Industry News
First Cash Announces Plans to Complete Transition to Credit Services Product in Texas Markets
DATELINE: ARLINGTON, Texas Sept. 19
ARLINGTON, Texas, Sept. 19 /PRNewswire-FirstCall/ -- First Cash Financial Services, Inc. (NASDAQ:FCFS), a leading specialty consumer financial services provider, today announced plans to complete the transition of its short-term credit offerings in its Texas locations from a bank-funded payday advance product to its new credit services product. The credit services product replaces the bank-funded payday advance product provided by County Bank of Rehoboth Beach Delaware, and as a result, the Company intends to terminate its payday advance servicing agreement with County Bank by December 31, 2005.
Beginning in July of this year, the Company's First Cash Credit, Ltd. subsidiary began marketing in Texas a fee-based credit services package, which includes access to a short-term loan funded by an independent consumer finance lender. The Company has currently transferred over 90% of its existing Texas payday advance activity to the credit services product and expects to complete the transition during the fourth quarter of 2005. The Company believes that the credit services product will likely yield higher net transaction fees and margins than it previously realized under the bank-funded model.
Mr. Alan Barron, First Cash's Chief Executive Officer, noted that, "Positive customer acceptance of the credit services product has allowed us to accelerate our transition away from the bank-funded payday advance model. We believe that this is a beneficial outcome for both our customers and the Company."
Texas is the only state in which the Company has provided payday advances through a bank-funded model. First Cash also provides payday advance products in seven other markets, including California, Washington, Oregon, Illinois, District of Columbia, South Carolina and Oklahoma. In each of these jurisdictions, the Company is the direct issuer of its payday or short-term advances, as provided under existing state and/or local regulations. With the planned termination of the payday advance servicing agreement with County Bank, the Company anticipates that it will no longer offer any bank- funded/federally supervised payday advance products.
Forward-Looking Information
This release may contain forward-looking statements about the business, financial condition and prospects of First Cash Financial Services, Inc. Forward-looking statements can be identified by the use of forward-looking terminology such as "believes," "projects," "expects," "may," "estimates," "should," "plans," "intends," "could," or "anticipates," or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy. Forward-looking statements in this release include, without limitation, the Company's plans to terminate its bank-funded payday advance product provided by County Bank of Rehoboth Beach Delaware, its plans to extend its offering of a credit services product in its Texas markets, and its expectations for net transaction revenues and profits from its credit services product in Texas. These statements are made to provide the public with management's assessment of the Company's business. Although the Company believes that the expectations reflected in forward-looking statements are reasonable, there can be no assurances that such expectations will prove to be accurate. Security holders are cautioned that such forward-looking statements involve risks and uncertainties. The forward-looking statements contained in this release speak only as of the date of this statement, and the Company expressly disclaims any obligation or undertaking to release 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. Certain factors may cause results to differ materially from those anticipated by some of the statements made in this release. Such factors are difficult to predict and many are beyond the control of the Company. Recently revised and/or proposed federal and state regulations affecting the payday advance industry, which are described more fully in the Company's Annual Report on Form 10-K for the year ended December 31, 2004, and updated on the Form 10-Q for the quarters ended March 31, 2005 and June 30, 2005, could negatively affect the Company's financial results and growth expectations in certain markets. Other such factors may include changes in regional, national or international economic conditions, changes or increases in competition, the ability to open and integrate new stores, the ability to integrate and operate profitably the credit service product in Texas, changes in legislative and governmental regulations, unforeseen litigation, changes in interest rates, changes in tax rates or policies, changes in gold prices, changes in foreign currency exchange rates, future business decisions, and other uncertainties.
About First Cash
First Cash Financial Services, Inc. and its subsidiaries are engaged in the operation of pawn and consumer credit stores, which lend money on the collateral of pledged personal property, retail previously owned merchandise acquired through loan forfeitures, provide payday advances, and offer other financial services products. The Company currently owns and operates over 309 stores in eleven states and Mexico. First Cash is also an equal partner in Cash & Go, Ltd., a joint venture, which owns and operates 40 check-cashing and financial services kiosks located inside convenience stores.
First Cash was recently ranked for the second consecutive year by Fortune Small Business magazine on the "FSB 100: America's Fastest-Growing Small Public Companies." First Cash's common stock is traded on the Nasdaq Stock Market under the ticker symbol "FCFS," and it is a component Company in the Russell 2000 Index.
For further information, please contact:
Rick Wessel, Vice Chairman & President
Doug Orr, Executive Vice President & Chief Financial Officer
Email: investorrelations@firstcash.com
Website: www.firstcash.com