statements.

Note 2 - Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts):


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30,				September 30,					March 31,
		2021		2020		2021		2020			2022		2021
Numerator:	Numerator:									Numerator:
Net income	Net income	$	33,396	$	15,062	$	95,538	$	73,853	Net income	$	28,005	$	33,715

Denominator:	Denominator:									Denominator:
Weighted-average common shares for calculating basic earnings per share	Weighted-average common shares for calculating basic earnings per share	40,453		41,440		40,745		41,597		Weighted-average common shares for calculating basic earnings per share	48,241		41,034
Effect of dilutive securities:	Effect of dilutive securities:									Effect of dilutive securities:
Stock options and restricted stock unit awards	Stock options and restricted stock unit awards	63		96		44		94		Stock options and restricted stock unit awards	59		22
Weighted-average common shares for calculating diluted earnings per share	Weighted-average common shares for calculating diluted earnings per share	40,516		41,536		40,789		41,691		Weighted-average common shares for calculating diluted earnings per share	48,300		41,056

Earnings per share:	Earnings per share:									Earnings per share:
Basic	Basic	$	0.83	$	0.36	$	2.34	$	1.78	Basic	$	0.58	$	0.82
Diluted	Diluted	$	0.82	$	0.36	$	2.34	$	1.77	Diluted	$	0.58	$	0.82


~~Table of Contents~~

~~Note 3 - Acquisitions~~

Consistent with the Company’s strategy to continue its expansion of pawn stores in strategic markets, during the nine months ended September 30, 2021, the Company acquired 28 pawn stores in the U.S. in 2 separate transactions. The aggregate purchase price for these acquisitions totaled $50.7 million, net of cash acquired and subject to future post-closing adjustments. The aggregate purchase price was composed of $48.5 million in cash paid at closing and remaining short-term amounts payable to the sellers of approximately $2.2 million.

The purchase price of each of the 2021 acquisitions was allocated to assets acquired and liabilities assumed based upon the estimated fair market values at the date of acquisition. The excess purchase price over the estimated fair market value of the net assets acquired has been recorded as goodwill. The goodwill arising from these acquisitions consists largely of the synergies and economies of scale expected from combining the operations of the Company and the pawn stores acquired. These acquisitions were not material individually or in the aggregate to the Company’s consolidated financial statements.

The estimated fair value of the assets acquired and liabilities assumed are preliminary, as the Company is gathering information to finalize the valuation of these assets and liabilities. The preliminary allocation of the aggregate purchase price for these individually immaterial acquisitions during the nine months ended September 30, 2021 is as follows (in thousands):


~~Pawn loans~~	$	~~5,658~~
~~Pawn loan fees receivable~~	~~306~~

~~Inventories~~	~~5,481~~
~~Other current assets~~	~~161~~
~~Property and equipment~~	~~839~~
~~Goodwill~~ ~~(1)~~	~~38,920~~
~~Intangible assets~~	~~620~~

~~Current liabilities~~	~~(1,271)~~


~~Aggregate purchase price~~	$	~~50,714~~

~~(1)Substantially all of the goodwill is expected to be deductible for U.S. income tax purposes.~~

The results of operations for the acquired stores have been consolidated since the respective acquisition dates. During the nine months ended September 30, 2021, revenue from the acquired stores was $11.1 million and the earnings from the combined acquisitions since the acquisition dates (including $1.0 million of transaction and integration costs, net of tax) was approximately $1.4 million.

Note 43 - Operating Leases

Lessor

For information about the Company’s revenue-generating activities as a lessor, refer to Note 2 to the consolidated financial statements included in the Company’s 2021 Annual Report on Form 10-K. All of the Company’s lease agreements are considered operating leases.

Lessee

The Company leases the majority of its pawnshop locations and certain administrative offices under operating leases and determines if an arrangement is or contains a lease at inception. Many leases include both lease and non-lease components, for which the Company accounts ~~for~~ separately. Lease components include rent, taxes and insurance costs while non-lease components include common area or other maintenance costs. Operating leases are included in operating lease right of use assets, lease liability, current and lease liability, non-current in the consolidated balance sheets. The Company does not have any finance leases.

Leased facilities are generally leased for a term of three to five years with one or more options to renew for an additional three to five years, typically at the Company’s sole discretion. In addition, the majority of these leases can be terminated early upon an adverse change in law which negatively affects the store’s profitability. The Company regularly evaluates renewal and termination options to determine if the Company is reasonably certain to exercise the option, and excludes these options from the lease term included in the recognition of the operating lease right of use asset and lease liability until such certainty exists. The weighted-average remaining lease term for operating leases ~~as of September 30, 2021 and 2020~~ was 4.1 ~~years.~~years for both March 31, 2022 and 2021.


Table of Contents

The operating lease right of use asset and lease liability is recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The Company’s leases do not provide an implicit rate and therefore, it uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. The Company utilizes a portfolio approach for determining the incremental borrowing rate to apply to groups of leases with similar characteristics. The weighted-average discount rate used to measure the lease liability as of ~~September 30,~~March 31, 2022 and 2021 was 6.1% and ~~2020 was 6.4% and 7.2%~~6.7%, respectively.


~~Table of Contents~~

The Company has certain operating leases in Mexico which are denominated in U.S. dollars. The liability related to these leases is considered a monetary liability and requires remeasurement each reporting period into the functional currency (Mexican pesos) using reporting date exchange rates. The remeasurement results in the recognition of foreign currency exchange gains or losses each reporting period, which can produce a certain level of earnings volatility. The Company recognized a foreign currency ~~loss~~gain of ~~$0.5~~$0.7 million and a ~~gain~~loss of ~~$0.4~~$0.6 million during the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively, related to the remeasurement of these U.S. dollar denominated operating leases, which is included in (gain) loss on foreign exchange in the accompanying consolidated statements of income. During the nine months ended September 30, 2021 and 2020, the Company recognized a foreign currency loss of $0.4 million and $3.5 million, respectively, related to these U.S. dollar denominated leases.

Lease expense is recognized on a straight-line basis over the lease term, with variable lease expense recognized in the period such payments are incurred. The following table details the components of lease expense included in ~~store~~ operating expenses in the consolidated statements of income during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ (in thousands):


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30,				September 30,					March 31,
		2021		2020		2021		2020			2022		2021
Operating lease expense	Operating lease expense	$	31,595	$	30,038	$	94,034	$	90,673	Operating lease expense	$	31,528	$	31,065
Variable lease expense (1)	Variable lease expense (1)	4,120		3,656		11,893		10,604		Variable lease expense (1)	4,174		3,834
Total operating lease expense	Total operating lease expense	$	35,715	$	33,694	$	105,927	$	101,277	Total operating lease expense	$	35,702	$	34,899

(1)Variable lease costs consist primarily of taxes, insurance and common area or other maintenance costs paid based on actual costs incurred by the lessor and can therefore vary over the lease term.

The following table details the maturity of lease liabilities for all operating leases as of ~~September 30, 2021~~March 31, 2022 (in thousands):


Three months ending December 31, 2021		$	28,216
2022		99,302
Nine months ending December 31, 2022				Nine months ending December 31, 2022	$	81,751
2023	2023	79,255		2023	91,376
2024	2024	55,771		2024	67,484
2025	2025	30,568		2025	41,008
2026				2026	21,792
Thereafter	Thereafter	33,062		Thereafter	25,194
Total	Total	$	326,174	Total	$	328,605
Less amount of lease payments representing interest	Less amount of lease payments representing interest	(39,054)		Less amount of lease payments representing interest	(37,754)
Total present value of lease payments	Total present value of lease payments	$	287,120	Total present value of lease payments	$	290,851

The following table details supplemental cash flow information related to operating leases for the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ (in thousands):


		Nine Months Ended					Three Months Ended
		September 30,					March 31,
		2021		2020			2022		2021
Cash paid for amounts included in the measurement of operating lease liabilities	Cash paid for amounts included in the measurement of operating lease liabilities	$	85,565	$	82,473	Cash paid for amounts included in the measurement of operating lease liabilities	$	29,132	$	28,186
Leased assets obtained in exchange for new operating lease liabilities	Leased assets obtained in exchange for new operating lease liabilities	$	78,280	$	81,151	Leased assets obtained in exchange for new operating lease liabilities	$	18,946	$	16,778


Table of Contents

~~Note 5 - Long-Term Debt~~

~~The following table details the Company’s long-term debt at the respective principal amounts, net of unamortized debt issuance costs on the senior unsecured notes (in thousands):~~

As of September 30, As of
December 31,
2021 2020 2020
Revolving unsecured credit facility, maturing 2024 (1)
$ 246,000 $ 40,000 $ 123,000
4.625% senior unsecured notes due 2028 (2)
493,499 492,775 492,916
Total long-term debt $ 739,499 $ 532,775 $ 615,916

~~(1)Debt issuance costs related to the Company’s revolving unsecured credit facilities are included in other assets in the accompanying consolidated balance sheets.~~

~~(2)~~As of September 30, 2021, 2020 and December 31, 2020, deferred debt issuance costs of $6.5 million, $7.2 million and $7.1 million, respectively, are included as a direct deduction from the carrying amount of the senior unsecured notes due 2028 in the accompanying consolidated balance sheets.

~~Revolving Unsecured Credit Facility~~

As of September 30, 2021, the Company maintained an unsecured line of credit with a group of U.S. based commercial lenders (the “Credit Facility”) in the amount of $500.0 million. The Credit Facility matures on December 19, 2024. As of September 30, 2021, the Company had $246.0 million in outstanding borrowings and $3.2 million in outstanding letters of credit under the Credit Facility, leaving $250.8 million available for future borrowings, subject to certain financial covenants. The Credit Facility is unsecured and bears interest, at the Company’s option, of either (1) the prevailing LIBOR (with interest periods of 1 week or 1, 2, 3 or 6 months at the Company’s option) plus a fixed spread of 2.5% or (2) the prevailing prime or base rate plus a fixed spread of 1.5%. The agreement has a LIBOR floor of 0%. Additionally, the Company is required to pay an annual commitment fee of 0.325% on the average daily unused portion of the Credit Facility commitment. The weighted-average interest rate on amounts outstanding under the Credit Facility at September 30, 2021 was 2.63% based on 1 week LIBOR. Under the terms of the Credit Facility, the Company is required to maintain certain financial ratios and comply with certain financial covenants. The Credit Facility also contains customary restrictions on the Company’s ability to incur additional debt, grant liens, make investments, consummate acquisitions and similar negative covenants with customary carve-outs and baskets. The Company was in compliance with the covenants of the Credit Facility as of September 30, 2021. During the nine months ended September 30, 2021, the Company received net proceeds of $123.0 million from borrowings pursuant to the Credit Facility.

~~Revolving Unsecured Uncommitted Credit Facility~~

As of September 30, 2021, the Company’s primary subsidiary in Mexico, First Cash S.A. de C.V., maintained an unsecured and uncommitted line of credit guaranteed by FirstCash, Inc. with a bank in Mexico (the “Mexico Credit Facility”) in the amount of $600.0 million Mexican pesos. The Mexico Credit Facility bears interest at the Mexican Central Bank’s interbank equilibrium rate (“TIIE”) plus a fixed spread of 2.5% and matures on March 9, 2023. Under the terms of the Mexico Credit Facility, the Company is required to maintain certain financial ratios and comply with certain financial covenants. The Company was in compliance with the covenants of the Mexico Credit Facility as of September 30, 2021. At September 30, 2021, the Company had no amount outstanding under the Mexico Credit Facility and $600.0 million Mexican pesos available for borrowings.

~~Senior Unsecured Notes Due 2028~~

On August 26, 2020, the Company issued $500.0 million of 4.625% senior unsecured notes due on September 1, 2028 (the “Notes”), all of which are currently outstanding. Interest on the Notes is payable semi-annually in arrears on March 1 and September 1. The Notes are fully and unconditionally guaranteed on a senior unsecured basis jointly and severally by all of the Company's existing and future domestic subsidiaries that guarantee its Credit Facility. The Notes will permit the Company to make restricted payments, such as purchasing shares of its stock and paying cash dividends, in an unlimited amount if, after giving pro forma effect to the incurrence of any indebtedness to make such payment, the Company's consolidated total debt ratio is less than 2.75 to 1. The consolidated total debt ratio is defined generally in the indenture governing the Notes as the ratio of (1) the total consolidated debt of the Company minus cash and cash equivalents of the Company to (2) the Company’s consolidated trailing twelve months EBITDA, as adjusted to exclude certain non-recurring expenses and giving pro forma effect to operations acquired during the measurement period. As of September 30, 2021, the Company’s consolidated total debt


~~Table of Contents~~

ratio was 2.7 to 1. While the Notes generally limit the Company’s ability to make restricted payments if the consolidated total debt ratio is greater than 2.75 to 1, restricted payments are allowable within certain permitted baskets, which currently provides the Company with continued flexibility to make restricted payments when the Company’s consolidated total debt ratio is greater than 2.75 to 1.

The Company utilized the net proceeds from the offering of the Notes to redeem all of the $300.0 million aggregate principal amount of the Company’s 5.375% senior notes due 2024 and to repay a portion of the Company’s Credit Facility.

Note 64 - Fair Value of Financial Instruments

The fair value of financial instruments is determined by reference to various market data and other valuation techniques, as appropriate. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The three fair value levels are (from highest to lowest):

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

Recurring Fair Value Measurements

AsThe Company’s financial assets and liabilities as of ~~September 30, 2021, 2020~~March 31, 2022 and December 31, ~~2020,~~2021 that are measured at fair value on a recurring basis are as follows (in thousands):


	Estimated Fair Value
	March 31,		Fair Value Measurements Using
	2022		Level 1		Level 2		Level 3
Financial liabilities:
Contingent AFF acquisition consideration (1)	$	112,119	$	—	$	—	$	112,119

(1)The current portion of $98.2 million is included in accounts payable and accrued liabilities, and the non-current portion of $14.0 million is included in other liabilities in the accompanying consolidated balance sheets.


	Estimated Fair Value
	December 31,		Fair Value Measurements Using
	2021		Level 1		Level 2		Level 3
Financial liabilities:
Contingent AFF acquisition consideration (1)	$	109,549	$	—	$	—	$	109,549

(1)The current portion of $95.6 million is included in accounts payable and accrued liabilities and the non-current portion of $14.0 million is included in other liabilities in the accompanying consolidated balance sheets.

The Company revalues the contingent AFF acquisition consideration to fair value at the end of each reporting period. The estimate of the fair value of contingent AFF acquisition consideration is determined by applying a Monte Carlo simulation, which includes inputs not observable in the market, such as the risk-free rate, risk-adjusted discount rate, the volatility of the underlying financial metrics and projected financial forecast of AFF over the earn-out period, and therefore represents a Level 3 measurement. Significant increases or decreases in these inputs could result in a significantly lower or higher fair value measurement of the contingent AFF acquisition consideration.

The changes in financial assets and liabilities that are measured and recorded at fair value on a recurring basis using Level 3 fair value measurements for the three months ended March 31, 2022 is as follows (in thousands):


	Contingent Consideration
Contingent AFF acquisition consideration as of December 31, 2021	$	109,549
Change in fair value (1)	2,570
Balance at March 31, 2022	$	112,119

(1) The Company recognized a $2.6 million loss during the three months ended March 31, 2022 as a result of the change in fair value of the contingent AFF acquisition consideration, which is included in loss on revaluation of contingent acquisition consideration in the accompanying consolidated statement of income.


Table of Contents

There were no transfers in or out of Level 1, 2 or 3 during the three months ended March 31, 2022, and the Company did not have any financial assets orand liabilities that are measured at fair value on a recurring ~~basis.~~basis as of March 31, 2021.

Fair Value Measurements on a Non-Recurring Basis

The Company measures non-financial assets and liabilities, such as property and equipment and intangible assets, at fair value on a non-recurring basis, or when events or circumstances indicate that the carrying amount of the assets may be impaired. During the nine months ended September 30, 2020, the Company recorded a $1.9 million impairment related to a non-financial, non-operating asset that was included in other assets in the consolidated balance sheets.

