Pawn Loans Outstanding of $157.2 million, Net Revenue of $108 million, Net Loss of $2.6 million - All Year-Over-Year Improvements

EZCORP, Inc. (NASDAQ: EZPW), a leading provider of pawn transactions in the United States and Latin America, today announced results for its third quarter ended June 30, 2021.

All amounts in this release are in conformity with U.S. generally accepted accounting principles ("GAAP") unless otherwise noted. Comparisons shown in this release are to the same period in the prior year unless otherwise noted.

CEO COMMENTARY AND OUTLOOK

Chief Executive Officer Jason Kulas stated, “During the quarter, we completed the acquisition of 128 Cash Apoyo Efectivo stores in Mexico, our largest acquisition to date in terms of store-count, solidifying our position as the second largest for-profit pawn operator in Mexico. We also acquired 11 stores in the Houston, Texas area and opened four de novo stores in Latin America, bringing our total store count to 1,143 at the end of the quarter, 627 (55%) of which are in Latin America.

"The third quarter was a solid quarter in which we continued to make significant strides in strengthening and growing our core pawn business. Despite lingering transitory COVID-related impacts, including government stimulus programs in the U.S., we continued to drive meaningful improvements across core operating metrics. We achieved our highest quarter-ending balance of PLO since the beginning of the pandemic, up 25% on a sequential basis and 39% compared to a year ago. While merchandise sales volumes were down 21% from their peak pandemic levels a year ago, we delivered a 6% increase in sales gross profit through effective inventory management and higher margins. These positive results reflect the relentless focus of our store teams on meeting our customers’ needs and executing the fundamentals.

“Net Income improved from a loss of $5.5 million to a loss of $2.6 million, while adjusted EBITDA more than doubled, reflecting not only the improvement in core operating metrics, but also our ongoing commitment to expense management and efficiency. We remain on track to realize annualized cost savings of more than $14.0 million for fiscal 2021 even assuming store-level expenses trend higher as transaction volumes accelerate.

“Looking ahead, we remain well positioned to continue our trend of improving financial performance, and are excited about the increasing earnings power of the platform. Pawn transaction activity continues to rebuild, driving PLO balances closer to pre-pandemic levels, which will drive accelerating pawn service charge revenue in the coming quarters given the natural lag between pawn originations and related fees. In addition, we remain on track to realize meaningful cost savings this year and beyond, even assuming store-level expenses trend higher to meet accelerating transaction volumes. And, we maintain a strong and liquid balance sheet to fund accelerating pawn demand and capitalize on acquisition opportunities that further enhance our scale-enabled and geographically diverse footprint and generate strong returns on investment.”

 

CONSOLIDATED RESULTS Three Months Ended June 30 in millions, except per share amounts

 

 

As Reported

 

Adjusted1

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

Total Revenues

$

174.0

 

 

$

210.2

 

 

$

169.6

 

 

$

210.2

 

Net Revenues

$

108.0

 

 

$

102.2

 

 

$

105.5

 

 

$

104.4

 

(Loss) Income, Before Tax

$

(0.8)

 

 

$

(10.2)

 

 

$

3.2

 

 

$

(3.9)

 

Net Loss

$

(2.6)

 

 

$

(5.5)

 

 

$

(1.7)

 

 

$

(1.1)

 

Diluted Loss Per Share

$

(0.05)

 

 

$

(0.10)

 

 

$

(0.03)

 

 

$

(0.02)

 

EBITDA

$

11.7

 

 

$

2.2

 

 

$

12.0

 

 

$

5.3

 

  • Diluted loss per share was $0.05, compared to a diluted loss per share of $0.10 in the prior-year quarter. On an adjusted basis1, diluted loss per share was $0.03, compared to diluted loss per share of $0.02 in the prior-year quarter.
  • Income before taxes improved $9.5 million or 93% from a loss of $10.2 million to a loss of $0.8 million. Adjusted EBITDA increased $6.7 million or 126% from $5.3 million to $12.0 million.
  • Pawn loans outstanding (PLO) increased to $157.2 million up 39% from the prior-year quarter and 25% on a sequential basis. On a same store basis, PLO increased 34% year-over-year and 21% sequentially.
  • Net revenues increased $5.8 million or 6% while total revenues decreased $36.2 million or 17%.
  • Merchandise sales gross profit increased by 6%, even though merchandise sales decreased by $28.7 million or 21% as a result of effective inventory management. Merchandise sales gross profit margin was 44%, a 1,100 bps improvement over the prior-year quarter (which was adversely impacted by a cost of goods sold adjustment for merchandise lost during looting at 30 U.S. stores during that quarter) and 100 bps over the immediately preceding quarter.
  • PSC increased $8.0 million or 15% due to an increase in the average PLO balance during the quarter.
  • Jewelry scrapping sales decreased $14.6 million or 72% and jewelry scrapping sales gross profit decreased $3.9 million or 95%. Jewelry scrapping sales gross profit margin decreased to 4% from 20%. This reflects our strategy of focusing on selling jewelry at higher retail margins than the scrapping process provides.
  • Net inventory was $92.2 million, down 25% year-over-year and 7% sequentially. Inventory turnover improved to 3.1x from 2.9x.
  • Total operating expenses were down $2.1 million or 2% to $104.3 million. Store expenses decreased 1% even though store count grew by 11%. In addition, general and administrative expenses decreased $1.6 million or 10% due to continued focus on expense control initiatives implemented since the fourth quarter of 2020.
  • Cash and cash equivalents at the end of the quarter was $283.7 million, down $27.5 million or 9% year-over-year and $52.0 million or 15% on a sequential basis. The decrease is primarily due to the increase in PLO and the acquisition of new stores.

