Notes to Interim Condensed Consolidated Financial Statements
NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business
EZCORP, Inc. (collectively with its subsidiaries, the “Company”, “we”, “us” or “our”) is a leading provider of pawn loans in the United States and Latin America. Pawn loans are non-recourse loans collateralized by tangible property. We also sell merchandise, primarily collateral forfeited from pawn lending operations and pre-owned merchandise purchased from customers.
Basis of Presentation
The accompanying interim unaudited condensed consolidated financial statements (“Condensed Consolidated Financial Statements”) have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.
In the opinion of management, the accompanying Condensed Consolidated Financial Statements include all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation. Financial results for the three and six-month periods ended March 31, 2021, are not necessarily indicative of results that may be expected for the fiscal year ending September 30, 2021.
Our business is subject to seasonal variations, and operating results for the three and six months ended March 31, 2021 and 2020 (the "current quarter" and "prior-year quarter," respectively) are not necessarily indicative of the results of operations for the full fiscal year.
Principles of Consolidation
The accompanying Condensed Consolidated Financial Statements include the accounts of EZCORP, Inc. and its wholly owned subsidiaries. We use the equity method of accounting for entities in which we have a 50% or less investment and exercise significant influence. We account for equity investments for which we do not have significant influence and without readily determinable fair values at cost with adjustments for observable changes in price in orderly transactions for identical or similar investments of the same issuer or impairments. All inter-company accounts and transactions have been eliminated in consolidation.
Reclassifications
We have reclassified certain amounts in prior-period financial statements to conform to the current period presentation.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions include the determination of revenue recognition, inventory reserves, expected credit losses, useful lives of long-lived and intangible assets, valuation of share-based compensation, valuation of equity investments, valuation of deferred tax assets and liabilities, loss contingencies related to litigation and discount rates used for operating leases. Actual results may result in actual amounts differing from reported amounts.
Impact of COVID-19
The COVID-19 pandemic continues to affect the U.S. and global economies, and as previously disclosed in our 2020 Annual Report, the pandemic also affected our businesses in a variety of ways beginning in the second quarter of fiscal 2020 and continuing into fiscal 2021. We cannot estimate the length or severity of the COVID-19 pandemic or the related financial consequences on our business and operations, including whether and when historic economic and operating conditions will resume or the extent to which the disruption may impact our
business, financial position, results of operations or cash flows. Our estimates, judgments and assumptions related to COVID-19 could ultimately differ over time.
Recently Adopted Accounting Policies
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses (Topic 326) (“ASU 2016-13”). ASU 2016-13 modifies the measurement of expected credit losses of certain financial instruments, requiring entities to estimate an expected lifetime credit loss on financial assets. The ASU amends the impairment model to utilize an expected loss methodology and replaces the incurred loss methodology for financial instruments including trade receivables. The amendment requires entities to consider other factors, such as historical loss experience, current conditions and reasonable and supportable forecasts. ASU 2016-13 was effective on October 1, 2020.
We adopted ASU 2016-13 effective October 1, 2020 using the modified retrospective approach. There was no net cumulative effect adjustment to retained earnings as of October 1, 2020 as a result of this adoption. This amendment did not have a material impact on our balance sheets or cash flows from operations and did not have a material impact on our operating results.
Recently Issued Accounting Pronouncements
In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020 and adoption must be as of the beginning of our annual fiscal year. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.
NOTE 2: EXPECTED CREDIT LOSSES
We adopted ASU 2016-13 effective October 1, 2020. We have financing receivables within the scope of ASU 2016-13, specifically pawn loans receivables and related pawn service charges receivables.
Our pawn loans are short-term in nature, typically 30-120 days for U.S. Pawn loans and 30 days for Latin America Pawn loans. Under our existing accounting policy, if a pawn loan is deemed to be uncollectible, we do not recognize an allowance for doubtful accounts due to the expected recovery of the loan principal amount through the sale of the collateral. We record the forfeited collateral as inventory at the pawn loan principal amount.
Pawn service charges are recorded under the interest method over the term of the related pawn loan. Under our existing accounting policy, we accrue for any earned but unpaid pawn service charges at the end each month. We then apply a reserve to pawn service charges receivable at the end of each month using a pawn loan forfeiture rate derived from a trailing twelve-month average, adjusted for seasonality factors.
We have evaluated, on a collective basis, our pawn loan receivables and pawn service charge receivables and determined the new credit loss standard did not have a material impact on our consolidated financial statements, as our current polices appropriately capture lifetime expected credit losses.