Financial Assets and Liabilities Not Measured at Fair Value, But for Which Fair Value is Disclosed

The Company’s financial assets and liabilities as of ~~September 30,~~March 31, 2022, 2021 ~~2020~~ and December 31, ~~2020~~2021 that are not measured at fair value in the consolidated balance sheets are as follows (in thousands):


		Carrying Value		Estimated Fair Value									Carrying Value		Estimated Fair Value
		September 30,		September 30,		Fair Value Measurements Using							March 31,		March 31,		Fair Value Measurements Using
		2021		2021		Level 1		Level 2		Level 3			2022		2022		Level 1		Level 2		Level 3
Financial assets:	Financial assets:											Financial assets:
Cash and cash equivalents	Cash and cash equivalents	$	49,907	$	49,907	$	49,907	$	—	$	—	Cash and cash equivalents	$	113,317	$	113,317	$	113,317	$	—	$	—
Fees and service charges receivable		43,492		43,492		—		—		43,492
Accounts receivable, net												Accounts receivable, net	52,017		52,017		—		—		52,017
Pawn loans	Pawn loans	348,993		348,993		—		—		348,993		Pawn loans	344,101		344,101		—		—		344,101

Finance receivables, net												Finance receivables, net	140,481		180,819		—		—		180,819
		$	442,392	$	442,392	$	49,907	$	—	$	392,485		$	649,916	$	690,254	$	113,317	$	—	$	576,937

Financial liabilities:	Financial liabilities:											Financial liabilities:
Revolving unsecured credit facilities	Revolving unsecured credit facilities	$	246,000	$	246,000	$	—	$	246,000	$	—	Revolving unsecured credit facilities	$	218,000	$	218,000	$	—	$	218,000	$	—
Senior unsecured notes (outstanding principal)	Senior unsecured notes (outstanding principal)	500,000		516,000		—		516,000		—		Senior unsecured notes (outstanding principal)	1,050,000		992,000		—		992,000		—
		$	746,000	$	762,000	$	—	$	762,000	$	—		$	1,268,000	$	1,210,000	$	—	$	1,210,000	$	—


	Carrying Value		Estimated Fair Value
	March 31,		March 31,		Fair Value Measurements Using
	2021		2021		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	54,641	$	54,641	$	54,641	$	—	$	—
Accounts receivable, net	35,334		35,334		—		—		35,334
Pawn loans	265,438		265,438		—		—		265,438

	$	355,413	$	355,413	$	54,641	$	—	$	300,772

Financial liabilities:
Revolving unsecured credit facilities	$	44,000	$	44,000	$	—	$	44,000	$	—
Senior unsecured notes (outstanding principal)	500,000		506,000		—		506,000		—
	$	544,000	$	550,000	$	—	$	550,000	$	—


Table of Contents

Carrying Value Estimated Fair Value
September 30, September 30, Fair Value Measurements Using
2020 2020 Level 1 Level 2 Level 3
Financial assets:
Cash and cash equivalents $ 78,844 $ 78,844 $ 78,844 $ — $ —
Fees and service charges receivable 36,423 36,423 — — 36,423
Pawn loans 270,619 270,619 — — 270,619
$ 385,886 $ 385,886 $ 78,844 $ — $ 307,042
Financial liabilities:
Revolving unsecured credit facilities $ 40,000 $ 40,000 $ — $ 40,000 $ —
Senior unsecured notes (outstanding principal) 500,000 508,000 — 508,000 —
$ 540,000 $ 548,000 $ — $ 548,000 $ —


		Carrying Value		Estimated Fair Value									Carrying Value		Estimated Fair Value
		December 31,		December 31,		Fair Value Measurements Using							December 31,		December 31,		Fair Value Measurements Using
		2020		2020		Level 1		Level 2		Level 3			2021		2021		Level 1		Level 2		Level 3
Financial assets:	Financial assets:											Financial assets:
Cash and cash equivalents	Cash and cash equivalents	$	65,850	$	65,850	$	65,850	$	—	$	—	Cash and cash equivalents	$	120,046	$	120,046	$	120,046	$	—	$	—
Fees and service charges receivable		41,110		41,110		—		—		41,110
Accounts receivable, net												Accounts receivable, net	55,356		55,356		—		—		55,356
Pawn loans	Pawn loans	308,231		308,231		—		—		308,231		Pawn loans	347,973		347,973		—		—		347,973

Finance receivables, net												Finance receivables, net	181,021		233,000		—		—		233,000
		$	415,191	$	415,191	$	65,850	$	—	$	349,341		$	704,396	$	756,375	$	120,046	$	—	$	636,329

Financial liabilities:	Financial liabilities:											Financial liabilities:
Revolving unsecured credit facilities	Revolving unsecured credit facilities	$	123,000	$	123,000	$	—	$	123,000	$	—	Revolving unsecured credit facilities	$	259,000	$	259,000	$	—	$	259,000	$	—
Senior unsecured notes (outstanding principal)	Senior unsecured notes (outstanding principal)	500,000		516,000		—		516,000		—		Senior unsecured notes (outstanding principal)	1,050,000		1,058,000		—		1,058,000		—
		$	623,000	$	639,000	$	—	$	639,000	$	—		$	1,309,000	$	1,317,000	$	—	$	1,317,000	$	—

As cash and cash equivalents have maturities of less than three months, the carrying value of cash and cash equivalents approximates fair value. Due to their short-term maturities, the carrying value of pawn loans and ~~fees and service charges~~accounts receivable, net approximate fair value.

Finance receivables are measured at amortized cost, net of an allowance for loan losses on the consolidated balance sheets. In estimating fair value for finance receivables, the Company utilized a discounted cash flow methodology. The Company used various unobservable inputs reflecting its own assumptions, such as contractual future principal and interest cash flows, future charge-off rates and discount rates (which consider current interest rates and are adjusted for credit risk, among other factors).

The carrying value of the unsecured credit facilities ~~approximate~~approximates fair value as of ~~September 30,~~March 31, 2022, 2021 ~~2020~~ and December 31, ~~2020.~~2021. The fair value of the unsecured credit facilities is estimated based on market values for debt issuances with similar characteristics or rates currently available for debt with similar terms. In addition, the unsecured credit facilities have a variable interest rate based on a fixed spread over LIBOR or ~~TIIE~~the Mexican Central Bank’s interbank equilibrium rate (“TIIE”) and reprice with any changes in LIBOR or TIIE. The fair value of the senior unsecured notes is estimated based on quoted prices in markets that are not active.

Note 5 - Finance Receivables, Net

Finance receivables, net consist of the following (in thousands):


	As of March 31,				As of December 31,
	2022		2021		2021
Finance receivables, gross	$	191,845	$	—	$	220,329
Fair value premium on non-PCD finance receivables (1)	22,981		—		40,251
Non-credit discount on PCD finance receivables (2)	—		—		(3,521)
Merchant partner discounts and premiums, net	(430)		—		(104)
Unearned origination fees	(1,583)		—		(360)
Finance receivables, amortized cost	212,813		—		256,595
Less allowance for loan losses	(72,332)		—		(75,574)
Finance receivables, net	$	140,481	$	—	$	181,021

(1)Represents the difference between the initial fair value and the unpaid principal balance as of the date of the AFF Acquisition, which is recognized through interest income on an effective yield basis over the lives of the related non-purchased credit deteriorated (“PCD”) finance receivables.

(2)Represents the difference between the unpaid principal balance and the amortized cost basis as of the date of the AFF Acquisition, which is recognized through interest income on an effective yield basis over the lives of the related PCD finance receivables.


Table of Contents

Changes in the allowance for loan losses were as follows (in thousands):


	Three Months Ended
	March 31,
	2022		2021
Balance at beginning of period	$	75,574	$	—
Provision for loan losses	24,697		—

Charge-offs	(29,408)		—
Recoveries	1,469		—
Balance at end of period	$	72,332	$	—

The following is an assessment of the credit quality indicators of the amortized cost of finance receivables as of March 31, 2022, by origination year:


	2022		2021		2020		Total
FICO score category (1):
No FICO score identified or obtained	$	14,928	$	35,390	$	1,044	$	51,362
599 or less	19,589		43,693		5,389		68,671
Between 600 and 699	19,910		36,548		4,958		61,416
700 or greater	3,320		4,382		681		8,383
Finance receivables before fair value adjustments	$	57,747	$	120,013	$	12,072	189,832
Fair value premium on non-PCD finance receivables							22,981
Finance receivables, amortized cost							$	212,813

(1)FICO score as determined at the time of origination.

The following is an aging of the amortized cost of finance receivables as of March 31, 2022, by origination year:


	2022		2021		2020		Total
Delinquency:
1 to 30 days past due	$	3,083	$	11,180	$	1,132	$	15,395
31 to 60 days past due	1,048		6,917		556		8,521
61 to 90 days past due (1)	405		8,078		647		9,130
Total past due finance receivables before fair value adjustments	4,536		26,175		2,335		33,046
Current finance receivables before fair value adjustments	53,211		93,838		9,737		156,786
Finance receivables before fair value adjustments	$	57,747	$	120,013	$	12,072	189,832
Fair value premium on non-PCD finance receivables							22,981
Finance receivables, amortized cost							$	212,813

(1)The Company charges off finance receivables when a receivable is 90 days or more contractually past due.


Table of Contents

Note 6 - Leased Merchandise, Net

Leased merchandise, net consists of the following (in thousands):


	As of March 31,				As of December 31,
	2022		2021		2021
Leased merchandise (1)	$	193,023	$	—	$	156,280
Processing fees	(2,019)		—		(440)
Merchant partner discounts and premiums, net	1,192		—		310
Accumulated depreciation	(32,685)		—		(6,764)
Leased merchandise, before allowance for lease losses	159,511		—		149,386
Allowance for lease losses	(40,364)		—		(5,442)
Leased merchandise, net	$	119,147	$	—	$	143,944

(1)Acquired leased merchandise in the AFF Acquisition was recorded at fair value.

Changes in the allowance for lease losses were as follows (in thousands):


	Three Months Ended
	March 31,
	2022		2021
Balance at beginning of year	$	5,442	$	—
Provision for lease losses	39,820		—
Charge-offs	(6,020)		—
Recoveries	1,122		—
Balance at end of year	$	40,364	$	—


Table of Contents

Note 7 - Long-Term Debt

The following table details the Company’s long-term debt at the respective principal amounts, net of unamortized debt issuance costs on the senior unsecured notes (in thousands):


	As of March 31,				As of December 31,
	2022		2021		2021

Revolving unsecured credit facility, maturing 2024 (1)	$	218,000	$	44,000	$	259,000

Senior unsecured notes:
4.625% senior unsecured notes due 2028 (2)	492,739		493,108		492,499
5.625% senior unsecured notes due 2030 (3)	541,616		—		541,405
Total senior unsecured notes	1,034,355		493,108		1,033,904

Total long-term debt	$	1,252,355	$	537,108	$	1,292,904

(1)Debt issuance costs related to the Company’s revolving unsecured credit facilities are included in other assets in the accompanying consolidated balance sheets.

(2)As of March 31, 2022, 2021 and December 31, 2021, deferred debt issuance costs of $7.3 million, $6.9 million and $7.5 million, respectively, are included as a direct deduction from the carrying amount of the senior unsecured notes due 2028 in the accompanying consolidated balance sheets.

(3)As of March 31, 2022 and December 31, 2021, deferred debt issuance costs of $8.4 million and $8.6 million, respectively, are included as a direct deduction from the carrying amount of the senior unsecured notes due 2030 in the accompanying consolidated balance sheets.

Revolving Unsecured Credit Facility

As of March 31, 2022, the Company maintained an unsecured line of credit with a group of U.S.-based commercial lenders (the “Credit Facility”) in the amount of $500.0 million. The Credit Facility matures on December 19, 2024. As of March 31, 2022, the Company had $218.0 million in outstanding borrowings and $3.2 million in outstanding letters of credit under the Credit Facility, leaving $278.8 million available for future borrowings, subject to certain financial covenants. The Credit Facility is unsecured and bears interest, at the Company’s option, of either (1) the prevailing LIBOR (with interest periods of 1, 2, 3 or 6 months at the Company’s option) plus a fixed spread of 2.5% or (2) the prevailing prime or base rate plus a fixed spread of 1.5%. The agreement has a LIBOR floor of 0%. Additionally, the Company is required to pay an annual commitment fee of 0.325% on the average daily unused portion of the Credit Facility commitment. The weighted-average interest rate on amounts outstanding under the Credit Facility at March 31, 2022 was 2.82% based on 1-month LIBOR. Under the terms of the Credit Facility, the Company is required to maintain certain financial ratios and comply with certain financial covenants. The Credit Facility also contains customary restrictions on the Company’s ability to incur additional debt, grant liens, make investments, consummate acquisitions and similar negative covenants with customary carve-outs and baskets. The Company was in compliance with the covenants of the Credit Facility as of March 31, 2022. During the three months ended March 31, 2022, the Company made net payments of $41.0 million pursuant to the Credit Facility.

Revolving Unsecured Uncommitted Credit Facility

As of March 31, 2022, the Company’s primary subsidiary in Mexico, First Cash S.A. de C.V., maintained an unsecured and uncommitted line of credit guaranteed by FirstCash, Inc. with a bank in Mexico (the “Mexico Credit Facility”) in the amount of $600.0 million Mexican pesos. The Mexico Credit Facility bears interest at TIIE plus a fixed spread of 2.5% and matures on March 9, 2023. Under the terms of the Mexico Credit Facility, the Company is required to maintain certain financial ratios and comply with certain financial covenants. The Company was in compliance with the covenants of the Mexico Credit Facility as of March 31, 2022. At March 31, 2022, the Company had no amount outstanding under the Mexico Credit Facility and $600.0 million Mexican pesos available for borrowings.


Table of Contents

Senior Unsecured Notes Due 2028

On August 26, 2020, the Company issued $500.0 million of 4.625% senior unsecured notes due on September 1, 2028 (the “2028 Notes”), all of which are currently outstanding. Interest on the 2028 Notes is payable semi-annually in arrears on March 1 and September 1. The 2028 Notes are fully and unconditionally guaranteed on a senior unsecured basis jointly and severally by all of the Company's existing and future domestic subsidiaries that guarantee its Credit Facility. The 2028 Notes will permit the Company to make restricted payments, such as purchasing shares of its stock and paying cash dividends, in an unlimited amount if, after giving pro forma effect to the incurrence of any indebtedness to make such payment, the Company's consolidated total debt ratio is less than 2.75 to 1. The consolidated total debt ratio is defined generally in the indenture governing the 2028 Notes as the ratio of (1) the total consolidated debt of the Company minus cash and cash equivalents of the Company to (2) the Company’s consolidated trailing twelve months EBITDA, as adjusted to exclude certain non-recurring expenses and giving pro forma effect to operations acquired during the measurement period. As of March 31, 2022, the Company’s consolidated total debt ratio was 2.72 to 1. While the 2028 Notes generally limit the Company’s ability to make restricted payments if the consolidated total debt ratio is greater than 2.75 to 1, restricted payments are allowable within certain permitted baskets, which currently provide the Company with continued flexibility to make restricted payments when the Company’s consolidated total debt ratio is greater than 2.75 to 1.

Senior Unsecured Notes Due 2030

On December 13, 2021, the Company issued $550.0 million of 5.625% senior unsecured notes due on January 1, 2030 (the “2030 Notes”), all of which are currently outstanding. Interest on the 2030 Notes is payable semi-annually in arrears on January 1 and July 1. The 2030 Notes are fully and unconditionally guaranteed on a senior unsecured basis jointly and severally by all of the Company's existing and future domestic subsidiaries that guarantee its Credit Facility. The 2030 Notes will permit the Company to make restricted payments, such as purchasing shares of its stock and paying cash dividends, in an unlimited amount if, after giving pro forma effect to the incurrence of any indebtedness to make such payment, the Company's consolidated total debt ratio is less than 3.0 to 1. The consolidated total debt ratio is defined generally in the indenture governing the 2030 Notes as the ratio of (1) the total consolidated debt of the Company minus cash and cash equivalents of the Company to (2) the Company’s consolidated trailing twelve months EBITDA, as adjusted to exclude certain non-recurring expenses and giving pro forma effect to operations acquired during the measurement period. As of March 31, 2022, the Company’s consolidated total debt ratio was 2.72 to 1. While the 2030 Notes generally limit the Company’s ability to make restricted payments if the consolidated total debt ratio is greater than 3.0 to 1, restricted payments are allowable within certain permitted baskets, which currently provides the Company with continued flexibility to make restricted payments when the Company’s consolidated total debt ratio is greater than 3.0 to 1.

The Company utilized the net proceeds from the offering of the 2030 Notes to finance the cash consideration and transaction expenses for the AFF Acquisition, including the repayment, in full, of the outstanding debt under AFF’s credit facility at the closing of the AFF Acquisition, pay fees and expenses related to the note offering and reduce the outstanding balance on the Credit Facility.

Note 8 - Commitments and Contingencies

Litigation

The Company, in the ordinary course of business, is a defendant (actual or threatened) in certain lawsuits, arbitration proceedings and other general claims. Although no assurances can be given, in management’s opinion, any potential adverse result should not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

On January 14, 2022, plaintiff Genesee County Employees’ Retirement System filed a putative shareholder securities class action lawsuit (the “Litigation”) in the United States District Court for the Northern District of Texas against the Company and certain of its current officers styled Genesee County Employees’ Retirement System v. FirstCash Holdings, Inc., et al., Civil Action No. 4:22-CV-00033-P (N.D. Tex.). The complaint alleges that the defendants made materially false and/or misleading statements that caused losses to investors. The complaint further alleges that the defendants failed to disclose in public statements that the Company engaged in widespread and systemic violations of the Military Lending Act (“MLA”). The Litigation does not quantify any alleged damages, but, in addition to attorneys’ fees and costs, it seeks to recover damages on behalf of the plaintiff and other persons who purchased or otherwise acquired Company stock during the putative class period from February 1, 2018 through November 12, 2021 at allegedly inflated prices and purportedly suffered financial harm as a result. The Company disputes these allegations and intends to defend the Litigation vigorously. On April 4, 2022, following the appointment of a lead plaintiff, the Court entered an order setting certain case deadlines for the filing of an amended complaint and any responsive pleading thereto. At this stage, the Company is unable to determine whether a future loss will be incurred


Table of Contents

due to this Litigation, or estimate a range of loss, if any, and accordingly, no amounts have been accrued in the Company’s financial statements.

On November 12, 2021, the Consumer Financial Protection Bureau (“CFPB”) initiated a civil action in the United States District Court for the Northern District of Texas against FirstCash, Inc. and Cash America West, Inc., two of the Company’s subsidiaries, alleging violations of the MLA in connection with pawn transactions. The CFPB also alleges that these same alleged violations of the MLA also constitute breaches of a 2013 CFPB consent order entered into by its predecessor company that, among other things, allegedly required the company and its successors to cease and desist from further MLA violations. The CFPB is seeking an injunction, redress for affected borrowers and a civil monetary penalty. While the Company intends to vigorously defend itself against the allegations in the case, the Company cannot predict or determine the timing or final outcome of this matter or the effect that any adverse determinations the lawsuit may have on the Company.

