EX-99.5 9 d206224dex995.htm EX-99.5

Exhibit 99.5

Supplemental Unaudited Pro Forma Condensed Combined Financial Information

For the Periods Indicated Below

Adjusted Net Income and Adjusted Diluted Earnings Per Share

Management believes the presentation of adjusted net income and adjusted diluted earnings per share provides investors with greater transparency and provides a more complete understanding of the Company’s and AFF’s financial performance and prospects for the future by excluding items that management believes are non-operating in nature and not representative of the Company’s and AFF’s core operating performance.

The following tables provide a reconciliation between net income and diluted earnings per share to adjusted net income and adjusted diluted earnings per share, both on a FirstCash standalone basis and on a pro forma combined basis, which are shown net of tax (in thousands, except per share amounts):

|  | Year Ended December 31, 2020 |  |  | Nine Months Ended September 30, 2020 |  |  | Nine Months Ended September 30, 2021 |  |  | Trailing Twelve Months Ended September 30, 2021 |
|  | FirstCash Stand Alone |  |  | Pro Forma Combined |  |  | FirstCash Stand Alone |  |  | Pro Forma Combined |  |  | FirstCash Stand Alone |  |  | Pro Forma Combined |  |  | FirstCash Stand Alone |  |  | Pro Forma Combined |
Net income |  | $ | 106,579 |  |  | $ | 62,583 |  |  | $ | 73,853 |  |  | $ | 39,898 |  |  | $ | 95,538 |  |  | $ | 74,091 |  |  | $ | 128,264 |  |  | $ | 96,776 |
Adjustments, net of tax: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Merger and acquisition expenses |  |  | 991 |  |  |  | 991 |  |  |  | 151 |  |  |  | 151 |  |  |  | 950 |  |  |  | 950 |  |  |  | 1,790 |  |  |  | 1,790 |
Non-cash foreign currency loss (gain) related to lease liability |  |  | 874 |  |  |  | 874 |  |  |  | 2,453 |  |  |  | 2,453 |  |  |  | 256 |  |  |  | 256 |  |  |  | (1,323 | ) |  |  | (1,323 | )
Non-cash write-off of certain Cash America merger related lease intangibles |  |  | 5,432 |  |  |  | 5,432 |  |  |  | 3,579 |  |  |  | 3,579 |  |  |  | 1,263 |  |  |  | 1,263 |  |  |  | 3,116 |  |  |  | 3,116 |
Non-cash impairment of certain other assets |  |  | 1,463 |  |  |  | 1,463 |  |  |  | 1,463 |  |  |  | 1,463 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Loss on extinguishment of debt |  |  | 9,037 |  |  |  | 9,037 |  |  |  | 9,037 |  |  |  | 9,037 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Accrual of pre-merger Cash America income tax liability |  |  | 693 |  |  |  | 693 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 693 |  |  |  | 693 |
Consumer lending wind-down costs and asset impairments |  |  | 84 |  |  |  | 84 |  |  |  | 84 |  |  |  | 84 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Amortization of premium resulting from the fair market value adjustment to finance receivables (1) |  |  | — |  |  |  | 23,545 |  |  |  | — |  |  |  | 17,658 |  |  |  | — |  |  |  | 5,886 |  |  |  | — |  |  |  | 11,773 |
Amortization of acquisition related intangible assets (2) |  |  | — |  |  |  | 49,798 |  |  |  | — |  |  |  | 37,349 |  |  |  | — |  |  |  | 51,459 |  |  |  | — |  |  |  | 63,908 |
Adjusted net income |  | $ | 125,153 |  |  | $ | 154,500 |  |  | $ | 90,620 |  |  | $ | 111,672 |  |  | $ | 98,007 |  |  | $ | 133,905 |  |  | $ | 132,540 |  |  | $ | 176,733 |

