Record Pawn Loans Outstanding and Third
Quarter Merchandise Sales Drive Strong Revenue and Earnings
Growth
EZCORP, Inc. (NASDAQ: EZPW), a leading provider of pawn
transactions in the United States and Latin America, today
announced results for its third quarter ended June 30, 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.
THIRD QUARTER HIGHLIGHTS
- Pawn loans outstanding (PLO) up 12% to $229.4 million.
- Total revenue increased 19%, and gross profit increased
15%.
- Merchandise sales gross margin remains within our targeted
range at 36%.
- Net income increased $6.0 million to $18.2 million.
- Diluted earnings per share of $0.24, up from $0.17. On an
adjusted basis1, diluted earnings per share of $0.20, compared to
$0.16.
- Return on earning assets (ROEA) remains strong at 161%.
CEO COMMENTARY AND OUTLOOK
Lachie Given, Chief Executive Officer, stated, "As a result of
our team's persistent pursuit of operational excellence, we
achieved record PLO and third quarter revenue and merchandise
sales, driving another quarter of robust operating results for our
stakeholders.
"We grew our store footprint, opening 13 de novo stores during
the quarter. Twelve of the new stores are in Latin America, with
five in Mexico, taking our store count there to 540, and seven in
Guatemala, expanding our market leadership there to 110 stores. In
Las Vegas, we opened an additional Max Pawn luxury store, giving us
three luxury pawn stores in that market.
"Our EZ+ Rewards loyalty program has grown to 3.3 million
members, an 18% increase over the previous quarter. We continue to
implement strategies to win and retain customers and drive customer
engagement, enhancing their experience through targeted EZ+
marketing, moving payments online, and improving our retail
showrooms. In the local communities we serve, we continue to
provide a unique and essential service to our customers, focusing
on meeting our customers' immediate cash needs with pawn loans and
purchases, while providing outstanding value-for-money, offering a
broad array of second-hand goods and a more sustainable way to
shop.
"We delivered another strong quarter of operating and financial
results through our commitment to People, Pawn, and Passion. Team
recruitment, retention, rewards and recognition remain focal
points, as we employ the most passionate, productive, and tenured
team in the industry. Investing in our people and technology to
grow our customer base and improve the customer experience
continues to be a successful formula for us in driving excellent
financial and operating results for our shareholders," Given
concluded.
CONSOLIDATED RESULTS
Three Months Ended June 30
As Reported
Adjusted1
in millions, except per share amounts
2023
2022
2023
2022
Total revenues
$
255.8
$
215.8
$
249.5
$
215.8
Gross profit
$
148.8
$
129.5
$
145.5
$
129.5
Income before tax
$
21.3
$
13.1
$
18.3
$
14.8
Net income
$
18.2
$
12.2
$
14.6
$
11.0
Diluted earnings per share
$
0.24
$
0.17
$
0.20
$
0.16
EBITDA (non-GAAP measure)
$
30.2
$
23.3
$
27.0
$
25.1
- Diluted earnings per share of $0.24, up from $0.17. On an
adjusted basis, diluted earnings per share of $0.20, up from
$0.16.
- Income before taxes was $21.3 million, up from $13.1 million,
and adjusted EBITDA increased 8% to $27.0 million.
- PLO increased 12% to $229.4 million, up $25.2 million. On a
same-store basis2, PLO increased 9% due to improved operational
performance and continued strong loan demand.
- Total revenues increased 19% and gross profit increased 15%,
reflecting improved pawn service charge (PSC) revenue, merchandise
sales and merchandise sales gross profit.
- PSC increased 17% as a result of higher average PLO and
yields.
- Merchandise sales gross margin remains within our targeted
range at 36%. Aged general merchandise was 1.6% of total general
merchandise inventory. This is a 60 bps improvement over the second
quarter.
- Net inventory increased 17%, as expected with the growth in
PLO. Inventory turnover remained strong at 2.8x.
- Store expenses increased 17%, primarily due to increased labor
in-line with store activity, higher store count and, to a lesser
extent, expenses related to our loyalty program and rent. On a
same-store basis, store expenses increased 12%. General and
administrative expenses decreased 4%, primarily due to the
litigation accrual charge of $2.0 million recorded in prior period
partially offset by an increase in costs related to our Workday
implementation.
- Cash and cash equivalents at the end of the quarter was $238.0
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,
and strategic investments.
