Strong Consumer Demand Driving Record Pawn
Loans Outstanding and Revenue to Over $1 Billion for the
Year
EZCORP, Inc. (NASDAQ: EZPW), a leading provider of pawn
transactions in the United States and Latin America, today
announced results for its fourth quarter and full year ended
September 30, 2023.
Unless otherwise noted, all amounts in this release are in
conformity with U.S. generally accepted accounting principles
(“GAAP”) and comparisons shown are to the same period in the prior
year.
FOURTH QUARTER AND FULL YEAR HIGHLIGHTS
- Pawn loans outstanding (PLO) up 17% to $245.8 million.
- Total revenue increased 16% for the quarter and 18% for the
full year, while gross profit1 increased 16% for the quarter and
15% for the full year.
- Merchandise sales gross margin remains within our targeted
range at 36% for both the quarter and full year.
- Net income for the quarter was $10.3 million, an increase of
$2.9 million. Net income for the year was $38.5 million, a decrease
of $11.7 million. The majority of the decrease was driven by our
$26.3 million (after tax) share of the one-time, non-cash goodwill
impairment and other discrete adjustments recognized by Cash
Converters International, which we primarily recorded in our second
quarter.
- Diluted earnings per share was $0.15 for the quarter, up from
$0.11 and for the year was $0.53 down from $0.70. On an adjusted
basis1, diluted earnings per share for the quarter was $0.23,
compared to $0.15, and for the year was $0.92, compared to
$0.75.
- Return on earning assets (ROEA) remains strong at 157% for the
quarter and 161% for the full year.
CEO COMMENTARY AND OUTLOOK
Lachie Given, Chief Executive Officer, stated, “Due to our
team's relentless focus on superior execution and operational
excellence, we achieved another quarter of outstanding financial
results. PLO, revenues, and merchandise sales all reached new
records for the fourth quarter and for the year.
“We added 21 stores during the quarter, further expanding our
store footprint. Two of the new stores were acquired in the U.S.
and 19 were opened in Latin America. Ten of those were opened in
Mexico, taking our store count there to 549; seven were in
Guatemala, expanding our market leadership there to 117 stores; and
the remaining 2, in Honduras. In October, we invested an additional
$15 million into Simple Management Group through Founders LLC, as
they acquired another 22 stores in Panama and Costa Rica. This
business now operates 95 pawn stores in the US, Caribbean and
Central America and continues to develop a significant industry
presence.
“Our EZ+ Rewards loyalty program continues to grow rapidly, with
3.8 million members globally, a 15% increase over the previous
quarter, and a 100% increase over prior year. The strategies we
have implemented to win and retain customers and drive customer
engagement have been extremely successful, and are important in
achieving our strong store metrics.
“We embarked on our next three-year strategic plan in October,
advancing our commitment to ‘People, Pawn and Passion,’ underpinned
by a fundamental focus on operating excellence in every store every
day. We will continue to invest in our people and technology to
expand our customer base and their experiences with us, while
ensuring that we employ the most passionate, productive, and
tenured team in the industry. We offer a unique and essential
service to address our customers' short-term cash needs and provide
a wide variety of pre-owned goods for our expanding customer base
of environmentally and cost-conscious consumers.
“We maintain a robust acquisition pipeline and our objective is
to significantly grow our store footprint in an exciting global
industry. We have a strong balance sheet and the liquidity to
execute on that strategy.
“The EZCORP team worked hard on behalf of all stakeholders to
deliver the prior three-year plan. The business has grown
substantially and its operating and financial performance improved
materially in that time. I am very excited about the future as we
continue to drive value for all shareholders.”
