AUSTIN, Texas, Jan. 20, 2011 /PRNewswire/ -- EZCORP, Inc.
(Nasdaq: EZPW), a leading provider of specialty consumer financial
services, today announced results for its first fiscal quarter
ended December 31, 2010.
Highlights include:
- Non-GAAP earnings per share of $0.69, up 33% over prior year quarter; GAAP
earnings per share of $0.55, up 6%
over prior year quarter.
- Non-GAAP net income of $34.5
million, up 34%; GAAP net income of $27.4 million, up 7%.
- Total revenues of $218.8 million,
up 18% over prior year quarter.
- Non-GAAP consolidated operating income of $50.3 million (38% of net revenue), up 29% over
prior year quarter; GAAP consolidated operating income of
$39.4 million (29% of net revenue),
up 1% over prior year quarter.
- Store level operating income up $11.6
million in U.S. Pawn, $1.6
million in Empeno Facil and $1.8
million in EZMONEY.
- Pre-tax contribution from strategic affiliates of $3.4 million, up from $1.3
million in prior year quarter.
(Logo:
http://photos.prnewswire.com/prnh/20090713/EZCORPLOGO)
Non-GAAP results exclude a previously announced one-time charge
related to the retirement of the Company's former Chief Executive
Officer.
Commenting on these results, President and Chief Executive
Officer, Paul Rothamel, stated, "We
are excited to get the new fiscal year off to a great start, with
13% same store revenue growth and all segments posting double-digit
operating income growth. Accentuating the ability to leverage
our expense structure through increased scale, our team members
turned an 18% total revenue increase into a 34% growth in net
income excluding the one-time charge."
Rothamel added, "Our geographic diversification continued this
quarter with 29 new stores in Mexico, Canada and domestic areas outside Texas. As a benefit of this
diversification and continued growth in our newer products, U.S.
payday lending, while remaining strong, now represents 16% of our
total revenues compared to 20% a year ago."
The Company also announced that it expects fiscal 2011 earnings
per share, excluding the one-time charge described above, to
increase 22% year-over-year to $2.40
($2.26 on a GAAP basis). This
is an increase from its previous estimate of $2.35 per share ($2.21 on a GAAP basis).
About EZCORP
EZCORP is a leading provider of specialty consumer financial
services. It provides collateralized non-recourse loans,
commonly known as pawn loans, and a variety of short-term consumer
loans, including payday loans, installment loans and auto title
loans, or fee-based credit services to customers seeking
loans. At its pawn stores, the company also sells
merchandise, primarily collateral forfeited from its pawn lending
operations.
EZCORP operates more than 1,000 stores, including over 500 pawn
stores in the U.S. and Mexico and
over 500 short-term consumer loan stores in the U.S. and
Canada. The company also has significant investments in
Albemarle & Bond Holdings PLC (ABM.L), one of the U.K.'s
largest pawnbroking businesses with over 130 stores, and Cash
Converters International Limited (CCV.L and CCV.AUS), which
franchises and operates a worldwide network of over 500 stores that
provide financial services and sell pre-owned merchandise.
Special Note Regarding Forward-Looking Statements
This announcement contains certain forward-looking statements
regarding the Company's expected operating and financial
performance for future periods, including expected future earnings.
These statements are based on the Company's current
expectations. Actual results for future periods may differ
materially from those expressed or implied by these forward-looking
statements due to a number of uncertainties and other factors,
including changing market conditions in the overall economy and the
industry, consumer demand for the Company's services and
merchandise, actions of third parties who offer services and
products in the Company's locations and changes in the regulatory
environment. For a discussion of these and other factors
affecting the Company's business and prospects, see the Company's
annual, quarterly and other reports filed with the Securities and
Exchange Commission.
Use of Non-GAAP Financial Measures
In addition to reporting financial results in accordance with
generally accepted accounting principles (GAAP), the Company has
provided non-GAAP net income, non-GAAP consolidated operating
income and non-GAAP earnings per share for the current period, as
well as non-GAAP expected earnings per share for fiscal 2011.