|  | Year Ended December 31, 2020 |  |  | Nine Months Ended September 30, 2020 |  |  | Nine Months Ended September 30, 2021 |  |  | Trailing Twelve Months Ended September 30, 2021 |
|  | FirstCash Stand Alone |  |  | Pro Forma Combined |  |  | FirstCash Stand Alone |  |  | Pro Forma Combined |  |  | FirstCash Stand Alone |  |  | Pro Forma Combined |  |  | FirstCash Stand Alone |  |  | Pro Forma Combined |
Diluted earnings per share |  | $ | 2.56 |  |  | $ | 1.26 |  |  | $ | 1.77 |  |  | $ | 0.80 |  |  | $ | 2.34 |  |  | $ | 1.52 |  |  | $ | 3.13 |  |  | $ | 1.98 |
Adjustments, net of tax: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Merger and acquisition expenses |  |  | 0.02 |  |  |  | 0.02 |  |  |  | — |  |  |  | — |  |  |  | 0.02 |  |  |  | 0.02 |  |  |  | 0.04 |  |  |  | 0.04 |
Non-cash foreign currency loss (gain) related to lease liability |  |  | 0.02 |  |  |  | 0.02 |  |  |  | 0.06 |  |  |  | 0.05 |  |  |  | 0.01 |  |  |  | 0.01 |  |  |  | (0.03 | ) |  |  | (0.03 | )
Non-cash write-off of certain Cash America merger related lease intangibles |  |  | 0.13 |  |  |  | 0.11 |  |  |  | 0.09 |  |  |  | 0.07 |  |  |  | 0.03 |  |  |  | 0.03 |  |  |  | 0.07 |  |  |  | 0.06 |
Non-cash impairment of certain other assets |  |  | 0.04 |  |  |  | 0.03 |  |  |  | 0.03 |  |  |  | 0.03 |  |  |  | — |  |  |  | — |  |  |  | 0.01 |  |  |  | — |
Loss on extinguishment of debt |  |  | 0.22 |  |  |  | 0.18 |  |  |  | 0.22 |  |  |  | 0.18 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Accrual of pre-merger Cash America income tax liability |  |  | 0.02 |  |  |  | 0.01 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 0.02 |  |  |  | 0.01 |
Consumer lending wind-down costs and asset impairments |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Amortization of premium resulting from the fair market value adjustment to finance receivables (1) |  |  | — |  |  |  | 0.47 |  |  |  | — |  |  |  | 0.36 |  |  |  | — |  |  |  | 0.12 |  |  |  | — |  |  |  | 0.24 |
Amortization of acquisition related intangible assets (2) |  |  | — |  |  |  | 1.00 |  |  |  |  |  |  |  | 0.75 |  |  |  | — |  |  |  | 1.05 |  |  |  | — |  |  |  | 1.31 |
Adjusted diluted earnings per share |  | $ | 3.01 |  |  | $ | 3.10 |  |  | $ | 2.17 |  |  | $ | 2.24 |  |  | $ | 2.40 |  |  | $ | 2.75 |  |  | $ | 3.24 |  |  | $ | 3.61 |

(1) | See description of this adjustment in footnote 3(p) in the Unaudited Pro Forma Condensed Combined Financial Information included as Exhibit 99.4 to this Current Report.

(2) | See description of this adjustment in footnote 3(t) in the Unaudited Pro Forma Condensed Combined Financial Information included as Exhibit 99.4 to this Current Report.

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA

The Company defines EBITDA as net income before income taxes, depreciation and amortization, interest expense and interest income and adjusted EBITDA as EBITDA adjusted for certain items as listed below that management considers to be non-recurring in nature and not representative of its actual operating performance. The Company believes EBITDA and adjusted EBITDA are commonly used by investors to assess a company’s financial performance, and adjusted EBITDA is used as a starting point in the calculation of the consolidated total debt ratio as defined in the Company’s senior unsecured notes. The following table provides a reconciliation of net income to EBITDA and adjusted EBITDA, both on a FirstCash standalone and on a pro forma combined basis (in thousands):