1 ”Adjusted” basis, which is a non-GAAP measure, excludes certain items. “Constant currency” basis, which is a non-GAAP measure, excludes the impact of foreign currency exchange rate fluctuations. “Free cash flow,” which is a non-GAAP measure, includes certain adjustments to cash flow from operating activities.

For additional information about these calculations, as well as a reconciliation to the most comparable GAAP financial measures, see “Non-GAAP Financial Information” at the end of this release.

SEGMENT RESULTS

U.S. Pawn

  • PLO increased 35% year-over-year to $117.2 million. On a sequential basis, PLO increased 23% compared to a 29% sequential decrease in the prior-year quarter. On a same store basis, PLO increased 34% year-over-year and 22% sequentially.
  • Total revenue was down 25% to $130.4 million, while net revenues decreased 3% to $83.3 million.
  • Merchandise sales and same store sales declined 27% to $84.5 million, but merchandise sales gross profit was down only 3%, reflecting increased gross margins of 46% compared to 35% in the prior-year-quarter (37% when excluding a loss from looting of $2.2 million from merchandise cost of goods sold in the prior-year-quarter). Aged general merchandise inventory as a percentage of total inventory improved to 1.2% from 4.9%.
  • PSC increased 7% to $44.0 million as a result of higher average PLO for the quarter.
  • Jewelry scrapping sales decreased $15.2 million or 89% and jewelry scrapping sales gross profit decreased $4.2 million or 99% Jewelry scrapping sales gross profit margin decreased to 2% from 25%.
  • Net inventory was down $20.9 million or 23% year-over-year and 1% sequentially. Inventory turnover decreased to 2.8x from 3.2x.
  • Store expenses were down 6% to $62.5 million driven by a reduction in labor expense.
  • Segment contribution increased $1.6 million to $18.1 million. When excluding the looting charge taken in the prior year quarter, segment contribution decreased $0.6 million.
  • Segment store count increased by 11 during the quarter, due to the acquisition of 11 pawn stores in the Houston, Texas area.

Latin America Pawn

  • PLO increased 51% year-over-year to $40.0 million (36% on constant currency basis). On a sequential basis, PLO increased 34% compared to a 31% sequential decrease in the prior-year quarter. On a same store basis, PLO increased 32% year-over-year and 17% sequentially.
  • Total revenue was up 25% to $43.5 million (12% on a constant currency basis), while net revenues increased 59% to $24.7 million (43% on a constant currency basis).
  • Merchandise sales grew 15% to $23.3 million (up 3% to $20.8 million on a constant currency basis) and same store sales grew 8% (down 4% on a constant currency basis). Merchandise sales gross profit was up 91%, reflecting significantly improved margins of 35% compared to 21% in the prior-year quarter. Aged general merchandise as a percentage of total inventory improved to 0.9% from 18.1%.
  • PSC increased $5.0 million to $16.4 million (up 30% to $14.8 million on a constant currency basis) as a result of higher average PLO for the quarter.
  • Net inventory was down $9.9 million or 30% year-over-year (38% on a constant currency basis), but up 41% sequentially. Inventory turnover improved to 4.0x from 2.2x.
  • Store expenses were up $4.3 million or 28% ($2.2 million or 15% on a constant currency basis) primarily due to an increase in transaction volume and costs resulting from the re-opening of stores impacted by the COVID-19 pandemic last year.
  • Segment contribution was $3.6 million ($3.2 million on a constant currency basis), compared to a segment loss of $0.7 million in the prior year quarter.
  • Segment store count increased by 121 during the quarter, reflecting the acquisition of 128 Cash Apoyo Efectivo stores, the addition of four de novo stores and the closure of 11 stores in Peru.

FORM 10-Q

EZCORP’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 has been filed with the Securities and Exchange Commission and is available in the Investor Relations section of the Company’s website at http://investors.ezcorp.com.

CONFERENCE CALL

EZCORP will host a conference call on Thursday, August 5, 2021, at 7:00 am Central Time to discuss fiscal third quarter results. Analysts and institutional investors may participate on the conference call by dialing (866) 269-4262, Conference ID: 8885759, or internationally by dialing (323) 347-3281. The conference call will be webcast simultaneously to the public through this link: http://investors.ezcorp.com/. A replay of the conference call will be available online at http://investors.ezcorp.com/ shortly after the end of the call.