CONSOLIDATED RESULTS
Three Months Ended September 30
As Reported
Adjusted1
in millions, except per share amounts
2023
2022
2023
2022
Total revenues
$
270.5
$
233.4
$
261.4
$
233.4
Gross profit
$
159.4
$
137.6
$
154.6
$
137.6
Income before tax
$
13.1
$
13.2
$
22.2
$
13.1
Net income
$
10.3
$
7.3
$
17.3
$
10.7
Diluted earnings per share
$
0.15
$
0.11
$
0.23
$
0.15
EBITDA (non-GAAP measure)
$
22.4
$
24.8
$
31.2
$
24.8
Twelve Months Ended September
30
As Reported
Adjusted1
in millions, except per share amounts
2023
2022
2023
2022
Total revenues
$
1,049.0
$
886.2
$
1,026.3
$
886.2
Gross profit
$
609.8
$
528.1
$
598.0
$
528.1
Income before tax
$
51.6
$
67.7
$
92.5
$
71.8
Net income
$
38.5
$
50.2
$
69.8
$
54.4
Diluted earnings per share
$
0.53
$
0.70
$
0.92
$
0.75
EBITDA
$
92.8
$
109.0
$
129.3
$
113.1
- Diluted earnings per share was $0.15 for the fourth quarter, up
from $0.11. On an adjusted basis, diluted earnings per share was
$0.23, up from $0.15. The primary difference between GAAP and
adjusted financial results is attributable to impairments of $6.9
million (after tax), unrelated to operations. For the full year,
diluted earnings per share was $0.53, compared to $0.70. On an
adjusted basis, diluted earnings per share for the year was $0.92,
compared to $0.75. The primary difference between GAAP and adjusted
financial results is attributable to our share of the one-time,
non-cash goodwill impairment recognized by Cash Converters
International, which we recorded in our second quarter.
- For the fourth quarter, income before taxes decreased to $13.1
million from $13.2 million, and adjusted EBITDA increased 26% to
$31.2 million. For the full year, income before taxes decreased to
$51.6 million from $67.7 million and adjusted EBITDA increased 14%
to $129.3 million.
- PLO increased 17% to $245.8 million, up $35.8 million. On a
same-store basis2, PLO increased 14% due to improved operational
performance and continued strong pawn demand.
- In the fourth quarter, total revenues and gross profit
increased 16%, reflecting improved pawn service charge (PSC)
revenue, merchandise sales and merchandise sales gross profit.
Similarly for the full year, total revenues increased 18% and gross
profit increased 15%.
- PSC increased 19% in the fourth quarter and 20% for the full
year as a result of higher average PLO and yields.
- Merchandise sales gross margin remains within our target range
at 36%. Aged general merchandise was 1.3% of total general
merchandise inventory. This is a 30 bps improvement over the third
quarter. For the full year, merchandise sales gross profit margin
was 36%, compared to 38%.
- Net inventory increased 10%, as expected with the growth in
PLO. Inventory turnover increased to 2.7x for the quarter, from
2.6x and was flat at 2.8x for the year.
- For the fourth quarter, store expenses increased 17% (14% on a
same-store basis2), primarily due to increased labor in-line with
store activity, higher store count and, to a lesser extent,
expenses related to our loyalty program. For the full year, store
expenses increased 17% (15% on a same-store basis2), primarily due
to increased labor in-line with store activity, higher store count
and, to a lesser extent, expenses related to our loyalty
program.
- General and administrative expenses increased 4% in the fourth
quarter, primarily due to an increase in costs related to
insurance, our Workday implementation and incentive compensation.
For the full year, general and administrative expenses increased
5%, primarily due to an increase in costs related to incentive
compensation, insurance and our Workday implementation, partially
offset by the litigation accrual charge of $2.0 million recorded in
prior period.
- Cash and cash equivalents at the end of the quarter was $220.6
million, up 7% year-over-year. The increase was primarily due to
cash inflows provided by operating activities and the net cash
proceeds associated with the convertible debt refinancing offset by
the increase in PLO and inventory, the acquisition of new stores,
strategic investments and share repurchases.
SEGMENT RESULTS
U.S. Pawn
- PLO continued to increase, ending the year at $190.6 million,
up 17% or 13% on a same store basis due to improved customer
service and increased pawn demand.
- In the fourth quarter, total revenue was up 12% and gross
profit increased 13%, primarily due to increased PSC. For the full
year, total revenues increased 16% and gross profit increased 12%,
primarily due to increased PSC.
- PSC increased 17% in the fourth quarter and increased 19% for
the full year as a result of higher average PLO and yields.
- During the fourth quarter, merchandise sales gross margin
decreased to 38% from 40%, within our target range. Aged general
merchandise was 0.9% of total general merchandise inventory which
is a 10 bps improvement over the third quarter. For the full year,
merchandise sales gross profit margin decreased 300 bps to 38%,
reflecting a return to normalized margins.