The only difference between the presented non-GAAP measures
and the most closely comparable GAAP measures is the exclusion of a
one-time charge related to the retirement of the Company's former
Chief Executive Officer and the related tax benefit. The
Company's management uses these non-GAAP financial measures to
understand the Company's financial performance from period to
period. Management does not believe that the excluded
one-time charge is reflective of underlying operating performance.
The non-GAAP financial measures are not meant to be
considered in isolation or as a substitute for the corresponding
GAAP measures, but rather are provided to facilitate an enhanced
understanding of the Company's actual and expected performance and
to enable more meaningful period-to-period comparisons. A
reconciliation of the non-GAAP financial measures to the most
closely comparable GAAP financial measures is provided in the
accompanying financial schedules.
For additional information, contact Investor Relations at (512)
314-2220.
EZCORP,
Inc.
|
|
Highlights
of Consolidated Statements of Operations (Unaudited)
|
|
(in
thousands, except per share data and percents)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31,
|
|
Increase
|
|
Percent
|
|
|
|
2010
|
|
2009
|
|
(Decrease)
|
|
Change
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Merchandise
sales
|
$ 67,730
|
|
$ 62,476
|
|
$
5,254
|
|
8.4
|
|
|
Jewelry
scrapping sales
|
50,665
|
|
37,442
|
|
13,223
|
|
35.3
|
|
|
Pawn service
charges
|
49,810
|
|
40,797
|
|
9,013
|
|
22.1
|
|
|
Signature
loan fees
|
40,066
|
|
38,678
|
|
1,388
|
|
3.6
|
|
|
Auto title
loan fees
|
6,244
|
|
3,102
|
|
3,142
|
|
101.3
|
|
|
Other
|
4,311
|
|
2,256
|
|
2,055
|
|
91.1
|
|
|
Total revenues
|
218,826
|
|
184,751
|
|
34,075
|
|
18.4
|
|
|
Cost of goods
sold:
|
|
|
|
|
|
|
|
|
|
Cost of
merchandise sales
|
41,311
|
|
39,264
|
|
2,047
|
|
5.2
|
|
|
Cost of
jewelry scrapping sales
|
32,255
|
|
23,306
|
|
8,949
|
|
38.4
|
|
|
Total cost of goods sold
|
73,566
|
|
62,570
|
|
10,996
|
|
17.6
|
|
|
Bad debt:
|
|
|
|
|
|
|
|
|
|
Signature
loan bad debt
|
10,046
|
|
8,790
|
|
1,256
|
|
14.3
|
|
|
Auto title
loan bad debt
|
982
|
|
460
|
|
522
|
|
113.5
|
|
|
Total bad debt
|
11,028
|
|
9,250
|
|
1,778
|
|
19.2
|
|
|
Net revenue
|
134,232
|
|
112,931
|
|
21,301
|
|
18.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
expense
|
64,504
|
|
58,181
|
|
6,323
|
|
10.9
|
|
|
Administrative
expense
|
26,138
|
|
12,297
|
|
13,841
|
|
112.6
|
|
|
Depreciation and
amortization
|
4,179
|
|
3,356
|
|
823
|
|
24.5
|
|
|
Loss on sale/disposal of
assets
|
7
|
|
211
|
|
(204)
|
|
(96.7)
|
|
|
Operating
income
|
39,404
|
|
38,886
|
|
518
|
|
1.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
(3)
|
|
(8)
|
|
5
|
|
(62.5)
|
|
|
Interest
expense
|
300
|
|
365
|
|
(65)
|
|
(17.8)
|
|
|
Equity in net income of
unconsolidated affiliates
|
(3,367)
|
|
(1,283)
|
|
(2,084)
|
|
162.4
|
|
|
Other
|
(61)
|
|
(15)
|
|
(46)
|
|
-
|
|
|
Income before income
taxes
|
42,535
|
|
39,827
|
|
2,708
|
|
6.8
|
|
|
Income tax
expense
|
15,106
|
|
14,120
|
|
986
|
|
7.0
|
|
|
Net income
|
$ 27,429
|
|
$ 25,707
|
|
$
1,722
|
|
6.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share,
diluted
|
$ 0.55
|
|
$ 0.52
|
|
$
0.03
|
|
5.7
|
|
|
Weighted average shares,
diluted
|
50,119
|
|
49,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
or
|
|
|
|
|
|
|
|
Percentage
Point (ppt)
|
|
|
OTHER
DATA:
|
|
|
|
|
Increase
(Decrease)
|
|
|
Gross margin on
merchandise sales
|
39.0%
|
|
37.2%
|
|
1.8
|
|
ppts
|
|
|
Gross margin on jewelry
scrapping sales
|
36.3%
|
|
37.8%
|
|
(1.5)
|
|
ppts
|
|
|
Gross margin on total
sales
|
37.9%
|
|
37.4%
|
|
0.5
|
|
ppts
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature loan bad debt as
percent of fees
|
25.1%
|
|
22.7%
|
|
2.4
|
|
ppts
|
|
|
Auto title loan bad debt
as percent of fees
|
15.7%
|
|
14.8%
|
|
0.9
|
|
ppts
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized inventory
turnover
|
3.8
|
|
3.7
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
margin
|
29.4%
|
|
34.4%
|
|
(5.0)
|
|
ppts
|
|
|
|
|
|
|
|
|
|
|
EZCORP,
Inc.