On November 7, 2018, plaintiffs Maria Andrade and Shaun Caulkins filed a complaint (the “Andrade Complaint”) in the United States District Court for the Northern District of California against AFF. In the Andrade Complaint, the plaintiffs allege that AFF partnered with California merchants to deceive California customers into taking out usurious loans made from AFF, an unlicensed lender. Based on these allegations, the plaintiffs assert claims on behalf of themselves and a class of all California residents who purchased consumer goods or services from AFF’s partner retail businesses. Plaintiffs seek, among other things, class certification, a declaration that AFF’s security agreements are void and uncollectible, restitution of all amounts collected from class members, actual damages, statutory damages, and attorneys’ fees. Plaintiff Caulkins’ claims were dismissed in October 2020 and co-defendants were dismissed from the complaint in August 2021. The class certification motion hearing is set for August 15, 2022. At this time, the Company cannot predict or determine the timing or final outcome of the Andrade Complaint or the effect that any adverse determinations the lawsuit may have on the Company.

On October 20, 2021, plaintiff Larry Facio filed a complaint (the “Facio Complaint”) in the United States District Court for the Northern District of California against AFF. In the Facio Complaint, the plaintiff alleges that AFF partnered with California merchants to deceive California customers into taking out usurious loans made from AFF, an unlicensed lender. Plaintiff seeks, among other things, class certification, a declaration that AFF’s security agreements are subject to the California Finance Lenders Law and that no person has a right to collect or receive principal or payments, restitution for all amounts collected from class members, actual damages, statutory damages and attorneys’ fees. The case has been stayed pending resolution of the Andrade Complaint and pending the court’s ruling on AFF’s motion to compel arbitration. Accordingly, the Company cannot predict or determine the timing or final outcome of the Facio Complaint or the effect that any adverse determinations the lawsuit may have on the Company.

Note 79 - Segment Information

The Company organizes its operations into 23 reportable segments as follows:

•U.S. ~~operations~~pawn

•Latin America ~~operations - includes operations in Mexico, Guatemala, Colombia and El Salvador~~pawn

•Retail POS payment solutions (AFF)

Corporate expenses and income, which include administrative expenses, corporate depreciation and amortization, interest expense, interest income, (gain) loss on foreign exchange, merger and acquisition expenses, loss ~~(gain)~~ on ~~foreign exchange, write-offs~~revaluation of ~~certain lease intangibles~~contingent acquisition consideration, and ~~impairments~~impairment and dispositions of certain other assets, are ~~incurred or earned in both the U.S. and Latin America, but~~ presented on a consolidated basis and are not allocated between the U.S. ~~operations~~pawn segment, ~~and~~ Latin America ~~operations~~pawn segment or retail POS payment solutions segment.

~~The following tables present reportable segment information for the three and nine month periods ended September 30, 2021 and 2020 (in thousands):~~

Three Months Ended September 30, 2021
U.S.
Operations Latin America
Operations Corporate Consolidated
Revenue:
Retail merchandise sales $ 167,257 $ 101,469 $ — $ 268,726
Pawn loan fees 76,674 44,691 — 121,365
Wholesale scrap jewelry sales 4,168 5,415 — 9,583
Total revenue 248,099 151,575 — 399,674
Cost of revenue:
Cost of retail merchandise sold 93,326 64,731 — 158,057
Cost of wholesale scrap jewelry sold 3,778 4,750 — 8,528
Total cost of revenue 97,104 69,481 — 166,585
Net revenue 150,995 82,094 — 233,089
Expenses and other income:
Store operating expenses 93,247 45,372 — 138,619
Administrative expenses — — 30,208 30,208
Depreciation and amortization 5,662 4,591 964 11,217
Interest expense — — 7,961 7,961
Interest income — — (143) (143)
Merger and acquisition expenses — — 12 12
Loss on foreign exchange — — 558 558
Write-off of certain Cash America merger related lease intangibles — — 361 361
Total expenses and other income 98,909 49,963 39,921 188,793
Income (loss) before income taxes $ 52,086 $ 32,131 $ (39,921) $ 44,296

1418


Table of Contents

Three Months Ended September 30, 2020
U.S.
Operations Latin America
Operations Corporate Consolidated
Revenue:
Retail merchandise sales $ 151,618 $ 83,364 $ — $ 234,982
Pawn loan fees 66,180 33,390 — 99,570
Wholesale scrap jewelry sales 12,692 12,589 — 25,281
Consumer loan and credit services fees 57 — — 57
Total revenue 230,547 129,343 — 359,890
Cost of revenue:
Cost of retail merchandise sold 84,673 52,557 — 137,230
Cost of wholesale scrap jewelry sold 10,316 9,502 — 19,818
Consumer loan and credit services loss provision 104 — — 104
Total cost of revenue 95,093 62,059 — 157,152
Net revenue 135,454 67,284 — 202,738
Expenses and other income:
Store operating expenses 92,678 39,383 — 132,061
Administrative expenses — — 24,354 24,354
Depreciation and amortization 5,390 3,903 1,133 10,426
Interest expense — — 6,561 6,561
Interest income — — (499) (499)
Merger and acquisition expenses — — 7 7
Gain on foreign exchange — — (432) (432)
Write-off of certain Cash America merger related lease intangibles — — 837 837
Loss on extinguishment of debt — — 11,737 11,737
Total expenses and other income 98,068 43,286 43,698 185,052
Income (loss) before income taxes $ 37,386 $ 23,998 $ (43,698) $ 17,686
The following tables present reportable segment information for the three-month periods ended March 31, 2022 and 2021 (in thousands):


	Three Months Ended March 31, 2022
	U.S. Pawn		Latin America Pawn		Retail POS Payment Solutions		Corporate		Consolidated
Revenue:
Retail merchandise sales	$	204,942	$	97,877	$	—	$	—	$	302,819
Pawn loan fees	90,339		41,480		—		—		131,819
Leased merchandise income	—		—		149,947		—		149,947
Interest and fees on finance receivables	—		—		42,449		—		42,449
Wholesale scrap jewelry sales	16,524		16,281		—		—		32,805
Total revenue	311,805		155,638		192,396		—		659,839

Cost of revenue:
Cost of retail merchandise sold	119,718		62,496		—		—		182,214
Depreciation of leased merchandise	—		—		93,706		—		93,706
Provision for lease losses	—		—		39,820		—		39,820
Provision for loan losses	—		—		24,697		—		24,697
Cost of wholesale scrap jewelry sold	14,530		13,685		—		—		28,215
Total cost of revenue	134,248		76,181		158,223		—		368,652

Net revenue	177,557		79,457		34,173		—		291,187

Expenses and other income:
Operating expenses	98,822		45,542		28,932		—		173,296
Administrative expenses	—		—		—		36,863		36,863
Depreciation and amortization	5,587		4,401		682		14,872		25,542
Interest expense	—		—		—		16,221		16,221
Interest income	—		—		—		(676)		(676)
Gain on foreign exchange	—		—		—		(480)		(480)
Merger and acquisition expenses	—		—		—		665		665
Loss on revaluation of contingent acquisition consideration	—		—		—		2,570		2,570
Impairments and dispositions of certain other assets	—		—		—		177		177

Total expenses and other income	104,409		49,943		29,614		70,212		254,178

Income (loss) before income taxes	$	73,148	$	29,514	$	4,559	$	(70,212)	$	37,009

1519


Table of Contents


		Nine Months Ended September 30, 2021									Three Months Ended March 31, 2021
		U.S. Operations		Latin America Operations		Corporate		Consolidated			U.S. Pawn		Latin America Pawn		Corporate		Consolidated
Revenue:	Revenue:									Revenue:
Retail merchandise sales	Retail merchandise sales	$	530,468	$	275,867	$	—	$	806,335	Retail merchandise sales	$	189,957	$	82,085	$	—	$	272,042
Pawn loan fees	Pawn loan fees	220,013		126,783		—		346,796		Pawn loan fees	76,397		39,125		—		115,522

Wholesale scrap jewelry sales	Wholesale scrap jewelry sales	20,217		23,843		—		44,060		Wholesale scrap jewelry sales	9,203		11,172		—		20,375

Total revenue	Total revenue	770,698		426,493		—		1,197,191		Total revenue	275,557		132,382		—		407,939

Cost of revenue:	Cost of revenue:									Cost of revenue:
Cost of retail merchandise sold	Cost of retail merchandise sold	295,455		173,179		—		468,634		Cost of retail merchandise sold	106,530		50,623		—		157,153

Cost of wholesale scrap jewelry sold	Cost of wholesale scrap jewelry sold	16,678		20,979		—		37,657		Cost of wholesale scrap jewelry sold	7,513		9,684		—		17,197

Total cost of revenue	Total cost of revenue	312,133		194,158		—		506,291		Total cost of revenue	114,043		60,307		—		174,350

Net revenue	Net revenue	458,565		232,335		—		690,900		Net revenue	161,514		72,075		—		233,589

Expenses and other income:	Expenses and other income:									Expenses and other income:
Store operating expenses		282,068		133,003		—		415,071
Operating expenses										Operating expenses	95,247		42,077		—		137,324
Administrative expenses	Administrative expenses	—		—		88,605		88,605		Administrative expenses	—		—		30,999		30,999
Depreciation and amortization	Depreciation and amortization	16,391		13,388		2,952		32,731		Depreciation and amortization	5,382		4,263		967		10,612
Interest expense	Interest expense	—		—		22,389		22,389		Interest expense	—		—		7,230		7,230
Interest income	Interest income	—		—		(420)		(420)		Interest income	—		—		(158)		(158)
Loss on foreign exchange										Loss on foreign exchange	—		—		267		267
Merger and acquisition expenses	Merger and acquisition expenses	—		—		1,264		1,264		Merger and acquisition expenses	—		—		166		166
Loss on foreign exchange		—		—		248		248
Write-off of certain Cash America merger related lease intangibles		—		—		1,640		1,640

Impairments and dispositions of certain other assets										Impairments and dispositions of certain other assets	—		—		878		878

Total expenses and other income	Total expenses and other income	298,459		146,391		116,678		561,528		Total expenses and other income	100,629		46,340		40,349		187,318

Income (loss) before income taxes	Income (loss) before income taxes	$	160,106	$	85,944	$	(116,678)	$	129,372	Income (loss) before income taxes	$	60,885	$	25,735	$	(40,349)	$	46,271


~~Table of Contents~~

Nine Months Ended September 30, 2020
U.S.
Operations Latin America
Operations Corporate Consolidated
Revenue:
Retail merchandise sales $ 556,528 $ 262,483 $ — $ 819,011
Pawn loan fees 235,937 107,738 — 343,675
Wholesale scrap jewelry sales 37,727 36,710 — 74,437
Consumer loan and credit services fees 2,003 — — 2,003
Total revenue 832,195 406,931 — 1,239,126
Cost of revenue:
Cost of retail merchandise sold 325,863 167,573 — 493,436
Cost of wholesale scrap jewelry sold 32,754 28,268 — 61,022
Consumer loan and credit services loss provision (480) — — (480)
Total cost of revenue 358,137 195,841 — 553,978
Net revenue 474,058 211,090 — 685,148
Expenses and other income:
Store operating expenses 303,686 122,926 — 426,612
Administrative expenses — — 85,642 85,642
Depreciation and amortization 16,352 11,568 3,504 31,424
Interest expense — — 21,953 21,953
Interest income — — (1,209) (1,209)
Merger and acquisition expenses — — 209 209
Loss on foreign exchange — — 1,639 1,639
Write-off of certain Cash America merger related lease intangibles — — 4,649 4,649
Loss on extinguishment of debt — — 11,737 11,737
Impairment of certain other assets — — 1,900 1,900
Total expenses and other income 320,038 134,494 130,024 584,556
Income (loss) before income taxes $ 154,020 $ 76,596 $ (130,024) $ 100,592

1720


Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of financial condition, results of operations, liquidity and capital resources of FirstCash Holdings, Inc. and its wholly-owned subsidiaries (together, the “Company”) should be read in conjunction with the Company’s consolidated financial statements and accompanying notes included under Part I, Item 1 of this quarterly report on Form 10-Q, as well as with the audited consolidated financial statements and accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

GENERAL

The Company’s primary line of business is the operation of retail pawn stores, also known as “pawnshops,” which focus on serving cash and credit-constrained consumers. The Company is athe leading operator of ~~retail-based~~ pawn stores ~~with over 2,800 store locations~~ in the U.S. and Latin America. ~~The Company’s pawn stores generate retail sales primarily from the merchandise acquired through collateral forfeitures and over-the-counter purchases from customers. In addition, the~~Pawn stores help customers meet small short-term cash needs by providing non-recourse pawn loans and buying merchandise directly from customers. Personal property, such as jewelry, electronics, tools, appliances, sporting goods and musical instruments, is pledged and held as collateral for the pawn loans ~~and held by the Company~~ over the typical 30-day term of the ~~loan plus~~loan. Pawn stores also generate retail sales primarily from the merchandise acquired through collateral forfeitures and over-the-counter purchases from customers.

With the Company’s acquisition of American First Finance (“AFF”) on December 17, 2021 (the “AFF Acquisition”), the Company is also a ~~stated grace period.~~leading provider of technology-driven, retail point-of-sale (“POS”) payment solutions focused on serving credit-constrained consumers. The Company’s retail POS payment solutions business line consists solely of the operations of AFF, which focuses on lease-to-own (“LTO”) products and facilitating other retail financing payment options across a large network of traditional and e-commerce merchant partners in all 50 states in the U.S., the District of Columbia and Puerto Rico. AFF’s retail partners provide consumer goods and services to their customers and use AFF’s LTO and retail finance solutions to facilitate payments on such transactions. As one of the largest omni-channel providers of “no credit required” payment options, AFF’s technology set provides consumers with seamless leasing and financing experiences in-store, online, in-cart and on mobile devices.

The ~~Company organizes its operations~~Company’s two business lines are organized into ~~two~~three reportable segments. The U.S. ~~operations~~pawn segment consists of all pawn operations in the U.S. and the Latin America ~~operations~~pawn segment consists of all pawn operations in Mexico, Guatemala, Colombia and El Salvador. The retail POS payment solutions segment consists of the operations of AFF in the U.S. and Puerto Rico.


Table of Contents

OPERATIONS AND LOCATIONS

As of ~~September 30, 2021,~~March 31, 2022, the Company ~~had 2,808~~operated 2,829 pawn store locations composed of ~~1,069~~1,078 stores in 2425 U.S. states and the District of Columbia, ~~1,651~~1,663 stores in 32 states in Mexico, 60 stores in Guatemala, 15 stores in Colombia and 13 stores in El Salvador.

The following ~~tables detail~~table details pawn store count activity:

Three Months Ended September 30, 2021
U.S. Latin America
Operations Segment Operations Segment Total Locations
Total locations, beginning of period 1,071 1,733 2,804
New locations opened — 14 14
Consolidation of existing pawn locations (1)
(2) (8) (10)
Total locations, end of period 1,069 1,739 2,808
Nine Months Ended September 30, 2021
U.S. Latin America
Operations Segment Operations Segment Total Locations
Total locations, beginning of period 1,046 1,702 2,748
New locations opened 1 49 50
Locations acquired 28 — 28
Consolidation of existing pawn locations (1)
(6) (12) (18)
Total locations, end of period 1,069 1,739 2,808


	Three Months Ended March 31, 2022
	U.S.	Latin America	Total
Total locations, beginning of period	1,081	1,744	2,825
New locations opened (1)	—	10	10



Consolidation of existing pawn locations (2)	(3)	(3)	(6)

Total locations, end of period	1,078	1,751	2,829

(1)In addition to new store openings, the Company strategically relocated one store in Latin America during the three months ended March 31, 2022.

(2)Store consolidations were primarily acquired locations over the past five years which have been combined with overlapping stores and for which the Company expects to maintain a significant portion of the acquired customer base in the consolidated location.

18As of March 31, 2022, AFF provided lease-to-own and retail finance payment solutions for consumer goods and services through a nationwide network of approximately 6,900 active retail merchant partner locations.


~~Table of Contents~~

CRITICAL ACCOUNTING ~~POLICIES~~ESTIMATES

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The significant accounting policies and estimates that the Company believes are the most critical to aid in fully understanding and evaluating its reported financial results have been reported in the Company’s ~~2020~~2021 Annual Report on Form 10-K. There have been no changes to the Company’s significant accounting policies for the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022.


Table of Contents

RESULTS OF OPERATIONS (unaudited)

Continuing Impact of COVID-19

The ~~Company~~COVID-19 pandemic continues to ~~monitor the~~ impact numerous aspects of the ~~COVID-19 pandemic on all aspects of~~Company’s business and the continuing long-term impact to its ~~business.~~business remains unknown. The extent to which COVID-19 continues to impact the Company’s operations, results of operations, liquidity and financial condition will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the unknown duration and severity of the COVID-19 pandemic, which may be impacted by variants of ~~the COVID-19 virus~~concern and the efficacy and adoption rate of the COVID-19 vaccines in the jurisdictions in which the Company ~~operates,~~operates. In addition, changes in economic conditions and consumer spending, rising inflation, and the actions taken to ~~contain~~limit the economic impact of COVID-19, such as ~~well as further actions taken to limit the resulting economic impact. In particular,~~ government stimulus and other transfer programs, have and may continue to have a material adverse impact on demand for pawn loans in future periods. Moreover, safety protocols, staffing constraints and supply chain delays continue to impact operations and traffic counts for many retailers, which include the Company’s pawn stores and many of AFF’s retail merchant partners.

Constant Currency Results

The Company’s management reviews and analyzes operating results in Latin America on a constant currency basis because the Company believes this better represents the Company’s underlying business trends. Constant currency results are non-GAAP financial measures, which exclude the effects of foreign currency translation and are calculated by translating current-year results at prior-year average exchange rates. The wholesale scrap jewelry sales in Latin America are priced and settled in U.S. dollars and are not affected by foreign currency translation, as are a small percentage of the operating and administrative expenses in Latin America, which are billed and paid in U.S. dollars. Amounts presented on a constant currency basis are denoted as such. See “Non-GAAP Financial Information” for additional discussion of constant currency operating results.

