EZCORP, Inc. (NASDAQ: EZPW) today announced results for its
second quarter ended March 31, 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, “We remain focused
on meeting our customers’ short-term cash needs and providing
access to affordable pre-owned general merchandise and jewelry, and
we believe we have the right people, platform, footprint and cost
structure in place to continue to strengthen and grow our core pawn
business. Key highlights for the second quarter of fiscal 2021
included GAAP earnings per share of $0.10 and adjusted EPS of
$0.17. The adjusted EPS was steady on a year-over-year basis
despite lower pawn loans outstanding, pawn service charges and
merchandise sales related to COVID-19 and related stimulus program
headwinds. Merchandise sales gross profit continued to grow driven
by improving inventory turns and rising merchandise margins, and we
made further progress on our expense reduction initiatives. Looking
ahead, even assuming store-level costs trend higher consistent with
increasing transaction activity, we remain well positioned to drive
higher operating margins as revenue rebuilds reflecting ongoing
cost savings and simplification efforts across the business.
“In the near term, lingering impacts from the second stimulus
package as well as an extended tax filing season have continued to
temporarily reduce demand for pawn loans in the U.S., and in Latin
America we continue to be challenged with constrained traffic,
limited operating hours and increased remittances. That said, we
remain confident pawn loans outstanding will rebuild given several
ongoing initiatives. First, we continue to broaden customer
engagement via our digital pawn servicing platform and expanded
payment options. Second, our differentiated technology and data
analytics capabilities are increasingly driving improving
loan-to-value ratios and redemption rates. Third, we remain
committed to optimizing team member development, productivity and
retention through enhanced training and diversity and inclusion
programs.
"Finally, we remain focused on increasingly leveraging our
strong balance sheet to fund pawn loans outstanding growth and
capitalize on strategic and financially accretive acquisitions to
complement de novo store growth. We have opened 8 de novo stores in
Latin America so far this year and recently completed the
acquisition of 11 stores in the Houston, Texas metropolitan
area.”
RESULTS FOR SECOND QUARTER OF FISCAL 2021
- Diluted earnings per share was $0.10, compared to $(0.74) in
the prior-year quarter. On an adjusted basis1, diluted earnings per
share was $0.17, consistent with the prior-year quarter. Income
before taxes increased by $40.9 million to $6.8 million.
- Total revenues decreased $38.3 million or 17%, primarily due to
a $16.8 million or 21% decrease in pawn service charges (PSC) and a
$14.6 million or 11% decrease in merchandise sales.
- The decrease in PSC was due to a $34.9 million or 22% decrease
in pawn loans outstanding (PLO). Pawn loan demand was significantly
reduced due to the impacts of government stimulus which led to
higher loan redemptions compared to the prior year quarter.
- Although merchandise sales decreased by $14.6 million,
merchandise sales gross profit improved by 12%, driven by effective
inventory management and less aged inventory leading to a 900 bps
improvement in merchandise sales gross profit margin to 43%. The
sales margin in the prior year quarter was negatively impacted by
200 bps due to greater sales volume of aged merchandise.
- Total operating expenses were down $55.0 million or 35% to
$103.1 million primarily due to a $47.1 million impairment charge
in the prior year quarter with no similar charge in the current
year quarter. Excluding the prior year impairment charge, total
operating expenses decreased by 7% or $7.9 million largely driven
by the decrease in store expenses of $6.5 million or 7% due to a
continued focus on expense control.
- Net inventory was $86.2 million, down 50% year-over-year and 9%
sequentially. Inventory turnover improved to 3.1x from 2.1x and on
a sequential basis improved 7% from 2.9x.
- Cash and cash equivalents at the end of the quarter was $335.6
million, an increase of $141.9 million or 73% from the prior-year
quarter due to the year-over-year reduction in earning assets. On a
sequential basis, cash and cash equivalents increased $45.2 million
or 16%, due to higher loan redemptions and merchandise
sales.