SEGMENT RESULTS
U.S. Pawn
- PLO ended the quarter at $178.9 million, up 12% or 9% on a same
store basis.
- Total revenue was up 16% and gross profit increased 12%,
reflecting increased PSC and higher merchandise sales.
- PSC increased 16% as a result of higher average PLO.
- Merchandise sales gross margin decreased to 39% from 41%,
within our target range. Aged general merchandise was 1.0% of total
general merchandise inventory. This is a 40 bps improvement over
the second quarter.
- Net inventory increased 13%, as expected with the growth in
PLO. Inventory turnover increased to 2.6x from 2.5x.
- Store expenses increased 14%, primarily due to increased labor
in-line with store activity, higher store count and, to a lesser
extent, expenses related to our loyalty program.
- Segment contribution increased 9% to $32.3 million.
- Segment store count increased by 1 de novo store during the
quarter.
Latin America Pawn
- PLO improved to $50.5 million, up 14% (1% on constant currency
basis). On a same store basis, PLO increased 11% (decreased 2% on a
constant currency basis). PLO balance was lower than expected with
a greater pay down during the quarter driven by a change in Mexican
law, which significantly increased profit share required to be paid
by companies to employees by May 30.
- Total revenue was up 26% (15% on constant currency basis) and
gross profit increased 24% (14% on a constant currency basis),
reflecting increased PSC, higher merchandise sales and improved
merchandise sales gross profit.
- PSC increased 19% (10% on a constant currency basis) as a
result of higher average PLO and yield.
- Merchandise sales gross margin increased from 29% to 30%. Aged
general merchandise increased to 2.4% from 1.3% of total
merchandise inventory. This is a 80 bps improvement over the second
quarter.
- Net inventory increased 30% (13% on a constant currency basis),
as expected with the growth in PLO. Inventory turnover remained
strong at 3.4x, down from 3.7x.
- Store expenses increased 26% (14% on a constant currency
basis), primarily due to rent linked to inflation, higher store
count and, to a lesser extent, expenses related to our loyalty
program. Same-store expenses increased 21% (9% on a constant
currency basis).
- Segment contribution increased 59% (48% on a constant currency
basis) to $9.7 million. On an adjusted basis, segment contribution
was up 12% to $6.7 million, with the primary adjustment being the
reversal of contingent consideration liability in connection with a
previously completed acquisition.
- Segment store count increased by 12 de novo stores during the
quarter.
FORM 10-Q
EZCORP’s Quarterly Report on Form 10-Q for the quarter ended
June 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.
CONFERENCE CALL
EZCORP will host a conference call on Thursday, August 3, 2023,
at 8:00 am Central Time to discuss Third Quarter Fiscal 2023
results. Analysts and institutional investors may participate on
the conference call by dialing (833) 470-1428, Conference ID:
870985, or internationally by dialing (404) 975-4839. 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 Linked In 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.
Note: Percentages are calculated from the underlying numbers in
thousands and, as a result, may not agree to the percentages
calculated from numbers in millions.
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.
2“Same Store” basis, which is a financial measure, includes
stores open the entirety of the comparable periods.
EZCORP, Inc.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Three Months Ended
June 30,
Nine Months Ended
June 30,
(in thousands, except per share
amounts)
2023
2022
2023
2022
Revenues:
Merchandise sales
$
147,980
$
128,334
$
464,274
$
399,610
Jewelry scrapping sales
13,931
7,168
34,640
19,802
Pawn service charges
93,819
80,291
279,442
232,999
Other revenues, net
82
49
206
407
Total revenues
255,812
215,842
778,562
652,818
Merchandise cost of goods sold
95,069
80,167
297,285
245,524
Jewelry scrapping cost of goods sold
11,958
6,167
30,813
16,747
Gross profit
148,785
129,508
450,464
390,547
Operating expenses:
Store expenses
104,932
89,430
307,004
261,944
General and administrative
17,876
18,715
48,961
46,487
Depreciation and amortization
8,026
7,746
23,977
22,770
(Gain) loss on sale or disposal of
assets
(29
)
—
28
(692
)
Other
(2,632
)
—
(5,097
)
—
Total operating expenses
128,173
115,891
374,873
330,509
Operating income
20,612
13,617
75,591
60,038
Interest expense
3,414
2,693
12,994
7,651
Interest income
(2,584
)
(190
)
(5,146
)
(749
)
Equity in net (income) loss of
unconsolidated affiliates
(1,523
)
(1,758
)
29,394
(1,457
)
Other (income) expense
(5
)
(210
)
(159
)
41
Income before income taxes
21,310
13,082
38,508
54,552
Income tax expense
3,088
867
10,298
11,729
Net income
$
18,222
$
12,215
$
28,210
$
42,823
Basic earnings per share
$
0.33
$
0.22
$
0.51
$
0.76
Diluted earnings per share
$
0.24
$
0.17
$
0.38
$
0.59
Weighted-average basic shares
outstanding
55,367
56,656
55,776
56,465
Weighted-average diluted shares
outstanding
86,825
82,504
79,559
82,349
EZCORP, Inc.
CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(in thousands, except share and per share
amounts)
June 30,
2023
June 30,
2022
September 30,
2022
Assets:
Current assets:
Cash and cash equivalents
$
237,974
$
222,342
$
206,028
Restricted cash
8,549
8,614
8,341
Pawn loans
229,379
204,155
210,009
Pawn service charges receivable, net
34,959
32,000
33,476
Inventory, net
154,944
132,713
151,615
Prepaid expenses and other current
assets
44,925
29,822
34,694
Total current assets
710,730
629,646
644,163
Investments in unconsolidated
affiliates
10,247
43,384
37,733
Other investments
39,220
18,000
24,220
Property and equipment, net
61,849
51,505
56,725
Right-of-use asset, net
243,100
217,506
221,405
Goodwill
302,120
286,798
286,828
Intangible assets, net
60,009
61,017
56,819
Notes receivable, net
—
1,207
1,215
Deferred tax asset, net
19,610
15,773
12,145
Other assets
10,793
5,991
6,625
Total assets
$
1,457,678
$
1,330,827
$
1,347,878
Liabilities and equity:
Current liabilities:
Accounts payable, accrued expenses and
other current liabilities
$
74,458
$
76,566
$
84,509
Customer layaway deposits
18,595
14,927
16,023
Operating lease liabilities, current
56,919
53,358
52,334
Total current liabilities
149,972
144,851
152,866
Long-term debt, net
359,686
312,521
312,903
Deferred tax liability, net
349
307
373
Operating lease liabilities
197,499
175,489
180,756
Other long-term liabilities
11,130
11,905
8,749
Total liabilities
718,636
645,073
655,647
Commitments and Contingencies
Stockholders’ equity:
Class A Non-voting Common Stock, par value
$0.01per share; shares authorized: 100 million; issued and
outstanding: 52,214,761 as of June 30, 2023; 53,685,333 as of June
30, 2022; and 53,454,885 as of September 30, 2022
522
537
534
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
344,857
343,763
345,330
Retained earnings
422,549
396,461
402,006
Accumulated other comprehensive loss
(28,916
)
(55,037
)
(55,669
)
Total equity
739,042
685,754
692,231
Total liabilities and equity
$
1,457,678
$
1,330,827
$
1,347,878
EZCORP, Inc.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
Nine Months Ended
June 30,
(in thousands)
2023
2022
Operating activities:
Net income
$
28,210
$
42,823
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation and amortization
23,977
22,770
Amortization of debt discount and deferred
financing costs
1,135
1,051
Non-cash lease expense
41,752
39,061
Deferred income taxes
(7,489
)
475
Other adjustments
(4,894
)
(734
)
Provision for inventory reserve
(160
)
(2,096
)
Stock compensation expense
6,876
4,008
Equity in net loss of unconsolidated
affiliates
29,394
(1,457
)
Net loss on extinguishment of debt
3,545
—
Changes in operating assets and
liabilities, net of acquisitions:
Service charges and fees receivable
(316
)
(2,949
)
Inventory
(5,501
)
(7,837
)
Prepaid expenses, other current assets and
other assets
(2,750
)
2,025
Accounts payable, accrued expenses and
other liabilities
(53,018
)
(53,209
)
Customer layaway deposits
1,036
2,265
Income taxes
8,923
(1,068
)
Dividends from unconsolidated
affiliates
3,589
3,366
Net cash provided by operating
activities
74,309
48,494
Investing activities:
Loans made
(592,689
)
(524,965
)
Loans repaid
343,886
295,823
Recovery of pawn loan principal through
sale of forfeited collateral
251,608
191,082
Capital expenditures, net
(27,751
)
(18,100
)
Acquisitions, net of cash acquired
(12,968
)
(1,850
)
Issuance of notes receivable
(15,500
)
(1,000
)
Investment in unconsolidated
affiliates
(2,133
)
(6,079
)
Investment in other investments
(15,000
)
(16,500
)
Net cash used in investing activities
(70,547
)
(81,589
)
Financing activities:
Taxes paid related to net share settlement
of equity awards
(1,149
)
(792
)
Proceeds from issuance of debt
230,000
—
Debt issuance cost
(7,458
)
—
Cash paid on extinguishment of debt
(1,951
)
—
Payments on debt
(178,488
)
—
Repurchase of common stock
(13,982
)
—
Net cash provided by (used in) financing
activities
26,972
(792
)
Effect of exchange rate changes on cash
and cash equivalents and restricted cash
1,420
1,219
Net increase (decrease) in cash, cash
equivalents and restricted cash
32,154
(32,668
)
Cash, cash equivalents and restricted cash
at beginning of period
214,369
263,624
Cash, cash equivalents and restricted cash
at end of period
$
246,523
$
230,956
EZCORP, Inc.