- Net inventory increased 12%, as expected with the growth in
PLO. Inventory turnover decreased to 2.4x from 2.5x in the quarter
and was flat at 2.6x for the full year.
- In the fourth quarter, store expenses increased 11% (9% on a
same store basis), primarily due to increased labor in-line with
store activity, higher store count and, to a lesser extent,
expenses related to our loyalty program. Similarly for the full
year, store expenses increased 12% (10% on a same store
basis).
- Segment contribution increased 20% to $37.2 million in the
fourth quarter and increased 14% to $146.5 million for the full
year.
- Segment store count increased by 14 due to the acquisition of
12 stores, the addition of 3 de novo stores and the consolidation
of 1 store during the full year.
Latin America Pawn
- PLO improved to $55.1 million, up 19% (7% on constant currency
basis). On a same store basis, PLO increased 16% (4% on a constant
currency basis) as consumer demand increased, reflecting recoveries
from the third quarter.
- In the fourth quarter, total revenue was up 28% (13% on
constant currency basis) and gross profit increased 24% (10% on a
constant currency basis), primarily due to increased PSC, higher
merchandise sales and improved gross profit. For the full year,
total revenues were up 26% (16% on a constant currency basis),
while gross profit increased by 25% (16% on a constant currency
basis).
- PSC increased in the fourth quarter to $26.5 million, up 23%
(9% on a constant currency basis) as a result of higher average PLO
and yields. Similarly for the full year, PSC increased 22% (13% on
a constant currency basis).
- Merchandise sales gross margin decreased in the fourth quarter
from 31% to 30%, and for the full year it increased 100 bps to 31%.
Aged general merchandise was 2.0% of total merchandise inventory
which is a 40 bps improvement over the third quarter.
- Net inventory increased 2% (decreased 9% on a constant currency
basis), driven by strong inventory turnover at 3.6x, up from 3.1x
for the quarter. For the full year inventory turnover was 3.4x,
down from 3.5x.
- In the fourth quarter, store expenses increased 34% (18% on a
constant currency basis), primarily due to increases in minimum
wage and headcount, higher store count and, to a lesser extent,
expenses related to our loyalty program and rent. Same-store
expenses increased $7.2 million or 30% (14% on a constant currency
basis). For similar reasons, full year store expenses increased 31%
(20% on a constant currency basis). Same-store expenses increased
26% (15% on a constant currency basis).
- For the fourth quarter, segment contribution decreased to $6.4
million, down 4% (13% on a constant currency basis). For the full
year, segment contribution was up 32% to $31.7 million (24% on a
constant currency basis). On an adjusted basis, segment
contribution for the fourth quarter was down 12% to $5.9 million.
On an adjusted basis, segment contribution for the full year was up
7% to $25.5 million, with the primary adjustment being the reversal
of contingent consideration liability in connection with a
previously completed acquisition.
- Segment store count increased by 42 due to the addition of 44
de novo stores and the consolidation of 2 stores during the full
year.
FORM 10-K
EZCORP’s Annual Report on Form 10-K for the year ended September
30, 2023 has been filed with the Securities and Exchange
Commission. The report is available in the Investor Relations
section of the Company’s website at http://investors.ezcorp.com.
EZCORP shareholders may obtain a paper copy of the report, free of
charge, by sending a request to the investor relations contact
below.
CONFERENCE CALL
EZCORP will host a conference call on Thursday, November 16,
2023, at 8:00 am Central Time to discuss Fourth Quarter Fiscal 2023
results. Analysts and institutional investors may participate on
the conference call by registering online at:
https://register.vevent.com/register/BI9b68b07fa36145dba75f47155a87dcab.
Once registered you will receive the dial-in details with a unique
PIN to join the call. 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 S&P 1000 Index and
Nasdaq Composite Index.