CONSOLIDATED RESULTS
Three Months Ended March 31
in millions, except per share amounts
As Reported
Adjusted1
2021
2020
2021
2020
Total Revenues
$
184.9
$
223.3
$
185.5
$
223.3
Net Revenues
$
113.7
$
127.4
$
114.1
$
127.4
Income, Before Tax
$
6.8
$
(34.1)
$
10.4
$
16.6
Net Income
$
5.3
$
(40.9)
$
9.5
$
9.4
Diluted Earnings Per Share
$
0.10
$
(0.74)
$
0.17
$
0.17
EBITDA
$
19.8
$
(21.4)
$
20.0
$
26.0
- Total revenues decreased 17% to $184.9 million. PSC was down
21% to $63.4 million due to lower average PLO. On a sequential
basis, PLO decreased 15% from the prior quarter, compared to an 18%
sequential decrease in the same period of the prior year.
- Net revenues were down 11% to $113.7 million.
- Consolidated merchandise sales gross profit increased 12% to
$49.4 million.
- Consolidated store expenses decreased 7% primarily due to a
reduction of expenses in line with reduced activity at the store
level. Total store count decreased by 16 stores or 2% since the end
of the prior-year quarter due to the closure of 22 financial
services stores in Canada. General and administrative expense
decreased 10% to $13.8 million, due to a continued focus on expense
control.
SEGMENT RESULTS
U.S. Pawn
- Total revenue was down 15% to $147.0 million, reflecting the
impact of lower PLO driving a decrease in PSC revenue.
- PLO decreased 22% year-over-year to $95.4 million. On a
sequential basis, PLO decreased 22% compared to a 23% sequential
decrease in the prior-year quarter.
- PSC decreased 20% to $49.6 million as a result of lower average
PLO for the quarter, offset by an increase in PLO yield to 180%
from 173%.
- Merchandise sales declined 8% to $93.8 million. Inventory
turnover improved to 2.9x from 2.0x. Merchandise sales gross profit
was up 13% and related margins grew to 45% from 36%, above our
targeted range. Aged general merchandise inventory improved to 1.6%
from 6.4%.
- Net revenues decreased 9% to $92.1 million primarily due to
lower PSC, partially offset by increased merchandise sales gross
profit.
- Store expenses were down 6% to $63.7 million driven by a
reduction in labor expense.
- Segment contribution increased $5.3 million to $25.8 million
due to a $4.0 million decrease in store expenses and a $10.0
million impairment charge taken in the prior year quarter with no
similar charge in the current year quarter, partially offset by a
$8.7 million decrease in net revenues driven by the decrease in PSC
described above.
Latin America Pawn
- Total revenue was down 22% to $37.8 million, reflecting the
impact of lower PLO driving a decrease in PSC revenue in addition
to decreased merchandise sales.
- PLO decreased 22% year-over-year to $29.9 million as the result
of the impact of constrained traffic, limited operating hours and
increased remittances from the U.S. On a sequential basis, PLO
increased 15% compared to a 6% decrease in the prior-year
quarter.
- PSC decreased 25% to $13.9 million (down 24% to $14.1 million
on a constant currency basis) as a result of lower average PLO for
the quarter, offset by an increase in yield to 199% from 184% in
the prior year.
- Merchandise sales declined 22% to $21.4 million (down 20% to
$21.8 million on a constant currency basis), but merchandise sales
gross profit was up 10% and related margins were 35%, up from 25%.
Inventory turnover improved to 4.0x from 2.5x. Aged general
merchandise inventory decreased to 3.1% from 11.4%.
- Net revenues decreased 17% to $21.5 million (down 15% to $21.9
million on a constant currency basis) primarily due to lower
PSC.
- Store expenses were down 5% to $17.5 million driven by a
reduction in labor expense.
- Segment contribution for the quarter was $2.6 million ($2.7
million on a constant currency basis), compared to a segment loss
of $30.1 million in the prior year quarter, primarily due to a
$35.9 million impairment charge of goodwill, intangible and other
assets taken in the prior year quarter with no similar charge in
the current quarter.
- Latin America Pawn added four de novo stores in the quarter.