OPERATING SEGMENT
RESULTS
Three Months Ended June 30,
2023
(Unaudited)
(in thousands)
U.S. Pawn
Latin America Pawn
Other Investments
Total Segments
Corporate Items
Consolidated
Revenues:
Merchandise sales
$
102,177
$
45,803
$
—
$
147,980
$
—
$
147,980
Jewelry scrapping sales
13,098
833
—
13,931
—
13,931
Pawn service charges
68,790
25,029
—
93,819
—
93,819
Other revenues
27
40
15
82
—
82
Total revenues
184,092
71,705
15
255,812
—
255,812
Merchandise cost of goods sold
62,799
32,270
—
95,069
—
95,069
Jewelry scrapping cost of goods sold
11,101
857
—
11,958
—
11,958
Gross profit
110,192
38,578
15
148,785
—
148,785
Segment and corporate expenses
(income):
Store expenses
75,389
29,543
—
104,932
—
104,932
General and administrative
—
—
—
—
17,876
17,876
Depreciation and amortization
2,505
2,303
—
4,808
3,218
8,026
Gain on sale or disposal of assets
—
(29
)
—
(29
)
—
(29
)
Other
—
(2,632
)
—
(2,632
)
—
(2,632
)
Interest expense
—
—
—
—
3,414
3,414
Interest income
(1
)
(256
)
—
(257
)
(2,327
)
(2,584
)
Equity in net income of unconsolidated
affiliates
—
—
(1,523
)
(1,523
)
—
(1,523
)
Other (income) expense
—
(65
)
10
(55
)
50
(5
)
Segment contribution
$
32,299
$
9,714
$
1,528
$
43,541
Income (loss) before income taxes
$
43,541
$
(22,231
)
$
21,310
Three Months Ended June 30,
2022
(Unaudited)
(in thousands)
U.S. Pawn
Latin America
Pawn
Other Investments
Total Segments
Corporate Items
Consolidated
Revenues:
Merchandise sales
$
94,005
$
34,329
$
—
$
128,334
$
—
$
128,334
Jewelry scrapping sales
5,404
1,764
—
7,168
—
7,168
Pawn service charges
59,322
20,969
—
80,291
—
80,291
Other revenues
21
7
21
49
—
49
Total revenues
158,752
57,069
21
215,842
—
215,842
Merchandise cost of goods sold
55,885
24,282
—
80,167
—
80,167
Jewelry scrapping cost of goods sold
4,506
1,661
—
6,167
—
6,167
Gross profit
98,361
31,126
21
129,508
—
129,508
Segment and corporate expenses
(income):
Store expenses
66,036
23,394
—
89,430
—
89,430
General and administrative
—
—
—
—
18,715
18,715
Depreciation and amortization
2,572
1,987
—
4,559
3,187
7,746
Interest expense
—
—
—
—
2,693
2,693
Interest income
(1
)
(189
)
—
(190
)
—
(190
)
Equity in net income of unconsolidated
affiliates
—
—
(1,758
)
(1,758
)
—
(1,758
)
Other (income) expense
—
(163
)
19
(144
)
(66
)
(210
)
Segment contribution
$
29,754
$
6,097
$
1,760
$
37,611
Income (loss) before income taxes
$
37,611
$
(24,529
)
$
13,082
Nine Months Ended June 30,
2023
(Unaudited)
(in thousands)
