EZPW EZCORP Inc

EZCORP Announces 101% Earnings Growth for Second Quarter AUSTIN, Texas, April 20 /PRNewswire-FirstCall/ -- EZCORP, Inc. announced today results for its second fiscal quarter and six month period, which ended March 31, 2004. For the quarter ended March 31, 2004, EZCORP's net income improved 101% to $3,007,000 (twenty-three cents per share) compared to $1,498,000 (twelve cents per share) for the prior year period. These earnings are above the Company's previously announced estimate of thirteen to sixteen cents for this period. Total revenues for the second fiscal quarter increased 10% to $58,289,000 compared to $53,022,000 for the prior year second fiscal quarter. After higher levels of gross profit on merchandise and jewelry scrapping sales and higher levels of operating expense, operating income improved 90% to $4,468,000. For the six months ended March 31, 2004, EZCORP generated net income of $5,997,000 (forty-six cents per share) compared to a net loss for the same six month period a year ago. Effective October 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, which deals with the accounting treatment of goodwill and other intangible assets. After a charge of $8,037,000 for the cumulative effect of adopting this new accounting principle, the Company reported a net loss for the six month period ended March 31, 2003 of $4,254,000 (thirty-four cents per share). Commenting on these results, President and Chief Executive Officer, Joe Rotunda, stated, "It was an excellent quarter with each business element growing in volume and profitability. For the quarter, we had 5% same store sales growth with better margins, we more than doubled our payday loan balance from last year, and we increased our pawn loan balance 2% from a year ago. Our strong profit performance coupled with seasonal trends enabled us to generate significant cash flow and reduce debt during the quarter over $17 million to $15 million." Rotunda continued, "In addition to our financial performance, we have made considerable progress with new store development. Through the first six months of the year, we have opened an additional 51 EZMoney Payday Loan stores, 46 of which adjoin an EZPAWN location. We now plan to open approximately 120 new EZMoney storefronts this fiscal year, up from our earlier guidance of 75 to 85." Rotunda concluded, "Considering our performance through the first two quarters of fiscal 2004 and our plans for the balance of the year, we are raising our earnings guidance for the fiscal year to a range of $0.65 to $0.70 per share." EZCORP meets the short-term cash needs of the cash and credit constrained consumer by offering convenient, non-recourse loans collateralized by tangible personal property, commonly known as pawn loans, and short-term non- collateralized loans, often referred to as payday loans. The Company also sells merchandise, primarily collateral forfeited from its pawn lending operations, to consumers looking for good value. As of March 31, 2004, the Company operated 280 EZPAWN and 55 EZMONEY Payday Loan stores, 48 of which adjoin an EZPAWN location. 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 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 April 20, 2004 at 3:30pm Central Time. The conference call can be accessed over the Internet (or replay it at your convenience) at the following address. http://www.firstcallevents.com/service/ajwz403904219gf12.html 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 and store counts) Three Months Ended March 31, 2004 2003 1 Revenues: 2 Merchandise sales $33,188 $31,587 3 Jewelry scrapping sales 5,186 4,184 4 Pawn service charges 14,488 14,323 5 Payday loan service charges 5,072 2,675 6 Other revenues 355 253 7 Total revenues 58,289 53,022 8 Cost of goods sold: 9 Cost of merchandise sales 18,858 19,243 10 Cost of jewelry scrapping sales 3,659 3,429 11 Total cost of goods sold 22,517 22,672 12 Net revenues 35,772 30,350 13 14 Operations expense 23,061 21,414 15 Administrative expense 6,378 4,393 16 Depreciation and amortization 1,865 2,192 17 Operating income 4,468 2,351 18 19 Interest