New store openings typically pressure earnings in the short term as
they ramp up, but drive higher profitability over time.
FORM 10-Q
EZCORP’s Quarterly Report on Form 10-Q for the quarter ended
March 31, 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, May 6, 2021, at
7:00 am Central Time to discuss fiscal second quarter results.
Analysts and institutional investors may participate on the
conference call by dialing (866) 269-4260, Conference ID: 5433254,
or internationally by dialing (323) 347-3277. 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
loans in the United States and Latin America. We also sell
merchandise, primarily collateral forfeited from pawn lending
operations and pre-owned 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.
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.
EZCORP, Inc.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Three Months Ended
March 31,
Six Months Ended
March 31,
(in thousands, except per share
amount)
2021
2020
2021
2020
Revenues:
Merchandise sales
$
115,225
$
129,830
$
223,008
$
256,558
Jewelry scrapping sales
6,075
11,878
12,834
21,406
Pawn service charges
63,436
80,222
126,925
164,947
Other revenues
203
1,350
307
2,803
Total revenues
184,939
223,280
363,074
445,714
Merchandise cost of goods sold
65,790
85,776
130,333
169,852
Jewelry scrapping cost of goods sold
5,401
9,617
10,603
17,371
Other cost of revenues
—
525
—
1,061
Net revenues
113,748
127,362
222,138
257,430
Operating expenses:
Store expenses
81,149
87,648
160,458
176,923
General and administrative
13,771
15,341
26,281
34,179
Impairment of goodwill, intangible and
other assets
—
47,060
—
47,060
Depreciation and amortization
8,089
7,762
15,661
15,495
Loss on sale or disposal of assets and
other
112
261
90
1,005
Total operating expenses
103,121
158,072
202,490
274,662
Operating income (loss)
10,627
(30,710
)
19,648
(17,232
)
Interest expense
5,518
5,881
10,973
11,210
Interest income
(585
)
(941
)
(1,406
)
(1,784
)
Equity in net (income) loss of
unconsolidated affiliates
(1,250
)
(1,184
)
(1,766
)
4,713
Other expense (income)
145
(341
)
(454
)
(243
)
Income (loss) before income taxes
6,799
(34,125
)
12,301
(31,128
)
Income tax expense
1,469
6,749
2,672
8,508
Net income (loss)
$
5,330
$
(40,874
)
$
9,629
$
(39,636
)
Basic earnings (loss) per share
$
0.10
$
(0.74
)
$
0.17
$
(0.71
)
Diluted earnings (loss) per share
$
0.10
$
(0.74
)
$
0.17
$
(0.71
)
Weighted-average basic shares
outstanding
55,661
55,448
55,509
55,557
Weighted-average diluted shares
outstanding
55,665
55,522
55,511
55,608
EZCORP, Inc.
CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(in thousands, except share and per share
amounts)
March 31,
2021
March 31,
2020
September 30,
2020
(Unaudited)
Assets:
Current assets:
Cash and cash equivalents
$
335,638
$
193,729
$
304,542
Restricted cash
8,006
4,000
8,011
Pawn loans
125,268
160,179
131,323
Pawn service charges receivable, net
20,842
27,304
20,580
Inventory, net
86,214
173,251
95,891
Notes receivable, net
—
3,728
—
Prepaid expenses and other current
assets
30,676
23,629
32,903
Total current assets
606,644
585,820
593,250
Investments in unconsolidated
affiliates
34,961
27,993
32,458
Property and equipment, net
51,836
58,787
56,986
Lease right-of-use asset
170,479
206,839
183,809
Goodwill
258,199
257,222
257,582
Intangible assets, net
58,125
64,043
58,638
Notes receivable, net
1,164
1,132
1,148
Deferred tax asset, net
9,693
6,251
8,931
Other assets
5,152
5,045
4,221
Total assets
$
1,196,253
$
1,213,132
$
1,197,023