|  | Year Ended December 31, 2020 |  |  | Nine Months Ended September 30, 2020 |  |  | Nine Months Ended September 30, 2021 |  |  | Trailing Twelve Months Ended September 30, 2021 |
|  | FirstCash Stand Alone |  |  | Pro Forma Combined |  |  | FirstCash Stand Alone |  |  | Pro Forma Combined |  |  | FirstCash Stand Alone |  |  | Pro Forma Combined |  |  | FirstCash Stand Alone |  |  | Pro Forma Combined |
Net income |  | $ | 106,579 |  |  | $ | 62,583 |  |  | $ | 73,853 |  |  | $ | 39,898 |  |  | $ | 95,538 |  |  | $ | 74,091 |  |  | $ | 128,264 |  |  | $ | 96,776 |
Income taxes |  |  | 37,120 |  |  |  | 23,981 |  |  |  | 26,739 |  |  |  | 16,597 |  |  |  | 33,834 |  |  |  | 27,427 |  |  |  | 44,215 |  |  |  | 34,811 |
Depreciation and amortization |  |  | 42,105 |  |  |  | 108,171 |  |  |  | 31,424 |  |  |  | 80,944 |  |  |  | 32,731 |  |  |  | 100,933 |  |  |  | 43,412 |  |  |  | 128,160 |
Interest expense |  |  | 29,344 |  |  |  | 54,045 |  |  |  | 21,953 |  |  |  | 40,479 |  |  |  | 22,389 |  |  |  | 40,915 |  |  |  | 29,780 |  |  |  | 54,481 |
Interest income |  |  | (1,540 | ) |  |  | (1,951 | ) |  |  | (1,209 | ) |  |  | (1,608 | ) |  |  | (420 | ) |  |  | (422 | ) |  |  | (751 | ) |  |  | (765 | )
EBITDA |  |  | 213,608 |  |  |  | 246,829 |  |  |  | 152,760 |  |  |  | 176,310 |  |  |  | 184,072 |  |  |  | 242,944 |  |  |  | 244,920 |  |  |  | 313,463 |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Merger and acquisition expenses |  |  | 1,316 |  |  |  | 1,316 |  |  |  | 209 |  |  |  | 209 |  |  |  | 1,264 |  |  |  | 1,264 |  |  |  | 2,371 |  |  |  | 2,371 |
Non-cash foreign currency loss (gain) related to lease liability |  |  | 1,249 |  |  |  | 1,249 |  |  |  | 3,505 |  |  |  | 3,505 |  |  |  | 366 |  |  |  | 366 |  |  |  | (1,890 | ) |  |  | (1,890 | )
Non-cash write-off of certain Cash America merger related lease intangibles |  |  | 7,055 |  |  |  | 7,055 |  |  |  | 4,649 |  |  |  | 4,649 |  |  |  | 1,640 |  |  |  | 1,640 |  |  |  | 4,046 |  |  |  | 4,046 |
Non-cash impairment of certain other assets |  |  | 1,900 |  |  |  | 1,900 |  |  |  | 1,900 |  |  |  | 1,900 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Loss on extinguishment of debt |  |  | 11,737 |  |  |  | 11,737 |  |  |  | 11,737 |  |  |  | 11,737 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer lending wind-down costs and asset impairments |  |  | 109 |  |  |  | 109 |  |  |  | 109 |  |  |  | 109 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Amortization of premium resulting from the fair market value adjustment to finance receivables (1) |  |  | — |  |  |  | 30,578 |  |  |  | — |  |  |  | 22,933 |  |  |  | — |  |  |  | 7,644 |  |  |  | — |  |  |  | 15,289 |
Adjusted EBITDA |  | $ | 236,974 |  |  | $ | 300,773 |  |  | $ | 174,869 |  |  | $ | 221,352 |  |  | $ | 187,342 |  |  | $ | 253,858 |  |  | $ | 249,447 |  |  | $ | 333,279 |

(1) | See description of this adjustment in footnote 3(p) in the Unaudited Pro Forma Condensed Combined Financial Information included as Exhibit 99.4 to this Current Report.

Adjusted Unaudited Summary Pro Forma Combined Statement of Operations

For the Trailing Twelve Months Ended September 30, 2021

(in thousands, except per share data)

|  | Pro Forma Combined (1) |  |  | Adjustments (2) |  |  | Adjusted Pro Forma Combined |
Revenue: |  |  |  |  |  |  |  |  |  |  |  |
Retail merchandise sales |  | $ | 1,062,842 |  |  | $ | — |  |  | $ | 1,062,842 |
Pawn loan fees |  |  | 460,638 |  |  |  | — |  |  |  | 460,638 |
Leased merchandise income |  |  | 315,042 |  |  |  | — |  |  |  | 315,042 |
Interest and fees |  |  | 193,344 |  |  |  | 15,289 |  |  |  | 208,633 |
Wholesale scrap jewelry revenue |  |  | 65,856 |  |  |  | — |  |  |  | 65,856 |
Total revenue |  |  | 2,097,722 |  |  |  | 15,289 |  |  |  | 2,113,011 |
Cost of revenue: |  |  |  |  |  |  |  |  |  |  |  |
Cost of retail merchandise sold |  |  | 616,285 |  |  |  | — |  |  |  | 616,285 |
Depreciation of leased merchandise |  |  | 180,834 |  |  |  | — |  |  |  | 180,834 |
Provision for lease losses |  |  | 66,093 |  |  |  | — |  |  |  | 66,093 |
Provision for loan losses |  |  | 67,257 |  |  |  | — |  |  |  | 67,257 |
Cost of wholesale scrap jewelry sold |  |  | 56,181 |  |  |  | — |  |  |  | 56,181 |
Total cost of revenue |  |  | 986,650 |  |  |  | — |  |  |  | 986,650 |
Net revenue |  |  | 1,111,072 |  |  |  | 15,289 |  |  |  | 1,126,361 |
Expenses and other income: |  |  |  |  |  |  |  |  |  |  |  |
Operating expenses |  |  | 660,052 |  |  |  | — |  |  |  | 660,052 |
Administrative expenses |  |  | 130,097 |  |  |  | — |  |  |  | 130,097 |
Depreciation and amortization |  |  | 128,160 |  |  |  | (82,998 | ) |  |  | 45,162 |
Interest expense |  |  | 54,481 |  |  |  | — |  |  |  | 54,481 |
Interest income |  |  | (765 | ) |  |  | — |  |  |  | (765 | )
Merger and acquisition expenses |  |  | 2,371 |  |  |  | (2,371 | ) |  |  | — |
(Gain) loss on foreign exchange |  |  | (507 | ) |  |  | 1,890 |  |  |  | 1,383 |
Write-offs and impairments of certain lease intangibles and other assets |  |  | 5,596 |  |  |  | (4,046 | ) |  |  | 1,550 |
Total expenses and other income |  |  | 979,485 |  |  |  | (87,525 | ) |  |  | 891,960 |
Income before income taxes |  |  | 131,587 |  |  |  | 102,814 |  |  |  | 234,401 |
Provision for income taxes |  |  | 34,811 |  |  |  | 22,857 |  |  |  | 57,668 |
Net income |  | $ | 96,776 |  |  | $ | 79,957 |  |  | $ | 176,733 |
Net income per share: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 1.98 |  |  |  |  |  |  | $ | 3.61 |
Diluted |  | $ | 1.98 |  |  |  |  |  |  | $ | 3.61 |
Weighted average common shares outstanding: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 48,910 |  |  |  |  |  |  |  | 48,910 |
Diluted |  |  | 48,967 |  |  |  |  |  |  |  | 48,967 |