|
|
Highlights
of Consolidated Balance Sheets (Unaudited)
|
|
(in
thousands, except per share data and store counts)
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
2010
|
|
2009
|
|
Assets:
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash
equivalents
|
$ 23,908
|
|
$ 17,032
|
|
Pawn loans
|
124,388
|
|
103,446
|
|
Signature loans,
net
|
11,953
|
|
8,934
|
|
Auto title loans,
net
|
3,307
|
|
2,110
|
|
Pawn service charges
receivable, net
|
24,068
|
|
19,662
|
|
Signature loan fees
receivable, net
|
6,141
|
|
6,044
|
|
Auto title loan fees
receivable, net
|
1,600
|
|
827
|
|
Inventory, net
|
77,677
|
|
63,515
|
|
Deferred tax
asset
|
23,248
|
|
15,671
|
|
Prepaid expenses and other
assets
|
20,724
|
|
20,654
|
|
Total current
assets
|
317,014
|
|
257,895
|
|
|
|
|
|
|
Investments in
unconsolidated affiliates
|
108,959
|
|
90,455
|
|
Property and equipment,
net
|
66,641
|
|
52,378
|
|
Deferred tax asset,
non-current
|
-
|
|
5,011
|
|
Goodwill
|
128,181
|
|
101,134
|
|
Other assets,
net
|
24,252
|
|
19,931
|
|
Total assets
|
$ 645,047
|
|
$ 526,804
|
|
Liabilities and stockholders'
equity:
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Current maturities of
long-term debt
|
$ 10,000
|
|
$ 10,000
|
|
Accounts payable and other
accrued expenses
|
48,986
|
|
39,692
|
|
Customer layaway
deposits
|
5,950
|
|
2,697
|
|
Federal income taxes
payable
|
5,267
|
|
6,480
|
|
Total current
liabilities
|
70,203
|
|
58,869
|
|
|
|
|
|
|
Long-term debt, less
current maturities
|
12,500
|
|
22,500
|
|
Deferred tax
liability
|
1,619
|
|
-
|
|
Deferred gains and other
long-term liabilities
|
2,419
|
|
2,840
|
|
Total stockholders'
equity
|
558,306
|
|
442,595
|
|
Total liabilities and
stockholders' equity
|
$ 645,047
|
|
$ 526,804
|
|
|
|
|
|
|
Pawn loan balance per ending
pawn store
|
$
236
|
|
$
235
|
|
Inventory per ending pawn
store
|
$
147
|
|
$
144
|
|
Book value per share
|
$ 11.18
|
|
$
9.08
|
|
Tangible book value per
share
|
$
8.29
|
|
$
6.68
|
|
Pawn store count - end of
period
|
528
|
|
440
|
|
Signature loan store count - end
of period
|
504
|
|
480
|
|
Shares outstanding - end of
period
|
49,923
|
|
48,732
|
|
|
|
|
|
EZCORP,
Inc.