Business operations in Mexico, Guatemala and Colombia are transacted in Mexican pesos, Guatemalan quetzales and Colombian pesos. The Company also has operations in El Salvador, where the reporting and functional currency is the U.S. dollar. The following table provides exchange rates for the Mexican peso, Guatemalan quetzal and Colombian peso for the current and prior-year periods:


		September 30,		Favorable /				March 31,		Favorable /
		2021	2020	(Unfavorable)				2022	2021	(Unfavorable)
Mexican peso / U.S. dollar exchange rate:	Mexican peso / U.S. dollar exchange rate:						Mexican peso / U.S. dollar exchange rate:
End-of-period	End-of-period	20.3	22.5		10	%	End-of-period	20.0	20.6		3	%
Three months ended	Three months ended	20.0	22.1		10	%	Three months ended	20.5	20.3		(1)	%
Nine months ended		20.1	21.8		8	%

Guatemalan quetzal / U.S. dollar exchange rate:	Guatemalan quetzal / U.S. dollar exchange rate:						Guatemalan quetzal / U.S. dollar exchange rate:
End-of-period	End-of-period	7.7	7.8		1	%	End-of-period	7.7	7.7		—	%
Three months ended	Three months ended	7.7	7.7		—	%	Three months ended	7.7	7.8		1	%
Nine months ended		7.7	7.7		—	%

Colombian peso / U.S. dollar exchange rate:	Colombian peso / U.S. dollar exchange rate:						Colombian peso / U.S. dollar exchange rate:
End-of-period	End-of-period	3,835	3,879		1	%	End-of-period	3,748	3,737		—	%
Three months ended	Three months ended	3,844	3,730		(3)	%	Three months ended	3,914	3,553		(10)	%
Nine months ended		3,696	3,703		—	%

~~Amounts presented on a constant currency basis are denoted as such. See “Non-GAAP Financial Information” for additional discussion of constant currency operating results.~~

1923


Table of Contents

Operating Results for the Three Months Ended ~~September 30, 2021~~March 31, 2022 Compared to the Three Months Ended ~~September 30, 2020~~March 31, 2021

U.S. ~~Operations~~Pawn Segment

The following table details earning assets, which consist of pawn loans and inventories, as well as other earning asset metrics of the U.S. ~~operations~~pawn segment as of ~~September 30, 2021~~March 31, 2022 compared to ~~September 30, 2020~~March 31, 2021 (dollars in thousands, except as otherwise noted):


		As of September 30,										As of March 31,
		2021			2020			Increase				2022			2021			Increase
U.S. Operations Segment
U.S. Pawn Segment											U.S. Pawn Segment
Earning assets:	Earning assets:										Earning assets:
Pawn loans	Pawn loans	$	242,825		$	188,819			29	%	Pawn loans	$	241,597		$	169,642			42	%
Inventories	Inventories		175,047			120,397			45	%	Inventories		184,671			128,308			44	%
		$	417,872		$	309,216			35	%		$	426,268		$	297,950			43	%

Average outstanding pawn loan amount (in ones)	Average outstanding pawn loan amount (in ones)	$	208		$	188			11	%	Average outstanding pawn loan amount (in ones)	$	226		$	215			5	%

Composition of pawn collateral:	Composition of pawn collateral:										Composition of pawn collateral:
General merchandise	General merchandise	36		%	34		%				General merchandise	33		%	30		%
Jewelry	Jewelry	64		%	66		%				Jewelry	67		%	70		%
		100		%	100		%					100		%	100		%

Composition of inventories:	Composition of inventories:										Composition of inventories:
General merchandise	General merchandise	48		%	42		%				General merchandise	44		%	44		%
Jewelry	Jewelry	52		%	58		%				Jewelry	56		%	56		%
		100		%	100		%					100		%	100		%

Percentage of inventory aged greater than one year	Percentage of inventory aged greater than one year	1		%	2		%				Percentage of inventory aged greater than one year	1		%	2		%

Inventory turns (trailing twelve months cost of merchandise sales divided by average inventories)	Inventory turns (trailing twelve months cost of merchandise sales divided by average inventories)	2.9 times			3.2 times						Inventory turns (trailing twelve months cost of merchandise sales divided by average inventories)	2.8 times			3.3 times

2024


Table of Contents

The following table presents segment pre-tax operating income and other operating metrics of the U.S. ~~operations~~pawn segment for the three months ended ~~September 30, 2021~~March 31, 2022 compared to the three months ended ~~September 30, 2020~~March 31, 2021 (dollars in thousands). ~~Store operating~~Operating expenses include salary and benefit expense of ~~store-level~~pawn-store-level employees, occupancy costs, bank charges, security, insurance, utilities, supplies and other costs incurred by the pawn stores.


		Three Months Ended										Three Months Ended
		September 30,						Increase /				March 31,
		2021			2020			(Decrease)				2022			2021			Increase
U.S. Operations Segment
U.S. Pawn Segment											U.S. Pawn Segment
Revenue:	Revenue:										Revenue:
Retail merchandise sales	Retail merchandise sales	$	167,257		$	151,618			10	%	Retail merchandise sales	$	204,942		$	189,957			8	%
Pawn loan fees	Pawn loan fees		76,674			66,180			16	%	Pawn loan fees		90,339			76,397			18	%
Wholesale scrap jewelry sales	Wholesale scrap jewelry sales		4,168			12,692			(67)	%	Wholesale scrap jewelry sales		16,524			9,203			80	%
Consumer loan and credit services fees (1)			—			57			(100)	%
Total revenue	Total revenue		248,099			230,547			8	%	Total revenue		311,805			275,557			13	%

Cost of revenue:	Cost of revenue:										Cost of revenue:
Cost of retail merchandise sold	Cost of retail merchandise sold		93,326			84,673			10	%	Cost of retail merchandise sold		119,718			106,530			12	%
Cost of wholesale scrap jewelry sold	Cost of wholesale scrap jewelry sold		3,778			10,316			(63)	%	Cost of wholesale scrap jewelry sold		14,530			7,513			93	%
Consumer loan and credit services loss provision (1)			—			104			(100)	%
Total cost of revenue	Total cost of revenue		97,104			95,093			2	%	Total cost of revenue		134,248			114,043			18	%

Net revenue	Net revenue		150,995			135,454			11	%	Net revenue		177,557			161,514			10	%

Segment expenses:	Segment expenses:										Segment expenses:
Store operating expenses			93,247			92,678			1	%
Operating expenses											Operating expenses		98,822			95,247			4	%
Depreciation and amortization	Depreciation and amortization		5,662			5,390			5	%	Depreciation and amortization		5,587			5,382			4	%
Total segment expenses	Total segment expenses		98,909			98,068			1	%	Total segment expenses		104,409			100,629			4	%

Segment pre-tax operating income	Segment pre-tax operating income	$	52,086		$	37,386			39	%	Segment pre-tax operating income	$	73,148		$	60,885			20	%

Operating metrics:	Operating metrics:										Operating metrics:
Retail merchandise sales margin	Retail merchandise sales margin	44		%	44		%				Retail merchandise sales margin	42		%	44		%

Net revenue margin	Net revenue margin	61		%	59		%				Net revenue margin	57		%	59		%
Segment pre-tax operating margin	Segment pre-tax operating margin	21		%	16		%				Segment pre-tax operating margin	23		%	22		%

~~(1)Effective June 30, 2020, the Company no longer offers an unsecured consumer loan product in the U.S.~~

Retail Merchandise Sales Operations

U.S. retail merchandise sales increased ~~10%~~8% to ~~$167.3~~$204.9 million during the ~~third~~first quarter of ~~2021~~2022 compared to ~~$151.6~~$190.0 million for the ~~third~~first quarter of ~~2020.~~2021. Same-store retail sales increased 6%4% in the ~~third~~first quarter of ~~2021~~2022 compared to the ~~third~~first quarter of ~~2020.~~2021. The increase in total and same-store retail sales was primarily due to increased inventory levels during the ~~third~~first quarter of ~~2021~~2022 compared to the ~~third~~first quarter of ~~2020.~~2021. The gross profit margin on retail merchandise sales in the U.S. was 42% in the first quarter of 2022 and 44% in ~~both~~ the ~~third~~first quarter of ~~2021 and 2020.~~2021.

U.S. inventories increased ~~45%~~44% from ~~$120.4~~$128.3 million at ~~September 30, 2020~~March 31, 2021 to ~~$175.0~~$184.7 million at ~~September 30, 2021.~~March 31, 2022. The increase was primarily due to ~~lower than normal~~lower-than-normal inventory balances at ~~September 30, 2020~~March 31, 2021 due to the impacts of the COVID-19 pandemic. Inventories aged greater than one year in the U.S. were 1% at ~~September 30, 2021~~March 31, 2022 compared to 2% at ~~September 30, 2020.~~March 31, 2021.

2125


Table of Contents

Pawn Lending Operations

U.S. pawn loan fees increased 16% to $76.7 million during the third quarter of 2021 compared to $66.2 million for the third quarter of 2020. Same-store pawn fees in the third quarter of 2021 increased 11% compared to the third quarter of 2020. Pawn loan receivables as of ~~September 30, 2021~~March 31, 2022 increased ~~29%~~42% in total and ~~23%~~38% on a same-store basis compared to ~~September 30, 2020.~~March 31, 2021. The increase in total and same-store pawn receivables ~~and resulting pawn loan fees~~ was primarily due to the continued recovery in pawn lending demand during the ~~third~~first quarter of ~~2021 towards~~2022 to pre-pandemic levels.

U.S. pawn loan fees increased 18% to $90.3 million during the first quarter of 2022 compared to $76.4 million for the first quarter of 2021. Same-store pawn fees in the first quarter of 2022 increased 14% compared to the first quarter of 2021. The increase in total and same-store pawn loan fees was primarily due to the continued recovery in pawn loan receivables, as described above.

Segment Expenses and Segment Pre-Tax Operating Income

U.S. ~~store~~ operating expenses increased 1%4% to ~~$93.2~~$98.8 million during the ~~third~~first quarter of ~~2021~~2022 compared to ~~$92.7~~$95.2 million during the ~~third~~first quarter of ~~2020~~2021 while same-store operating expenses ~~decreased 3%~~were flat compared with the prior-year period. The ~~decrease~~increase in ~~same-store~~ operating expenses was primarily due to ~~cost saving initiatives in response to COVID-19.~~increased store count and increased store-level incentive compensation driven by increased revenues during the first quarter of 2022.

The U.S. segment pre-tax operating income for the ~~third~~first quarter of ~~2021~~2022 was ~~$52.1~~$73.1 million, which generated a pre-tax segment operating margin of ~~21%~~23% compared to ~~$37.4~~$60.9 million and ~~16%~~22% in the prior year, respectively. The increase in the segment pre-tax operating income and margin reflected increases in gross profit from retail sales, ~~and~~ pawn loan fees ~~partially offset by a decrease in~~and gross profit from scrap sales, ~~and a slight~~partially offset by an increase in operating expenses.

2226


Table of Contents

Latin America Operations Segment

Latin American results of operations for the three months ended ~~September 30, 2021~~March 31, 2022 compared to the three months ended ~~September 30, 2020 benefited from~~March 31, 2021 were impacted by a ~~10% favorable~~1% unfavorable change in the average value of the Mexican peso compared to the U.S. dollar. The translated value of Latin American earning assets as of ~~September 30, 2021~~March 31, 2022 compared to ~~September 30, 2020~~March 31, 2021 benefited from a ~~10%~~3% favorable change in the end-of-period value of the Mexican peso compared to the U.S. dollar.

The following table details earning assets, which consist of pawn loans and inventories as well as other earning asset metrics of the Latin America ~~operations~~pawn segment as of ~~September 30, 2021~~March 31, 2022 compared to ~~September 30, 2020~~March 31, 2021 (dollars in thousands, except as otherwise noted):


											Constant Currency Basis															Constant Currency Basis
											As of															As of
											September 30,															March 31,
		As of September 30,									2021		Increase				As of March 31,									2022		Increase
		2021			2020			Increase			(Non-GAAP)		(Non-GAAP)				2022			2021			Increase			(Non-GAAP)		(Non-GAAP)
Latin America Operations Segment
Latin America Pawn Segment																Latin America Pawn Segment
Earning assets:	Earning assets:															Earning assets:
Pawn loans	Pawn loans	$	106,168		$	81,800			30	%	$	96,443		18	%	Pawn loans	$	102,504		$	95,796			7	%	$	99,610		4	%
Inventories	Inventories		79,213			48,267			64	%	71,927			49	%	Inventories		62,605			57,028			10	%	60,841			7	%

		$	185,381		$	130,067			43	%	$	168,370		29	%		$	165,109		$	152,824			8	%	$	160,451		5	%

Average outstanding pawn loan amount (in ones)	Average outstanding pawn loan amount (in ones)	$	76		$	64			19	%	$	69		8	%	Average outstanding pawn loan amount (in ones)	$	79		$	76			4	%	$	76		—	%

Composition of pawn collateral:	Composition of pawn collateral:															Composition of pawn collateral:
General merchandise	General merchandise	68		%	66		%									General merchandise	68		%	66		%
Jewelry	Jewelry	32		%	34		%									Jewelry	32		%	34		%
		100		%	100		%										100		%	100		%

Composition of inventories:	Composition of inventories:															Composition of inventories:
General merchandise	General merchandise	67		%	60		%									General merchandise	68		%	58		%
Jewelry	Jewelry	33		%	40		%									Jewelry	32		%	42		%
		100		%	100		%										100		%	100		%

Percentage of inventory aged greater than one year	Percentage of inventory aged greater than one year	1		%	2		%									Percentage of inventory aged greater than one year	1		%	2		%

Inventory turns (trailing twelve months cost of merchandise sales divided by average inventories)	Inventory turns (trailing twelve months cost of merchandise sales divided by average inventories)	4.2 times			4.1 times											Inventory turns (trailing twelve months cost of merchandise sales divided by average inventories)	4.3 times			4.4 times

2327


Table of Contents

The following table presents segment pre-tax operating income and other operating metrics of the Latin America ~~operations~~pawn segment for the three months ended ~~September 30, 2021~~March 31, 2022 compared to the three months ended ~~September 30, 2020~~March 31, 2021 (dollars in thousands). ~~Store operating~~Operating expenses include salary and benefit expense of ~~store-level~~pawn-store-level employees, occupancy costs, bank charges, security, insurance, utilities, supplies and other costs incurred by the pawn stores.


														Constant Currency Basis																			Constant Currency Basis
														Three Months																			Three Months
														Ended																			Ended
			Three Months Ended											September 30,			Increase /					Three Months Ended											March 31,
			September 30,							Increase /				2021			(Decrease)					March 31,											2022			Increase
			2021				2020			(Decrease)				(Non-GAAP)			(Non-GAAP)					2022				2021			Increase				(Non-GAAP)			(Non-GAAP)
Latin America Operations Segment
Latin America Pawn Segment																				Latin America Pawn Segment
Revenue:	Revenue:																			Revenue:
Retail merchandise sales	Retail merchandise sales		$	101,469			$	83,364			22	%		$	92,367			11	%	Retail merchandise sales		$	97,877			$	82,085			19	%		$	98,802			20	%
Pawn loan fees	Pawn loan fees		44,691				33,390				34	%		40,662				22	%	Pawn loan fees		41,480				39,125				6	%		41,873				7	%
Wholesale scrap jewelry sales	Wholesale scrap jewelry sales		5,415				12,589				(57)	%		5,415				(57)	%	Wholesale scrap jewelry sales		16,281				11,172				46	%		16,281				46	%

Total revenue	Total revenue		151,575				129,343				17	%		138,444				7	%	Total revenue		155,638				132,382				18	%		156,956				19	%

Cost of revenue:	Cost of revenue:																			Cost of revenue:
Cost of retail merchandise sold	Cost of retail merchandise sold		64,731				52,557				23	%		58,945				12	%	Cost of retail merchandise sold		62,496				50,623				23	%		63,084				25	%
Cost of wholesale scrap jewelry sold	Cost of wholesale scrap jewelry sold		4,750				9,502				(50)	%		4,300				(55)	%	Cost of wholesale scrap jewelry sold		13,685				9,684				41	%		13,819				43	%

Total cost of revenue	Total cost of revenue		69,481				62,059				12	%		63,245				2	%	Total cost of revenue		76,181				60,307				26	%		76,903				28	%

Net revenue	Net revenue		82,094				67,284				22	%		75,199				12	%	Net revenue		79,457				72,075				10	%		80,053				11	%

Segment expenses:	Segment expenses:																			Segment expenses:
Store operating expenses			45,372				39,383				15	%		41,555				6	%
Operating expenses																				Operating expenses		45,542				42,077				8	%		45,965				9	%
Depreciation and amortization	Depreciation and amortization		4,591				3,903				18	%		4,229				8	%	Depreciation and amortization		4,401				4,263				3	%		4,451				4	%
Total segment expenses	Total segment expenses		49,963				43,286				15	%		45,784				6	%	Total segment expenses		49,943				46,340				8	%		50,416				9	%

Segment pre-tax operating income	Segment pre-tax operating income		$	32,131			$	23,998			34	%		$	29,415			23	%	Segment pre-tax operating income		$	29,514			$	25,735			15	%		$	29,637			15	%

Operating metrics:	Operating metrics:																			Operating metrics:
Retail merchandise sales margin	Retail merchandise sales margin	36			%	37			%				36			%				Retail merchandise sales margin	36			%	38			%				36			%

Net revenue margin	Net revenue margin	54			%	52			%				54			%				Net revenue margin	51			%	54			%				51			%
Segment pre-tax operating margin	Segment pre-tax operating margin	21			%	19			%				21			%				Segment pre-tax operating margin	19			%	19			%				19			%

~~Retail Merchandise Sales Operations~~

Latin America retail merchandise sales increased 22% (11% on a constant currency basis) to $101.5 million during the third quarter of 2021 compared to $83.4 million for the third quarter of 2020. Same-store retail sales increased 21% (10% on a constant currency basis) during the third quarter of 2021 compared to the third quarter of 2020. The increase in total and same-store retail sales was primarily due to increased inventory levels during the third quarter of 2021 compared to the third quarter of 2020. The gross profit margin on retail merchandise sales was 36% during the third quarter of 2021 compared to 37% during the third quarter of 2020.