ABOUT EZCORP

Formed in 1989, EZCORP has grown into a leading provider of pawn transactions in the United States and Latin America. We also sell merchandise, primarily collateral forfeited from pawn lending operations and pre-owned and recycled merchandise purchased from customers. We are dedicated to satisfying the short-term cash needs of consumers who are both cash and credit constrained, focusing on an industry-leading customer experience. EZCORP is traded on NASDAQ under the symbol EZPW and is a member of the Russell 2000 Index, S&P 1000 Index and Nasdaq Composite Index.

FORWARD LOOKING STATEMENTS

This announcement contains certain forward-looking statements regarding the company’s strategy, initiatives and expected performance. These statements are based on the Company’s current expectations as to the outcome and timing of future events. All statements, other than statements of historical facts, including all statements regarding the company's strategy, initiatives and future performance, that address activities or results that the company plans, expects, believes, projects, estimates or anticipates, will, should or may occur in the future, including future financial or operating results, are forward-looking statements. 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 operating risks, liquidity risks, legislative or regulatory developments, market factors, current or future litigation and risks associated with the COVID-19 pandemic. 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. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

 

EZCORP, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

 

 

Three Months Ended June 30,

 

Nine Months Ended June 30,

(in thousands, except per share amount)

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

Merchandise sales

$

107,808

 

 

$

136,537

 

 

$

330,816

 

 

$

393,095

 

Jewelry scrapping sales

5,673

 

 

20,303

 

 

18,507

 

 

41,709

 

Pawn service charges

60,431

 

 

52,460

 

 

187,356

 

 

217,407

 

Other revenues

121

 

 

924

 

 

428

 

 

3,727

 

Total revenues

174,033

 

 

210,224

 

 

537,107

 

 

655,938

 

Merchandise cost of goods sold

60,539

 

 

91,859

 

 

190,872

 

 

261,711

 

Jewelry scrapping cost of goods sold

5,473

 

 

16,158

 

 

16,076

 

 

33,529

 

Other cost of revenues

 

 

32

 

 

 

 

1,093

 

Net revenues

108,021

 

 

102,175

 

 

330,159

 

 

359,605

 

Operating expenses:

 

 

 

 

 

 

 

Store expenses

81,803

 

 

82,341

 

 

242,261

 

 

259,264

 

General and administrative

14,589

 

 

16,176

 

 

40,870

 

 

50,355

 

Impairment of goodwill, intangible and other assets

 

 

 

 

 

 

47,060

 

Depreciation and amortization

7,419

 

 

7,679

 

 

23,080

 

 

23,174

 

Loss on sale or disposal of assets and other

 

 

255

 

 

90

 

 

1,260

 

Other charges

497

 

 

 

 

497

 

 

 

Total operating expenses

104,308

 

 

106,451

 

 

306,798

 

 

381,113

 

Operating income (loss)

3,713

 

 

(4,276)

 

 

23,361

 

 

(21,508)

 

Interest expense

5,569

 

 

5,379

 

 

16,542

 

 

16,589

 

Interest income

(512)

 

 

(628)

 

 

(1,918)

 

 

(2,412)

 

Equity in net (income) loss of unconsolidated affiliates

(643)

 

 

1,183

 

 

(2,409)

 

 

5,896

 

Other expense (income)

65

 

 

28

 

 

(389)

 

 

(215)

 

(Loss) income before income taxes

(766)

 

 

(10,238)

 

 

11,535

 

 

(41,366)

 

Income tax expense (benefit)

1,804

 

 

(4,751)

 

 

4,476

 

 

3,757

 

Net (loss) income

$

(2,570)

 

 

$

(5,487)

 

 

$

7,059

 

 

$

(45,123)

 

 

 

 

 

 

 

 

 

Basic (loss) earnings per share

$

(0.05)

 

 

$

(0.10)

 

 

$

0.13

 

 

$

(0.81)

 

Diluted (loss) earnings per share

$

(0.05)

 

 

$

(0.10)

 

 

$

0.13

 

 

$

(0.81)

 

 

 

 

 

 

 

 

 

Weighted-average basic shares outstanding

55,898

 

 

55,068

 

 

55,639

 

 

55,395

 

Weighted-average diluted shares outstanding

55,898

 

 

55,068

 

 

55,653

 

 

55,395

 

 

EZCORP, Inc. CONSOLIDATED BALANCE SHEETS

 

(in thousands, except share and per share amounts)

June 30, 2021

 

June 30, 2020

 

September 30, 2020

 

(Unaudited)

 

 

Assets:

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

283,668

 

 

$

311,130

 

 

$

304,542

 

Restricted cash

13,795

 

 

4,000

 

 

8,011

 

Pawn loans

157,155

 

 

113,290

 

 

131,323

 

Pawn service charges receivable, net

24,965

 

 

17,432

 

 

20,580

 

Inventory, net

92,242

 

 

123,112

 

 

95,891

 

Notes receivable, net

 

 

3,866

 

 

 

Prepaid expenses and other current assets

28,343

 

 

25,754

 

 

32,903

 

Total current assets

600,168

 

 

598,584

 

 

593,250

 

Investments in unconsolidated affiliates

35,387

 

 

29,483

 

 

32,458

 

Property and equipment, net

55,630

 

 

58,098

 

 