|
|
Operating
Segment Results (Unaudited)
|
|
(in
thousands, except store counts and percents)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Pawn
|
|
Empeno
|
|
EZMONEY
|
|
|
|
Three months ended December 31,
2010:
|
Operations
|
|
Facil
|
|
Operations
|
|
Consolidated
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Merchandise Sales
|
$
62,341
|
|
$
5,389
|
|
$
-
|
|
$
67,730
|
|
|
|
Scrap Sales
|
47,006
|
|
3,462
|
|
197
|
|
50,665
|
|
|
|
Pawn service charges
|
46,436
|
|
3,374
|
|
-
|
|
49,810
|
|
|
|
Signature loan fees
|
509
|
|
-
|
|
39,557
|
|
40,066
|
|
|
|
Auto title loan fees
|
393
|
|
-
|
|
5,851
|
|
6,244
|
|
|
|
Other
|
4,081
|
|
189
|
|
41
|
|
4,311
|
|
|
|
Total
revenues
|
160,766
|
|
12,414
|
|
45,646
|
|
218,826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merchandise cost of goods
sold
|
38,197
|
|
3,114
|
|
-
|
|
41,311
|
|
|
Scrap cost of goods
sold
|
29,538
|
|
2,638
|
|
79
|
|
32,255
|
|
|
Signature loan bad
debt
|
165
|
|
-
|
|
9,881
|
|
10,046
|
|
|
Auto title loan bad
debt
|
61
|
|
-
|
|
921
|
|
982
|
|
|
|
Net
revenues
|
92,805
|
|
6,662
|
|
34,765
|
|
134,232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations expense
|
43,196
|
|
4,278
|
|
17,030
|
|
64,504
|
|
|
|
Store operating
income
|
$
49,609
|
|
$
2,384
|
|
$
17,735
|
|
$
69,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin on merchandise
sales
|
38.7%
|
|
42.2%
|
|
N/A
|
|
39.0%
|
|
|
Gross margin on scrap
sales
|
37.2%
|
|
23.8%
|
|
59.9%
|
|
36.3%
|
|
|
Gross margin on total
sales
|
38.1%
|
|
35.0%
|
|
59.9%
|
|
37.9%
|
|
|
Annualized inventory
turnover
|
3.7
|
|
4.1
|
|
N/A
|
|
3.8
|
|
|
Signature loan bad debt as
percent of fees
|
32.4%
|
|
N/A
|
|
25.0%
|
|
25.1%
|
|
|
Auto title loan bad debt as
percent of fees
|
15.5%
|
|
N/A
|
|
15.7%
|
|
15.7%
|
|
|
Store operating income
margin
|
53.5%
|
|
35.8%
|
|
51.0%
|
|
51.9%
|
|
|
Pawn store count - end of
period
|
396
|
|
132
|
|
-
|
|
528
|
|
|
Signature loan store count - end
of period
|
6
|
|
-
|
|
498
|
|
504
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
2009:
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Merchandise Sales
|
$
59,211
|
|
$
3,265
|
|
$
-
|
|
$
62,476
|
|
|
|
Scrap Sales
|
36,823
|
|
607
|
|
12
|
|
37,442
|
|
|
|
Pawn service charges
|
38,941
|
|
1,856
|
|
-
|
|
40,797
|
|
|
|
Signature loan fees
|
553
|
|
-
|
|
38,125
|
|
38,678
|
|
|
|
Auto title loan fees
|
475
|
|
-
|
|
2,627
|
|
3,102
|
|
|
|
Other
|
2,167
|
|
89
|
|
-
|
|
2,256
|
|
|
|
Total
revenues
|
138,170
|
|
5,817
|
|
40,764
|
|
184,751
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merchandise cost of goods
sold
|
36,906
|
|
2,358
|
|
-
|
|
39,264
|
|
|
Scrap cost of goods
sold
|
22,824
|
|
475
|
|
7
|
|
23,306
|
|
|
Signature loan bad
debt
|
186
|
|
-
|
|
8,604
|
|
8,790
|
|
|
Auto title loan bad
debt
|
70
|
|
-
|
|
390
|
|
460
|
|
|
|
Net
revenues
|
78,184
|
|
2,984
|
|
31,763
|
|
112,931
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations expense
|
40,199
|
|
2,164
|
|
15,818
|
|
58,181
|
|
|
|
Store operating
