EZPW EZCORP Inc

AUSTIN, Texas, July 25 /PRNewswire-FirstCall/ -- EZCORP, Inc. (NASDAQ:EZPW) announced today results for its third fiscal quarter and nine month period, which ended June 30, 2006. For the quarter ended June 30, 2006, EZCORP's net income increased 163% to $5,608,000 ($0.40 per share) compared to $2,129,000 ($0.16 per share) for the quarter ended June 30, 2005. Total revenues for the third fiscal quarter increased 31% to $73,786,000 while operating income improved 155% to $8,040,000. Operating income margins for the quarter, measured as a percent of net revenues, improved approximately eight percentage points to 16%. For the nine months ended June 30, 2006, EZCORP's net income increased 82% to $20,091,000 ($1.44 per share) compared to $11,047,000 ($0.82 per share) for the same nine month period a year ago. Total revenues grew 26% to $228,497,000 while operating income increased 79% to $29,895,000. Operating income margins for the nine months, measured as a percent of net revenue, improved approximately six percentage points to 20%. Commenting on these results, President and Chief Executive Officer, Joe Rotunda, stated, "We continue to be pleased with our strong momentum and the continuation of our five-plus year trend of growing our earnings and profitably expanding our business. Our fiscal third quarter is the 16th consecutive quarter of year-over-year earnings growth. This quarter we increased earnings 163% over the prior year quarter. We are especially pleased with the strong performance of our pawn operation as well as the continued strong performance of our signature loan business." Rotunda continued, "Our pawn contribution or pawn net revenues improved 17% in the third quarter as a result of a 35% increase in sales gross profit and a 2% increase in pawn service charges. Higher gold values assisted in delivering this strong pawn performance. Our signature loan contribution, or fees less bad debt and direct transaction expenses, increased 78% over the prior year quarter. The maturation of our 288 EZMONEY stores opened in the last three years fueled this significant growth." Rotunda concluded, "Our earnings guidance for the fourth fiscal 2006 quarter is $0.43 to $0.46 per share compared to $0.27 per share for the fiscal 2005 fourth quarter. For our 2006 fiscal year, we are raising guidance to $1.87 to $1.90 per share compared to fiscal 2005's $1.09 per share. Included in our guidance is an expected earnings drag of approximately $0.07 to $0.10 per share for stores open less than nine months." EZCORP is a lender and provider of credit services to individuals who do not have cash resources or access to credit to meet their short-term cash needs. In 280 EZPAWN locations, the Company offers non-recourse loans collateralized by tangible personal property, commonly known as pawn loans. At these locations, the Company also sells merchandise, primarily collateral forfeited from its pawn lending operations, to consumers looking for good value. In 288 EZMONEY locations and 82 EZPAWN locations, the Company offers short-term non-collateralized loans, often referred to as payday loans, or fee based credit services to customers seeking loans. This announcement contains certain forward-looking statements regarding the Company's expected performance for future periods including, but not limited to, new store expansion and expected future earnings. Actual results for these periods may materially differ from these statements. Such forward- looking statements involve risks and uncertainties such as changing market conditions in the overall economy and the industry, consumer demand for the Company's services and merchandise, changes in the regulatory environment, and other factors periodically discussed in the Company's annual, quarterly and other reports filed with the Securities and Exchange Commission. You are invited to listen to a conference call discussing these results on July 25, 2006 at 3:30pm Central Time. The conference call can be accessed over the Internet (or replayed at your convenience) at the following address. http://www.videonewswire.com/event.asp?id=34480 For additional information, contact Dan Tonissen at (512) 314-2289. EZCORP, Inc. Highlights of Consolidated Statements of Operations (Unaudited) (in thousands, except per share