Follow us on social media:
Facebook EZPAWN Official https://www.facebook.com/EZPAWN/
EZPAWN Instagram Official
https://www.instagram.com/ezpawnofficial/
EZCORP LinkedIn https://www.linkedin.com/company/ezcorp/
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
September 30,
Twelve Months Ended
September 30,
(in thousands, except per share
amounts)
2023
2022
2023
2022
Revenues:
Merchandise sales
$
151,172
$
133,276
$
615,446
$
532,886
Jewelry scrapping sales
14,888
12,231
49,528
32,033
Pawn service charges
104,330
87,866
383,772
320,865
Other revenues
89
34
295
441
Total revenues
270,479
233,407
1,049,041
886,225
Merchandise cost of goods sold
97,494
83,858
394,779
329,382
Jewelry scrapping cost of goods sold
13,611
11,949
44,424
28,696
Gross profit
159,374
137,600
609,838
528,147
Operating expenses:
Store expenses
111,570
95,473
418,574
357,417
General and administrative
18,568
17,855
67,529
64,342
Impairment of other assets
4,343
—
4,343
—
Depreciation and amortization
8,154
9,370
32,131
32,140
Loss (gain) on sale or disposal of assets
and other
180
18
208
(674
)
Other (income) expense
—
—
(5,097
)
—
Total operating expenses
142,815
122,716
517,688
453,225
Operating income
16,559
14,884
92,150
74,922
Interest expense
3,462
2,321
16,456
9,972
Interest income
(2,324
)
(68
)
(7,470
)
(817
)
Equity in net (income) loss of
unconsolidated affiliates
(935
)
(322
)
28,459
(1,779
)
Other expense (income)
3,231
(208
)
3,072
(167
)
Income before income taxes
13,125
13,161
51,633
67,713
Income tax expense
2,872
5,824
13,170
17,553
Net income
$
10,253
$
7,337
$
38,463
$
50,160
Basic earnings per share
$
0.19
$
0.13
$
0.69
$
0.89
Diluted earnings per share
$
0.15
$
0.11
$
0.53
$
0.70
Weighted-average basic shares
outstanding
55,020
56,598
55,586
56,498
Weighted-average diluted shares
outstanding
87,154
82,539
80,865
82,400
EZCORP, Inc.
CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(in thousands, except share and per share
amounts)
September 30,
2023
September 30,
2022
Assets:
Current assets:
Cash and cash equivalents
$
220,595
$
206,028
Restricted cash
8,373
8,341
Pawn loans
245,766
210,009
Pawn service charges receivable, net
38,885
33,476
Inventory, net
166,477
151,615
Prepaid expenses and other current
assets
39,623
34,694
Total current assets
719,719
644,163
Investments in unconsolidated
affiliates
10,987
37,733
Other investments
36,220
24,220
Property and equipment, net
68,096
56,725
Right-of-use assets, net
234,388
221,405
Goodwill
302,372
286,828
Intangible assets, net
58,216
56,819
Notes receivable, net
—
1,215
Deferred tax asset, net
25,702
12,145
Other assets, net
12,011
6,625
Total assets
$
1,467,711
$
1,347,878
Liabilities and equity:
Current liabilities:
Current maturities of long-term debt,
net
$
34,265
$
—
Accounts payable, accrued expenses and
other current liabilities
81,605
84,509
Customer layaway deposits
18,920
16,023
Operating lease liabilities, current
57,182
52,334
Total current liabilities
191,972
152,866
Long-term debt, net
325,847
312,903
Deferred tax liability, net
435
373
Operating lease liabilities
193,187
180,756
Other long-term liabilities
10,502
8,749
Total liabilities
721,943
655,647
Commitments and Contingencies (Note
13)
Stockholders’ equity:
Class A Non-voting Common Stock, par value
$0.01 per share; shares authorized: 100 million; 51,869,569 issued
and outstanding as of September 30, 2023; and issued and
outstanding of 53,454,885 as of September 30, 2022
519
534
Class B Voting Common Stock, convertible,
par value $0.01 per share; shares authorized: 3 million; issued and
outstanding: 2,970,171 as of September 30, 2023 and 2022
30
30
Additional paid-in capital
346,181
345,330
Retained earnings
431,140
402,006
Accumulated other comprehensive loss
(32,102
)
(55,669
)
Total equity
745,768
692,231
Total liabilities and equity