expense, net 373 474 20 Equity in net income of unconsolidated affiliate (496) (427) 21 Income before income taxes 4,591 2,304 22 Income tax expense 1,584 806 23 Income before cumulative effect of a change in accounting principle 3,007 1,498 24 Cumulative effect of adopting a new accounting principle, net of tax --- --- 25 Net income $3,007 $1,498 26 27 Income per share, assuming dilution: 28 Income before cumulative effect of a change in accounting principle $0.23 $0.12 29 Cumulative effect of adopting a new accounting principle, net of tax --- --- 30 Net income $0.23 $0.12 31 32 Weighted average shares - assuming dilution 13,209 12,513 33 Pawn store count - average for period 280 280 34 Mono-line payday loan store count - average for period 39 --- EZCORP, Inc. Highlights of Consolidated Statements of Operations (Unaudited) (in thousands, except per share data and store counts) Six Months Ended March 31, 2004 2003 1 Revenues: 2 Merchandise sales $64,250 $63,132 3 Jewelry scrapping sales 7,679 6,837 4 Pawn service charges 30,040 29,957 5 Payday loan service charges 9,933 5,752 6 Other revenues 701 543 7 Total revenues 112,603 106,221 8 Cost of goods sold: 9 Cost of merchandise sales 36,441 37,937 10 Cost of jewelry scrapping sales 5,349 6,055 11 Total cost of goods sold 41,790 43,992 12 Net revenues 70,813 62,229 13 14 Operations expense 45,677 42,859 15 Administrative expense 12,240 8,690 16 Depreciation and amortization 3,780 4,459 17 Operating income 9,116 6,221 18 19 Interest expense, net 821 1,131 20 Equity in net income of unconsolidated affiliate (861) (730) 21 Income before income taxes 9,156 5,820 22 Income tax expense 3,159 2,037 23 Income before cumulative effect of a change in accounting principle 5,997 3,783 24 Cumulative effect of adopting a new accounting principle, net of tax --- (8,037) 25 Net income (loss) $5,997 $(4,254) 26 27 Income (loss) per share, assuming dilution: 28 Income before cumulative effect of a change in accounting principle $0.46 $0.30 29 Cumulative effect of adopting a new accounting principle, net of tax --- (0.64) 30 Net income (loss) $0.46 $(0.34) 31 32 Weighted average shares - assuming dilution 13,101 12,438 33 Pawn store count - average for period 280 280 34 Mono-line payday loan store count - average for period 26 --- EZCORP, Inc. Highlights of Consolidated Balance Sheets (Unaudited) (in thousands, except per share data and store counts) As of March 31, 2004 2003 1 Assets: 2 Current assets: 3 Cash and cash equivalents $202 $3,386 4 Pawn loans 42,079 41,218 5 Payday loans 4,643 2,253 6 Pawn service charges receivable, net 7,825 7,966 7 Payday loan service charges receivable, net 928 442 8 Inventory, net 29,492 29,535 9 Deferred tax asset 8,163 6,418 10 Prepaid expenses and other assets 3,054 2,456 11 Total current assets 96,386 93,674 12 Investment in unconsolidated affiliates 15,417 15,124 13 Property and equipment, net 24,642 28,659 14 Deferred tax asset, non-current 4,391 1,948 15 Other assets 5,366 5,477 16 Total assets $146,202 $144,882 17 Liabilities and stockholders' equity: 18 Current liabilities: 19 Accounts payable and other accrued expenses 11,668 10,030 20 Customer layaway deposits 1,842 1,731 21 Federal income taxes payable 771 443 22 Total current liabilities 14,281 12,204 23 Long-term debt, less current maturities 15,000 28,000 24 Deferred gains and other long-term liabilities 4,139 4,019 25 Total long-term liabilities 19,139 32,019 26 Total stockholders' equity 112,782 100,659 27 Total liabilities and stockholders' equity $146,202 $144,882 28 29 Pawn loan balance per ending pawn store $150 $147 30 Inventory per ending pawn store $105 $105 31 Book value per share $9.25 $8.26 32 Tangible book value per share $9.04 $8.03 33 Pawn store count - end of period 280 280 34 Mono-line payday loan store count - end of period 55 --- 35 Shares outstanding - end of period 12,198 12,188 http://www.firstcallevents.com/service/ajwz403904219gf12.htmlDATASOURCE: EZCORP, Inc. CONTACT: Dan Tonissen of EZCORP, Inc., +1-512-314-2289 Web site: http://www.ezcorp.com/

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