Profile: First Cash Financial Services Inc (FCFS.OQ)
29 Apr 2016
First Cash Financial Services, Inc., incorporated on April 24, 1991, is an operator of retail-based pawn stores in the United States and Latin America. The Company's primary business is the operation of full-service pawn stores, which make small pawn loans secured by personal property, such as consumer electronics, jewelry, power tools, household appliances, sporting goods and musical instruments. In addition, some of the Company's pawn stores offer small unsecured consumer loans or credit services products. The Company also operates consumer finance stores in Texas and Mexico. These stores primarily provide consumer financial services products including credit services and small unsecured consumer loans. The Company manages its pawn and consumer loan operations under three operating segments: U.S. pawn operations, U.S. consumer loan operations and Latin America pawn and consumer loan operations. The Company operates approximately 1,075 stores in the United States, Mexico and Guatemala.
Pawn Merchandise Sales
The Company's pawn merchandise sales are primarily retail sales to the general public from its pawn stores. The items the Company sells primarily consist of pre-owned consumer electronics, jewelry, power tools, household appliances, sporting goods and musical instruments. The Company also melts down certain quantities of scrap jewelry and sells the gold, silver and diamonds in commodity markets. The Company acquires pawn merchandise inventory primarily through forfeited pawn collateral and, to a lesser extent, through purchases of used goods directly from the general public. Merchandise acquired by the Company through forfeited pawn collateral is carried in inventory at the amount of the related pawn loan, exclusive of any accrued service fees. The Company also acquires limited quantities of new or refurbished general merchandise inventories directly from wholesalers and manufacturers. The Company does not provide financing to customers for the purchase of its merchandise, but does permit its customers to purchase merchandise on an interest-free layaway plan.
Pawn Lending Activities
The Company's pawn stores make small secured loans to its customers in order to help them meet short-term cash needs. All pawn loans are collateralized by personal property, such as consumer electronics, jewelry, power tools, household appliances, sporting goods and musical instruments. The Company does not investigate the creditworthiness of the borrower, primarily relying instead on the marketability and sales value of pledged goods as a basis for its credit decision. Pledged property is held through the term of the loan, unless the pawn is paid earlier or renewed. The typical pawn loan term is generally 30 days plus an additional grace period of 15 to 90 days depending on geographical markets and local regulations.
Credit Services and Consumer Loan Activities
The Company offers a fee-based credit services organization program (CSO Program) to assist consumers in Texas markets in obtaining extensions of credit. The Company's consumer loan and pawn stores in Texas offer the CSO Program and credit services are also offered through an Internet platform for Texas residents. Under the CSO Program, the Company assists customers in applying for a short-term extension of credit from an independent, non-bank, consumer lending company (the Independent Lender) and issues the Independent Lender a letter of credit to guarantee the repayment of the extension of credit. The Company also offers an automobile title lending product under the CSO Program. The Company also offers small, unsecured consumer loans to customers in various states within the United States and in Mexico.
First Cash Financial Services Inc
690 E Lamar Blvd Ste 400
ARLINGTON TX 76011-3864