$
1,467,711
$
1,347,878
EZCORP, Inc.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
Twelve Months Ended
September 30,
(in thousands)
2023
2022
Operating activities:
Net income
$
38,463
$
50,160
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation and amortization
32,131
32,140
Amortization of debt discount and deferred
financing costs
1,561
1,433
Non-cash lease expense
56,937
52,201
Deferred income taxes
(12,802
)
4,945
Impairment of other assets
4,343
—
Other adjustments
(2,890
)
2,511
Provision for inventory reserve
603
(2,253
)
Stock compensation expense
9,539
5,053
Equity in net loss (income) from
investment in unconsolidated affiliates
28,459
(1,779
)
Net loss on extinguishment of debt
3,545
—
Changes in operating assets and
liabilities, net of business acquisitions:
Service charges and fees receivable
(4,204
)
(4,572
)
Inventory
(4,810
)
(15,341
)
Prepaid expenses, other current assets and
other assets
(1,814
)
3,238
Accounts payable, accrued expenses and
other liabilities
(61,522
)
(65,141
)
Customer layaway deposits
1,376
3,359
Income taxes
12,919
(2,785
)
Dividends from unconsolidated
affiliates
—
3,366
Net cash provided by operating
activities
101,834
66,535
Investing activities:
Loans made
(821,725
)
(740,057
)
Loans repaid
458,854
410,523
Recovery of pawn loan principal through
sale of forfeited collateral
336,349
274,423
Capital expenditures, net
(40,446
)
(31,895
)
Acquisitions, net of cash acquired
(14,874
)
(1,850
)
Issuance of notes receivable
(15,500
)
(1,000
)
Investment in unconsolidated affiliate
(2,133
)
(6,927
)
Investment in other investments
(15,000
)
(16,500
)
Dividends from unconsolidated
affiliates
3,589
—
Net cash used in investing activities
(110,886
)
(113,283
)
Financing activities:
Taxes paid related to net share settlement
of equity awards
(1,148
)
(792
)
Proceeds from borrowings
230,000
—
Debt issuance cost
(7,458
)
—
Cash paid on extinguishment of debt
(1,951
)
—
Payments on assumed debt and other
borrowings
(178,488
)
—
Purchase and retirement of treasury
stock
(16,988
)
(2,040
)
Payments of finance leases
(275
)
—
Net cash provided by (used in) financing
activities
23,692
(2,832
)
Effect of exchange rate changes on cash
and cash equivalents and restricted cash
(41
)
325
Net increase (decrease) in cash, cash
equivalents and restricted cash
14,599
(49,255
)
Cash and cash equivalents and restricted
cash at beginning of period
214,369
263,624
Cash and cash equivalents and restricted
cash at end of period
$
228,968
$
214,369
EZCORP, Inc.
OPERATING SEGMENT
RESULTS
Three Months Ended September
30, 2023
(Unaudited)
(in thousands)
U.S. Pawn
Latin America
Pawn
Other
Investments
Total Segments
Corporate
Items
Consolidated
Revenues:
Merchandise sales
$
103,347
$
47,825
$
—
$
151,172
$
—
$
151,172
Jewelry scrapping sales
13,217
1,671
—
14,888
—
14,888
Pawn service charges
77,874
26,456
—
104,330
—
104,330
Other revenues
35
46
8
89
—
89
Total revenues
194,473
75,998
8
270,479
—
270,479
Merchandise cost of goods sold
64,176
33,318
—
97,494
—
97,494
Jewelry scrapping cost of goods sold
11,842
1,769
—
13,611
—
13,611
Gross profit
118,455
40,911
8
159,374
—
159,374
Segment and corporate expenses
(income):
Store expenses
78,680
32,890
—
111,570
—
111,570
General and administrative
—
—
—
—
18,568
18,568
Impairment of other assets
—
—
—
—
4,343
4,343
Depreciation and amortization
2,562
2,341
—
4,903
3,251
8,154
Loss (gain) on sale or disposal of assets
and other
31
(233
)
—
(202
)
382
180
Interest expense
—
—
—
—
3,462
3,462
Interest income
—
(416
)
(1,500
)
(1,916
)
(408
)
(2,324
)
Equity in net income of unconsolidated
affiliates
—
—
(935
)
(935
)
—
(935
)
Other (income) expense
—
(90
)
11
(79
)
3,310
3,231
Segment contribution
$
37,182
$
6,419
$
2,432
$
46,033
Income (loss) before income taxes
$
46,033
$
(32,908
)
$