The presentation of pawn loan and pawn service charge receivable as separate line items on our consolidated balance sheet will remain unchanged under the new credit loss standard.
As of March 31, 2021, pawn loan and related pawn service charge receivable, net were $125.3 million and $20.8 million, respectively.
NOTE 3: OTHER CHARGES
During the fourth quarter of fiscal 2020, we began to implement strategic initiatives to refocus on our core pawn business and optimize our cost structure in order to improve our bottom line performance and position the Company for sustainable growth. The initiatives focused on workforce reductions, closure of our CASHMAX operations, store closures, write-offs and other miscellaneous charges. We recorded $20.4 million of such charges for the quarter ended September 30, 2020, and had accrued charges of $10.7 million remaining at September 30, 2020. We had no similar charges for the six months ended March 31, 2021.
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(in thousands)
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Accrued Charges at September 30, 2020
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Charges
|
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Payments and Adjustments
|
|
Accrued Charges at December 31, 2020
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Charges
|
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Payments and Adjustments
|
|
Accrued Charges at March 31, 2021
|
Cash charges:
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|
|
|
|
|
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|
|
|
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|
|
Labor reduction costs
|
|
$
|
5,946
|
|
|
$
|
—
|
|
|
$
|
(2,343)
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|
|
$
|
3,603
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|
|
$
|
—
|
|
|
$
|
(1,075)
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|
|
$
|
2,528
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CASHMAX shutdown costs
|
|
800
|
|
|
—
|
|
|
$
|
(400)
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|
$
|
400
|
|
|
—
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|
|
$
|
(400)
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|
|
$
|
—
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Store closure costs
|
|
1,806
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|
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—
|
|
|
$
|
(1,706)
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|
|
$
|
100
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—
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|
|
$
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(100)
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|
$
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—
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Other
|
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2,166
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|
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—
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|
|
$
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(166)
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|
|
$
|
2,000
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|
|
—
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|
|
$
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—
|
|
|
$
|
2,000
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|
|
|
|
10,718
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|
|
$
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—
|
|
|
$
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(4,615)
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|
|
$
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6,103
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|
|
$
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—
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|
|
$
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(1,575)
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|
|
$
|
4,528
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NOTE 4: EARNINGS PER SHARE
The following table reconciles the number of common shares used to compute basic and diluted earnings per share attributable to EZCORP Inc., shareholders:
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Three Months Ended
March 31,
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Six Months Ended
March 31,
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(in thousands, except per share amounts)
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2021
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2020
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|
2021
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|
2020
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|
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|
|
|
|
|
|
|
|
|
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|
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|
|
|
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Net income (loss)
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$
|
5,330
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|
|
$
|
(40,874)
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|
|
$
|
9,629
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|
|
$
|
(39,636)
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|
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|
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|
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Earnings per common share
|
|
|
|
|
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Average common share outstanding (denominator)
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55,661
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|
|
55,448
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|
55,509
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|
|
55,557
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|
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|
|
|
|
|
|
|
|
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|
|
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Earnings per common share
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$
|
0.10
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|
|
$
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(0.74)
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|
|
$
|
0.17
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|
$
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(0.71)
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Diluted earnings per common share
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|
|
|
|
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Average common share outstanding
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55,661
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|
55,448
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|
|
55,509
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|
|
55,557
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Dilutive effect of restricted stock and convertible notes*
|
4
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|
|
74
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2
|
|
|
51
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Diluted average common shares outstanding (denominator)
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55,665
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|
55,522
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|
55,511
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|
55,608
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Diluted earnings per common share
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$
|
0.10
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|
|
$
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(0.74)
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|
|
$
|
0.17
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|
|
$
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(0.71)
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|
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|
|
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Potential common shares excluded from the calculation of diluted earnings per share above*:
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Restricted stock**
|
964
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|
2,777
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|
$
|
831
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|
|
$
|
2,495
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* Includes time-based share-based awards and Convertible Notes. See Note 8 for discussion of the terms and conditions of the potential impact of the 2024 Convertible Notes and 2025 Convertible Notes.
** Includes antidilutive share-based awards as well as performance-based share-based awards that are contingently issuable, but for which the condition for issuance has not been met as of the end of the reporting period.
NOTE 5: LEASES
We determine if a contract contains a lease at inception. Our lease portfolio consists primarily of operating leases for pawn store locations and corporate offices with lease terms ranging from three to ten years.