Liabilities and equity:
Current liabilities:
Current maturities of long-term debt,
net
$
—
$
267
$
213
Accounts payable, accrued expenses and
other current liabilities
69,019
53,152
71,504
Customer layaway deposits
11,401
13,060
11,008
Lease liability
41,060
44,076
49,742
Total current liabilities
121,480
110,555
132,467
Long-term debt, net
257,143
244,288
251,016
Deferred tax liability, net
167
2,540
524
Lease liability
138,622
171,006
153,040
Other long-term liabilities
9,597
7,190
10,849
Total liabilities
527,009
535,579
547,896
Commitments and Contingencies (Note
11)
Stockholders’ equity:
Class A Non-voting Common Stock, par value
$0.01 per share; shares authorized: 100 million; issued and
outstanding: 52,873,568 as of March 31, 2021; 52,097,590 as of
March 31, 2020; and 52,332,848 as of September 30, 2020
528
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
399,439
406,171
398,475
Retained earnings
327,798
347,004
318,169
Accumulated other comprehensive loss
(58,551
)
(76,173
)
(68,068
)
Total equity
669,244
677,553
649,127
Total liabilities and equity
$
1,196,253
$
1,213,132
$
1,197,023
EZCORP, Inc.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
Six Months Ended
March 31,
(in thousands)
2021
2020
Operating activities:
Net income (loss)
$
9,629
$
(39,636
)
Adjustments to reconcile net income (loss)
to net cash flows from operating activities:
Depreciation and amortization
15,661
15,495
Amortization of debt discount and deferred
financing costs
6,754
6,493
Amortization of lease right-of-use
asset
23,835
22,752
Accretion of notes receivable discount and
deferred compensation fee
—
(546
)
Deferred income taxes
(1,119
)
(3,698
)
Impairment of goodwill and intangible
assets
—
47,060
Other adjustments
(250
)
1,810
Provision for inventory reserve
(5,265
)
(742
)
Stock compensation expense
1,618
2,722
Equity in net (income) loss of
unconsolidated affiliates
(1,766
)
4,713
Changes in operating assets and
liabilities:
Service charges and fees receivable
(106
)
4,027
Inventory
6,481
(539
)
Prepaid expenses, other current assets and
other assets
3,874
(2,791
)
Accounts payable, accrued expenses and
other liabilities
(43,436
)
(37,799
)
Customer layaway deposits
238
538
Income taxes
2,573
1,412
Net cash provided by operating
activities
18,721
21,271
Investing activities:
Loans made
(269,468
)
(351,050
)
Loans repaid
177,888
229,054
Recovery of pawn loan principal through
sale of forfeited collateral
109,019
158,792
Capital expenditures, net
(8,359
)
(12,160
)
Net cash provided by investing
activities
9,080
28,636
Financing activities:
Taxes paid related to net share settlement
of equity awards
(839
)
(1,458
)
Payout of deferred consideration
—
(175
)
Proceeds from borrowings, net of issuance
costs
—
(109
)
Payments on borrowings
(871
)
(355
)
Repurchase of common stock
—
(5,159
)
Net cash used in financing activities
(1,710
)
(7,256
)
Effect of exchange rate changes on cash
and cash equivalents and restricted cash
5,000
(7,364
)
Net increase in cash, cash equivalents and
restricted cash
31,091
35,287
Cash, cash equivalents and restricted cash
at beginning of period
312,553
162,442
Cash, cash equivalents and restricted cash
at end of period
$
343,644
$
197,729
Supplemental disclosure of cash flow
information
Cash and cash equivalents
$
335,638
$
193,729
Restricted cash
8,006
4,000
Total cash and cash equivalents and
restricted cash
$
343,644
$
197,729
Non-cash investing and financing
activities:
Pawn loans forfeited and transferred to
inventory
$
99,285
$
156,468
EZCORP, Inc.