13,125
Three Months Ended September
30, 2022
(Unaudited)
(in thousands)
U.S. Pawn
Latin America
Pawn
Other
Investments
Total Segments
Corporate
Items
Consolidated
Revenues:
Merchandise sales
$
95,811
$
37,465
$
—
$
133,276
$
—
$
133,276
Jewelry scrapping sales
11,875
356
—
12,231
—
12,231
Pawn service charges
66,331
21,535
—
87,866
—
87,866
Other revenues
16
—
18
34
—
34
Total revenues
174,033
59,356
18
233,407
—
233,407
Merchandise cost of goods sold
57,911
25,947
—
83,858
—
83,858
Jewelry scrapping cost of goods sold
11,476
473
—
11,949
—
11,949
Gross profit
104,646
32,936
18
137,600
—
137,600
Segment and corporate expenses
(income):
Store expenses
70,897
24,576
—
95,473
—
95,473
General and administrative
—
—
—
—
17,855
17,855
Depreciation and amortization
2,685
2,055
—
4,740
4,630
9,370
Gain on sale of disposal of assets and
other
51
(33
)
—
18
—
18
Interest expense
—
—
—
—
2,321
2,321
Interest income
(1
)
(189
)
—
(190
)
122
(68
)
Equity in net income of unconsolidated
affiliates
—
—
(322
)
(322
)
—
(322
)
Other (income) expense
—
(185
)
37
(148
)
(60
)
(208
)
Segment contribution
$
31,014
$
6,712
$
303
$
38,029
Income (loss) before income taxes
$
38,029
$
(24,868
)
$
13,161
Twelve Months Ended September
30, 2023
(Unaudited)
(in thousands)
U.S. Pawn
Latin America
Pawn
Other
Investments
Total Segments
Corporate
Items
Consolidated
Revenues:
Merchandise sales
$
432,578
$
182,868
$
—
$
615,446
$
—
$
615,446
Jewelry scrapping sales
43,305
6,223
—
49,528
—
49,528
Pawn service charges
285,919
97,853
—
383,772
—
383,772
Other revenues
119
121
55
295
—
295
Total revenues
761,921
287,065
55
1,049,041
—
1,049,041
Merchandise cost of goods sold
267,874
126,905
—
394,779
—
394,779
Jewelry scrapping cost of goods sold
37,709
6,715
—
44,424
—
44,424
Gross profit
456,338
153,445
55
609,838
—
609,838
Segment and corporate expenses
(income):
Store expenses
299,319
119,255
—
418,574
—
418,574
General and administrative
—
(3
)
—
(3
)
67,532
67,529
Impairment of other assets
—
—
—
—
4,343
4,343
Depreciation and amortization
10,382
9,191
—
19,573
12,558
32,131
Loss (gain) on sale or disposal of assets
and other
115
(289
)
—
(174
)
382
208
Other income
—
(5,097
)
—
(5,097
)
—
(5,097
)
Interest expense
—
—
—
—
16,456
16,456
Interest income
(2
)
(1,139
)
(1,500
)
(2,641
)
(4,829
)
(7,470
)
Equity in net loss of unconsolidated
affiliates
—
—
28,459
28,459
—
28,459
Other (income) expense
—
(131
)
31
(100
)
3,172
3,072
Segment contribution
146,524
31,658
$
(26,935
)
$
151,247
Income (loss) before income taxes
$
151,247
$
(99,614
)
$
51,633
Twelve Months Ended September
30, 2022
(Unaudited)
(in thousands)
U.S. Pawn
Latin America
Pawn
Other
Investments
Total Segments
Corporate
Items
Consolidated
Revenues:
Merchandise sales
$
391,958
$
140,928
$
—
$
532,886
$
—
$
532,886
Jewelry scrapping sales
25,739
6,294
—
32,033
—
32,033
Pawn service charges
240,982
79,883
—
320,865
—
320,865
Other revenues
83
247
111
441
—
441
Total revenues
658,762
227,352
111
886,225
—
886,225
Merchandise cost of goods sold
230,241
99,141
—
329,382
—
329,382
Jewelry scrapping cost of goods sold
22,755
5,941
—
28,696
—
28,696
Gross profit
405,766
122,270
111
528,147
—
528,147
Segment and corporate expenses
(income):
Store expenses
266,114
91,303
—
357,417
—
357,417
General and administrative
—
—
—
—
64,342
64,342
Depreciation and amortization
10,552
7,913
—
18,465
13,675
32,140
Loss (gain) on sale or disposal of assets
and other
51
(37
)
—
14
(688
)
(674
)
Interest expense
—
—
—
—
9,972
9,972
Interest income
(2
)
(815
)
—
(817
)
—
(817
)
Equity in net income of unconsolidated
affiliates
—
—
(1,779
)
(1,779
)
—
(1,779
)
Other (income) expense
—
(148
)
52
(96
)
(71
)
(167
)
Segment contribution
$
129,051
$
24,054
$
1,838
$
154,943
Income (loss) before income taxes
$
154,943
$
(87,230
)
$
67,713
EZCORP, Inc.
