EZCORP Reports Second Quarter 2022 Results

PLO Up 39%; Revenue up 17%; Net Income up 179%

Board of Directors Authorizes a Three-Year $50 Million Share Repurchase Program

EZCORP, Inc. (NASDAQ: EZPW), a leading provider of pawn transactions in the United States and Latin America, today announced results for its second quarter ended March 31, 2022.

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.

SECOND QUARTER HIGHLIGHTS

  • Pawn loans outstanding (PLO) was up 39%.
  • Total revenue increased 17%, and net revenue increased 13%.
  • Merchandise sales gross profit margin was at the high end of our stated range at 38%.
  • Net income increased 179%.
  • Diluted earnings per share of $0.20 were up significantly from $0.10. On an adjusted basis1, diluted earnings per share were $0.22, compared to $0.17 in the prior-year quarter.
  • Return on earning assets (ROEA) remains strong at 175%.

CEO COMMENTARY AND OUTLOOK

Chief Executive Officer Lachie Given stated, “We continue to execute on the plan we put in place at the end of fiscal 2020 and drove another quarter of successful results. We had a significant increase in net income, and PLO continues to grow strongly. PLO is at the highest level it has ever been at the end of the second quarter, and is now within 4% of pre-pandemic levels on a same store basis.

“Our Board of Directors has approved a new three-year share repurchase program for up to $50 million that enables us to return capital to shareholders by buying back shares at what we believe to be attractive valuations. This share repurchase program underscores our confidence in our balance sheet and strong cash flow generation. We believe our consistent and positive business momentum provides us with capacity to return cash to shareholders while continuing to innovate and grow the business.

“In the second quarter, we opened three de novo stores in Latin America, and after the end of the quarter, we acquired three stores in the Dallas, Texas area. We continue to look for opportunities to grow and diversify in new and established pawn markets.

“We have expanded our EZ+ Rewards program beyond the US and Mexico into Guatemala. We are now live in our three largest regions, with over 900,000 customers enrolled. We have also improved our online customer experience with live chat support. Our focus is on providing our customers with a unique and essential service by addressing their short-term cash needs, as well as an environmentally friendly retail experience. The nature of our business contributes to the circular economy, extending the useful life of items and reducing waste, and we are looking to further expand our customer base with programs focused on environmentally conscious consumers.

“Improving the experience for team members as well as our customers is the foundation for improving our financial results. Attracting and retaining talent is a high priority. We engage with team members at all levels to understand their goals, identify future leaders and make sure we are rewarding performance.

“People, Pawn and Passion is our operating theme, and our team is focused on improving efficiency, optimizing costs and providing the best experience for our customers. I am extremely proud of our team members, who have driven another successful quarter. We are committed to continuous improvement for all stakeholders: our team, our customers and our shareholders.”

CONSOLIDATED RESULTS

Three Months Ended March 31

As Reported

 

Adjusted1

in millions, except per share amounts

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

Total revenues

$

216.0

 

$

184.9

 

$

216.3

 

$

184.9

Net revenues

$

128.9

 

$

113.7

 

$

129.1

 

$

113.7

Income before tax

$

20.1

 

$

6.8

 

$

22.3

 

$

10.4

Net income

$

14.9

 

$

5.3

 

$

16.6

 

$

9.5

Diluted earnings per share

$

0.20

 

$

0.10

 

$

0.22

 

$

0.17

EBITDA (non-GAAP measure)

$

29.8

 

$

19.8

 

$

32.1

 

$

20.0

  • Diluted earnings per share were $0.20 for the second quarter, up from $0.10. On an adjusted basis, diluted earnings per share were $0.22, up from $0.17.
  • Income before taxes improved by 196% to $20.1 million, while adjusted EBITDA increased 61% to $32.1 million.
  • PLO increased 39% to $173.6 million, up $48.4 million. On a same-store basis2, PLO increased 33% due to increased loan demand reflecting a recovery towards pre-COVID levels.
  • Total revenues increased 17%, and net revenues increased 13%, reflecting improved pawn service charge (PSC) revenue and merchandise sales.
  • PSC increased 21% due to an increase in the average PLO balance during the quarter.
  • Merchandise sales gross profit margin was at the high end of our stated range at 38%, reflecting the commitment to improving the core business by decreasing aged general merchandise (less than 1% of total general merchandise inventory) and focusing on selling inventory in the first 90 days.
  • Net inventory increased 39% reflecting a return towards normalized inventory levels. Inventory turnover remained strong at 2.9x for the quarter, down from 3.1x.
  • Store expenses increased 6%, primarily due to increased store count. On a same-store basis, store expenses were flat.
  • General and administrative expenses decreased 11%, primarily due to the reversal of incentive compensation for the departing CEO.
  • Cash and cash equivalents at the end of the quarter was $255.0 million, down 24% year-over-year. The decrease is primarily due to the increase in PLO and inventory, strategic investments and the acquisition of new stores.