OPERATING SEGMENT
RESULTS
(Unaudited)
Three Months Ended March 31,
2021
(in thousands)
U.S. Pawn
Latin America
Pawn
Other
International
Total Segments
Corporate
Items
Consolidated
Revenues:
Merchandise sales
$
93,827
$
21,398
$
—
$
115,225
$
—
$
115,225
Jewelry scrapping sales
3,581
2,494
—
6,075
—
6,075
Pawn service charges
49,577
13,859
—
63,436
—
63,436
Other revenues
29
—
174
203
—
203
Total revenues
147,014
37,751
174
184,939
—
184,939
Merchandise cost of goods sold
51,812
13,978
—
65,790
—
65,790
Jewelry scrapping cost of goods sold
3,149
2,252
—
5,401
—
5,401
Other cost of revenues
—
—
—
—
—
—
Net revenues
92,053
21,521
174
113,748
—
113,748
Segment and corporate expenses
(income):
Store expenses
63,657
17,492
—
81,149
—
81,149
General and administrative
—
—
—
—
13,771
13,771
Depreciation and amortization
2,636
1,793
—
4,429
3,660
8,089
Loss on sale or disposal of assets and
other
—
101
—
101
11
112
Interest expense
—
—
—
—
5,518
5,518
Interest income
—
(571
)
—
(571
)
(14
)
(585
)
Equity in net income of unconsolidated
affiliates
—
—
(1,250
)
(1,250
)
—
(1,250
)
Other expense
—
85
9
94
51
145
Segment contribution
$
25,760
$
2,621
$
1,415
$
29,796
Income (loss) before income taxes
$
29,796
$
(22,997
)
$
6,799
Three Months Ended March 31,
2020
(in thousands)
U.S. Pawn
Latin America
Pawn
Other
International
Total Segments
Corporate
Items
Consolidated
Revenues:
Merchandise sales
$
102,447
$
27,383
$
—
$
129,830
$
—
$
129,830
Jewelry scrapping sales
9,659
2,219
—
11,878
—
11,878
Pawn service charges
61,700
18,522
—
80,222
—
80,222
Other revenues
31
25
1,294
1,350
—
1,350
Total revenues
173,837
48,149
1,294
223,280
—
223,280
Merchandise cost of goods sold
65,286
20,490
—
85,776
—
85,776
Jewelry scrapping cost of goods sold
7,800
1,817
—
9,617
—
9,617
Other cost of revenues
—
37
488
525
—
525
Net revenues
100,751
25,805
806
127,362
—
127,362
Segment and corporate expenses
(income):
Store expenses
67,619
18,469
1,560
87,648
—
87,648
General and administrative
—
—
—
—
15,341
15,341
Impairment of goodwill, intangible and
other assets
10,000
35,936
1,124
47,060
—
47,060
Depreciation and amortization
2,711
1,940
23
4,674
3,088
7,762
(Gain) loss on sale or disposal of assets
and other
—
(123
)
—
(123
)
384
261
Interest expense
—
402
154
556
5,325
5,881
Interest income
—
(369
)
—
(369
)
(572
)
(941
)
Equity in net income of unconsolidated
affiliates
—
—
(1,184
)
(1,184
)
—
(1,184
)
Other (income) expense
—
(309
)
20
(289
)
(52
)
(341
)
Segment contribution (loss)
$
20,421
$
(30,141
)
$
(891
)
$
(10,611
)
Loss before income taxes
$
(10,611
)
$
(23,514
)
$
(34,125
)
Six Months Ended March 31,
2021
(in thousands)
U.S. Pawn
Latin America
Pawn
Other
International
Total
Segments
Corporate
Items
Consolidated
Revenues:
Merchandise sales
$
176,080
$
46,928
$
—
$
223,008
$
—
$
223,008
Jewelry scrapping sales
7,585
5,249
—
12,834
—
12,834
Pawn service charges
99,797
27,128
—
126,925
—
126,925
Other revenues
51
7
249
307
—
307
Total revenues
283,513
79,312
249
363,074
—
363,074
Merchandise cost of goods sold
99,871
30,462
—
130,333
—
130,333