income
|
$
37,985
|
|
$
820
|
|
$
15,945
|
|
$
54,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin on merchandise
sales
|
37.7%
|
|
27.8%
|
|
N/A
|
|
37.2%
|
|
|
Gross margin on scrap
sales
|
38.0%
|
|
21.7%
|
|
41.7%
|
|
37.8%
|
|
|
Gross margin on total
sales
|
37.8%
|
|
26.8%
|
|
41.7%
|
|
37.4%
|
|
|
Annualized inventory
turnover
|
3.7
|
|
3.9
|
|
N/A
|
|
3.7
|
|
|
Signature loan bad debt as
percent of fees
|
33.6%
|
|
N/A
|
|
22.6%
|
|
22.7%
|
|
|
Auto title loan bad debt as
percent of fees
|
14.7%
|
|
N/A
|
|
14.8%
|
|
14.8%
|
|
|
Store operating income
margin
|
48.6%
|
|
27.5%
|
|
50.2%
|
|
48.5%
|
|
|
Pawn store count - end of
period
|
370
|
|
70
|
|
-
|
|
440
|
|
|
Signature loan store count - end
of period
|
6
|
|
-
|
|
474
|
|
480
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Non-GAAP
Financial Measures
|
|
The following tables provide a
reconciliation of the differences between the reported or projected
non-GAAP financial measures for the periods indicated and the most
comparable GAAP financial measures. The non-GAAP financial
measures presented may not be directly comparable to similarly
titled measures reported by other companies and their usefulness
for such purposes are therefore limited. EZCORP management
believes presentation of the Non-GAAP financial measures enhances
investors' ability to analyze the Company's operating results.
However, non-GAAP financial measures are not an alternative
to GAAP financial measures and should be read only in conjunction
with financial measures presented on a GAAP basis.
|
|
|
EZCORP,
Inc.
|
|
Reconciliation of Non-GAAP
Consolidated Financial Measures (Unaudited)
|
|
(in
thousands, except per share data and percents)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31, 2010
|
|
|
|
|
Non-GAAP
|
|
|
|
|
GAAP
|
|
Adjustments
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
Net revenue
|
134,232
|
|
-
|
|
134,232
|
|
|
|
|
|
|
|
|
Operations expense
|
64,504
|
|
-
|
|
64,504
|
|
Administrative
expense
|
26,138
|
|
(10,945)
|
|
15,193
|
|
Depreciation and
amortization
|
4,179
|
|
-
|
|
4,179
|
|
Loss on sale/disposal of
assets
|
7
|
|
-
|
|
7
|
|
Operating
income
|
39,404
|
|
10,945
|
|
50,349
|
|
|
|
|
|
|
|
|
Interest income
|
(3)
|
|
-
|
|
(3)
|
|
Interest expense
|
300
|
|
-
|
|
300
|
|
Equity in net income of
unconsolidated affiliates
|
(3,367)
|
|
-
|
|
(3,367)
|
|
Other
|
(61)
|
|
-
|
|
(61)
|
|
Income before income
taxes
|
42,535
|
|
10,945
|
|
53,480
|
|
Income tax expense
|
15,106
|
|
3,831
|
|
18,937
|
|
Net income
|
$
27,429
|
|
$
7,114
|
|
$
34,543
|
|
|
|
|
|
|
|
|
Net income per share,
diluted
|
$
0.55
|
|
$
0.14
|
|
$
0.69
|
|
Weighted average shares,
diluted
|
50,119
|
|
-
|
|
50,119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Projected
Year Ending September 30, 2011
|
|
|
Projected
|
|
Non-GAAP
|
|
Projected
|
|
|
GAAP
|
|
Adjustments
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
Net income per share,
diluted
|
$
2.26
|
|
$
0.14
|
|
$
2.40
|
|
|
|
|
|
|
|
SOURCE EZCORP, Inc.