U.S. Pawn
Latin America Pawn
Other Investments
Total Segments
Corporate Items
Consolidated
Revenues:
Merchandise sales
$
329,231
$
135,043
$
—
$
464,274
$
—
$
464,274
Jewelry scrapping sales
30,088
4,552
—
34,640
—
34,640
Pawn service charges
208,045
71,397
—
279,442
—
279,442
Other revenues
84
75
47
206
—
206
Total revenues
567,448
211,067
47
778,562
—
778,562
Merchandise cost of goods sold
203,698
93,587
—
297,285
—
297,285
Jewelry scrapping cost of goods sold
25,867
4,946
—
30,813
—
30,813
Gross profit
337,883
112,534
47
450,464
—
450,464
Segment and corporate expenses
(income):
Store expenses
220,639
86,365
—
307,004
—
307,004
General and administrative
—
(3
)
—
(3
)
48,964
48,961
Depreciation and amortization
7,820
6,850
—
14,670
9,307
23,977
Loss (gain) on sale or disposal of
assets
84
(56
)
—
28
—
28
Other charges
—
(5,097
)
—
(5,097
)
—
(5,097
)
Interest expense
—
—
—
—
12,994
12,994
Interest income
(2
)
(723
)
—
(725
)
(4,421
)
(5,146
)
Equity in net loss of unconsolidated
affiliates
—
—
29,394
29,394
—
29,394
Other (income) expense
—
(41
)
20
(21
)
(138
)
(159
)
Segment contribution (loss)
$
109,342
$
25,239
$
(29,367
)
$
105,214
Income (loss) before income taxes
$
105,214
$
(66,706
)
$
38,508
Nine Months Ended June 30,
2022
(Unaudited)
(in thousands)
U.S. Pawn
Latin America Pawn
Other Investments
Total Segments
Corporate Items
Consolidated
Revenues:
Merchandise sales
$
296,147
$
103,463
$
—
$
399,610
$
—
$
399,610
Jewelry scrapping sales
13,864
5,938
—
19,802
—
19,802
Pawn service charges
174,651
58,348
—
232,999
—
232,999
Other revenues
67
247
93
407
—
407
Total revenues
484,729
167,996
93
652,818
—
652,818
Merchandise cost of goods sold
172,330
73,194
—
245,524
—
245,524
Jewelry scrapping cost of goods sold
11,279
5,468
—
16,747
—
16,747
Gross profit
301,120
89,334
93
390,547
—
390,547
Segment and corporate expenses
(income):
Store expenses
195,217
66,727
—
261,944
—
261,944
General and administrative
—
—
—
—
46,487
46,487
Depreciation and amortization
7,867
5,858
—
13,725
9,045
22,770
Gain on sale or disposal of assets and
other
—
(4
)
—
(4
)
(688
)
(692
)
Interest expense
—
—
—
—
7,651
7,651
Interest income
(1
)
(626
)
—
(627
)
(122
)
(749
)
Equity in net income of unconsolidated
affiliates
—
—
(1,457
)
(1,457
)
—
(1,457
)
Other expense (income)
—
37
15
52
(11
)
41
Segment contribution
$
98,037
$
17,342
$
1,535
$
116,914
Income (loss) before income taxes
$
116,914
$
(62,362
)
$
54,552
EZCORP, Inc.
