UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2005
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number: 0-19133
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
FIRST CASH 401(k) PROFIT SHARING PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
FIRST CASH FINANCIAL SERVICES, INC.
690 East Lamar Boulevard, Suite 400
Arlington, Texas 76011
FIRST CASH 401(k) PROFIT SHARING PLAN
INDEX
Report of Independent Registered Public Accounting Firm
Financial Statements:
Statements of Net Assets Available for Benefits
Statement of Changes in Net Assets Available for Benefits
Notes to Financial Statements
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Administrative Committee
First Cash 401(k) Profit Sharing Plan
Arlington, Texas
We have audited the accompanying statements of net assets available for
benefits of the First Cash 401(k) Profit Sharing Plan (the "Plan") as of
December 31, 2005 and 2004, and the related statement of changes in net
assets available for benefits for the year ended December 31, 2005. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with the auditing standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
An audit includes consideration of internal control over financial reporting
as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Plan's internal control over financial reporting.
Accordingly, we express no such opinion. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly in
all material respects, the net assets available for benefits of the First
Cash 401(k) Profit Sharing Plan as of December 31, 2005 and 2004, and the
related statement of changes in its net assets available for benefits for
the year ended December 31, 2005, in conformity with United States generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule
of assets held for investment purposes at December 31, 2005, is presented
for the purpose of additional analysis and is not a required part of
the basic financial statements but is supplementary information required
by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. This
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied
in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/S/ HEIN & ASSOCIATES LLP
Dallas, Texas
May 18, 2006
FIRST CASH 401(k) PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31,
-----------------------
2005 2004
---------- ----------
ASSETS:
Investments, at fair value:
Mutual funds $ 1,832,726 $ 1,534,480
Money market funds 1,405,087 1,289,646
First Cash Financial Services, Inc. common stock 4,227,480 4,031,237
Participant loans 532,054 577,352
---------- ----------
Total investments 7,997,347 7,432,715
Contributions receivable:
Participant - 63,894
Employer - 17,885
---------- ----------
Total contributions receivable - 81,779
Other - 2,547
---------- ----------
Total assets 7,997,347 7,517,041
LIABILITIES:
Refundable contributions 21,337 45,499
---------- ----------
Net assets available for benefits $ 7,976,010 $ 7,471,542
========== ==========
See accompanying notes to these financial statements.
FIRST CASH 401(k) PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2005
ADDITIONS TO NET ASSETS ATTRIBUTABLE TO:
Investment income:
Net appreciation in fair value of investments $ 367,138
Interest and dividends 108,390
----------
Net investment income 475,528
Contributions:
Employer 256,556
Participant, including rollovers 939,207
----------
1,195,763
----------
Total additions 1,671,291
DEDUCTIONS FROM NET ASSETS ATTRIBUTABLE TO:
Benefits paid directly to participants 1,016,124
Loans paid off as part of a distribution 132,877
Other 17,822
----------
Total deductions 1,166,823
----------
INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS 504,468
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 7,471,542
----------
End of year $ 7,976,010
==========
See accompanying notes to these financial statements.
FIRST CASH 401(k) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005 AND 2004
1. DESCRIPTION OF PLAN
-------------------
The following description of the First Cash 401(k) Profit Sharing Plan
(the "Plan") provides only general information. For a more complete
description of the Plan's provisions, participants should refer to the
Plan agreement.
General
-------
The Plan is a salary deferral plan covering substantially all U.S.-based
employees of First Cash Financial Services, Inc. (the "Company" or the
"Employer") who have completed one year of service with the Company. The
Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA). The trustee of the Plan is Frontier Trust
Company, FSB.
Contributions
-------------
Each year, participants may contribute to the Plan an amount up to 15% of
their annual compensation. Each participant's annual contribution shall
not exceed the maximum amount allowed for deferral for U.S. federal
income taxes, which was generally $14,000 for 2005. The amount of a
participant's annual compensation that may be taken into account for
purposes of determining the Company's matching contribution for any
purpose under the Plan shall not exceed an amount prescribed annually by
the IRS. The Company contributes to the Plan a matching amount equal to
50% of the first 3% of the participant's annual compensation that
is contributed to the Plan. In addition, a special discretionary
contribution as determined by the Company may be contributed, pro rata,
based upon each participating employee's compensation to the total
compensation of all participating employees. No such contribution was
made in 2005.