Inventories in Latin America increased 64% (49% on a constant currency basis) from $48.3 million at September 30, 2020 to $79.2 million at September 30, 2021. The increase was primarily due to lower than normal inventory balances at September 30, 2020 due to the impacts of the COVID-19 pandemic. Inventories aged greater than one year in Latin America were 1% at September 30, 2021 and 2% at September 30, 2020.

2428


Table of Contents

Retail Merchandise Sales Operations

Latin America retail merchandise sales increased 19% (20% on a constant currency basis) to $97.9 million during the first quarter of 2022 compared to $82.1 million for the first quarter of 2021. Same-store retail sales increased 18% (19% on a constant currency basis) during the first quarter of 2022 compared to the first quarter of 2021. The increase in total and same-store retail sales was primarily due to increased inventory levels during the first quarter of 2022 compared to the first quarter of 2021. The gross profit margin on retail merchandise sales was 36% during the first quarter of 2022 compared to 38% during the first quarter of 2021.

Latin America inventories increased 10% (7% on a constant currency basis) from $57.0 million at March 31, 2021 to $62.6 million at March 31, 2022. The increase was primarily due to lower-than-normal inventory balances at March 31, 2021 due to the impacts of the COVID-19 pandemic. Inventories aged greater than one year in Latin America were 1% at March 31, 2022 and 2% at March 31, 2021.

Pawn Lending Operations

Latin America pawn loan fees increased 34% (22% on a constant currency basis), totaling $44.7 million during the third quarter of 2021 compared to $33.4 million for the third quarter of 2020. Same-store pawn fees increased 33% (21% on a constant currency basis) in the third quarter of 2021 compared to the third quarter of 2020. Pawn loan receivables increased ~~30% (18%~~7% (4% on a constant currency basis) as of ~~September 30, 2021~~March 31, 2022 compared to ~~September 30, 2020,~~March 31, 2021, and on a same-store basis pawn loan receivables increased ~~29% (17%~~6% (3% on a constant currency basis). The increase in total and same-store pawn receivables ~~and resulting pawn loan fees~~ was primarily due to the continued recovery in pawn lending demand during the ~~third~~first quarter of ~~2021~~2022 towards pre-pandemic levels. The Company attributes the slower growth in Latin American pawn receivables in part to continued, elevated currency remittances from the U.S.

Latin America pawn loan fees increased 6% (7% on a constant currency basis), totaling $41.5 million during the first quarter of 2022 compared to $39.1 million for the first quarter of 2021. Same-store pawn fees increased 5% (6% on a constant currency basis) in the first quarter of 2022 compared to the first quarter of 2021. The increase in total and same-store constant currency pawn loan fees was primarily due to the continued recovery in pawn loan receivables as described above.

Segment Expenses and Segment Pre-Tax Operating Income

~~Store operating~~Operating expenses increased ~~15% (6%~~8% (9% on a constant currency basis) to ~~$45.4~~$45.5 million during the ~~third~~first quarter of 2022 compared to $42.1 million during the first quarter of 2021, ~~compared to $39.4 million during the third quarter of 2020. Currency adjusted~~reflecting continued store growth and inflationary pressure on labor and other operating expenses ~~increased primarily due to the 1% increase~~ in the ~~Latin America weighted-average store count.~~current quarter. Same-store operating expenses increased ~~14% (5%~~7% (8% on a constant currency basis). compared to the prior-year period.

The segment pre-tax operating income for the ~~third~~first quarter of ~~2021~~2022 was ~~$32.1~~$29.5 million, which generated a pre-tax segment operating margin of ~~21%~~19% compared to ~~$24.0~~$25.7 million and 19% in the prior year, respectively. The increase in the segment pre-tax operating income ~~and margin~~ was primarily due to ~~an increase~~increases in gross profit from retail sales, ~~and~~ pawn loan fees and ~~a 10% favorable change in the average value of the Mexican peso,~~gross profit from scrap sales, partially offset by an increase in ~~store~~ operating expenses.


Table of Contents

Retail POS Payment Solutions Segment

The Company completed the AFF Acquisition on December 17, 2021, and the results of operations of AFF have been consolidated since the acquisition date. As a result of purchase accounting, AFF’s as reported earning assets, consisting of finance receivables and leased merchandise, contain significant fair value adjustments. The fair value adjustments will be amortized over the life of the finance receivables and lease contracts acquired at the time of acquisition.

The following table provides a detail of finance receivables as reported and as adjusted to exclude the impacts of purchase accounting as of March 31, 2022 (in thousands):


	As of March 31, 2022
	As Reported (GAAP)		Adjustments		Adjusted (Non-GAAP)
Finance receivables, before allowance for loan losses (1)	$	212,813	$	(26,484)	$	186,329
Less allowance for loan losses	(72,332)		—		(72,332)
Finance receivables, net	$	140,481	$	(26,484)	$	113,997

(1) As reported acquired finance receivables was recorded at fair value in conjunction with purchase accounting. Adjustment represents the difference between the original amortized cost basis and fair value of the remaining acquired finance receivables.

The following table provides a detail of leased merchandise as reported and as adjusted to exclude the impacts of purchase accounting as of March 31, 2022 (in thousands):


	As of March 31, 2022
	As Reported (GAAP)		Adjustments		Adjusted (Non-GAAP)
Leased merchandise, before allowance for lease losses (1)	$	159,511	$	32,327	$	191,838
Less allowance for lease losses	(40,364)		(35,664)		(76,028)
Leased merchandise, net	$	119,147	$	(3,337)	$	115,810

(1) As reported acquired leased merchandise was recorded at fair value (which includes estimates for charge-offs) in conjunction with purchase accounting. Adjustment represents the difference between the original depreciated cost and fair value of the remaining acquired leased merchandise.

2530


Table of Contents

AFF’s as reported results of operations contain significant purchase accounting impacts. The following table presents segment pre-tax operating income as reported and as adjusted to exclude the impacts of purchase accounting for the three months ended March 31, 2022 (in thousands). Operating expenses include salary and benefit expense of certain operations focused departments, merchant partner incentives, bank and other payment processing charges, credit reporting costs, information technology costs, advertising costs and other operational costs incurred by AFF. Administrative expenses of AFF and amortization expense of intangible assets related to the purchase of AFF are not included in the segment pre-tax operating income.


	Three Months Ended March 31, 2022
	As Reported				Adjusted
	(GAAP)		Adjustments		(Non-GAAP)
Retail POS Payment Solutions Segment
Revenue:
Leased merchandise income	$	149,947	$	—	$	149,947
Interest and fees on finance receivables	42,449		16,173		58,622

Total revenue	192,396		16,173		208,569

Cost of revenue:
Depreciation of leased merchandise	93,706		(4,359)		89,347
Provision for lease losses	39,820		—		39,820
Provision for loan losses	24,697		—		24,697

Total cost of revenue	158,223		(4,359)		153,864

Net revenue	34,173		20,532		54,705

Segment expenses:
Operating expenses	28,932		—		28,932
Depreciation and amortization	682		—		682
Total segment expenses	29,614		—		29,614

Segment pre-tax operating income	$	4,559	$	20,532	$	25,091


Table of Contents

Consolidated Results of Operations

The following table reconciles pre-tax operating income of the Company’s U.S. ~~operations~~pawn segment, Latin America pawn segment and ~~Latin America operations~~retail POS payment solutions segment discussed above to consolidated net income for the three months ended ~~September 30, 2021~~March 31, 2022 compared to the three months ended ~~September 30, 2020~~March 31, 2021 (dollars in thousands):


		Three Months Ended								Three Months Ended
		September 30,				Increase /				March 31,				Increase /
		2021		2020		(Decrease)				2022		2021		(Decrease)
Consolidated Results of Operations	Consolidated Results of Operations								Consolidated Results of Operations
Segment pre-tax operating income:	Segment pre-tax operating income:								Segment pre-tax operating income:
U.S. operations		$	52,086	$	37,386		39	%
Latin America operations		32,131		23,998			34	%
U.S. pawn									U.S. pawn	$	73,148	$	60,885		20	%
Latin America pawn									Latin America pawn	29,514		25,735			15	%
Retail POS payment solutions (1)									Retail POS payment solutions (1)	4,559		—			—	%
Consolidated segment pre-tax operating income	Consolidated segment pre-tax operating income	84,217		61,384			37	%	Consolidated segment pre-tax operating income	107,221		86,620			24	%

Corporate expenses and other income:	Corporate expenses and other income:								Corporate expenses and other income:
Administrative expenses	Administrative expenses	30,208		24,354			24	%	Administrative expenses	36,863		30,999			19	%
Depreciation and amortization	Depreciation and amortization	964		1,133			(15)	%	Depreciation and amortization	14,872		967			1,438	%
Interest expense	Interest expense	7,961		6,561			21	%	Interest expense	16,221		7,230			124	%
Interest income	Interest income	(143)		(499)			(71)	%	Interest income	(676)		(158)			328	%
(Gain) loss on foreign exchange									(Gain) loss on foreign exchange	(480)		267			280	%
Merger and acquisition expenses	Merger and acquisition expenses	12		7			71	%	Merger and acquisition expenses	665		166			301	%
Loss (gain) on foreign exchange		558		(432)			(229)	%
Write-off of certain Cash America merger related lease intangibles		361		837			(57)	%
Loss on extinguishment of debt		—		11,737			(100)	%
Loss on revaluation of contingent acquisition consideration									Loss on revaluation of contingent acquisition consideration	2,570		—			—	%
Impairments and dispositions of certain other assets									Impairments and dispositions of certain other assets	177		878			(80)	%

Total corporate expenses and other income	Total corporate expenses and other income	39,921		43,698			(9)	%	Total corporate expenses and other income	70,212		40,349			74	%

Income before income taxes	Income before income taxes	44,296		17,686			150	%	Income before income taxes	37,009		46,271			(20)	%

Provision for income taxes	Provision for income taxes	10,900		2,624			315	%	Provision for income taxes	9,004		12,556			(28)	%

Net income	Net income	$	33,396	$	15,062		122	%	Net income	$	28,005	$	33,715		(17)	%

(1) The AFF results are significantly impacted by certain purchase accounting adjustments as noted in the retail POS payment solutions segment results of operations above. Adjusted retail POS payment solutions segment pre-tax operating income excluding such purchase accounting adjustments was $25.1 million for the three months ended March 31, 2022.

Corporate Expenses and Taxes

Administrative expenses increased ~~24%~~19% to ~~$30.2~~$36.9 million during the ~~third~~first quarter of 2022 compared to $31.0 million in the first quarter of 2021, ~~compared to $24.4 million in the third quarter of 2020,~~ primarily due to ~~increased incentive compensation and a 10% favorable change in~~ the ~~average value of the Mexican peso resulting in higher U.S. dollar translated expenses.~~AFF Acquisition. As a percentage of revenue, administrative expenses ~~increased~~decreased from ~~7% during the third quarter of 2020 to~~ 8% during the ~~third~~first quarter of ~~2021.~~2021 to 6% during the first quarter of 2022.

Corporate depreciation and amortization expense increased 1,438% to $14.9 million during the first quarter of 2022 compared to $1.0 million in the first quarter of 2021, primarily due to $14.2 million in amortization expense during the first quarter of 2022 related to identified intangible assets in the AFF Acquisition.

Interest expense increased ~~21%~~124% to ~~$8.0~~$16.2 million during the ~~third~~first quarter of ~~2021~~2022 compared to ~~$6.6~~$7.2 million in the ~~third~~first quarter of ~~2020,~~2021, primarily due to an increase in the Company’s outstanding senior unsecured notes and higher average balances outstanding on the Company’s unsecured credit ~~facilities, partially offset by lower weighted-average interest rates on the Company’s debt during the third quarter of 2021 compared to the third quarter of 2020.~~facilities. See Note 57 of Notes to Consolidated Financial Statements and “Liquidity and Capital Resources.”

During the third quarter of 2020, the Company redeemed its outstanding $300.0 million, 5.375% senior notes due 2024, incurring a loss on extinguishment of debt of $11.7 million, which includes an early redemption premium and other redemption costs of $8.8 million and the write-off of unamortized debt issuance costs of $2.9 million.

Consolidated effective income tax rates for the third quarter of 2021 and 2020 were 24.6% and 14.8%, respectively. The increase in the effective tax rate was primarily due to the Internal Revenue Service finalizing regulations in July 2020 for the global intangible low-taxed income tax (“GILTI”) provisions for foreign operations in the U.S. federal tax code. The finalized

2632


Table of Contents

~~regulations essentially eliminated~~Merger and acquisition expenses increased 301% to $0.7 million during the ~~impact~~first quarter of 2022 compared to $0.2 million during first quarter of 2021, reflecting timing of transaction costs primarily related to the AFF Acquisition.

The Company recognized a loss of $2.6 million during the first quarter of 2022 as a result of an increase in the liability for the estimated fair value of certain contingent consideration related to the AFF Acquisition.

Consolidated effective income tax rates for the first quarter of 2022 and 2021 were 24.3% and 27.1%, respectively. The decrease in the effective tax rate was primarily due to an increase in U.S. sourced income, primarily a result of the ~~incremental GILTI tax on~~AFF Acquisition, which is taxed at a lower rate than the Latin American countries the Company ~~on a retroactive basis, which resulted~~operates in, ~~a significant tax benefit being recorded in the third quarter of 2020. This was partially offset by~~and an increased foreign permanent tax benefit recorded in the ~~third~~first quarter of 2022 compared to the first quarter of 2021, related to an increased inflation index adjustment allowed in Mexico as a result of elevated inflation in Mexico, which started during the latter half of 2021.

~~Operating Results for the Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020~~LIQUIDITY AND CAPITAL RESOURCES

~~U.S. Operations Segment~~Material Capital Requirements

The following table presents segment pre-tax operating income and other operating metrics of the U.S. operations segment for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 (dollars in thousands). Store operating expenses include salary and benefit expense of store-level employees, occupancy costs, bank charges, security, insurance, utilities, supplies and other costs incurred by the stores.

Nine Months Ended
September 30, Increase /
2021 2020 (Decrease)
U.S. Operations Segment
Revenue:
Retail merchandise sales $ 530,468 $ 556,528 (5) %
Pawn loan fees 220,013 235,937 (7) %
Wholesale scrap jewelry sales 20,217 37,727 (46) %
Consumer loan and credit services fees (1)
— 2,003 (100) %
Total revenue 770,698 832,195 (7) %
Cost of revenue:
Cost of retail merchandise sold 295,455 325,863 (9) %
Cost of wholesale scrap jewelry sold 16,678 32,754 (49) %
Consumer loan and credit services loss provision (1)
— (480) (100) %
Total cost of revenue 312,133 358,137 (13) %
Net revenue 458,565 474,058 (3) %
Segment expenses:
Store operating expenses 282,068 303,686 (7) %
Depreciation and amortization 16,391 16,352 — %
Total segment expenses 298,459 320,038 (7) %
Segment pre-tax operating income $ 160,106 $ 154,020 4 %
Operating metrics:
Retail merchandise sales margin 44 % 41 %
Net revenue margin 59 % 57 %
Segment pre-tax operating margin 21 % 19 %
Company’s primary capital requirements include:

~~(1)~~•~~Effective June 30, 2020,~~Expand pawn operations through growth of pawn receivables and inventories in existing stores, new store openings and strategic acquisition of pawn stores;

•Expand retail POS payment solutions operations through growth of the business generated from new and existing merchant partners;

◦Expected to result in additional purchases of lease merchandise, funding of additional finance receivables and an increase in servicing and collection activities to support increased leases and finance receivables outstanding;

◦Expected to require operational support and development activities around AFF’s proprietary loan management and decisioning systems along with merchant and customer service functions; and

•Return capital to shareholders through dividends and stock repurchases.

Other material capital requirements include operating expenses (see Note 3 of Notes to Consolidated Financial Statements regarding operating lease commitments), general corporate operating activities, income tax payments and debt service among others. The Company believes that net cash provided by operating activities and available and unused funds under its revolving unsecured credit facilities will be adequate to meet its liquidity and capital needs for these items in the short-term over the next 12 months and also in the long-term beyond the next 12 months.

Expand Pawn Operations

The Company intends to continue expansion through new store openings, primarily in Latin America. For 2022, the Company ~~no longer offers an unsecured consumer loan product~~expects to add up to 60 de novo full-service pawn locations in Latin America. Future store openings remain subject to uncertainties related to the ~~U.S.~~COVID-19 pandemic, including but not limited to, the ability to continue construction projects and obtain necessary licenses and permits, utility services, store equipment, supplies and staffing.

The Company continually looks for, and is presented with, potential pawn store acquisition opportunities and will evaluate potential acquisitions based upon growth potential, purchase price, available liquidity, debt covenant restrictions, strategic fit and quality of management personnel, among other factors.