56,986

 

Lease right-of-use asset

185,467

 

 

204,591

 

 

183,809

 

Goodwill

283,619

 

 

257,326

 

 

257,582

 

Intangible assets, net

61,922

 

 

65,003

 

 

58,638

 

Notes receivable, net

1,173

 

 

1,140

 

 

1,148

 

Deferred tax asset, net

10,292

 

 

5,505

 

 

8,931

 

Other assets

4,992

 

 

4,572

 

 

4,221

 

Total assets

$

1,238,650

 

 

$

1,224,302

 

 

$

1,197,023

 

 

 

 

 

 

 

Liabilities and equity:

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current maturities of long-term debt, net

$

 

 

$

268

 

 

$

213

 

Accounts payable, accrued expenses and other current liabilities

84,966

 

 

58,358

 

 

71,504

 

Customer layaway deposits

11,884

 

 

11,902

 

 

11,008

 

Lease liability

47,241

 

 

48,840

 

 

49,742

 

Total current liabilities

144,091

 

 

119,368

 

 

132,467

 

Long-term debt, net

260,632

 

 

247,618

 

 

251,016

 

Deferred tax liability, net

1,309

 

 

2,165

 

 

524

 

Lease liability

149,342

 

 

167,716

 

 

153,040

 

Other long-term liabilities

10,058

 

 

7,523

 

 

10,849

 

Total liabilities

565,432

 

 

544,390

 

 

547,896

 

Commitments and Contingencies (Note 13)

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Class A Non-voting Common Stock, par value $0.01 per share; shares authorized: 100 million; issued and outstanding: 53,086,438 as of June 30, 2021; 52,097,590 as of June 30, 2020; and 52,332,848 as of September 30, 2020

530

 

 

521

 

 

521

 

Class B Voting Common Stock, convertible, par value $0.01 per share; shares authorized: 3 million; issued and outstanding: 2,970,171

30

 

 

30

 

 

30

 

Additional paid-in capital

402,522

 

 

408,601

 

 

398,475

 

Retained earnings

325,228

 

 

341,517

 

 

318,169

 

Accumulated other comprehensive loss

(55,092)

 

 

(70,757)

 

 

(68,068)

 

Total equity

673,218

 

 

679,912

 

 

649,127

 

Total liabilities and equity

$

1,238,650

 

 

$

1,224,302

 

 

$

1,197,023

 

 

EZCORP, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

 

 

Nine Months Ended June 30,

(in thousands)

2021

 

2020

 

 

Operating activities:

 

 

 

Net income (loss)

$

7,059

 

 

$

(45,123)

 

Adjustments to reconcile net income (loss) to net cash flows from operating activities:

 

 

 

Depreciation and amortization

23,080

 

 

23,174

 

Amortization of debt discount and deferred financing costs

10,243

 

 

9,814

 

Amortization of lease right-of-use asset

35,885

 

 

34,265

 

Accretion of notes receivable discount and deferred compensation fee

 

 

(688)

 

Deferred income taxes

(576)

 

 

(3,327)

 

Impairment of goodwill and intangible assets

 

 

47,060

 

Other adjustments

(331)

 

 

2,128

 

Provision for inventory reserve

(6,812)

 

 

(4,477)

 

Stock compensation expense

3,156

 

 

5,093

 

Equity in net (income) loss of unconsolidated affiliates

(2,409)

 

 

5,896

 

Changes in operating assets and liabilities, net of business acquisitions:

 

 

 

Service charges and fees receivable

(2,832)

 

 

14,076

 

Inventory

5,382

 

 

12,467

 

Prepaid expenses, other current assets and other assets

7,908

 

 

(3,348)

 

Accounts payable, accrued expenses and other liabilities

(51,565)

 

 

(40,450)

 

Customer layaway deposits

511

 

 

(709)

 

Income taxes

4,423

 

 

514

 

Net cash provided by operating activities

33,122

 

 

56,365

 

Investing activities:

 

 

 

Loans made

(423,450)

 

 

(442,752)

 

Loans repaid

260,536

 

 

321,718

 

Recovery of pawn loan principal through sale of forfeited collateral

155,595

 

 

248,290

 

Capital expenditures, net

(14,635)

 

 

(20,867)

 

Acquisitions, net of cash acquired

(15,132)

 

 

 

Principal collections on notes receivable

 

 

4,000

 

Net cash (used in) provided by investing activities

(37,086)

 

 

110,389

 

Financing activities:

 

 

 

Taxes paid related to net share settlement of equity awards

(839)

 

 

(1,458)

 

Payout of deferred consideration

 

 

(350)

 

Proceeds from borrowings, net of issuance costs

 

 

(106)

 

Payments on assumed debt and other borrowings

(15,363)

 

 

(316)

 

Repurchase of common stock

 

 

(5,158)

 

Net cash used in financing activities

(16,202)

 

 

(7,388)

 

Effect of exchange rate changes on cash and cash equivalents and restricted cash

5,076

 

 

(6,678)

 

Net (decrease) increase in cash, cash equivalents and restricted cash

(15,090)

 

 

152,688

 