STORE COUNT ACTIVITY
(Unaudited)
Three Months Ended September
30, 2023
U.S. Pawn
Latin America
Pawn
Consolidated
As of June 30, 2023
528
684
1,212
New locations opened
—
19
19
Locations acquired
2
—
2
Locations sold, combined or closed
(1
)
(1
)
(2
)
As of September 30, 2023
529
702
1,231
Three Months Ended September
30, 2022
U.S. Pawn
Latin America
Pawn
Consolidated
As of June 30, 2022
519
644
1,163
New locations opened
—
16
16
Locations sold, combined or closed
(4
)
—
(4
)
As of September 30, 2022
515
660
1,175
Twelve Months Ended September
30, 2023
U.S. Pawn
Latin America
Pawn
Consolidated
As of September 30, 2022
515
660
1,175
New locations opened
3
44
47
Locations acquired
12
—
12
Locations sold, combined or closed
(1
)
(2
)
(3
)
As of September 30, 2023
529
702
1,231
Twelve Months Ended September
30, 2022
U.S. Pawn
Latin America
Pawn
Consolidated
As of September 30, 2021
516
632
1,148
New locations opened
—
28
28
Locations acquired
3
—
3
Locations sold, combined or closed
(4
)
—
(4
)
As of September 30, 2022
515
660
1,175
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. In addition, we have an equity
method investment that is denominated in Australian dollars and is
translated into U.S. dollars. 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 twelve months ended September
30, 2023 and 2022 were as follows:
September 30,
Three Months Ended
September 30,
Twelve Months Ended
September 30,
2023
2022
2023
2022
2023
2022
Mexican peso
17.4
20.1
17.1
20.2
18.3
20.4
Guatemalan quetzal
7.7
7.6
7.7
7.6
7.6
7.5
Honduran lempira
24.5
24.1
24.3
24.2
24.3
24.1
Australian dollar
1.6
1.6
1.5
1.5
1.5
1.4
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
Three Months Ended
September 30,
Twelve Months Ended
September 30,
(in millions)
2023
2022
2023
2022
Net income
$
10.3
$
7.3
$
38.5
$
50.2
Interest expense
3.5
2.3
16.5
10.0
Interest income
(2.3
)
(0.1
)
(7.5
)
(0.8
)
Income tax expense
2.9
5.8
13.2
17.6
Depreciation and amortization
8.1
9.4
32.1
32.1
EBITDA
$
22.4
$
24.8
$
92.8
$
109.1
Total
Revenues
Gross
Profit
Income
Before Tax
Tax Effect
Net
Income
Diluted
EPS
EBITDA
2023 Q4 Reported
$
270.5
$
159.4
$
13.1
$
2.8
$
10.3
$
0.15
$
22.4
Corporate office impairment
—
—
5.5
1.3
4.2
0.05
5.5
Investment impairment
—
—
3.5
0.8
2.7
0.03
3.5
CCV discrete adjustments
—
—
0.4
0.1
0.3
—
0.4
FX impact
—
—
(0.1
)
—
(0.1
)
—
(0.1
)
Constant currency impact
(9.1
)
(4.8
)
(0.2
)
(0.1
)
(0.1
)
—
(0.5
)
2023 Q4 Adjusted
$
261.4
$
154.6
$
22.2
$
4.9
$
17.3
$
0.23
$
31.2
Total
Revenues
Gross
Profit
Income
Before Tax
Tax Effect
Net
Income
Diluted
EPS
EBITDA
2023 Full Year Reported
$
1,049.0
$
609.8
$
51.6
$
13.1
$
38.5
$
0.53
$
92.8
CCV impairment and discrete
adjustments
—
—
34.3
8.0
26.3
0.30
34.3
Investment impairment
—
—
3.5
0.8
2.7
0.03
3.5
Debt extinguishment
—
—
3.5
0.8