Although viewed by management as a discretionary expenditure not required to operate its pawn stores, the Company may continue to purchase real estate from its landlords at existing stores or in conjunction with pawn store acquisitions as opportunities arise at reasonable valuations. The Company purchased the real estate at six store locations, primarily from landlords at existing stores, for a cumulative purchase price of $10.2 million during the three months ended March 31, 2022.

2733


Table of Contents

Expand Retail ~~Merchandise Sales~~POS Payment Solutions Operations

~~U.S.~~AFF will continue to promote and build relationships with existing customers and merchants and believes there is an opportunity to increase the share of existing merchants’ overall transaction volumes. While existing merchant partner relationships represent a significant source of AFF’s origination volumes, the Company believes there are also many more untapped traditional and e-commerce merchants providing goods and services to customers that could benefit from offering AFF’s retail ~~merchandise sales decreased 5%~~POS payment solutions. AFF has made, and intends to ~~$530.5 million during the nine months ended September 30, 2021 compared~~continue to ~~$556.5 million for the nine months ended September 30, 2020. Same-store retail sales decreased 7% during the nine months ended September 30, 2021 compared~~make, investments in its marketing team to ~~the nine months ended September 30, 2020. The decrease~~drive awareness of AFF’s products at its merchant partners to increase utilization and encourage repeat business through increased marketing directly to AFF’s customers. In addition, AFF has made, and intends to continue to make, investments in ~~total~~its unique and ~~same-store retail sales was primarily due to higher than normal retail sales during the nine months ended September 30, 2020, driven by the impacts of COVID-19.~~proprietary decisioning platform.

~~During the nine months ended September 30, 2021, the gross profit margin on retail merchandise sales in the U.S. was 44% compared~~Return of Capital to a margin of 41% during the nine months ended September 30, 2020. The increase in margin was primarily a result of continued retail demand for value-priced pre-owned merchandise, increased buying of merchandise directly from customers and lower levels of aged inventory, which limited the need for normal discounting.

~~Pawn Lending Operations~~

U.S. pawn loan fees decreased 7%, totaling $220.0 million during the nine months ended September 30, 2021 compared to $235.9 million for the nine months ended September 30, 2020. Same-store pawn fees decreased 9% during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The decline in total and same-store pawn loan fees was primarily due to the significantly lower than normal beginning pawn loan levels, partially offset by the continued recovery in pawn loan demand towards pre-pandemic levels during 2021.

~~Segment Expenses and Segment Pre-Tax Operating Income~~

U.S. store operating expenses decreased 7% to $282.1 million during the nine months ended September 30, 2021 compared to $303.7 million during the nine months ended September 30, 2020 and same-store operating expenses decreased 9% compared with the prior-year period. The decrease in total and same-store operating expenses was primarily due to cost saving initiatives in response to COVID-19.

The U.S. segment pre-tax operating income for the nine months ended September 30, 2021 was $160.1 million, which generated a pre-tax segment operating margin of 21% compared to $154.0 million and 19% in the prior year, respectively. The increase in the segment pre-tax operating income and margin reflected an increase in gross profit from retail sales and a decrease in operating expenses, partially offset by a decrease in pawn loan fees, gross profit from scrap sales and net revenue from consumer loan and credit services products as a result of discontinuing consumer lending operations in 2020.


~~Table of Contents~~

~~Latin America Operations Segment~~

Latin American results of operations for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 benefited from a 8% favorable change in the average value of the Mexican peso compared to the U.S. dollar.

The following table presents segment pre-tax operating income and other operating metrics of the Latin America operations segment for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 (dollars in thousands). Store operating expenses include salary and benefit expense of store-level employees, occupancy costs, bank charges, security, insurance, utilities, supplies and other costs incurred by the stores.

Constant Currency Basis
Nine Months
Ended
Nine Months Ended September 30, Increase /
September 30, Increase / 2021 (Decrease)
2021 2020 (Decrease) (Non-GAAP) (Non-GAAP)
Latin America Operations Segment
Revenue:
Retail merchandise sales $ 275,867 $ 262,483 5 % $ 256,116 (2) %
Pawn loan fees 126,783 107,738 18 % 117,662 9 %
Wholesale scrap jewelry sales 23,843 36,710 (35) % 23,843 (35) %
Total revenue 426,493 406,931 5 % 397,621 (2) %
Cost of revenue:
Cost of retail merchandise sold 173,179 167,573 3 % 160,821 (4) %
Cost of wholesale scrap jewelry sold 20,979 28,268 (26) % 19,449 (31) %
Total cost of revenue 194,158 195,841 (1) % 180,270 (8) %
Net revenue 232,335 211,090 10 % 217,351 3 %
Segment expenses:
Store operating expenses 133,003 122,926 8 % 124,080 1 %
Depreciation and amortization 13,388 11,568 16 % 12,544 8 %
Total segment expenses 146,391 134,494 9 % 136,624 2 %
Segment pre-tax operating income $ 85,944 $ 76,596 12 % $ 80,727 5 %
Operating metrics:
Retail merchandise sales margin 37 % 36 % 37 %
Net revenue margin 54 % 52 % 55 %
Segment pre-tax operating margin 20 % 19 % 20 %


~~Table of Contents~~

~~Retail Merchandise Sales Operations~~

Latin America retail merchandise sales increased 5% (decreased 2% on a constant currency basis) to $275.9 million during the nine months ended September 30, 2021 compared to $262.5 million for the nine months ended September 30, 2020. Same-store retail sales increased 3% (decreased 4% on a constant currency basis) during the nine months ended September 30, 2021 compared to nine months ended September 30, 2020. The decrease in total and same-store constant currency retail sales was primarily a result of significantly lower than normal inventory levels at the beginning of 2021, which limited retail sales during the first half of 2021, partially offset by the government imposed COVID-19 retail restrictions, which limited retail sales during the second quarter of 2020. The gross profit margin on retail merchandise sales was 37% during the nine months ended September 30, 2021 compared to 36% during the nine months ended September 30, 2020.

~~Pawn Lending Operations~~

Pawn loan fees in Latin America increased 18% (9% on a constant currency basis) totaling $126.8 million during the nine months ended September 30, 2021 compared to $107.7 million for the nine months ended September 30, 2020. Same-store pawn fees increased 16% (8% on a constant currency basis) during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The increase in total and same-store constant currency pawn loan fees was primarily due to the continued improvement of pawn loan origination activity during the nine months ended September 30, 2021, partially offset by significantly lower than normal beginning pawn loan levels.

~~Segment Expenses and Segment Pre-Tax Operating Income~~

Store operating expenses increased 8% (1% on a constant currency basis) to $133.0 million during the nine months ended September 30, 2021 compared to $122.9 million during the nine months ended September 30, 2020. Same-store operating expenses increased 6% (decreased 1% on a constant currency basis) compared to the prior-year period.

The segment pre-tax operating income for the nine months ended September 30, 2021 was $85.9 million, which generated a pre-tax segment operating margin of 20% compared to $76.6 million and 19% in the prior year, respectively. The increase in the segment pre-tax operating income and margin was primarily due to an increase in gross profit from retail sales and pawn loan fees and an 8% favorable change in the average value of the Mexican peso, partially offset by a decrease in gross profit from scrap sales and a slight increase in store operating expenses.


~~Table of Contents~~

~~Consolidated Results of Operations~~

The following table reconciles pre-tax operating income of the Company’s U.S. operations segment and Latin America operations segment discussed above to consolidated net income for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 (dollars in thousands):

Nine Months Ended
September 30, Increase /
2021 2020 (Decrease)
Consolidated Results of Operations
Segment pre-tax operating income:
U.S. operations $ 160,106 $ 154,020 4 %
Latin America operations 85,944 76,596 12 %
Consolidated segment pre-tax operating income 246,050 230,616 7 %
Corporate expenses and other income:
Administrative expenses 88,605 85,642 3 %
Depreciation and amortization 2,952 3,504 (16) %
Interest expense 22,389 21,953 2 %
Interest income (420) (1,209) (65) %
Merger and acquisition expenses 1,264 209 505 %
Loss on foreign exchange 248 1,639 (85) %
Write-off of certain Cash America merger related lease intangibles 1,640 4,649 (65) %
Loss on extinguishment of debt — 11,737 (100) %
Impairment of certain other assets — 1,900 (100) %
Total corporate expenses and other income 116,678 130,024 (10) %
Income before income taxes 129,372 100,592 29 %
Provision for income taxes 33,834 26,739 27 %
Net income $ 95,538 $ 73,853 29 %

~~Corporate Expenses and Taxes~~

Administrative expenses increased 3% to $88.6 million during the nine months ended September 30, 2021 compared to $85.6 million during the nine months ended September 30, 2020, primarily due to increased incentive compensation and an 8% favorable change in the average value of the Mexican peso resulting in higher U.S. dollar translated expenses, partially offset by reduced travel costs and other cost saving initiatives in response to COVID-19. Administrative expenses were 7% of revenue during both the nine months ended September 30, 2021 and 2020.

Interest expense increased 2% to $22.4 million during the nine months ended September 30, 2021 compared to $22.0 million for the nine months ended September 30, 2020, primarily due to an increase in the Company’s outstanding senior unsecured notes and higher average balances outstanding on the Company’s unsecured credit facilities, partially offset by lower weighted-average interest rates on the Company’s debt during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. See Note 5 of Notes to Consolidated Financial Statements and “Liquidity and Capital Resources.”

During the nine months ended September 30, 2020, the Company redeemed its outstanding $300.0 million, 5.375% senior notes due 2024, incurring a loss on extinguishment of debt of $11.7 million, which includes an early redemption premium and other redemption costs of $8.8 million and the write-off of unamortized debt issuance costs of $2.9 million.


~~Table of Contents~~

During the nine months ended September 30, 2021, the Company recorded a $1.6 million write-off of certain Cash America merger related lease intangibles compared to a $4.6 million write-off of certain Cash America merger related lease intangibles during the nine months ended September 30, 2020. The Company also recorded a $1.9 million impairment related to a non-operating asset during the first quarter of 2020.

Consolidated effective income tax rates for the nine months ended September 30, 2021 and 2020 were 26.2% and 26.6%, respectively. The decrease in the effective tax rate was primarily due to an increased foreign permanent tax benefit recorded during the nine months ended September 30, 2021 related to an increased inflation index adjustment allowed in Mexico as a result of elevated inflation during 2021, partially offset by the Internal Revenue Service finalizing regulations in July 2020 for the GILTI provisions for foreign operations in the U.S. federal tax code as noted in the quarter-to-date section above.

~~LIQUIDITY AND CAPITAL RESOURCES~~

As of September 30, 2021, the Company’s primary sources of liquidity were $49.9 million in cash and cash equivalents, $280.4 million of available and unused funds under the Company’s revolving unsecured credit facilities, subject to certain financial covenants, $392.5 million in customer loans and fees and service charges receivable and $254.3 million in inventories. See Note 5 of Notes to Consolidated Financial Statements. The Company had working capital of $487.1 million as of September 30, 2021.

The Company intends to continue expansion through new store openings, primarily in Latin America, and through opportunistic acquisitions both in the U.S. and Latin America. Additionally, as opportunities arise at reasonable valuations, the Company may continue to purchase real estate from its landlords at existing stores or in conjunction with pawn store acquisitions.Shareholders

In ~~October 2021,~~April 2022, the Company’s Board of Directors declared a $0.30 per share ~~fourth~~second quarter cash dividend on common shares outstanding, or an aggregate of ~~$12.1~~$14.2 million based on the ~~September 30, 2021~~March 31, 2022 share count, ~~which will~~to be paid on ~~November 30, 2021~~May 31, 2022 to stockholders of record as of ~~November 15, 2021.~~May 16, 2022. While the Company currently expects to continue the payment of quarterly cash dividends, the amount, declaration and payment of cash dividends in the future (quarterly or otherwise) will be made by the Board of Directors, from time to time, subject to the Company’s financial condition, results of operations, business requirements, compliance with legal requirements, debt covenant restrictions and other relevant factors, including the impact of COVID-19.

During the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, the Company repurchased a total of ~~688,000~~1,048,000 shares of common stock at an aggregate cost of ~~$49.6~~$72.2 million and an average cost per share of ~~$72.10, and during~~$68.87 to complete the ~~nine~~$100.0 million share repurchase program authorized in January 2021. During the three months ended ~~September 30, 2020,~~March 31, 2021, the Company repurchased ~~981,000~~84,000 shares of common stock at an aggregate cost of ~~$80.3~~$5.0 million and an average cost per share of ~~$81.84. The Company has approximately $72.2~~$59.06. In April 2022, the Board of Directors approved a new share repurchase authorization of up to $100.0 million of ~~remaining availability under its~~common shares, of which the entire $100.0 million is currently ~~authorized stock repurchase program.~~remaining. While the Company intends to continue repurchases under its active share repurchase program, future share repurchases are subject to a variety of factors, including, but not limited to, the level of cash balances, liquidity needs, credit availability, debt covenant restrictions, general business and economic conditions, regulatory requirements, the market price of the Company’s stock, dividend policy and the availability of alternative investment opportunities.

Sources of Liquidity

The Company regularly evaluates opportunities to optimize its capital structure, including through consideration of the issuance of debt or equity, to refinance existing debt and to enter into interest rate hedge transactions, such as interest rate swap agreements. As of March 31, 2022, the Company’s primary sources of liquidity were $113.3 million in cash and cash equivalents and $308.9 million of available and unused funds under the Company’s revolving unsecured credit facilities, subject to certain financial covenants (see Note 7 of Notes to Consolidated Financial Statements). The Company had working capital of $651.8 million as of March 31, 2022.

The Company’s cash and cash equivalents as of March 31, 2022 included $36.5 million held by its foreign subsidiaries. These cash balances, which are primarily held in Mexican pesos, are associated with foreign earnings the Company has asserted are indefinitely reinvested and which the Company primarily plans to use to support its continued growth plans outside the U.S. through funding of capital expenditures, acquisitions, operating expenses or other similar cash needs of the Company’s foreign operations.

The Company’s liquidity is affected by a number of factors, including changes in general customer traffic and demand, pawn loan balances, loan-to-value ratios, collection of pawn fees, merchandise sales, inventory levels, LTO and finance receivable originations, collection of lease and finance receivable payments, seasonality, operating expenses, administrative expenses, expenses related to merger and acquisition activities, earnout payments associated with the AFF Acquisition, litigation related expenses, tax rates, gold prices, foreign currency exchange rates and the pace of new pawn store expansion and acquisitions. Additionally, a prolonged reduction in earnings and EBITDA could limit the Company’s future ability to fully borrow on its credit facilities under current leverage covenants. Regulatory developments affecting the Company’s operations may also impact ~~of COVID-19.~~profitability and liquidity. See “Regulatory Developments.”

If needed, the Company could seek to raise additional funds from a variety of sources, including, but not limited to, repatriation of excess cash held in Latin America, the sale of assets, reductions in operating expenses, capital expenditures and dividends, the forbearance or deferral of operating expenses, the issuance of debt or equity securities, leveraging currently unencumbered real estate owned by the Company and/or changes to its management of current assets. The characteristics of the Company’s current assets, specifically the ability to rapidly liquidate gold jewelry inventory, which accounts for approximately 50% of total inventory, give the Company flexibility to quickly increase cash flow, if necessary.

3234


Table of Contents

Cash Flows and Liquidity Metrics

The following tables set forth certain historical information with respect to the Company’s sources and uses of cash and other key indicators of liquidity (dollars in thousands):

Nine Months Ended September 30,
2021 2020
Cash flow provided by operating activities $ 137,850 $ 177,366
Cash flow (used in) provided by investing activities $ (189,935) $ 87,791
Cash flow provided by (used in) financing activities $ 36,704 $ (229,878)

As of September 30,
2021 2020
Working capital $ 487,090 $ 371,410
Current ratio 3.2:1 2.8:1
Liabilities to equity ratio 1.0:1 0.8:1
Net debt ratio (1)
2.8:1 1.7:1


	Three Months Ended March 31,
	2022		2021
Cash flow provided by operating activities	$	120,145	$	69,174
Cash flow provided by investing activities	$	183	$	17,258
Cash flow used in financing activities	$	(127,895)	$	(96,727)


		As of March 31,
		2022			2021
Working capital		$	651,802		$	345,644
Current ratio	2.7:1			2.6:1

~~(1)~~
~~Adjusted EBITDA, a component of the net debt ratio, is a non-GAAP financial measure. See “Non-GAAP Financial Information” for a calculation of the net debt ratio.~~

Cash Flow Provided by Operating Activities

Net cash provided by operating activities ~~decreased $39.5~~increased $51.0 million, or ~~22%~~74%, from ~~$177.4~~$69.2 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 to ~~$137.9~~$120.1 million for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022, due to net changes in certain non-cash adjustments to reconcile net income to operating cash flow and net changes in other operating assets and liabilities (as detailed in the consolidated statements of cash flows), partially offset by ~~an increase~~a decrease in net income of ~~$21.7~~$5.7 million.

Cash Flow Provided by Investing Activities

Net cash ~~used in investing activities increased $277.7 million, or 316%, from net cash~~ provided by investing activities ~~of $87.8~~decreased $17.1 million, or 99%, from $17.3 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 to ~~net cash used in investing activities of $189.9~~$0.2 million for the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022. Cash flows from investing activities ~~include funding of pawn store~~are utilized primarily to fund acquisitions, purchases of furniture, fixtures, equipment and improvements, which includes capital expenditures for improvements to existing stores and for new pawn store openings and other corporate assets, and discretionary purchases of store real property. In addition, cash flows related to the funding of new pawn loans net of cash repayments and recovery of principal through the sale of inventories acquired from forfeiture of pawn collateral and finance receivables are included in investing activities. The Company paid ~~$49.4 million in cash related to current and prior-year store acquisitions, $31.6~~$7.0 million for furniture, fixtures, equipment and improvements and ~~$38.3~~$10.2 million for discretionary pawn store real property purchases during the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 compared to ~~$9.3 million, $27.9~~$9.5 million and ~~$20.9~~$14.4 million in the prior-year period, respectively. The Company ~~funded a net increase~~paid $1.2 million in cash related to pawn ~~loans of $70.6 million~~store acquisitions during the ~~nine~~three months ended ~~September 30, 2021, whereas the~~March 31, 2021. The Company received funds from a net decrease in pawn loans of ~~$145.9~~$17.4 million during the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2022 and $42.4 million during the three months ended March 31, 2021, and the Company received funds from a net decrease in finance receivables of $0.1 million during the three months ended March 31, 2022.