Cash, cash equivalents and restricted cash at beginning of period

312,553

 

 

162,442

 

Cash, cash equivalents and restricted cash at end of period

$

297,463

 

 

$

315,130

 

 

 

 

 

Supplemental disclosure of cash flow information

 

 

 

Cash and cash equivalents

$

283,668

 

 

$

311,130

 

Restricted cash

13,795

 

 

4,000

 

Total cash and cash equivalents and restricted cash

$

297,463

 

 

$

315,130

 

 

 

 

 

Non-cash investing and financing activities:

 

 

 

Pawn loans forfeited and transferred to inventory

$

145,839

 

 

$

200,160

 

Transfer of consideration for current period acquisition

1,547

 

 

 

Acquisition earn-out contingency

4,608

 

 

 

Accrued acquisition consideration held as restricted cash

5,824

 

 

 

 

EZCORP, Inc. OPERATING SEGMENT RESULTS (Unaudited)

 

 

Three Months Ended June 30, 2021

(in thousands)

U.S. Pawn

 

Latin America Pawn

 

Other International

 

Total Segments

 

Corporate Items

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Merchandise sales

$

84,465

 

 

$

23,343

 

 

$

 

 

$

107,808

 

 

$

 

 

$

107,808

 

Jewelry scrapping sales

1,908

 

 

3,765

 

 

 

 

5,673

 

 

 

 

5,673

 

Pawn service charges

44,039

 

 

16,392

 

 

 

 

60,431

 

 

 

 

60,431

 

Other revenues

32

 

 

 

 

89

 

 

121

 

 

 

 

121

 

Total revenues

130,444

 

 

43,500

 

 

89

 

 

174,033

 

 

 

 

174,033

 

Merchandise cost of goods sold

45,310

 

 

15,229

 

 

 

 

60,539

 

 

 

 

60,539

 

Jewelry scrapping cost of goods sold

1,878

 

 

3,595

 

 

 

 

5,473

 

 

 

 

5,473

 

Other cost of revenues

 

 

 

 

 

 

 

 

 

 

 

Net revenues

83,256

 

 

24,676

 

 

89

 

 

108,021

 

 

 

 

108,021

 

Segment and corporate expenses (income):

 

 

 

 

 

 

 

 

 

 

 

Store expenses

62,507

 

 

19,296

 

 

 

 

81,803

 

 

 

 

81,803

 

General and administrative

 

 

 

 

 

 

 

 

14,589

 

 

14,589

 

Depreciation and amortization

2,600

 

 

1,806

 

 

 

 

4,406

 

 

3,013

 

 

7,419

 

Other charges

 

 

497

 

 

 

 

497

 

 

 

 

497

 

Interest expense

 

 

 

 

 

 

 

 

5,569

 

 

5,569

 

Interest income

 

 

(484)

 

 

 

 

(484)

 

 

(28)

 

 

(512)

 

Equity in net income of unconsolidated affiliates

 

 

 

 

(643)

 

 

(643)

 

 

 

 

(643)

 

Other (income) expense

 

 

(5)

 

 

18

 

 

13

 

 

52

 

 

65

 

Segment contribution

$

18,149

 

 

$

3,566

 

 

$

714

 

 

$

22,429

 

 

 

 

 

Income (loss) before income taxes

 

 

 

 

 

 

$

22,429

 

 

$

(23,195)

 

 

$

(766)

 

 

Three Months Ended June 30, 2020

(in thousands)

U.S. Pawn

 

Latin America Pawn

 

Other International

 

Total Segments

 

Corporate Items

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Merchandise sales

$

116,258

 

 

$

20,279

 

 

$

 

 

$

136,537

 

 

 

 

$

136,537

 

Jewelry scrapping sales

17,129

 

 

3,174

 

 

 

 

20,303

 

 

 

 

20,303

 

Pawn service charges

41,069

 

 

11,391

 

 

 

 

52,460

 

 

 

 

52,460

 

Other revenues

40

 

 

 

 

884

 

 

924

 

 

 

 

924

 

Total revenues

174,496

 

 

34,844

 

 

884

 

 

210,224

 

 

 

 

210,224

 

Merchandise cost of goods sold

75,838

 

 

16,021

 

 

 

 

91,859

 

 

 

 

91,859

 

Jewelry scrapping cost of goods sold

12,875

 

 

3,283

 

 

 

 

16,158

 

 

 

 

16,158

 

Other cost of revenues

 

 

32

 

 

 

 

32

 

 

 

 

32

 

Net revenues

85,783

 

 

15,508

 

 

884

 

 

102,175

 

 

 

 

102,175

 

Segment and corporate expenses (income):

 

 

 

 

 

 

 

 

 

 

 

Store expenses

66,243

 

 

15,041

 

 

1,057

 

 

82,341

 

 

 

 

82,341

 

General and administrative

 

 

 

 

 

 

 

 

16,176

 

 

16,176

 

Depreciation and amortization

2,749

 

 

1,647

 

 

3

 

 

4,399

 

 

3,280

 

 

7,679

 

(Gain) loss on sale or disposal of assets and other

234

 

 

23

 

 

(20)

 