The information below provides a summary of our leasing activities. See Note 12 in our 2020 Annual Report for additional information about our leasing activities.
The table below presents balances of our operating leases:
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(in thousands)
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March 31, 2021
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|
March 31, 2020
|
|
September 30,
2020
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|
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|
|
|
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Right-of-use asset
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$
|
170,479
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|
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$
|
206,839
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|
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$
|
183,809
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Lease liability, current
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$
|
41,060
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|
|
$
|
44,076
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|
|
$
|
49,742
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|
|
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Lease liability, non-current
|
138,622
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|
|
171,006
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|
|
153,040
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|
Total lease liability
|
$
|
179,682
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|
|
$
|
215,082
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|
|
$
|
202,782
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|
|
|
The table below provides the composition of our lease costs:
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Three Months Ended
March 31,
|
|
Six Months Ended
March 31,
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(in thousands)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
Operating lease expense
|
$
|
14,616
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|
|
$
|
15,453
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|
|
$
|
29,815
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|
|
$
|
31,978
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|
Variable lease expense
|
2,923
|
|
|
3,093
|
|
|
5,968
|
|
|
5,900
|
|
Other (1)
|
(859)
|
|
|
—
|
|
|
(1,725)
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|
|
—
|
|
Total lease expense
|
$
|
16,680
|
|
|
$
|
18,546
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|
|
$
|
34,058
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|
|
$
|
37,878
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(1) Includes sublease rental income.
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Lease expense is recognized on a straight-line basis over the lease term with variable lease expense recognized in the period in which the costs are incurred. The components of lease expense are included in "Store" and "General and Administrative" expense, based on the underlying lease use.
Other supplemental information includes the following for our operating leases:
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Six Months Ended
March 31,
|
|
2021
|
|
2020
|
|
|
|
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Weighted-average remaining contractual lease term (years)
|
5.07
|
|
5.72
|
Weighted-average incremental borrowing rate
|
7.88
|
%
|
|
8.25
|
%
|
|
|
|
|
Maturities of lease liabilities as of March 31, 2021 were as follows (in thousands):
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|
|
|
|
|
Remaining 2021
|
$
|
26,419
|
|
Fiscal 2022
|
53,629
|
|
Fiscal 2023
|
41,651
|
|
Fiscal 2024
|
30,463
|
|
Fiscal 2025
|
21,522
|
|
Thereafter
|
45,866
|
|
Total lease payments
|
$
|
219,550
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Less: Portion representing interest
|
39,868
|
|
Present value of operating lease liabilities
|
$
|
179,682
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|
Less: Current portion
|
41,060
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Non-current portion
|
$
|
138,622
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|
We recorded $6.6 million and $0.9 million in non-cash additions to our right of use assets and lease liabilities for the six months ended March 31, 2021 and March 31, 2020, respectively.
NOTE 6: STRATEGIC INVESTMENTS
As of March 31, 2021, we owned 214,183,714 shares, or 34.75%, of Cash Converters International Limited ("Cash Converters International"). The following tables present summary financial information for Cash Converters International’s most recently reported results at December 31, 2020 after translation to U.S. dollars:
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|
|
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|
|
|
December 31,
|
(in thousands)
|
2020
|
|
2019
|
|
|
|
|
Current assets
|
$
|
170,412
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|
|
$
|
164,906
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|
Non-current assets
|
189,810
|
|
|
199,277
|
|
Total assets
|
$
|
360,222
|
|
|
$
|
364,183
|
|
|
|
|
|
Current liabilities
|
$
|
59,962
|
|
|
$
|
93,958
|
|
Non-current liabilities
|
58,368
|
|
|
60,503
|
|
Shareholders’ equity
|
241,892
|
|
|
209,722
|
|
Total liabilities and shareholders’ equity
|
$
|
360,222
|
|
|
$
|
364,183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Half-Year Ended December 31,
|
(in thousands)
|
2020
|
|
2019
|
|
|
|
|
Gross revenues
|
$
|
71,153
|
|
|
$
|
98,531
|
|
Gross profit
|
51,231
|
|
|
59,250
|
|
Net profit (loss)
|
5,561
|
|
|
(13,280)
|
|
See Note 7 for the fair value and carrying value of our investment in Cash Converters International.
NOTE 7: FAIR VALUE MEASUREMENTS
The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:
•Level 1 — Quoted market prices in active markets for identical assets or liabilities.
•Level 2 — Other observable market-based inputs or unobservable inputs that are corroborated by market data.