Cash Flow Used in Financing Activities

Net cash ~~provided by financing activities increased $266.6 million, or 116%, from net cash~~ used in financing activities ~~of $229.9~~increased $31.2 million, or 32%, from $96.7 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 to ~~net cash provided by financing activities of $36.7~~$127.9 million for the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022. Net ~~borrowings~~payments on the credit facilities were ~~$123.0~~$41.0 million during the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 compared to net payments of ~~$298.5~~$79.0 million during the ~~nine~~three months ended September 30, 2020. During the nine months ended September 30, 2020, the Company received $500.0 million in proceeds from the private offering of the 4.625% senior unsecured notes due on September 1, 2028 (the “Notes”) and paid $5.3 million in debt issuance costs. Using part of the proceeds from the Notes, the Company redeemed the $300.0 million aggregate principal amount of the Company’s 5.375% senior notes due 2024 (the “2024 Notes”) and paid redemption premiums over the face value of the 2024 Notes and other redemption costs of $8.8 million during the nine months ended September 30, 2020.March 31, 2021. The Company funded ~~$49.6~~$72.2 million ~~worth of~~for share repurchases and paid dividends of ~~$35.4~~$14.5 million during the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, compared to funding ~~$80.3~~$5.0 million ~~worth~~ of share repurchases and dividends paid of ~~$33.6~~$11.1 million during the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021. In addition, the Company paid ~~$1.7 million in~~ withholding taxes on net share settlements of restricted stock awards during the ~~nine~~three months ended ~~September 30,~~March 31, 2021 ~~compared to $3.3 million during the nine months ended September 30, 2020.~~


~~Table of Contents~~

~~The continued developments and fluidity~~ of the COVID-19 pandemic make it difficult to predict the impact of COVID-19 on the Company’s liquidity and presents a material uncertainty which could adversely affect the Company’s results of operations, financial condition and cash flows in the future. Other factors such as changes in general customer traffic and demand, loan balances, loan-to-value ratios, collection of pawn fees, merchandise sales, inventory levels, seasonality, operating expenses, administrative expenses, merger and acquisition activities and related expenses, tax rates, gold prices, foreign currency exchange rates and the pace of new store expansion and acquisitions, affect the Company’s liquidity. Regulatory developments affecting the Company’s operations may also impact profitability and liquidity. See “Regulatory Developments.” Additionally, a prolonged reduction in earnings and EBITDA could limit the Company’s future ability to fully borrow under its credit facilities under current leverage covenants.$1.7 million.

REGULATORY DEVELOPMENTS

The ~~Company remains~~Company’s pawn, LTO and retail finance businesses are subject to significant regulation ~~of its pawn and general business operations~~ in all of the jurisdictions in which it operates. Existing regulations and regulatory developments are further and more completely described under “Governmental Regulation” in Part I, Item 1 of the Company’s ~~2020~~2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February ~~1, 2021.~~28, 2022. There have been no material changes in regulatory developments directly affecting the Company since December 31, ~~2020.~~2021.

On March 23, 2021, the governor of Illinois signed into law the Predatory Loan Prevention Act (“PLPA”) that caps annual effective interest rates at 36% on most consumer loans, including payday and car title loans. The Company does not believe the PLPA applies to collateralized pawn loans, and on May 19, 2021, along with the Illinois Pawnbrokers Association and other Illinois pawn industry plaintiffs, filed a complaint for declaratory judgment and injunctive relief in Illinois Circuit Court to prevent enforcement of the PLPA against pawn transactions primarily on the grounds that the PLPA does not apply to pawn transactions (the “Petition”). On September 7, 2021, the court granted the Petition and ordered a preliminary injunction. The Illinois consumer finance regulator did not appeal the court’s decision within the permitted timeframe, and therefore the injunction against the PLPA’s application to pawn transactions will remain in effect until any further action on the Petition.


Table of Contents

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, adjusted retail POS payment solutions segment metrics and constant currency results as factors in the measurement and evaluation of the Company’s operating performance and period-over-period growth. The Company derives these financial calculations on the basis of methodologies other than GAAP, primarily by excluding from a comparable GAAP measure certain items the Company does not consider to be representative of its actual operating performance. These financial calculations are “non-GAAP financial measures” as defined under the SEC rules. The Company uses these non-GAAP financial measures in operating its business because management believes they are less susceptible to variances in actual operating performance that can result from the excluded items, other infrequent charges and currency fluctuations. The Company presents these financial measures to investors because management believes they are useful to investors in evaluating the primary factors that drive the Company’s core operating performance and provide greater transparency into the Company’s results of operations. However, items that are excluded and other adjustments and assumptions that are made in calculating these non-GAAP financial measures are significant components in understanding and assessing the Company’s financial performance. These non-GAAP financial measures should be evaluated in conjunction with, and are not a substitute for, the Company’s GAAP financial measures. Further, because these non-GAAP financial measures are not determined in accordance with GAAP and are thus susceptible to varying calculations, the non-GAAP financial measures, as presented, may not be comparable to other ~~similarly titled~~similarly-titled measures of other companies.

While acquisitions are an important part of the Company’s overall strategy, the Company has adjusted the applicable financial calculations to exclude merger and acquisition expenses, including the Company’s transaction expenses incurred in connection with its acquisition of AFF, and the impacts of purchase accounting with respect to the AFF acquisition in order to allow more accurate comparisons of the financial results to prior periods. In addition, the Company does not consider these merger and acquisition expenses to be related to the organic operations of the acquired businesses or its continuing operations, and such expenses are generally not relevant to assessing or estimating the long-term performance of the acquired businesses. Merger and acquisition expenses include incremental costs directly associated with merger and acquisition activities, including professional fees, legal expenses, severance, retention and other employee-related costs, contract breakage costs and costs related to the consolidation of technology systems and corporate facilities, among others.


~~Table of Contents~~

The Company has certain leases in Mexico which are denominated in U.S. dollars. The lease liability of these U.S. dollar denominated leases, which is considered a monetary liability, is remeasured into Mexican pesos using current period exchange rates, resulting in the recognition of foreign currency exchange gains or losses. The Company has adjusted the applicable financial measures to exclude these remeasurement gains or losses because they are non-cash, non-operating items that could create volatility in the Company’s consolidated results of operations due to the magnitude of the end of period lease liability being remeasured, and to improve comparability of current periods presented with prior periods.

In conjunction with the Cash America merger in 2016, the Company recorded certain lease intangibles related to ~~above~~above- or ~~below market~~below-market lease liabilities of Cash America which are included in the operating lease right of use asset on the consolidated balance sheets. As the Company continues to opportunistically purchase real estate from landlords at certain Cash America stores, the associated lease intangible, if any, is ~~written-off~~written off and gain or loss is recognized. The Company has adjusted the applicable financial measures to exclude these gains or losses given the variability in size and timing of these transactions and because they are non-cash, non-operating gains or losses. The Company believes this improves comparability of operating results for current periods presented with prior periods.

3536


Table of Contents

Adjusted Net Income and Adjusted Diluted Earnings Per Share

Management believes the presentation of adjusted net income and adjusted diluted earnings per share provides investors with greater transparency and provides a more complete understanding of the Company’s financial performance and prospects for the future by excluding items that management believes are non-operating in nature and not representative of the Company’s core operating ~~performance of its continuing operations.~~performance. In addition, management believes the adjustments shown below are useful to investors in order to allow them to compare the Company’s financial results for the current periods presented with the prior periods presented.

The following table provides a reconciliation between net income and diluted earnings per share calculated in accordance with GAAP to adjusted net income and adjusted diluted earnings per share, which are shown net of tax (in thousands, except per share amounts):

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
In Thousands Per Share In Thousands Per Share In Thousands Per Share In Thousands Per Share
Net income and diluted earnings per share, as reported $ 33,396 $ 0.82 $ 15,062 $ 0.36 $ 95,538 $ 2.34 $ 73,853 $ 1.77
Adjustments, net of tax:
Merger and acquisition expenses 8 — 5 — 950 0.02 151 —
Non-cash foreign currency loss (gain) loss related to lease liability 359 0.01 (308) (0.01) 256 0.01 2,453 0.06
Non-cash write-off of certain Cash America merger related lease intangibles 278 0.01 644 0.02 1,263 0.03 3,579 0.09
Loss on extinguishment of debt — — 9,037 0.22 — — 9,037 0.22
Non-cash impairment of certain other assets (1)
— — — — — — 1,463 0.03
Consumer lending wind-down costs and asset impairments — — 13 — — — 84 —
Adjusted net income and diluted earnings per share $ 34,041 $ 0.84 $ 24,453 $ 0.59 $ 98,007 $ 2.40 $ 90,620 $ 2.17


	Three Months Ended March 31,
	2022				2021
	In Thousands		Per Share		In Thousands		Per Share
Net income and diluted earnings per share, as reported	$	28,005	$	0.58	$	33,715	$	0.82
Adjustments, net of tax:




Merger and acquisition expenses	511		0.01		116		—
Non-cash foreign currency (gain) loss related to lease liability	(484)		(0.01)		421		0.01
AFF purchase accounting adjustments, net (1)	28,703		0.60		—		—
Impairments and dispositions of certain other assets	136		—		676		0.02



Adjusted net income and diluted earnings per share	$	56,871	$	1.18	$	34,928	$	0.85

(1)~~Impairment~~Includes $12.5 million related to the amortization of purchase accounting adjustments to record acquired finance receivables at fair value, $10.9 million related to the amortization of acquired intangible assets, $3.3 million related to the amortization of purchase accounting adjustments to record acquired leased merchandise at fair value and a ~~non-operating asset in which~~$2.0 million loss on the ~~Company determined that an other than temporary impairment existed as~~revaluation of ~~March 31, 2020.~~AFF contingent acquisition consideration (all shown net of tax).


~~Table of Contents~~

The following ~~tables provide~~table provides a reconciliation of the gross amounts, the impact of income taxes and the net amounts for the adjustments included in the table above (in thousands):

Three Months Ended September 30,
2021 2020
Pre-tax Tax After-tax Pre-tax Tax After-tax
Merger and acquisition expenses $ 12 $ 4 $ 8 $ 7 $ 2 $ 5
Non-cash foreign currency loss (gain) related to lease liability 513 154 359 (439) (131) (308)
Non-cash write-off of certain Cash America merger related lease intangibles 361 83 278 837 193 644
Loss on extinguishment of debt — — — 11,737 2,700 9,037
Consumer lending wind-down costs and asset impairments — — — 17 4 13
Total adjustments $ 886 $ 241 $ 645 $ 12,159 $ 2,768 $ 9,391
Nine Months Ended September 30,
2021 2020
Pre-tax Tax After-tax Pre-tax Tax After-tax
Merger and acquisition expenses $ 1,264 $ 314 $ 950 $ 209 $ 58 $ 151
Non-cash foreign currency loss related to lease liability 366 110 256 3,505 1,052 2,453
Non-cash write-off of certain Cash America merger related lease intangibles 1,640 377 1,263 4,649 1,070 3,579
Loss on extinguishment of debt — — — 11,737 2,700 9,037
Non-cash impairment of certain other assets — — — 1,900 437 1,463
Consumer lending wind-down costs and asset impairments — — — 109 25 84
Total adjustments $ 3,270 $ 801 $ 2,469 $ 22,109 $ 5,342 $ 16,767


	Three Months Ended March 31,
	2022						2021
	Pre-tax		Tax		After-tax		Pre-tax		Tax		After-tax
Merger and acquisition expenses	$	665	$	154	$	511	$	166	$	50	$	116
Non-cash foreign currency (gain) loss related to lease liability	(692)		(208)		(484)		602		181		421
AFF purchase accounting adjustments, net	37,277		8,574		28,703		—		—		—
Impairment and dispositions of certain other assets	177		41		136		878		202		676


Total adjustments	$	37,427	$	8,561	$	28,866	$	1,646	$	433	$	1,213


Table of Contents

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA

The Company defines EBITDA as net income before income taxes, depreciation and amortization, interest expense and interest income and adjusted EBITDA as EBITDA adjusted for certain items, as listed below, that management considers to be non-operating in nature and not representative of its actual operating performance. The Company believes EBITDA and adjusted EBITDA are commonly used by investors to assess a company’s financial performance and adjusted EBITDA is used as a starting point in the calculation of the consolidated total debt ratio as defined in the Company’s senior unsecured notes. The following table provides a reconciliation of net income to EBITDA and adjusted EBITDA ~~(dollars in~~(in thousands):


										Trailing Twelve													Trailing Twelve
		Three Months Ended				Nine Months Ended				Months Ended							Three Months Ended				Months Ended
		September 30,				September 30,				September 30,							March 31,				March 31,
		2021		2020		2021		2020		2021			2020				2022		2021			2022		2021
Net income	Net income	$	33,396	$	15,062	$	95,538	$	73,853	$	128,264		$	128,007		Net income	$	28,005	$	33,715			$	119,199	$	107,376
Income taxes			10,900		2,624		33,834		26,739		44,215			44,103
Provision for income taxes																Provision for income taxes		9,004		12,556				38,041		36,877
Depreciation and amortization	Depreciation and amortization		11,217		10,426		32,731		31,424		43,412			42,270		Depreciation and amortization		25,542		10,612				60,836		42,043
Interest expense	Interest expense		7,961		6,561		22,389		21,953		29,780			30,148		Interest expense		16,221		7,230				41,377		28,156
Interest income	Interest income		(143)		(499)		(420)		(1,209)		(751)			(1,476)		Interest income		(676)		(158)				(1,214)		(1,513)
EBITDA	EBITDA		63,331		34,174		184,072		152,760		244,920			243,052		EBITDA		78,096		63,955				258,239		212,939
Adjustments:	Adjustments:															Adjustments:
Merger and acquisition expenses	Merger and acquisition expenses		12		7		1,264		209		2,371			465		Merger and acquisition expenses		665		166				15,948		1,414
Non-cash foreign currency loss (gain) related to lease liability			513		(439)		366		3,505		(1,890)			2,621
Non-cash write-off of certain Cash America merger related lease intangibles			361		837		1,640		4,649		4,046			4,649
Non-cash foreign currency (gain) loss related to lease liability																Non-cash foreign currency (gain) loss related to lease liability		(692)		602				(650)		(2,533)
AFF purchase accounting adjustments, net (1)																AFF purchase accounting adjustments, net (1)		23,102		—				51,593		—
Impairments and dispositions of certain other assets																Impairments and dispositions of certain other assets		177		878				248		4,412
Loss on extinguishment of debt	Loss on extinguishment of debt		—		11,737		—		11,737		—			11,737		Loss on extinguishment of debt		—		—				—		11,737
Non-cash impairment of certain other assets			—		—		—		1,900		—			1,900

Consumer lending wind-down costs and asset impairments			—		17		—		109		—			268

Adjusted EBITDA	Adjusted EBITDA	$	64,217	$	46,333	$	187,342	$	174,869	$	249,447		$	264,692		Adjusted EBITDA	$	101,348	$	65,601			$	325,378	$	227,969

Net debt ratio calculation:
Total debt (outstanding principal)										$	746,000		$	540,000
Less: cash and cash equivalents											(49,907)			(78,844)
Net debt										$	696,093		$	461,156
Adjusted EBITDA										$	249,447		$	264,692
Net debt ratio (net debt divided by adjusted EBITDA)										2.8		:1	1.7		:1

(1)Excludes $14.2 million and $16.2 million of amortization expense related to identifiable intangible assets as a result of the AFF Acquisition for the three months and trailing twelve months ended March 31, 2022, respectively, which is already included in the add back of depreciation and amortization to calculate EBITDA.


Table of Contents

Free Cash Flow and Adjusted Free Cash Flow

For purposes of its internal liquidity assessments, the Company considers free cash flow and adjusted free cash flow. The Company defines free cash flow as cash flow from operating activities less purchases of furniture, fixtures, equipment and improvements and net fundings/repayments of pawn loan and finance receivables, which are considered to be operating in nature by the Company but are included in cash flow from investing activities. Adjusted free cash flow is defined as free cash flow adjusted for merger and acquisition expenses paid that management considers to be non-operating in nature.