(1) | Represents the unaudited pro forma condensed combined statement of operations of the Combined Company for the trailing twelve months ended September 30, 2021. See Exhibit 99.4 to this Current Report for further information including the pro forma adjustments made to the historical financials of the Company and AFF to arrive at this condensed combined statement of operations.

(2) | See descriptions of these adjustments in the reconciliations of adjusted net income, adjusted diluted earnings per share and adjusted EBITDA above and in the footnotes to the Unaudited Pro Forma Condensed Combined Financial Information included as Exhibit 99.4 to this Current Report.

Supplemental Consolidated Financial Information of American First Finance Inc. and its Subsidiary

For the Periods Indicated Below

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA

AFF defines EBITDA as net income before income taxes, depreciation and amortization of property and equipment, net, interest expense and bank interest income and adjusted EBITDA as EBITDA adjusted for certain items as listed below that management considers to be non-operating in nature and not representative of its actual operating performance. The Company believes EBITDA and adjusted EBITDA are commonly used by investors to assess a company’s financial performance. The following table provides a reconciliation of AFF’s net income to EBITDA and adjusted EBITDA (in thousands):

|  | Year Ended December 31, |  |  | Nine Months Ended September 30, |  |  | Trailing Twelve Months Ended September 30, 2021 |
|  | 2020 |  |  | 2019 |  |  | 2021 |  |  | 2020 |
Net income |  | $ | 58,598 |  |  | $ | 53,458 |  |  | $ | 64,385 |  |  | $ | 43,828 |  |  | $ | 79,155 |
Income taxes |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Depreciation and amortization of property and equipment, net |  |  | 2,335 |  |  |  | 1,054 |  |  |  | 2,858 |  |  |  | 1,641 |  |  |  | 3,552 |
Interest expense |  |  | 9,800 |  |  |  | 10,386 |  |  |  | 10,794 |  |  |  | 7,007 |  |  |  | 13,587 |
Bank interest income |  |  | (411 | ) |  |  | (422 | ) |  |  | (2 | ) |  |  | (399 | ) |  |  | (14 | )
EBITDA |  |  | 70,322 |  |  |  | 64,476 |  |  |  | 78,035 |  |  |  | 52,077 |  |  |  | 96,280 |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Merger and acquisition expenses |  |  | — |  |  |  | — |  |  |  | 70 |  |  |  | — |  |  |  | 70 |
Non-recurring gain on sale of securities |  |  | (4,406 | ) |  |  | — |  |  |  | — |  |  |  | (4,406 | ) |  |  | — |
Non-recurring gain on forgiveness of PPP loan |  |  | — |  |  |  | — |  |  |  | (4,716 | ) |  |  | — |  |  |  | (4,716 | )
Adjusted EBITDA |  | $ | 65,916 |  |  | $ | 64,476 |  |  | $ | 73,389 |  |  | $ | 47,671 |  |  | $ | 91,634 |