•Level 3 — Unobservable inputs that are not corroborated by market data.
We have elected not to measure at fair value any eligible items for which fair value measurement is optional.
There were no transfers in or out of Level 1, Level 2 or Level 3 for financial assets or liabilities measured at fair value on a recurring basis during the periods presented.
Fair Value Measurement on a Recurring Basis
As of March 31, 2021 and September 30, 2020, we did not have any financial assets or liabilities measured at fair value on a recurring basis.
Financial Assets and Liabilities Not Measured at Fair Value
The tables below present our estimates of fair value of financial assets and liabilities that were not measured at fair value:
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|
|
|
|
|
|
|
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|
|
Carrying Value
|
|
Estimated Fair Value
|
|
|
March 31, 2021
|
|
March 31, 2021
|
|
Fair Value Measurement Using
|
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
2.89% promissory note receivable due April 2024
|
|
$
|
1,164
|
|
|
$
|
1,164
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,164
|
|
Investments in unconsolidated affiliates
|
|
34,961
|
|
|
45,491
|
|
|
37,894
|
|
|
—
|
|
|
7,597
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
2024 Convertible Notes
|
|
$
|
120,307
|
|
|
$
|
132,609
|
|
|
$
|
—
|
|
|
$
|
132,609
|
|
|
$
|
—
|
|
2025 Convertible Notes
|
|
136,836
|
|
|
143,175
|
|
|
—
|
|
|
143,175
|
|
|
—
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
|
Carrying Value
|
|
Estimated Fair Value
|
|
|
March 31, 2020
|
|
March 31, 2020
|
|
Fair Value Measurement Using
|
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
Notes receivable from Grupo Finmart, net
|
|
$
|
3,728
|
|
|
$
|
3,853
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,853
|
|
2.89% promissory note receivable due April 2024
|
|
1,132
|
|
|
1,132
|
|
|
—
|
|
|
—
|
|
|
1,132
|
|
Investments in unconsolidated affiliates
|
|
27,993
|
|
|
27,513
|
|
|
19,734
|
|
|
—
|
|
|
7,779
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
2024 Convertible Notes
|
|
$
|
114,196
|
|
|
$
|
106,203
|
|
|
$
|
—
|
|
|
$
|
106,203
|
|
|
$
|
—
|
|
2025 Convertible Notes
|
|
129,624
|
|
|
128,081
|
|
|
—
|
|
|
128,081
|
|
|
—
|
|
8.5% unsecured debt due 2024
|
|
983
|
|
|
983
|
|
|
—
|
|
|
—
|
|
|
983
|
|
CASHMAX secured borrowing facility
|
|
(248)
|
|
|
281
|
|
|
—
|
|
|
—
|
|
|
281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying Value
|
|
Estimated Fair Value
|
|
|
September 30,
2020
|
|
September 30, 2020
|
|
Fair Value Measurement Using
|
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
2.89% promissory note receivable due April 2024
|
|
$
|
1,148
|
|
|
$
|
1,148
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,148
|
|
Investments in unconsolidated affiliates
|
|
32,458
|
|
|
32,597
|
|
|
24,833
|
|
|
—
|
|
|
7,764
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
2024 Convertible Notes
|
|
$
|
117,193
|
|
|
$
|
129,979
|
|
|
$
|
—
|
|
|
$
|
129,979
|
|
|
$
|
—
|
|
2025 Convertible Notes
|
|
133,164
|
|
|
137,569
|
|
|
—
|
|
|
137,569
|
|
|
—
|
|
8.5% unsecured debt due 2024
|
|
872
|
|
|
872
|
|
|
—
|
|
|
—
|
|
|
872
|
|
Due to the short-term nature of cash and cash equivalents, pawn loans, pawn service charges receivable and other debt, we estimate that the carrying value approximates fair value. We consider our cash and cash equivalents to be measured using Level 1 inputs and our pawn loans, pawn service charges receivable and other debt to be measured using Level 3 inputs. Significant increases or decreases in the underlying assumptions used to value pawn loans, pawn service charges receivable, consumer loans, fees and interest receivable and other debt could significantly increase or decrease these fair value estimates.
In March 2019, we received $1.1 million in previously escrowed seller funds as a result of settling certain indemnification claims with the seller of GPMX. In April 2019, we loaned the $1.1 million back to the seller of GPMX in exchange for a promissory note. The note bears interest at the rate of 2.89% per annum and is secured by certain marketable securities owned by the seller and held in a U.S. brokerage account. All principal and accrued interest is due and payable in April 2024. The note approximated its carrying value as of March 31, 2021.
