Acquisitions

Consistent with the Company’s strategy to continue its expansion of pawn stores in selected markets, in September 2013, the Company acquired from Baja Unlimited, LLC and its subsidiaries, the operating entity owning the pawn loans, inventory, layaways and other operating assets and liabilities of eight large format pawn stores located in the Cabo/La Paz markets in Baja California Sur, Mexico. The purchase price for the all-cash transaction was $12,350,000, net of cash acquired, plus a nominal residual payment to be determined based on certain post-closing adjustments. The acquisition has been accounted for using the purchase method of accounting for both financial reporting and tax purposes. Accordingly, the purchase price was allocated to assets and liabilities acquired based upon their estimated fair market values at the date of acquisition, which were comparable for financial and tax purposes. The excess purchase price over the estimated fair market value of the net assets acquired has been recorded as goodwill of approximately $9,955,000, which is not deductible for foreign income tax purposes. The goodwill arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of Baja Unlimited, LLC. The estimated fair values of the assets acquired are preliminary, as the Company is gathering information to finalize the valuation of these assets by year end. The assets, liabilities and results of operations of the locations are included in the Company’s consolidated results as of the acquisition date, September 30, 2013.

Consistent with the Company’s strategy to continue its expansion of pawn stores in selected markets, in June 2013, the Company acquired from O'Pak Credit LP, Pro Pawn LP and Milar Credit LP (collectively "Valu + Pawn") the pawn loans, inventory, layaways and other operating assets and liabilities of 19 large format pawn stores located in Texas. The purchase price for the transaction was $69,967,000, net of cash acquired, and was composed of $68,967,000 in cash paid at closing and an additional $1,000,000 payable to the sellers in June 2014. The acquisition has been accounted for using the purchase method of accounting for both financial reporting and tax purposes. Accordingly, the purchase price was allocated to assets and liabilities acquired based upon their estimated fair market values at the date of acquisition, which were comparable for financial and tax purposes. The excess purchase price over the estimated fair market value of the net assets acquired has been recorded as goodwill of approximately $52,334,000, which is deductible for U.S. income tax purposes. The goodwill arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of Valu + Pawn. For tax purposes, the goodwill and intangible assets are being amortized over the statutory period of 15 years. The estimated fair values of the assets acquired are preliminary, as the Company is gathering information to finalize the valuation of these assets by year end. The assets, liabilities and results of operations of the locations are included in the Company’s consolidated results as of the acquisition date, June 25, 2013.

Additionally, during the nine months ended September 30, 2013, three pawn stores located in three U.S. states were acquired in three separate acquisitions for an aggregate purchase price of $2,750,000, net of cash acquired, and was composed of $2,677,000 in cash and payables to the sellers of $73,000. These acquisitions resulted in additional goodwill of approximately $1,685,000.

The preliminary allocations of the purchase prices for the Company's acquisitions during the nine months ended September 30, 2013 (the "2013 acquisitions") are as follows (in thousands):



	Valu + Pawn			Baja Unlimited, LLC			Other			Total
Pawn loans	$	9,361		$	824		$	353		$	10,538
Inventory	5,024			583			532			6,139
Other current assets	1,071			34			43			1,148
Property and equipment	1,002			939			55			1,996
Goodwill	52,334			9,955			1,685			63,974
Intangible assets	2,190			300			130			2,620
Other non-current assets	73			6			4			83
Current liabilities	(1,088		)	(291		)	(52		)	(1,431		)
Purchase price	$	69,967		$	12,350		$	2,750		$	85,067

During the nine months ended September 30, 2013, revenue from the 2013 acquisitions since the acquisition dates was $12,966,000. The combined transaction and non-recurring integration costs of the 2013 acquisitions recorded during the nine months ended September 30, 2013, were approximately $1,615,000. During the nine months ended September 30, 2013, the net earnings from the 2013 acquisitions since the acquisition dates (including acquisition and integration costs) were $774,000.

The following unaudited pro forma financial information reflects the consolidated results of operations of the Company as if all the 2013 acquisitions had occurred on January 1, 2012. The unaudited pro forma financial information has been prepared for informational purposes only and does not purport to be indicative of what would have resulted had the acquisitions occurred on the date indicated or what may result in the future (in thousands, except per share data):



	Nine Months Ended				Nine Months Ended
	September 30, 2013				September 30, 2012
	As Reported		Pro Forma		As Reported		Pro Forma
Total revenue from continuing operations	$	478,161	$	506,920	$	416,706	$	456,909
Income from continuing operations	59,068		62,506		53,421		58,227
Net income	59,068		62,506		52,750		57,556
Income from continuing operations per share:
Basic	$	2.03	$	2.15	$	1.85	$	2.01
Diluted	1.99		2.11		1.80		1.96
Net income per share:
Basic	$	2.03	$	2.15	$	1.82	$	1.99
Diluted	1.99		2.11		1.77		1.94