 

237

 

 

18

 

 

255

 

Interest expense

 

 

 

 

140

 

 

140

 

 

5,239

 

 

5,379

 

Interest income

 

 

(404)

 

 

 

 

(404)

 

 

(224)

 

 

(628)

 

Equity in net income of unconsolidated affiliates

 

 

 

 

1,183

 

 

1,183

 

 

 

 

1,183

 

Other (income) expense

 

 

(61)

 

 

(5)

 

 

(66)

 

 

94

 

 

28

 

Segment contribution (loss)

$

16,557

 

 

$

(738)

 

 

$

(1,474)

 

 

$

14,345

 

 

 

 

 

Loss before income taxes

 

 

 

 

 

 

$

14,345

 

 

$

(24,583)

 

 

$

(10,238)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended June 30, 2021

(in thousands)

U.S. Pawn

 

Latin America Pawn

 

Other International

 

Total Segments

 

Corporate Items

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Merchandise sales

$

260,545

 

 

$

70,271

 

 

$

 

 

$

330,816

 

 

$

 

 

$

330,816

 

Jewelry scrapping sales

9,493

 

 

9,014

 

 

 

 

18,507

 

 

 

 

18,507

 

Pawn service charges

143,836

 

 

43,520

 

 

 

 

187,356

 

 

 

 

187,356

 

Other revenues

83

 

 

7

 

 

338

 

 

428

 

 

 

 

428

 

Total revenues

413,957

 

 

122,812

 

 

338

 

 

537,107

 

 

 

 

537,107

 

Merchandise cost of goods sold

145,181

 

 

45,691

 

 

 

 

190,872

 

 

 

 

190,872

 

Jewelry scrapping cost of goods sold

7,871

 

 

8,205

 

 

 

 

16,076

 

 

 

 

16,076

 

Net revenues

260,905

 

 

68,916

 

 

338

 

 

330,159

 

 

 

 

330,159

 

Segment and corporate expenses (income):

 

 

 

 

 

 

 

 

 

 

 

Store expenses

188,256

 

 

54,005

 

 

 

 

242,261

 

 

 

 

242,261

 

General and administrative

 

 

 

 

 

 

 

 

40,870

 

 

40,870

 

Depreciation and amortization

7,972

 

 

5,459

 

 

 

 

13,431

 

 

9,649

 

 

23,080

 

Loss on sale or disposal of assets and other

27

 

 

 

 

 

 

27

 

 

63

 

 

90

 

Other charges

 

 

497

 

 

 

 

497

 

 

 

 

497

 

Interest expense

 

 

 

 

 

 

 

 

16,542

 

 

16,542

 

Interest income

 

 

(1,819)

 

 

 

 

(1,819)

 

 

(99)

 

 

(1,918)

 

Equity in net income of unconsolidated affiliates

 

 

 

 

(2,409)

 

 

(2,409)

 

 

 

 

(2,409)

 

Other (income) expense

 

 

(375)

 

 

(183)

 

 

(558)

 

 

169

 

 

(389)

 

Segment contribution

$

64,650

 

 

$

11,149

 

 

$

2,930

 

 

$

78,729

 

 

 

 

 

Income (loss) before income taxes

 

 

 

 

 

 

$

78,729

 

 

$

(67,194)

 

 

$

11,535

 

 

 

Nine Months Ended June 30, 2020

(in thousands)

U.S. Pawn

 

Latin America Pawn

 

Other International

 

Total Segments

 

Corporate Items

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Merchandise sales

$

314,059

 

 

$

79,036

 

 

$

 

 

$

393,095

 

 

$

 

 

$

393,095

 

Jewelry scrapping sales

32,905

 

 

8,804

 

 

 

 

41,709

 

 

 

 

41,709

 

Pawn service charges

166,859

 

 

50,548

 

 

 

 

217,407

 

 

 

 

217,407

 

Other revenues

107

 

 

50

 

 

3,570

 

 

3,727

 

 

 

 

3,727

 

Total revenues

513,930

 

 

138,438

 

 

3,570

 

 

655,938

 

 

 

 

655,938

 

Merchandise cost of goods sold

202,488

 

 

59,223

 

 

 

 

261,711

 

 

 

 

261,711

 

Jewelry scrapping cost of goods sold

25,430

 

 

8,099

 

 

 

 

33,529

 

 

 

 

33,529

 

Other cost of revenues

 

 

69

 

 

1,024

 

 

1,093

 

 

 

 

1,093

 

Net revenues

286,012

 

 

71,047

 

 

2,546

 

 

359,605

 

 

 

 

359,605

 

Segment and corporate expenses (income):

 

 

 

 

 

 

 

 

 

 

 

Store expenses

201,921

 

 

53,493

 

 

3,850

 

 

259,264

 

 

 

 

259,264

 

General and administrative

 

 

 

 

 

 

 

 

50,355

 

 

50,355

 

Impairment of goodwill, intangible and other assets

10,000

 

 

35,936

 

 

1,124

 

 

47,060

 

 

 

 

47,060

 

Depreciation and amortization

8,325

 

 

5,476

 

 

60

 