We use the equity method of accounting to account for our 34.75% ownership in Cash Converters International. The inputs used to generate the fair value of the investment were considered Level 1 inputs. These inputs are comprised of (a) the quoted stock price on the Australian Stock Exchange multiplied by (b) the number of shares we owned multiplied by (c) the applicable foreign currency exchange rate as of the end of our reporting period. We included no control premium for owning a large percentage of outstanding shares.
We use the equity method of accounting to account for our 13.14% ownership in Rich Data Corporation, a previously consolidated variable interest entity for which we no longer have the power to direct the activities that most significantly affect its economic performance. We believe its fair value approximates carrying value although such fair value is highly variable and includes significant unobservable inputs.
We measured the fair value of the 2024 and 2025 Convertible Notes using quoted price inputs. The notes are not actively traded, and thus the price inputs represent a Level 2 measurement. As the quoted price inputs are highly variable from day to day, the fair value estimates disclosed above could significantly increase or decrease.
In September 2020, we received the final payment from AlphaCredit on the notes receivable related to the sale of Grupo Finmart and recorded the amount under “Restricted cash” in our consolidated balance sheet as of March 31, 2021. In August 2019, AlphaCredit notified us of an indemnity claim for certain pre-closing taxes, but the nature, extent and validity of such claim has yet to be determined.
NOTE 8: DEBT
The following table presents the Company's debt instruments outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
|
March 31, 2020
|
|
September 30, 2020
|
(in thousands)
|
Gross Amount
|
|
Debt Discount and Issuance Costs
|
|
Carrying Amount
|
|
Gross Amount
|
|
Debt Discount and Issuance Costs
|
|
Carrying Amount
|
|
Gross Amount
|
|
Debt Discount and Issuance Costs
|
|
Carrying Amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 Convertible Notes
|
$
|
143,750
|
|
|
$
|
(23,443)
|
|
|
$
|
120,307
|
|
|
$
|
143,750
|
|
|
$
|
(29,554)
|
|
|
$
|
114,196
|
|
|
$
|
143,750
|
|
|
$
|
(26,557)
|
|
|
$
|
117,193
|
|
2025 Convertible Notes
|
172,500
|
|
|
(35,664)
|
|
|
136,836
|
|
|
172,500
|
|
|
(42,876)
|
|
|
129,624
|
|
|
172,500
|
|
|
(39,336)
|
|
|
133,164
|
|
8.5% unsecured debt due 2024*
|
—
|
|
|
—
|
|
|
—
|
|
|
983
|
|
|
—
|
|
|
983
|
|
|
872
|
|
|
—
|
|
|
872
|
|
CASHMAX secured borrowing facility*
|
—
|
|
|
—
|
|
|
—
|
|
|
281
|
|
|
(529)
|
|
|
(248)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
$
|
316,250
|
|
|
$
|
(59,107)
|
|
|
$
|
257,143
|
|
|
$
|
317,514
|
|
|
$
|
(72,959)
|
|
|
$
|
244,555
|
|
|
$
|
317,122
|
|
|
$
|
(65,893)
|
|
|
$
|
251,229
|
|
Less current portion
|
—
|
|
|
—
|
|
|
—
|
|
|
267
|
|
|
—
|
|
|
267
|
|
|
213
|
|
|
—
|
|
|
213
|
|
Total long-term debt
|
$
|
316,250
|
|
|
$
|
(59,107)
|
|
|
$
|
257,143
|
|
|
$
|
317,247
|
|
|
$
|
(72,959)
|
|
|
$
|
244,288
|
|
|
$
|
316,909
|
|
|
$
|
(65,893)
|
|
|
$
|
251,016
|
|
* Amount translated from Guatemalan quetzals and Canadian dollars as of applicable period end. Certain disclosures omitted due to materiality considerations.
The following table presents the Company's contractual maturities related to the debt instruments as of March 31, 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule of Contractual Maturities
|
(in thousands)
|
Total
|
|
Less Than 1 Year
|
|
1 - 3 Years
|
|
3 - 5 Years
|
|
More Than 5 Years
|
|
|
|
|
|
|
|
|
|
|
2024 Convertible Notes*
|
$
|
143,750
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
143,750
|
|
|
$
|
—
|
|
2025 Convertible Notes*
|
172,500
|
|
|
—
|
|
|
—
|
|
|
172,500
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
316,250
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
316,250
|
|
|
$
|
—
|
|
* Excludes the potential impact of embedded derivatives as discussed below.
