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First Cash purchases 19 Texas pawn locations

First Cash Financial Services Inc. purchased 19 pawn stores across Texas in a $70 million all-cash asset transaction, the Arlington-based pawn shop and loan company announced June 25. The acquired locations operate primarily under the Valu + Pawn brand and are in company’s existing store base in Fort Worth and Dallas and in the growing Houston market. “Valu + Pawn has developed profitable, high-performing locations with experienced personnel, large pawn receivable balances and significant operating cash flows,” said Rick Wessel, chief executive officer of First Cash, in a news release. “We expect meaningful earnings accretion from the transaction, especially beginning in 2014.” The transaction was funding primarily with the company’s revolving credit facility. The operations and earnings of the Valu + Pawn stores have been consolidated into First Cash effective with the closing of the transaction on June 25. Including the acquired stores, First Cash now operates a total of 866 locations and has increased its store count by 17 percent since the beginning of June a year ago. The company currently operates in 12 U.S. states and 24 states in Mexico. First Cash also issued an earnings forecast for the second quarter. The company projects second-quarter earnings to be in the range of 52 to 55 cents per diluted share. Excluding the non-recurring acquisition expenses of 4 cents per share, the company anticipates second-quarter earnings to be in the range of 56 to 59 cents per share. The expected second-quarter earnings results reflect the volatility in the price of gold and a weak Mexican peso. The company is reducing the mid-point of its fiscal 2013 earnings guidance by 10 percent from the current consensus forecast of $3.12 per share. The updated full-year guidance projects earnings per share to be between $2.75 and $2.90, compared to previous guidance of $3.10 to $3.24. Wessel said that despite lower gold prices, the company expects long-term growth opportunities will continue to remain attractive. “We believe that short-term volatility in gold prices has a limited impact on our core growth strategy, especially in Mexico, where due to our unique large format store model, gold lending makes up less than 15 percent of our collateral base,” Wessel said. The company intends to release second-quarter earnings results on July 17, prior to the opening of the stock market. First Cash Financial Services trades on the Nasdaq under the symbol “FCFS.”  

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Robert Francis
Robert is a Fort Worth native and longtime editor of the Fort Worth Business Press. He is a former president of the local Society of Professional Journalists and was a freelancer for a variety of newspapers, weeklies and magazines, including American Way, BrandWeek and InformatonWeek. A graduate of TCU, Robert has held a variety of writing and editing positions at publications such as the Grand Prairie Daily News and InfoWorld. He is also a musician and playwright.

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