If a participant makes a contribution during any year in an amount which
exceeds the maximum amount allowed under IRS rules pertaining to highly
compensated employees, the contribution is refunded and the matching
Company contribution on such additional participant contribution may be
forfeited by the participant and applied to reduce the employer's
matching contribution to the Plan for the following year. Management
believes that the Plan is in compliance with the funding requirements of
ERISA.
Participant Accounts
--------------------
Each participant's account is credited with the participant's
contribution, allocations of the Company's matching contributions and
Profit Sharing contributions, if applicable. Forfeitures of the non-
vested portion of terminated participants' accounts may be applied first
to payment of plan administrative expenses and any remaining forfeitures
will be used to reduce future Company contributions to the Plan.
The various participant allocations are based on a percentage of the
participant's elective deferral or compensation in relation to total
compensation of participants, as defined in the Plan agreement.
Vesting
-------
Participants are immediately vested in their contributions (including
rollovers) plus actual earnings thereon. Vesting in the remainder of
their accounts is generally based on years of continuous service with the
Company, which is determined as a twelve consecutive month period ending
on each anniversary of a participant's date of hire. A participant is
100% vested after six years of credited service. A participant is also
100% vested upon reaching retirement age or if employment is terminated
by reason of total and permanent disability or death.
Investment Options
------------------
Upon enrollment into the Plan, a participant may direct his or her
employee contributions in any increment to the Company's common stock or
any of the mutual fund investment options offered by Frontier Trust
Company, the custodian of the Plan. Participants may change the allocation
of their existing funds and future contributions at any time.
Payment of Benefits
-------------------
Participants whose employment terminates for any reason (except death)
are generally entitled to receive the vested portion of their account in
the form of a lump sum or installment distribution payable in cash.
During 2005, the Plan was amended to lower the mandatory cashout level
for terminated participants from $5,000 to $1,000. Certain participants
may be eligible to receive benefits in the form of annuity payments.
There were no benefits payable to participants at December 31, 2005 or at
December 31, 2004.
Participant Loans
-----------------
A participant may apply to the plan administrator for a loan under the
Plan. All loans made by the trustees shall be subject to the terms
and conditions set forth in the Plan Document and Trust Agreement.
Participants may borrow up to one-half of the participant's vested
account balance or $50,000, whichever is less. The loans will bear a
reasonable rate of interest based upon prevailing commercial rates for
loans of similar types. Repayments of the loan balance, plus interest,
are made bi-weekly through after-tax payroll deductions, not to exceed
five years, unless the loan was obtained to acquire a home, then over a
reasonable period of time as determined by the trustee. A participant
may have up to two loans outstanding at any one time. Participant loans
are collateralized by the respective participant accounts.
Forfeitures
-----------
Participants who terminate employment prior to being fully vested in the
Company's matching contributions forfeit non-vested amounts. At December
31, 2005, there was approximately $51,000 of forfeited non-vested
accounts. Forfeitures of Company matching contributions are used to
reduce future Company contributions to the Plan. In 2005, Company
matching contributions were reduced by approximately $56,000 from
forfeited, non-vested accounts. Forfeitures of discretionary Company
contributions are reallocated among all remaining participants.
Administrative Fees
-------------------
The Company has paid, at its discretion, the administrative expenses of
the Plan. Administrative expenses incurred in 2005 were approximately
$40,000.
Tax Status
----------
The Internal Revenue Service ("IRS") has determined and informed the
Company by a letter dated November 27, 2001, that the Plan is designed in
accordance with applicable sections of the Internal Revenue Code.
2. SUMMARY OF ACCOUNTING POLICIES
------------------------------
Basis of Accounting
-------------------
The financial statements and supplemental schedules are prepared on the
accrual basis of accounting.
Valuation of Investments
------------------------
Shares of registered investment companies are valued at quoted market
prices which represent the net asset value of shares held by the Plan at
year-end. Equity securities are valued at fair value using quoted market
prices. Participant loans and investments in money market funds are
stated at cost, which approximates fair value. Reinvested income,
accrued interest and dividends are reflected as additions to the cost
basis of the investments. Investment transactions are recorded on a
trade-date basis.
Payment of Benefits
-------------------
Benefits are recorded when paid. Benefits due to participants who have
elected to withdraw from the Plan but have not been paid, are deducted
from net assets available for benefits. Amounts allocated to withdrawing
participants at December 31, 2005 were immaterial.