 

13,861

 

 

9,313

 

 

23,174

 

(Gain) loss on sale or disposal of assets and other

234

 

 

(72)

 

 

(20)

 

 

142

 

 

1,118

 

 

1,260

 

Interest expense

 

 

430

 

 

464

 

 

894

 

 

15,695

 

 

16,589

 

Interest income

 

 

(1,161)

 

 

 

 

(1,161)

 

 

(1,251)

 

 

(2,412)

 

Equity in net loss of unconsolidated affiliates

 

 

 

 

5,896

 

 

5,896

 

 

 

 

5,896

 

Other (income) expense

 

 

(303)

 

 

14

 

 

(289)

 

 

74

 

 

(215)

 

Segment contribution (loss)

$

65,532

 

 

$

(22,752)

 

 

$

(8,842)

 

 

$

33,938

 

 

 

 

 

Income (loss) before income taxes

 

 

 

 

 

 

$

33,938

 

 

$

(75,304)

 

 

$

(41,366)

 

 

EZCORP, Inc. STORE COUNT ACTIVITY (Unaudited)

 

 

Three Months Ended June 30, 2021

 

U.S. Pawn

 

Latin America Pawn

 

Consolidated

 

 

 

 

 

 

As of March 31, 2021

505

 

 

506

 

 

1,011

 

New locations opened

 

 

4

 

 

4

 

Locations acquired

11

 

 

128

 

 

139

 

Locations sold, combined or closed

 

 

(11)

 

 

(11)

 

As of June 30, 2021

516

 

 

627

 

 

1,143

 

   

 

Three Months Ended June 30, 2020

 

U.S. Pawn

 

Latin America Pawn

 

Other International

 

Consolidated

 

 

 

 

 

 

 

 

As of March 31, 2020

512

 

 

493

 

 

22

 

 

1,027

 

New locations opened

 

 

3

 

 

 

 

3

 

Locations sold, combined or closed

(1)

 

 

 

 

 

 

(1)

 

As of June 30, 2020

511

 

 

496

 

 

22

 

 

1,029

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended June 30, 2021

 

U.S. Pawn

 

Latin America Pawn

 

Consolidated

 

 

 

 

 

 

As of September 30, 2020

505

 

 

500

 

 

1,005

 

New locations opened

 

 

10

 

 

10

 

Locations acquired

11

 

 

128

 

 

139

 

Locations sold, combined or closed

 

 

(11)

 

 

(11)

 

As of June 30, 2021

516

 

 

627

 

 

1,143

 

   

 

Nine Months Ended June 30, 2020

 

U.S. Pawn

 

Latin America Pawn

 

Other

International

 

Consolidated

 

 

 

 

 

 

 

 

As of September 30, 2019

512

 

 

480

 

 

22

 

 

1,014

 

New locations opened

 

 

16

 

 

 

 

16

 

Locations sold, combined or closed

(1)

 

 

 

 

 

 

(1)

 

As of June 30, 2020

511

 

 

496

 

 

22

 

 

1,029

 

 

Non-GAAP Financial Information (Unaudited)

In addition to the financial information prepared in conformity with accounting principles generally accepted in the United States ("GAAP"), we provide certain other non-GAAP financial information on a constant currency ("constant currency") and adjusted basis. We use constant currency results to evaluate our Latin America Pawn operations, which are denominated primarily in Mexican pesos, Guatemalan quetzales and other Latin American currencies. We believe that presentation of constant currency and adjusted results is meaningful and useful in understanding the activities and business metrics of our operations and reflect an additional way of viewing aspects of our business that, when viewed with GAAP results, provide a more complete understanding of factors and trends affecting our business. We provide non-GAAP financial information for informational purposes and to enhance understanding of our GAAP consolidated financial statements. We use this non-GAAP financial information primarily to evaluate and compare operating results across accounting periods.

Readers should consider the information in addition to, but not instead of or superior to, our financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.

Constant currency results reported herein are calculated by translating consolidated balance sheet and consolidated statement of operations items denominated in local currency to U.S. dollars using the exchange rate from the prior-year comparable period, as opposed to the current period, in order to exclude the effects of foreign currency rate fluctuations. We used the end-of-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. The end-of-period and approximate average exchange rates for each applicable currency as compared to U.S. dollars as of and for the three and nine months ended June 30, 2021 and 2020 were as follows:

 

 

June 30,

 

Three Months Ended June 30,

 

Nine Months Ended June 30,

 

 

2021

 

2020

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexican peso

 

19.9

 

 

23.1

 

 

20.0

 

 

23.3

 

 

20.3

 

 

20.8

 

Guatemalan quetzal

 

7.6

 

 

7.5

 

 

7.6

 

 

7.5

 

 

7.6

 

 

7.5

 

Honduran lempira

 

23.6

 

 

24.4

 

 

23.7

 

 

24.4

 

 

23.8

 

 

24.3

 

Peruvian sol

 

3.9

 

 

3.5

 

 

3.8

 

 

3.4

 

 

3.7

 

 

3.4

 

Our statement of operations constant currency results reflect the monthly exchange rate fluctuations and so are not directly calculable from the above rates. Constant currency results, where presented, also exclude the foreign currency gain or loss.