Jewelry scrapping cost of goods sold
5,993
4,610
—
10,603
—
10,603
Other cost of revenues
—
—
—
—
—
Net revenues
177,649
44,240
249
222,138
—
222,138
Segment and corporate expenses
(income):
Store expenses
125,749
34,709
—
160,458
—
160,458
General and administrative
—
—
—
—
26,281
26,281
Depreciation and amortization
5,372
3,653
—
9,025
6,636
15,661
Loss on sale or disposal of assets and
other
27
—
—
27
63
90
Interest expense
—
—
—
—
10,973
10,973
Interest income
—
(1,335
)
—
(1,335
)
(71
)
(1,406
)
Equity in net income of unconsolidated
affiliates
—
—
(1,766
)
(1,766
)
—
(1,766
)
Other (income) expense
—
(370
)
(201
)
(571
)
117
(454
)
Segment contribution
$
46,501
$
7,583
$
2,216
$
56,300
Income (loss) before income taxes
$
56,300
$
(43,999
)
$
12,301
Six Months Ended March 31,
2020
(in thousands)
U.S. Pawn
Latin America
Pawn
Other
International
Total
Segments
Corporate
Items
Consolidated
Revenues:
Merchandise sales
$
197,801
$
58,757
$
—
$
256,558
$
—
$
256,558
Jewelry scrapping sales
15,776
5,630
—
21,406
—
21,406
Pawn service charges
125,790
39,157
—
164,947
—
164,947
Other revenues
67
50
2,686
2,803
—
2,803
Total revenues
339,434
103,594
2,686
445,714
—
445,714
Merchandise cost of goods sold
126,650
43,202
—
169,852
—
169,852
Jewelry scrapping cost of goods sold
12,555
4,816
—
17,371
—
17,371
Other cost of revenues
—
37
1,024
1,061
—
1,061
Net revenues
200,229
55,539
1,662
257,430
—
257,430
Segment and corporate expenses
(income):
Store expenses
135,678
38,452
2,793
176,923
—
176,923
General and administrative
—
—
—
—
34,179
34,179
Impairment of goodwill, intangible and
other assets
10,000
35,936
1,124
47,060
—
47,060
Depreciation and amortization
5,576
3,829
57
9,462
6,033
15,495
(Gain) loss on sale or disposal of assets
and other
—
(95
)
—
(95
)
1,100
1,005
Interest expense
—
430
324
754
10,456
11,210
Interest income
—
(757
)
—
(757
)
(1,027
)
(1,784
)
Equity in net loss of unconsolidated
affiliates
—
—
4,713
4,713
—
4,713
Other (income) expense
—
(242
)
19
(223
)
(20
)
(243
)
Segment contribution (loss)
$
48,975
$
(22,014
)
$
(7,368
)
$
19,593
Income (loss) before income taxes
$
19,593
$
(50,721
)
$
(31,128
)
EZCORP, Inc.
STORE COUNT ACTIVITY
(Unaudited)
Three Months Ended March 31,
2021
U.S. Pawn
Latin America
Pawn
Consolidated
As of December 31, 2020
505
502
1,007
New locations opened
—
4
4
As of March 31, 2021
505
506
1,011
Three Months Ended March 31,
2020
U.S. Pawn
Latin America
Pawn
Other
International
Consolidated
As of December 31, 2019
512
484
22
1,018
New locations opened
—
9
—
9
As of March 31, 2020
512
493
22
1,027
Six Months Ended March 31,
2021
U.S. Pawn
Latin America
Pawn
Consolidated
As of September 30, 2020
505
500
1,005
New locations opened
—
6
6
Locations acquired
—
—
—
Locations sold, combined or closed
—
—
—
As of March 31, 2021
505
506
1,011
Six Months Ended March 31,
2020
U.S. Pawn
Latin America
Pawn
Other
International
Consolidated
As of September 30, 2019
512
480
22
1,014
New locations opened
—
13
—
13
Locations acquired
—
—
—
—
Locations sold, combined or closed
—
—
—
—
As of March 31, 2020
512
493
22
1,027