Free cash flow and adjusted free cash flow are commonly used by investors as an additional ~~measure~~measures of cash generated by business operations that may be used to repay scheduled debt maturities and debt service or, following payment of such debt obligations and other non-discretionary items, that may be available to invest in future growth through new business development activities or acquisitions, repurchase stock, pay cash dividends or repay debt obligations prior to their maturities. These metrics can also be used to evaluate the Company’s ability to generate cash flow from business operations and the impact that this cash flow has on the Company’s liquidity. However, free cash flow and adjusted free cash flow have limitations as analytical tools and should not be considered in isolation or as a substitute for cash flow from operating activities or other income statement data prepared in accordance with GAAP. The following table reconciles cash flow from operating activities to free cash flow and adjusted free cash flow (in thousands):


										Trailing Twelve										Trailing Twelve
		Three Months Ended				Nine Months Ended				Months Ended					Three Months Ended				Months Ended
		September 30,				September 30,				September 30,					March 31,				March 31,
		2021		2020		2021		2020		2021		2020			2022		2021			2022		2021
Cash flow from operating activities	Cash flow from operating activities	$	24,101	$	34,067	$	137,850	$	177,366	$	182,748	$	245,138	Cash flow from operating activities	$	120,145	$	69,174		$	274,275	$	214,053
Cash flow from certain investing activities:	Cash flow from certain investing activities:													Cash flow from certain investing activities:
Loan receivables, net (1)		(62,145)		(32,349)		(70,637)		145,930		(109,559)		183,334
Pawn loans, net (1)														Pawn loans, net (1)	17,383		42,394			(98,351)		96,603
Finance receivables, net														Finance receivables, net	61		—			(5,783)		520
Purchases of furniture, fixtures, equipment and improvements	Purchases of furniture, fixtures, equipment and improvements	(10,583)		(7,377)		(31,608)		(27,853)		(41,298)		(39,060)		Purchases of furniture, fixtures, equipment and improvements	(7,028)		(9,491)			(39,559)		(36,453)
Free cash flow	Free cash flow	(48,627)		(5,659)		35,605		295,443		31,891		389,412		Free cash flow	130,561		102,077			130,582		274,723
Merger and acquisition expenses paid, net of tax benefit	Merger and acquisition expenses paid, net of tax benefit	8		5		950		151		1,790		330		Merger and acquisition expenses paid, net of tax benefit	511		116			12,267		1,057
Adjusted free cash flow	Adjusted free cash flow	$	(48,619)	$	(5,654)	$	36,555	$	295,594	$	33,681	$	389,742	Adjusted free cash flow	$	131,072	$	102,193		$	142,849	$	275,780

(1)Includes the funding of new loans net of cash repayments and recovery of principal through the sale of inventories acquired from forfeiture of pawn collateral.

Retail POS Payment Solutions Segment Purchase Accounting Adjustments

Management believes the presentation of certain retail POS payment solutions segment metrics adjusted to exclude the impacts of purchase accounting provides investors with greater transparency and provides a more complete understanding of AFF’s financial performance and prospects for the future by excluding the impacts of purchase accounting, which management believes is non-operating in nature and not representative of AFF’s core operating performance. See the retail POS payment solutions segment tables in “Results of Operations” above for additional reconciliation of certain amounts adjusted to exclude the impacts of purchase accounting to as reported GAAP amounts.

Additionally, the following table provides a reconciliation of consolidated total revenue presented in accordance with GAAP to adjusted total revenue, which excludes the impacts of purchase accounting (in thousands):


	Three Months Ended March 31,
	2022		2021
Total revenue, as reported	$	659,839	$	407,939
Adjustments:
AFF purchase accounting adjustments (1)	16,173		—
Adjusted total revenue	$	676,012	$	407,939


Table of Contents

(1)Adjustment relates to the net amortization of the fair value premium on acquired finance receivables, which is recognized as an adjustment to interest income on an effective yield basis over the lives of the acquired finance receivables. See the retail POS payment solutions segment tables in “Results of Operations” above for additional segment level reconciliations.

Constant Currency Results

The Company’s reporting currency is the U.S. dollar. However, certain performance metrics discussed in this report 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, which are primarily transacted in local currencies.

The Company believes constant currency results provide valuable supplemental information regarding the underlying performance of its business operations in Latin America, consistent with how the Company’s management evaluates such performance and operating results. Constant currency results reported herein are calculated by translating certain balance sheet and income statement items denominated in local currencies using the exchange rate from the prior-year comparable period, as opposed to the current comparable period, in order to exclude the effects of foreign currency rate fluctuations for purposes of evaluating period-over-period comparisons. Business operations in Mexico, Guatemala and Colombia are transacted in Mexican pesos, Guatemalan quetzales and Colombian pesos. The Company also has operations in El Salvador where the reporting and functional currency is the U.S. dollar. See the Latin America operations segment tables in “Results of Operations” above for additional reconciliation of certain constant currency amounts to as reported GAAP amounts.


~~Table of Contents~~

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risks relating to the Company’s operations result primarily from changes in interest rates, gold prices and foreign currency exchange rates and are described in detail in the Company’s ~~2020~~2021 Annual Report on Form 10-K. The impact of current-year fluctuations in foreign currency exchange rates, in particular, are further discussed in Part I, Item 2 herein. The Company does not engage in speculative or leveraged transactions, nor does it hold or issue financial instruments for trading purposes. There have been no material changes to the Company’s exposure to market risks since December 31, ~~2020.~~2021.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company’s management, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934) as of ~~September 30, 2021~~March 31, 2022 (the “Evaluation Date”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the quarter ended ~~September 30, 2021~~March 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company’s management is in the process of documenting and testing AFF’s internal control over financial reporting and expects to incorporate AFF into its annual assessment of internal control over financial reporting for the Company’s year ending December 31, 2022.

Limitations on Effectiveness of Controls and Procedures

The Company’s management, including its Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s disclosure controls and procedures or internal controls will prevent all possible error and fraud. The Company’s disclosure controls and procedures are, however, designed to provide reasonable assurance of achieving their objectives, and the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective at that reasonable assurance level.


Table of Contents

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

~~There have been no material changes~~See Note 8 - Commitments and Contingencies of Notes to Consolidated Financial Statements contained in ~~the status~~Part I, Item 1 of ~~legal proceedings previously reported in the Company’s 2020 Annual Report on Form 10-K.~~this report which is incorporated to this Part II, Item 1 by reference.

ITEM 1A. RISK FACTORS

Important risk factors that could materially affect the Company’s business, financial condition or results of operations in future periods are described in Part I, Item 1A, “Risk Factors” of the Company’s ~~2020~~2021 Annual Report on Form 10-K. These factors are supplemented by those discussed under “Management’s Discussion And Analysis Of Financial Condition And Results Of Operations” and “Regulatory Developments” in Part I, Item 2 of this quarterly report and in “Governmental Regulation” in Part I, Item 1 of the Company’s ~~2020~~2021 Annual Report on Form 10-K. There have been no material changes in the Company’s risk factors from those in Part I, Item 1A, “Risk Factors” of the Company’s ~~2020~~2021 Annual Report on Form 10-K.


~~Table of Contents~~

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, the Company repurchased a total of ~~688,000~~1,048,000 shares of common stock at an aggregate cost of ~~$49.6~~$72.2 million and an average cost per share of ~~$72.10.~~$68.87, and during the three months ended March 31, 2021, repurchased 84,000 shares of common stock at an aggregate cost of $5.0 million and an average cost per share of $59.06. The Company intends to continue repurchases under its active share repurchase program, including through open market transactions under trading plans in accordance with Rule 10b5-1 and Rule 10b-18 under the Exchange Act of 1934, as amended, subject to a variety of factors, including, but not limited to, the level of cash balances, liquidity needs, credit availability, debt covenant restrictions, general business and economic conditions, regulatory requirements, the market price of the Company’s stock, dividend policy and the availability of alternative investment ~~opportunities, including acquisitions, and the impact of COVID-19.~~opportunities.

The following table provides the information with respect to purchases made by the Company of shares of its common stock during each month a share repurchase program was in effect during the three months ended ~~September 30, 2021~~March 31, 2022 (dollars in thousands, except per share amounts):

Total
Number
Of Shares
Purchased Average
Price
Paid
Per Share Total Number Of
Shares Purchased
As Part Of Publicly
Announced Plans Approximate Dollar Value Of Shares That May Yet Be Purchased Under The Plans
July 1 through July 31, 2021 152,000 $ 76.43 152,000 $ 72,217
August 1 through August 31, 2021 — — — 72,217
September 1 through September 30, 2021 — — — 72,217
Total 152,000 76.43 152,000


	Total Number Of Shares Purchased	Average Price Paid Per Share		Total Number Of Shares Purchased As Part Of Publicly Announced Plans	Approximate Dollar Value Of Shares That May Yet Be Purchased Under The Plans
January 1 through January 31, 2022	—	$	—	—	$	72,217
February 1 through February 28, 2022	250,000	74.18		250,000	53,624
March 1 through March 31, 2022	798,000	67.21		798,000	—
Total	1,048,000	68.87		1,048,000

The following table provides information regarding purchases made by the Company of shares of its common stock under each share repurchase program in effect during the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 (dollars in thousands):


Plan Authorization Date	Plan Authorization Date	Plan Completion Date	Dollar Amount Authorized		Shares Purchased in 2021	Dollar Amount Purchased in 2021		Remaining Dollar Amount Authorized For Future Purchases		Plan Authorization Date	Plan Completion Date	Dollar Amount Authorized		Shares Purchased in 2022	Dollar Amount Purchased in 2022		Remaining Dollar Amount Authorized For Future Purchases
January 28, 2020		May 4, 2021	$	100,000	318,000	$	21,827	$	—
January 27, 2021	January 27, 2021	Currently active	100,000		370,000	27,783		72,217		January 27, 2021	March 28, 2022	$	100,000	1,048,000	$	72,217	$	—
Total					688,000	$	49,610	$	72,217

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable.


Table of Contents

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

None.


~~Table of Contents~~

ITEM 6. EXHIBITS

Incorporated by Reference
Exhibit No. Exhibit Description Form File No. Exhibit Filing Date Filed Herewith
3.1
Amended and Restated Certificate of Incorporation
DEF 14A 0-19133 B 04/29/2004
3.2
Amendment to Amended and Restated Certificate of Incorporation
8-K 001-10960 3.1 09/02/2016
3.3
Amended and Restated Bylaws
10-Q 001-10960 3.3 04/26/2021
31.1
Certification Pursuant to Exchange Act Section 13(a)-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act provided by Rick L. Wessel, Chief Executive Officer
X
31.2
Certification Pursuant to Exchange Act Section 13(a)-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act provided by R. Douglas Orr, Chief Financial Officer
X
32.1
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 provided by Rick L. Wessel, Chief Executive Officer
X
32.2
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 provided by R. Douglas Orr, Chief Financial Officer
X
101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document X
101.SCH Inline XBRL Taxonomy Extension Schema Document X
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X
104 Cover Page Interactive Data File (embedded within the Inline XBRL document contained in Exhibit 101) X

Incorporated by Reference

Exhibit No.

Exhibit Description

Form

File No.

Exhibit

Filing Date

Filed Herewith

3.1

Amended and Restated Certificate of Incorporation

DEF 14A

0-19133

04/29/2004

3.2

Amendment to Amended and Restated Certificate of Incorporation

8-K

001-10960

3.1

09/02/2016

3.3

Amended and Restated Certificate of Incorporation of FirstCash Holdings, Inc., dated December 16, 2021

8-K12B

001-10960

3.1

12/16/2021

3.4

Amended and Restated Bylaws of FirstCash Holdings, Inc., dated December 16, 2021

8-K12B

001-10960

3.2

12/16/2021

31.1

Certification Pursuant to Exchange Act Section 13(a)-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act, provided by Rick L. Wessel, Chief Executive Officer

31.2

Certification Pursuant to Exchange Act Section 13(a)-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act, provided by R. Douglas Orr, Chief Financial Officer

32.1

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, provided by Rick L. Wessel, Chief Executive Officer

32.2

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, provided by R. Douglas Orr, Chief Financial Officer

101.INS

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (embedded within the Inline XBRL document contained in Exhibit 101)


Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Dated: ~~October 25, 2021~~May 2, 2022			FIRSTCASH HOLDINGS, INC.
			(Registrant)

			/s/ RICK L. WESSEL
			Rick L. Wessel
			Chief Executive Officer
			(On behalf of the Registrant)

			/s/ R. DOUGLAS ORR
			R. Douglas Orr
			Executive Vice President and Chief Financial Officer
			(As Principal Financial and Accounting Officer)


PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Income	2
	Consolidated Statements of Comprehensive Income	3
	Consolidated Statements of Changes in Stockholders’ Equity	4
	Consolidated Statements of Cash Flows	6
	Notes to Consolidated Financial Statements	78
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	1821
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	40

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	4041
Item 1A.	Risk Factors	4041
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3.	Defaults Upon Senior Securities	41
Item 4.	Mine Safety Disclosures	4142
Item 5.	Other Information	4142
Item 6.	Exhibits	42

SIGNATURES		43


	Three Months Ended September 30, 2021
	U.S. Operations		Latin America Operations		Corporate		Consolidated
Revenue:
Retail merchandise sales	$	167,257	$	101,469	$	—	$	268,726
Pawn loan fees	76,674		44,691		—		121,365
Wholesale scrap jewelry sales	4,168		5,415		—		9,583

Total revenue	248,099		151,575		—		399,674

Cost of revenue:
Cost of retail merchandise sold	93,326		64,731		—		158,057
Cost of wholesale scrap jewelry sold	3,778		4,750		—		8,528

Total cost of revenue	97,104		69,481		—		166,585

Net revenue	150,995		82,094		—		233,089

Expenses and other income:
Store operating expenses	93,247		45,372		—		138,619
Administrative expenses	—		—		30,208		30,208
Depreciation and amortization	5,662		4,591		964		11,217
Interest expense	—		—		7,961		7,961
Interest income	—		—		(143)		(143)
Merger and acquisition expenses	—		—		12		12
Loss on foreign exchange	—		—		558		558
Write-off of certain Cash America merger related lease intangibles	—		—		361		361


Total expenses and other income	98,909		49,963		39,921		188,793

Income (loss) before income taxes	$	52,086	$	32,131	$	(39,921)	$	44,296


	Three Months Ended September 30, 2020
	U.S. Operations		Latin America Operations		Corporate		Consolidated
Revenue:
Retail merchandise sales	$	151,618	$	83,364	$	—	$	234,982
Pawn loan fees	66,180		33,390		—		99,570
Wholesale scrap jewelry sales	12,692		12,589		—		25,281
Consumer loan and credit services fees	57		—		—		57
Total revenue	230,547		129,343		—		359,890

Cost of revenue:
Cost of retail merchandise sold	84,673		52,557		—		137,230
Cost of wholesale scrap jewelry sold	10,316		9,502		—		19,818
Consumer loan and credit services loss provision	104		—		—		104
Total cost of revenue	95,093		62,059		—		157,152

Net revenue	135,454		67,284		—		202,738

Expenses and other income:
Store operating expenses	92,678		39,383		—		132,061
Administrative expenses	—		—		24,354		24,354
Depreciation and amortization	5,390		3,903		1,133		10,426
Interest expense	—		—		6,561		6,561
Interest income	—		—		(499)		(499)
Merger and acquisition expenses	—		—		7		7
Gain on foreign exchange	—		—		(432)		(432)
Write-off of certain Cash America merger related lease intangibles	—		—		837		837
Loss on extinguishment of debt	—		—		11,737		11,737

Total expenses and other income	98,068		43,286		43,698		185,052

Income (loss) before income taxes	$	37,386	$	23,998	$	(43,698)	$	17,686


													Constant Currency Basis
													Nine Months
													Ended
		Nine Months Ended											September 30,			Increase /
		September 30,							Increase /				2021			(Decrease)
		2021				2020			(Decrease)				(Non-GAAP)			(Non-GAAP)
Latin America Operations Segment
Revenue:
Retail merchandise sales		$	275,867			$	262,483			5	%		$	256,116			(2)	%
Pawn loan fees		126,783				107,738				18	%		117,662				9	%
Wholesale scrap jewelry sales		23,843				36,710				(35)	%		23,843				(35)	%

Total revenue		426,493				406,931				5	%		397,621				(2)	%

Cost of revenue:
Cost of retail merchandise sold		173,179				167,573				3	%		160,821				(4)	%
Cost of wholesale scrap jewelry sold		20,979				28,268				(26)	%		19,449				(31)	%

Total cost of revenue		194,158				195,841				(1)	%		180,270				(8)	%

Net revenue		232,335				211,090				10	%		217,351				3	%

Segment expenses:
Store operating expenses		133,003				122,926				8	%		124,080				1	%
Depreciation and amortization		13,388				11,568				16	%		12,544				8	%
Total segment expenses		146,391				134,494				9	%		136,624				2	%

Segment pre-tax operating income		$	85,944			$	76,596			12	%		$	80,727			5	%

Operating metrics:
Retail merchandise sales margin	37			%	36			%				37			%

Net revenue margin	54			%	52			%				55			%
Segment pre-tax operating margin	20			%	19			%				20			%


	Nine Months Ended September 30,
	2021		2020
Cash flow provided by operating activities	$	137,850	$	177,366
Cash flow (used in) provided by investing activities	$	(189,935)	$	87,791
Cash flow provided by (used in) financing activities	$	36,704	$	(229,878)


	Three Months Ended September 30,								Nine Months Ended September 30,
	2021				2020				2021				2020
	In Thousands		Per Share		In Thousands		Per Share		In Thousands		Per Share		In Thousands		Per Share
Net income and diluted earnings per share, as reported	$	33,396	$	0.82	$	15,062	$	0.36	$	95,538	$	2.34	$	73,853	$	1.77
Adjustments, net of tax:




Merger and acquisition expenses	8		—		5		—		950		0.02		151		—
Non-cash foreign currency loss (gain) loss related to lease liability	359		0.01		(308)		(0.01)		256		0.01		2,453		0.06
Non-cash write-off of certain Cash America merger related lease intangibles	278		0.01		644		0.02		1,263		0.03		3,579		0.09
Loss on extinguishment of debt	—		—		9,037		0.22		—		—		9,037		0.22
Non-cash impairment of certain other assets (1)	—		—		—		—		—		—		1,463		0.03

Consumer lending wind-down costs and asset impairments	—		—		13		—		—		—		84		—

Adjusted net income and diluted earnings per share	$	34,041	$	0.84	$	24,453	$	0.59	$	98,007	$	2.40	$	90,620	$	2.17