Use of Estimates
----------------
The preparation of financial statements in conformity with United
States generally accepted accounting principles as applied to defined
contribution employee benefit plans requires the Plan's management to
make estimates and assumptions that affect the amounts reported in these
financial statements and accompanying notes. Actual results could differ
from those estimates.
3. INVESTMENTS
-----------
Investments, at fair value, consisted of the following as of December 31:
2005 2004
--------- ---------
Mutual Funds:
Merrill Lynch Fundamental Growth Fund Class A $ 346,385 $ 294,372
Merrill Lynch Basic Value Fund Class A 317,464 297,086
Merrill Lynch Global Allocation Fund Class A 382,219 (a) 417,714
Merrill Lynch FD Core Bond Class A 209,688 175,611
Oppenheimer Small Cap Value Fund Class A 207,043 29,686
Davis New York Venture Fund Class A 369,927 320,011
--------- ---------
1,832,726 1,534,480
Money Market Fund:
Merrill Lynch Retirement Preservation Trust (a) 1,405,087 (a) 1,289,646
First Cash Financial Services, Inc.
common stock (a) 4,227,480 (a) 4,031,237
Participant loans (a) 532,054 (a) 577,352
--------- ---------
$7,997,347 $7,432,715
========= =========
(a) Represents 5% or more of the Plan's net assets.
During 2005, the Plan's investments (including gains and losses on
investments, bought and sold, as well as held during the year)
appreciated in value by $367,138 as follows:
Mutual Funds $ 109,875
First Cash Financial Services, Inc. common stock 257,263
----------
$ 367,138
==========
4. PLAN TERMINATION
----------------
Although it has not expressed any intent to do so, the Company has the
right under the Plan agreement to terminate the Plan subject to the
provisions of ERISA. In the event of Plan termination, participants
become 100% vested in their accounts.
FIRST CASH 401(k) PROFIT SHARING PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
EIN: 75-2237318 Plan Number: 001
DECEMBER 31, 2005
(a) (b) (c) (d) (e)
DESCRIPTION OF INVESTMENT
INCLUDING MATURITY DATE,
IDENTITY OF ISSUER, RATE OF INTEREST,
BORROWER, LESSOR OR COLLATERAL PAR OR CURRENT
SIMILAR PARTY MATURITY VALUE COST VALUE
-------------------- ---------------------------- ---- ----------
Mutual Funds:
Merrill Lynch Fundamental Growth Fund ** $ 346,385
Merrill Lynch Basic Value Fund ** 317,464
Merrill Lynch Global Allocation Fund ** 382,219
Merrill Lynch FD Core Bond Portfolio ** 209,688
Oppenheimer Small Cap Value Fund ** 207,043
Davis New York Venture Fund ** 369,927
Money Market Fund:
Merrill Lynch Retirement Preservation Trust ** 1,405,087
* First Cash Financial
Services, Inc. Common Stock ** 4,227,480
* Loans to participants 5.5% - 9.5% interest and
varying maturities 532,054
----------
Total investments $ 7,997,347
==========
(a) This column will have an asterisk on each line which is identified as
a party-in-interest to the Plan. Frontier Trust Company acted as the
Plan's custodian through December 31, 2005.
(d) This column will have two asterisks on each line to indicate historical
cost information omitted as permitted for participant directed
transactions under an individual account plan.
See Report of Independent Registered Public Accounting Firm.
FIRST CASH 401(k) PROFIT SHARING PLAN
REQUIRED INFORMATION
ITEM 1 Not Applicable.
ITEM 2 Not Applicable.
ITEM 3 Not Applicable.
ITEM 4 Financial Statements and Exhibits
(a) Financial Statements
Financial statements and supplemental schedule prepared in accordance
with the financial reporting requirements of ERISA filed hereunder
are listed on page 2 hereof in the Table of Contents, in lieu of the
requirements of Items 1 to 3 above.
(b) Exhibits:
23 Consent of Independent Registered Public Accounting Firm
32.1 Certification of Plan Administrator
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan Administrative Committee that administers the Plan has duly caused
this Annual Report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: June 27, 2006
FIRST CASH 401(k) PROFIT SHARING PLAN
By: /s/ Rick Wessel
------------------
Plan Administrator