data) Three Months Ended June 30, 2006 2005 1 Revenues: 2 Merchandise sales $29,612 $26,102 3 Jewelry scrapping sales 11,028 4,892 4 Pawn service charges 15,021 14,722 5 Payday loan service charges 1,347 10,231 6 Credit service fees 16,474 --- 7 Other 304 303 8 Total revenues 73,786 56,250 9 Cost of goods sold: 10 Cost of merchandise sales 16,868 14,777 11 Cost of jewelry scrapping sales 6,830 3,644 12 Total cost of goods sold 23,698 18,421 13 Net revenues 50,088 37,829 14 15 Operations expense 27,402 23,693 16 Payday loan bad debt and direct transaction expenses 635 3,413 17 Credit service bad debt and direct transaction expenses 5,038 --- 18 Administrative expense 6,830 5,506 19 Depreciation and amortization 2,143 2,058 20 Operating income 8,040 3,159 21 22 Interest expense (income), net (150) 302 23 Equity in net income of unconsolidated affiliate (557) (505) 24 (Gain) loss on sale/disposal of assets (70) 36 25 Income before income taxes 8,817 3,326 26 Income tax expense 3,209 1,197 27 Net income $5,608 $2,129 28 29 Net income per share, assuming dilution $0.40 $0.16 30 31 Weighted average shares - assuming dilution 14,186 13,434 EZCORP, Inc. Highlights of Consolidated Statements of Operations (Unaudited) (in thousands, except per share data) Nine Months Ended June 30, 2006 2005 1 Revenues: 2 Merchandise sales $104,304 $91,413 3 Jewelry scrapping sales 26,294 16,164 4 Pawn service charges 46,988 46,073 5 Payday loan service charges 3,602 26,349 6 Credit service fees 46,347 --- 7 Other 962 977 8 Total revenues 228,497 180,976 9 Cost of goods sold: 10 Cost of merchandise sales 60,415 52,518 11 Cost of jewelry scrapping sales 17,281 11,717 12 Total cost of goods sold 77,696 64,235 13 Net revenues 150,801 116,741 14 15 Operations expense 81,623 70,384 16 Payday loan bad debt and direct transaction expenses 1,757 6,517 17 Credit service bad debt and direct transaction expenses 10,777 --- 18 Administrative expense 20,347 17,169 19 Depreciation and amortization 6,402 6,016 20 Operating income 29,895 16,655 21 22 Interest expense, net 113 916 23 Equity in net income of unconsolidated affiliate (1,745) (1,601) 24 (Gain) loss on sale/disposal of assets (62) 79 25 Income before income taxes 31,589 17,261 26 Income tax expense 11,498 6,214 27 Net income $20,091 $11,047 28 29 Net income per share, assuming dilution $1.44 $0.82 30 31 Weighted average shares - assuming dilution 13,974 13,507 EZCORP, Inc. Highlights of Consolidated Balance Sheets (Unaudited) (in thousands, except per share data and store counts) As of June 30, 2006 2005 1 Assets: 2 Current assets: 3 Cash and cash equivalents $22,731 $1,972 4 Pawn loans 48,932 50,888 5 Payday loans, net 1,966 11,089 6 Pawn service charges receivable, net 7,037 9,020 7 Payday loan service charges receivable, net 329 2,244 8 Credit service fees receivable, net 3,379 --- 9 Inventory, net 32,937 28,956 10 Deferred tax asset 8,365 9,711 11 Note receivable from related party --- 1,500 12 Prepaid expenses and other assets 3,340 3,197 13 Total current assets 129,016 118,577 14 Investment in unconsolidated affiliate 17,870 17,110 15 Property and equipment, net 27,283 26,147 16 Deferred tax asset, non-current 3,669 4,946 17 Other assets, net 3,245 4,205 18 Total assets $181,083 $170,985 19 Liabilities and stockholders' equity: 20 Current liabilities: 21 Accounts payable and other accrued expenses $18,517 $13,651 22 Customer layaway deposits 1,734 1,559 23 Federal income taxes payable 752 1,452 24 Total current liabilities 21,003 16,662 25 26 Long-term debt --- 21,900 27 Deferred gains and other long-term liabilities 3,339 3,687 28 Total long-term liabilities 3,339 25,587 29 Total stockholders' equity 156,741 128,736 30 Total liabilities and stockholders' equity $181,083 $170,985 31 32 Pawn loan balance per ending pawn store $175 $182 33 Inventory per ending pawn store $118 $103 34 Book value per share $11.85 $10.34 35 Tangible book value per share $11.65 $10.15 36 Pawn store count - end of period 280 280 37 Mono-line payday loan store count - end of period 288 203 38 Shares outstanding - end of period 13,226 12,446 http://www.videonewswire.com/event.asp?id=34480DATASOURCE: EZCORP, Inc. CONTACT: Dan Tonissen of EZCORP, Inc., +1-512-314-2289 Web site: http://www.ezcorp.com/

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