The following table presents the Company's interest expense related to the Convertible Notes for the three and six months ended March 31, 2021 and 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
Six Months Ended
March 31,
|
(in thousands)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
2024 Convertible Notes:
|
|
|
|
|
|
|
|
Contractual interest expense
|
$
|
1,033
|
|
|
$
|
1,033
|
|
|
$
|
2,066
|
|
|
$
|
2,066
|
|
Amortization of debt discount and deferred financing costs
|
1,572
|
|
|
1,457
|
|
|
3,114
|
|
|
2,886
|
|
Total interest expense
|
$
|
2,605
|
|
|
$
|
2,490
|
|
|
$
|
5,180
|
|
|
$
|
4,952
|
|
|
|
|
|
|
|
|
|
2025 Convertible Notes:
|
|
|
|
|
|
|
|
Contractual interest expense
|
$
|
1,024
|
|
|
$
|
1,024
|
|
|
$
|
2,048
|
|
|
$
|
2,048
|
|
Amortization of debt discount and deferred financing costs
|
1,853
|
|
|
1,722
|
|
|
3,672
|
|
|
3,413
|
|
Total interest expense
|
$
|
2,877
|
|
|
$
|
2,746
|
|
|
$
|
5,720
|
|
|
$
|
5,461
|
|
2.875% Convertible Senior Notes Due 2024
In July 2017, we issued $143.75 million aggregate principal amount of 2.875% Convertible Senior Notes Due 2024 (the “2024 Convertible Notes”). The 2024 Convertible Notes were issued pursuant to an indenture dated July 5, 2017 (the "2017 Indenture") by and between the Company and Wells Fargo Bank, National Association, as the original trustee. Effective October 1, 2019, Truist (formerly BB&T) assumed the duties and responsibilities as trustee under the 2017 Indenture. The 2024 Convertible Notes were issued in a private offering under Rule 144A under the Securities Act of 1933. The 2024 Convertible Notes pay interest semi-annually in arrears at a rate of 2.875% per annum on January 1 and July 1 of each year, commencing January 1, 2018, and mature on July 1, 2024 (the "2024 Maturity Date"), unless converted, redeemed or repurchased in accordance with the terms prior to such date. At maturity, the holders of the 2024 Convertible Notes will be entitled to receive cash equal to the principal of the 2024 Convertible Notes plus accrued interest.
The carrying amount of the 2024 Convertible Notes as a separate equity-classified instrument (the “2024 Convertible Notes Embedded Derivative”) included in “Additional paid-in capital” in our condensed consolidated balance sheets as of March 31, 2021 was $39.8 million, ($25.3 million, net of tax). The effective interest rate for the three and six months ended March 31, 2021 was approximately 9%. As of March 31, 2021, the remaining unamortized debt discount and issuance costs will be amortized through the 2024 Maturity Date assuming no early conversion.
The 2024 Convertible Notes are convertible into cash or shares of Class A Common Stock, or any combination thereof, at our option subject to satisfaction of certain conditions and during the periods described in the 2017 Indenture, based on an initial conversion rate of 100 shares of Class A Common Stock per $1,000 principal amount of 2024 Convertible Notes (equivalent to an initial conversion price of $10.00 per share of Class A Common Stock). We account for the Class A Common Stock issuable upon conversion under the treasury stock method. To the extent the average share price is over $10.00 per share for any fiscal quarter, we are required to recognize incremental dilution of our earnings per share.
If, among other triggers described in the 2017 Indenture, the market price of the Class A Common Stock meets the threshold based on at least 20 of the final 30 trading days of the quarter for the 2024 Convertible Notes to become convertible at the option of the holders during the subsequent quarter, we may be required to classify the 2024 Convertible Notes as current on our condensed consolidated balance sheets for each quarter in which such triggers are met. The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of March 31, 2021. As of March 31, 2021, the if-converted value of the 2024 Convertible Notes did not exceed the principal amount.