2.7
0.03
—
Corporate office impairment
—
—
5.5
1.3
4.2
0.05
5.5
Contingent consideration liability
—
—
(5.1
)
(1.2
)
(3.9
)
(0.05
)
(5.1
)
Effect of convertible debt dilution
—
—
—
—
—
0.06
—
FX impact
—
—
0.4
0.1
0.3
—
0.4
Constant currency impact
(22.7
)
(11.8
)
(1.2
)
(0.2
)
(1.0
)
(0.03
)
(2.1
)
2023 Full Year Adjusted
$
1,026.3
$
598.0
$
92.5
$
22.7
$
69.8
$
0.92
$
129.3
Total
Revenues
Gross
Profit
Income
Before Tax
Tax Effect
Net
Income
Diluted
EPS
EBITDA
2022 Q4 Reported
$
233.4
$
137.6
$
13.2
$
5.9
$
7.3
$
0.11
$
24.8
Tax Impact
$
—
$
—
$
(0.1
)
$
(3.5
)
$
3.4
$
0.04
$
—
2022 Q4 Adjusted
$
233.4
$
137.6
$
13.1
$
2.4
$
10.7
$
0.15
$
24.8
Total
Revenues
Gross
Profit
Income
Before Tax
Tax Effect
Net
Income
Diluted
EPS
EBITDA
2022 Full Year Reported
$
886.2
$
528.1
$
67.7
$
17.5
$
50.2
$
0.70
$
109.0
Litigation Accrual
—
—
2.0
0.5
1.5
0.02
2.0
CCV adjustment for impairment
—
—
2.1
0.5
1.6
0.02
2.1
Tax impact
—
—
—
(1.1
)
1.1
0.01
—
2022 Full Year Adjusted
$
886.2
$
528.1
$
71.8
$
17.4
$
54.4
$
0.75
$
113.1
Three Months Ended
September 30, 2023
Twelve Months Ended
September 30, 2023
(in millions)
U.S. Dollar
Amount
Percentage
Change YOY
U.S. Dollar
Amount
Percentage
Change YOY
Consolidated revenue
$
270.5
16
%
$
1,049.0
18
%
Currency exchange rate fluctuations
(9.1
)
(22.8
)
Constant currency consolidated revenue
$
261.4
12
%
$
1,026.2
16
%
Consolidated gross profit
$
159.4
16
%
$
609.8
15
%
Currency exchange rate fluctuations
(4.8
)
(11.8
)
Constant currency consolidated gross
profit
$
154.6
12
%
$
598.0
13
%
Consolidated net inventory
$
166.5
10
%
$
166.5
10
%
Currency exchange rate fluctuations
(4.2
)
(4.2
)
Constant currency consolidated net
inventory
$
162.3
7
%
$
162.3
7
%
Latin America Pawn gross profit
$
40.9
24
%
$
153.4
25
%
Currency exchange rate fluctuations
(4.8
)
(11.8
)
Constant currency Latin America Pawn gross
profit
$
36.1
10
%
$
141.6
16
%
Latin America Pawn PLO
$
55.1
19
%
$
55.1
19
%
Currency exchange rate fluctuations
(5.4
)
(5.4
)
Constant currency Latin America Pawn
PLO
$
49.7
7
%
$
49.7
7
%
Latin America Pawn PSC revenues
$
26.5
23
%
$
97.9
22
%
Currency exchange rate fluctuations
(3.0
)
(7.2
)
Constant currency Latin America Pawn PSC
revenues
$
23.5
9
%
$
90.7
13
%
Latin America Pawn merchandise sales
$
47.8
28
%
$
182.9
30
%
Currency exchange rate fluctuations
(5.9
)
(15.1
)
Constant currency Latin America Pawn
merchandise sales
$
41.9
12
%
$
167.8
19
%
Latin America Pawn segment profit before
tax
$
6.4
(4
)%
$
31.7
32
%
Currency exchange rate fluctuations
(0.6
)
(1.5
)
Constant currency Latin America Pawn
segment profit before tax
$
5.8
(13
)%
$
30.2
25
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231115399385/en/
Email: Investor_Relations@ezcorp.com Phone: (512) 314-2220
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