FirstCash, Inc (FCFS) has reported an 89.04 percent jump in profit for the quarter ended Dec. 31, 2016. The company has earned $36.69 million, or $0.76 a share in the quarter, compared with $19.41 million, or $0.69 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $37.45 million, or $0.77 a share compared with $20.60 million or $0.73 a share, a year ago.
Revenue during the quarter surged 141.37 percent to $462.04 million from $191.42 million in the previous year period. Gross margin for the quarter expanded 123 basis points over the previous year period to 55 percent. Total expenses were 86.82 percent of quarterly revenues, up from 83.49 percent for the same period last year. That has resulted in a contraction of 333 basis points in operating margin to 13.18 percent.
Operating income for the quarter was $60.91 million, compared with $31.61 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $78.40 million compared with $37.60 million in the prior year period. At the same time, adjusted EBITDA margin contracted 267 basis points in the quarter to 16.97 percent from 19.64 percent in the last year period.
“Our adjusted EPS guidance for 2017 is tempered by macro factors primarily related to foreign currency translation, conservatism in our outlook for the transitioning and consolidating of our merged U.S. operations and a higher tax rate. Despite these headwinds, we still expect adjusted net income growth in 2017 to be in the range of 39% to 47% compared to 2016. We remain optimistic and committed to our pawn-focused long-term strategies in both the U.S. and Latin America and anticipate adding approximately 85 stores this year. Through continued additions of new stores and accretive acquisitions, we believe that we are building a diversified multi-country earnings platform. Coupled with our capacity to repurchase stock and pay cash dividends, we are confident in our prospects for delivering long-term shareholder value,” concluded Rick Wessel, FirstCash chief executive officer.
For the financial year 2017, First Cash Financial Services expects adjusted net income to be in the range of $118 million to $125 million. For fiscal year 2017, the company expects diluted earnings per share to be in the range of $2.45 to $2.60 on adjusted basis.
Working capital increases sharply
FirstCash, Inc has recorded an increase in the working capital over the last year. It stood at $748.51 million as at Dec. 31, 2016, up 168.03 percent or $469.25 million from $279.26 million on Dec. 31, 2015. Current ratio was at 6.21 as on Dec. 31, 2016, down from 7.05 on Dec. 31, 2015.
Days sales outstanding went up to 44 days for the quarter compared with 33 days for the same period last year.
Days inventory outstanding has increased to 73 days for the quarter compared with 49 days for the previous year period.
Debt increases substantially
FirstCash, Inc has witnessed an increase in total debt over the last one year. It stood at $456.54 million as on Dec. 31, 2016, up 79.83 percent or $202.67 million from $253.87 million on Dec. 31, 2015. First Cash Financial Services has witnessed an increase in long-term debt over the last one year. It stood at $456.54 million as on Dec. 31, 2016, up 79.83 percent or $202.67 million from $253.87 million on Dec. 31, 2015. Total debt was 21.28 percent of total assets as on Dec. 31, 2016, compared with 33.54 percent on Dec. 31, 2015. Debt to equity ratio was at 0.31 as on Dec. 31, 2016, down from 0.59 as on Dec. 31, 2015. Interest coverage ratio improved to 9.43 for the quarter from 7.18 for the same period last year.
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