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 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 six months ended March 31, 2021
and 2020 were as follows:
March 31,
Three Months Ended
March 31,
Six Months Ended
March 31,
2021
2020
2021
2020
2021
2020
Mexican peso
20.5
23.8
20.3
20.0
20.4
19.6
Guatemalan quetzal
7.6
7.6
7.6
7.5
7.6
7.5
Honduran lempira
23.7
24.4
23.8
24.3
23.9
24.3
Peruvian sol
3.7
3.4
3.6
3.4
3.6
3.3
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 Q2
2020 Q2
(in millions)
Net income (loss)
$
5.3
$
(40.9
)
Interest expense
5.5
5.9
Interest income
(0.6
)
(0.9
)
Income tax expense
1.5
6.7
Depreciation and amortization
8.1
7.8
EBITDA
$
19.8
$
(21.4
)
Total
Revenues
Net
Revenues
Income
Before Tax
Tax Effect
Net
Income
Diluted EPS
EBITDA
2021 Q2 Reported
$
184.9
$
113.7
$
6.8
$
1.5
$
5.3
$
0.10
$
19.8
Acquisition expenses
—
—
0.2
—
0.2
—
0.2
Non cash interest
—
—
3.4
0.8
2.6
0.05
—
Non-recurring tax expense
—
—
—
(1.4
)
1.4
0.03
—
Constant currency impact
0.6
0.4
—
—
0.1
(0.01
)
—
2021 Q2 Adjusted
$
185.5
$
114.1
$
10.4
$
0.9
$
9.5
$
0.17
$
20.0
Total
Revenues
Net
Revenues
(Loss) Income
Before Tax
Tax Effect
Net (Loss)
Income
Diluted EPS
EBITDA
2020 Q2 Reported
$
223.3
$
127.4
$
(34.1
)
$
6.8
$
(40.9
)
$
(0.74
)
$
(21.4
)
Termination of non-core software
project
—
—
0.5
(0.1
)
0.4
0.01
0.5
Lobbying expense
—
—
0.2
—
0.2
—
0.2
Non-recurring tax expense
—
—
—
1.9
1.9
0.03
—
Impairment of goodwill, intangible assets
and other
—
—
47.1
(1.7
)
45.4
0.83
47.1
Non cash interest
—
—
3.3
(0.7
)
2.6
0.05
—
Constant currency impact
—
—
(0.3
)
—
(0.3
)
(0.01
)
(0.3
)
2020 Q2 Adjusted
$
223.3
$
127.4
$
16.6
$
7.2
$
9.4
$
0.17
$
26.0
2021 Q2:
U.S. Dollar
Amount
Percentage
Change YOY
(in millions)
Consolidated revenue
$
184.9
(17
)%
Currency exchange rate fluctuations
0.6
Constant currency consolidated revenue
$
185.5
(17
)%
Consolidated net revenue
$
113.7
(11
)%
Currency exchange rate fluctuations
0.4
Constant currency consolidated net
revenue
$
114.1
(10
)%
Consolidated net inventory
$
86.2
(50
)%
Currency exchange rate fluctuations
(1.7
)
Constant currency consolidated net
inventory
$
84.5
(51
)%
Latin America Pawn net revenue
$
21.5
(17
)%
Currency exchange rate fluctuations
0.4
Constant currency Latin America Pawn net
revenue
$
21.9
(15
)%
Latin America Pawn PLO
$
29.9
(22
)%
Currency exchange rate fluctuations
(2.8
)
Constant currency Latin America Pawn
PLO
$
27.1
(29
)%
Latin America Pawn PSC revenues
$
13.9
(25
)%
Currency exchange rate fluctuations
0.2
Constant currency Latin America Pawn PSC
revenues
$
14.1
(24
)%
Latin America Pawn merchandise sales
$
21.4
(22
)%
Currency exchange rate fluctuations
0.4
Constant currency Latin America Pawn
merchandise sales
$
21.8
(20
)%
Latin America Pawn segment profit before
tax
$
2.6
109
%
Currency exchange rate fluctuations
0.1
Constant currency Latin America Pawn
segment profit before tax
$
2.7
(54
)%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210505006089/en/
Email: Investor_Relations@ezcorp.com Phone: (512) 314-2220
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