2.375% 2025 Convertible Senior Notes Due 2025
In May 2018, we issued $172.5 million aggregate principal amount of 2.375% Convertible Senior Notes Due 2025 (the “2025 Convertible Notes”). The 2025 Convertible Notes were issued pursuant to an indenture dated May 14, 2018 (the "2018 Indenture") by and between the Company and Wells Fargo Bank, National Association, as the original trustee. Effective October 1, 2019, Truist (formerly BB&T) assumed the duties and responsibilities as trustee under the 2018 Indenture. The 2025 Convertible Notes were issued in a private offering under Rule 144A under the Securities Act of 1933. The 2025 Convertible Notes pay interest semi-annually in arrears at a rate of 2.375% per annum on May 1 and November 1 of each year, commencing November 1, 2018, and mature on May 1, 2025 (the "2025 Maturity Date"), unless converted, redeemed or repurchased in accordance with the terms prior to such date. The carrying amount of the 2025 Convertible Notes as a separate equity-classified instrument (the “2025 Convertible Notes Embedded Derivative”) included in “Additional paid-in capital” in our condensed consolidated balance sheets as of March 31, 2021 was $49.6 million, ($39.1 million, net of tax). The effective interest rate for the three and six months ended March 31, 2021 was approximately 9%. As of March 31, 2021, the remaining unamortized debt discount and issuance costs will be amortized through the 2025 Maturity Date assuming no early conversion.
The 2025 Convertible Notes are convertible into cash or shares of Class A Common Stock, or any combination thereof, at our option subject to satisfaction of certain conditions and during the periods described in the 2018 Indenture, based on an initial conversion rate of 62.8931 shares of Class A Common Stock per $1,000 principal amount of 2025 Convertible Notes (equivalent to an initial conversion price of $15.90 per share of Class A Common Stock). We account for the Class A Common Stock issuable upon conversion under the treasury stock method. To the extent the average share price is over $15.90 per share for any fiscal quarter or year-to-date period, we are required to recognize incremental dilution of our earnings per share.
If, among other triggers described in the 2018 Indenture, the market price of the Class A Common Stock meets the threshold based on at least 20 of the final 30 trading days of the quarter for the 2025 Convertible Notes to become convertible at the option of the holders during the subsequent quarter, we may be required to classify the 2025 Convertible Notes as current on our condensed consolidated balance sheets for each quarter in which such triggers are met. The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of March 31, 2021. As of March 31, 2021, the if-converted value of the 2025 Convertible Notes did not exceed the principal amount.
CASHMAX Secured Borrowing Facility
In November 2018, we entered into a receivable's securitization facility with a third-party lender to provide funding for installment loan originations in our Canadian CASHMAX business. We terminated this facility in September 2020 as part of the closure of the operations of our CASHMAX business. See our 2020 Annual Report for additional information regarding the closure of our Canadian operations.
NOTE 9: SHARE-BASED COMPENSATION
Common Stock Repurchase Program
In December 2019, the Company's Board of Directors (the "Board") authorized the repurchase of up to $60.0 million of our Class A Common Stock over three years. Repurchases under the program were suspended in March 2020 in order to preserve liquidity as a result of uncertainties related to the COVID-19 pandemic. No share repurchases under the program have been made during fiscal 2021. During fiscal 2020, we repurchased and retired 943,149 shares of our Class A Common Stock for $5.2 million, which was allocated between "Additional paid-in capital" and "Retained earnings" in our condensed consolidated balance sheets.
Stock Compensation
We maintain a Board-approved incentive plan to retain the services of our valued officers, directors and employees and to incentivize such persons to make contributions to our company and motivate excellent performance (the "Incentive Plan"). Under the Incentive Plan, we grant awards of restricted stock or restricted stock units to employees and non-employee directors. Awards granted to employees are typically subject to performance and service conditions. Awards granted to non-employee directors are time-based awards subject only to service conditions. Awards granted under the Incentive Plan are measured at the grant date fair value with compensation costs associated with the awards recognized over the requisite service period, usually the vesting period, on a straight-line basis.
In December 2020, we granted 143,145 restricted stock awards to our non-employee directors at a grant date fair value of $5.03. These awards vested in February 2021 (79,525 awards) and March 2021 (63,620 awards). In February 2021, we granted 127,744 restricted stock awards to our non-employee directors at a grant date fair value of $5.01, which awards will vest at the next annual meeting of stockholders, but no later than March 31, 2022.
In January 2021, we granted 289,592 restricted stock awards to employees at a grant date fair value of $4.68 and 275,107 restricted stock awards to employees at a grant date fair value of $4.71. These awards vest on September 30, 2021 and September 30, 2022, respectively.
In February 2021, we granted 392,419 restricted stock awards to employees at a grant date fair value of $4.96, which vest on September 30, 2023.
During the first quarter of fiscal 2020, we granted 222,912 shares of restricted stock awards to non-employee directors based on a share price of $6.46. These awards vested on September 30, 2020.