STORE COUNT ACTIVITY
(Unaudited)
Three Months Ended June 30,
2023
U.S. Pawn
Latin America Pawn
Consolidated
As of March 31, 2023
527
672
1,199
New locations opened
1
12
13
As of June 30, 2023
528
684
1,212
Three Months Ended June 30,
2022
U.S. Pawn
Latin America Pawn
Consolidated
As of March 31, 2022
516
636
1,152
New locations opened
—
8
8
Locations acquired
3
—
3
As of June 30, 2022
519
644
1,163
Nine Months Ended June 30,
2023
U.S. Pawn
Latin America Pawn
Consolidated
As of September 30, 2022
515
660
1,175
New locations opened
3
25
28
Locations acquired
10
—
10
Locations sold, combined or closed
—
(1
)
(1
)
As of June 30, 2023
528
684
1,212
Nine Months Ended June 30,
2022
U.S. Pawn
Latin America Pawn
Consolidated
As of September 30, 2021
516
632
1,148
New locations opened
—
12
12
Locations acquired
3
—
3
As of June 30, 2022
519
644
1,163
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 nine months ended June 30, 2023
and 2022 were as follows:
June 30,
Three Months Ended
June 30,
Nine Months Ended
June 30,
2023
2022
2023
2022
2023
2022
Mexican peso
17.1
20.2
17.7
20.0
18.7
20.4
Guatemalan quetzal
7.7
7.6
7.6
7.5
7.6
7.5
Honduran lempira
24.4
24.2
24.3
24.2
24.3
24.1
Australian dollar
1.5
1.5
1.5
1.4
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
June 30,
(in millions)
2023
2022
Net income
$
18.2
$
12.2
Interest expense
3.4
2.7
Interest income
(2.6
)
(0.2
)
Income tax expense
3.1
0.9
Depreciation and amortization
8.0
7.7
EBITDA
$
30.2
$
23.3
Total Revenues
Gross Profit
Income Before Tax
Tax Effect
Net Income
Diluted EPS
EBITDA
2023 Q3 Reported
$
255.8
$
148.8
$
21.3
$
3.1
$
18.2
$
0.24
$
30.2
Contingent consideration liability
—
—
(2.6
)
(0.5
)
(2.1
)
(0.02
)
(2.6
)
Tax Impact
—
—
—
1.0
(1.0
)
(0.01
)
—
Constant currency impact
(6.3
)
(3.3
)
(0.4
)
0.1
(0.5
)
(0.01
)
(0.6
)
2023 Q3 Adjusted
$
249.5
$
145.5
$
18.3
$
3.7
$
14.6
$
0.20
$
27.0
Total Revenues
Gross Profit
Income Before Tax
Tax Effect
Net Income
Diluted EPS
EBITDA
2022 Q3 Reported
$
215.8
$
129.5
$
13.1
$
0.9
$
12.2
$
0.17
$
23.3
Litigation accrual
—
—
2.0
0.1
1.9
0.02
2.0
Release of FIN 48 reserves
—
—
—
2.8
(2.8
)
(0.03
)
—
FX impact
—
—
(0.3
)
—
(0.3
)
—
(0.2
)
2022 Q3 Adjusted
$
215.8
$
129.5
$
14.8
$
3.8
$
11.0
$
0.16
$
25.1
Three Months Ended
June 30, 2023
Nine Months Ended
June 30, 2023
(in millions)
U.S. Dollar Amount
Percentage Change YOY
U.S. Dollar Amount
Percentage Change YOY
Consolidated revenue
$
255.8
19
%
$
778.6
19
%
Currency exchange rate fluctuations
(6.3
)
(13.7
)
Constant currency consolidated revenue
$
249.5
16
%
$
764.9
17
%
Consolidated gross profit
$
148.8
15
%
$
450.5
15
%
Currency exchange rate fluctuations
(3.3
)
(7.0
)
Constant currency consolidated gross
profit
$
145.5
12
%
$
443.5
14
%
Consolidated net inventory
$
154.9
17
%
$
154.9
17
%
Currency exchange rate fluctuations
(5.0
)
(5.0
)
Constant currency consolidated net
inventory
$
149.9
13
%
$
149.9
13
%
Latin America Pawn gross profit
$
38.6
24
%
$
112.5
26
%
Currency exchange rate fluctuations
(3.2
)
(7.0
)
Constant currency Latin America Pawn gross
profit
$
35.4
14
%
$
105.5
18
%
Latin America Pawn PLO
$
50.5
13
%
$
50.5
13
%
Currency exchange rate fluctuations
(5.5
)
(5.5
)
Constant currency Latin America Pawn
PLO
$
45.0
1
%
$
45.0
1
%
Latin America Pawn PSC revenues
$
25.0
19
%
$
71.4
22
%
Currency exchange rate fluctuations
(2.0
)
(4.3
)
Constant currency Latin America Pawn PSC
revenues
$
23.0
10
%
$
67.1
15
%
Latin America Pawn merchandise sales
$
45.8
33
%
$
135.0
31
%
Currency exchange rate fluctuations
(4.2
)
(9.1
)
Constant currency Latin America Pawn
merchandise sales
$
41.6
21
%
$
125.9
22
%
Latin America Pawn segment profit before
tax
$
9.7
59
%
$
25.2
46
%
Currency exchange rate fluctuations
(0.4
)
(0.9
)
Constant currency Latin America Pawn
segment profit before tax
$
9.3
53
%
$
24.4
39
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230802594687/en/
Email: Investor_Relations@ezcorp.com Phone: (512) 314-2220
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