Miscellaneous Non-GAAP Financial Measures

 

2021 Q3

 

2020 Q3

 

 

 

 

 

(in millions)

Net loss

$

(2.6)

 

 

$

(5.5)

 

Interest expense

5.6

 

 

5.4

 

Interest income

(0.5)

 

 

(0.6)

 

Income tax expense

1.8

 

 

(4.8)

 

Depreciation and amortization

7.4

 

 

7.7

 

EBITDA

$

11.7

 

 

$

2.2

 

   

 

Total Revenues

 

Net Revenues

 

Income Before Tax

 

Tax Effect

 

Net Income

 

Diluted EPS

 

EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2021 Q3 Reported

$

174.0

 

 

$

108.0

 

 

$

(0.8)

 

 

$

1.8

 

 

$

(2.6)

 

 

$

(0.05)

 

 

$

11.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition expenses

 

 

 

 

0.3

 

 

0.2

 

 

0.1

 

 

 

 

0.3

 

Peru reserve

 

 

 

 

0.5

 

 

0.4

 

 

0.1

 

 

 

 

 

Non cash net interest expense

 

 

 

 

3.5

 

 

2.5

 

 

1.0

 

 

0.02

 

 

 

Constant currency impact

(4.4)

 

 

(2.5)

 

 

(0.3)

 

 

 

 

(0.3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2021 Q3 Adjusted

$

169.6

 

 

$

105.5

 

 

$

3.2

 

 

$

4.9

 

 

$

(1.7)

 

 

$

(0.03)

 

 

$

12.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenues

 

Net Revenues

 

(Loss) Income Before Tax

 

Tax Effect

 

Net (Loss) Income

 

Diluted EPS

 

EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020 Q3 Reported

$

210.2

 

 

$

102.2

 

 

$

(10.2)

 

 

$

(4.7)

 

 

$

(5.5)

 

 

$

(0.10)

 

 

$

2.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COVID-19 expenses

 

 

 

 

0.5

 

 

0.1

 

 

0.4

 

 

0.01

 

 

0.5

 

Civil unrest - asset disposal

 

 

 

 

0.2

 

 

 

 

0.2

 

 

 

 

0.2

 

Civil unrest - looting

 

 

 

 

2.2

 

 

0.7

 

 

1.5

 

 

0.03

 

 

2.2

 

Currency exchange rate fluctuations

 

 

 

 

0.6

 

 

0.1

 

 

0.5

 

 

0.01

 

 

0.5

 

Non cash interest

 

 

 

 

3.2

 

 

1.0

 

 

2.2

 

 

0.04

 

 

 

Constant currency impact

 

 

2.2

 

 

(0.4)

 

 

 

 

(0.4)

 

 

(0.01)

 

 

(0.3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020 Q3 Adjusted

$

210.2

 

 

$

104.4

 

 

$

(3.9)

 

 

$

(2.8)

 

 

$

(1.1)

 

 

$

(0.02)

 

 

$

5.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2021 Q3:

U.S. Dollar Amount

 

Percentage Change YOY

 

 

 

 

 

(in millions)

 

 

Consolidated revenue

$

174.0

 

 

(17)

%

Currency exchange rate fluctuations

(4.4)

 

 

 

Constant currency consolidated revenue

$

169.6

 

 

(19)

%

 

 

 

 

Consolidated net revenue

$

108.0

 

 

6

%

Currency exchange rate fluctuations

(2.5)

 

 

 

Constant currency consolidated net revenue

$

105.5

 

 

1

%

 

 

 

 

Consolidated net inventory

$

92.2

 

 

(25)

%

Currency exchange rate fluctuations

(2.6)

 

 

 

Constant currency consolidated net inventory

$

89.6

 

 

(27)

%

 

 

 

 

Latin America Pawn net revenue

$

24.7

 

 

59

%

Currency exchange rate fluctuations

(2.5)

 

 

 

Constant currency Latin America Pawn net revenue

$

22.2

 

 

44

%

 

 

 

 

Latin America Pawn PLO

$

40.0

 

 

51

%

Currency exchange rate fluctuations

(4.0)

 

 

 

Constant currency Latin America Pawn PLO

$

36.0

 

 

36

%

 

 

 

 

Latin America Pawn PSC revenues

$

16.4

 

 

44

%

Currency exchange rate fluctuations

(1.6)

 

 

 

Constant currency Latin America Pawn PSC revenues

$

14.8

 

 

30

%

 

 

 

 

Latin America Pawn merchandise sales

$

23.3

 

 

15

%

Currency exchange rate fluctuations

(2.5)

 

 

 

Constant currency Latin America Pawn merchandise sales

$

20.8

 

 

2

%

 

 

 

 

Latin America Pawn segment profit before tax

$

3.6

 

 

583

%

Currency exchange rate fluctuations

(0.4)

 

 

 

Constant currency Latin America Pawn segment profit before tax

$

3.2

 

 

535

%

 

Email: Investor_Relations@ezcorp.com Phone: (512) 314-2220

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