NOTE 10: INCOME TAXES
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law and includes certain income tax provisions relevant to businesses. We recognized the effect on the consolidated financial statements in the period ended March 31, 2020. For the period ended March 31, 2021, the CARES Act has not had a material impact on our consolidated financial statements. At this time, we do not expect the impact of the CARES Act to have a material impact on our consolidated financial statements for the year ending September 30, 2021.
NOTE 11: COMMITMENTS AND CONTINGENCIES
Currently, and from time to time, we are involved in various claims, disputes, lawsuits, investigations, and legal and regulatory proceedings. We accrue for contingencies if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because these matters are inherently unpredictable and unfavorable developments or resolutions can occur, assessing contingencies requires judgments and is highly subjective about future events. The amount of resulting loss may differ from these estimates.
While we are unable to determine the ultimate outcome of any current litigation or regulatory actions, we do not believe the resolution of any particular matter will have a material adverse effect on our financial condition, results of operations or liquidity.
NOTE 12: SEGMENT INFORMATION
Our operations are primarily managed on a geographical basis and are comprised of three reportable segments. The factors for determining our reportable segments include the manner in which our chief operating decision maker (CODM) evaluates performance for purposes of allocating resources and assessing performance. During the first quarter of fiscal 2021, the financial information of our Lana business activities were no longer reviewed by the CODM for evaluating performance since Lana no longer has business activities. Rather, Lana offers support activities to U.S. Pawn. As a result, Lana is no longer an operating or reportable segment. Our historical segment results have been recast to conform to current presentation.
We currently report our segments as follows:
•U.S. Pawn — all pawn activities in the United States;
•Latin America Pawn — all pawn activities in Mexico and other parts of Latin America; and
•Other International — primarily our equity interest in the net income of Cash Converters International and Rich Data Corporation.
There are no inter-segment revenues presented below, and the amounts below were determined in accordance with the same accounting principles used in our condensed consolidated financial statements.
The following tables present revenue for each reportable segment, disaggregated revenue within our three reportable segments and Corporate, segment profits and segment contribution.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
NOTE 13: SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION
The following table provides supplemental information on net amounts included in our condensed consolidated balance sheets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
March 31, 2021
|
|
March 31, 2020
|
|
September 30,
2020
|
|
|
|
|
|
|
Gross pawn service charges receivable
|
$
|
26,607
|
|
|
$
|
34,843
|
|
|
$
|
27,259
|
|
Allowance for uncollectible pawn service charges receivable
|
(5,765)
|
|
|
(7,539)
|
|
|
(6,679)
|
|
Pawn service charges receivable, net
|
$
|
20,842
|
|
|
$
|
27,304
|
|
|
$
|
20,580
|
|
|
|
|
|
|
|
Gross inventory
|
$
|
93,470
|
|
|
$
|
182,794
|
|
|
$
|
108,205
|
|
Inventory reserves
|
(7,256)
|
|
|
(9,543)
|
|
|
(12,314)
|
|
Inventory, net
|
$
|
86,214
|
|
|
$
|
173,251
|
|
|
$
|
95,891
|
|
|
|
|
|
|
|
Prepaid expenses and other
|
$
|
7,881
|
|
|
$
|
8,953
|
|
|
$
|
10,614
|
|
Accounts receivable and other
|
8,442
|
|
|
10,934
|
|
|
6,991
|
|
Income taxes receivable
|
14,353
|
|
|
3,742
|
|
|
15,298
|
|
Prepaid expenses and other current assets
|
$
|
30,676
|
|
|
$
|
23,629
|
|
|
$
|
32,903
|
|
|
|
|
|
|
|
Property and equipment, gross
|
$
|
273,513
|
|
|
$
|
261,234
|
|
|
$
|
267,509
|
|
Accumulated depreciation
|
(221,677)
|
|
|
(202,447)
|
|
|
(210,523)
|
|
Property and equipment, net
|
$
|
51,836
|
|
|
$
|
58,787
|
|
|
$
|
56,986
|
|
|
|
|
|
|
|
Accounts payable
|
$
|
17,957
|
|
|
$
|
15,582
|
|
|
$
|
19,114
|
|
Accrued expenses and other
|
51,062
|
|
|
37,570
|
|
|
52,390
|
|
Accounts payable, accrued expenses and other current liabilities
|
$
|
69,019
|
|
|
$
|
53,152
|
|
|
$
|
71,504
|
|