SEGMENT RESULTS

U.S. Pawn

  • PLO continued to increase, ending the quarter at $133.5 million, up 40% (39% on a same store basis).
  • Total revenue was up 10% and net revenues increased 10%, reflecting increasing PSC and higher sales.
  • PSC increased 19% as a result of higher average PLO.
  • Merchandise sales gross profit gross margins decreased to 41% from 45% as expected. Aged general merchandise inventory improved to 0.4% from 1.6% of total merchandise inventory.
  • Net inventory increased 34%. Inventory turnover decreased to 2.6x from 2.9x due to increased inventory levels in the current quarter and stimulus impacts in the prior year.
  • Store expenses increased 1% primarily due to increased store count.
  • Segment contribution increased 31% to $33.8 million.

Latin America Pawn

  • PLO improved to $40.1 million or 34% (31% on constant currency basis). On a same store basis, PLO increased 15% (13% on a constant currency basis).
  • Total revenue was up 42% (43% on a constant currency basis), while net revenues increased 30% (31% on a constant currency basis).
  • PSC increased to $17.9 million or 29% (30% on a constant currency basis) as a result of higher average PLO for the quarter.
  • Merchandise sales gross profit margins decreased from 35% to 29%, reflecting a return to more normalized margins.
  • Net inventory increased 62% (58% on a constant currency basis). Inventory turnover remains strong at 3.8x, down from 4.0x.
  • Store expenses increased 22% (22% on a constant currency basis) primarily due to growth in year-over-year store count. Same-store expenses decreased 1% (1% on a constant currency basis).
  • Segment contribution increased to $4.8 million or 85% (88% on a constant currency basis), compared to $2.6 million.
  • Segment store count increased by three de novo stores opened during the quarter.

     

SHARE REPURCHASE PROGRAM

The Board of Directors has approved a new share repurchase program, which will replace the previous program that was suspended in March 2020 at the onset of the COVID-19 pandemic. Under the new program, the Company is authorized to repurchase up to $50 million of our Class A Non-Voting common shares over the next three years. This decision reflects the strength of our balance sheet and the successful recovery from the adverse impacts of the pandemic, as well as the Board’s confidence in our continued ability to generate significant cash flows and our commitment to driving long-term shareholder value through efficient capital deployment. Execution of the program will be responsive to fluctuating market conditions and valuations, liquidity needs and the expected return on investment compared to other opportunities.

Under the stock repurchase program, the Company may purchase Class A Non-Voting common stock from time to time at management’s discretion in accordance with applicable securities laws, including through open market transactions, block or privately negotiated transactions, or any combination thereof. In addition, the Company may purchase shares pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934.

The amount and timing of purchases will be dependent on a variety of factors, including stock price, trading volume, general market conditions, legal and regulatory requirements, general business conditions, the level of cash flows, and corporate considerations determined by management and the Board, such as liquidity and capital needs and the availability of attractive alternative investment opportunities. The Board of Directors has reserved the right to modify, suspend or terminate the program at any time.

FORM 10-Q

EZCORP’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 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, May 5, 2022, at 7:00 am Central Time to discuss Second Quarter Fiscal 2022 results. Analysts and institutional investors may participate on the conference call by dialing (833) 579-0921, Conference ID: 5093419, or internationally by dialing (778) 560-2579. The conference call will be webcast simultaneously to the public through this link: http://investors.ezcorp.com/. A replay of the conference call will be available online at http://investors.ezcorp.com/ shortly after the end of the call.

ABOUT EZCORP

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

Follow us on social media:

Facebook EZPAWN Official https://www.facebook.com/EZPAWN/

EZCORP Instagram Official https://www.instagram.com/ezcorp_official/

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 millions and, as a result, may not agree to the percentages calculated from numbers in thousands.

1Adjusted” 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.

2Same 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

March 31,

 

Six Months Ended

March 31,

(in thousands, except per share amounts)

2022

 

2021

 

2022

 

2021

Revenues:

 

 

 

 

 

 

 

Merchandise sales

$

133,556

 

 

$

115,225

 

 

$

271,276

 

 

$

223,008

 

Jewelry scrapping sales

 

5,690

 

 

 

6,075

 

 

 

12,634

 

 

 

12,834

 

Pawn service charges

 

76,683

 

 

 

63,436

 

 

 

152,708

 

 

 

126,925

 

Other revenues, net

 

53

 

 

 

203

 

 

 

358

 

 

 

307

 

Total revenues

 

215,982

 

 

 

184,939

 

 

 

436,976

 

 

 

363,074

 

Merchandise cost of goods sold

 

82,246

 

 

 

65,790

 

 

 

165,357

 

 

 

130,333

 

Jewelry scrapping cost of goods sold

 

4,808

 

 

 

5,401

 

 

 

10,580

 

 

 

10,603

 

Net revenues

 

128,928

 

 

 

113,748

 

 

 

261,039

 

 

 

222,138

 

Operating expenses:

 

 

 

 

 

 

 

Store expenses

 

85,743

 

 

 

81,149

 

 

 

172,514

 

 

 

160,458

 

General and administrative

 

12,227

 

 

 

13,771

 

 

 

27,772

 

 

 

26,281

 

Depreciation and amortization

 

7,450

 

 

 

8,089

 

 

 

15,024

 

 

 

15,661

 

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

 

(697

)

 

 

112

 

 

 

(692

)

 

 

90

 

Total operating expenses

 

104,723

 

 

 

103,121

 

 

 

214,618

 

 

 

202,490

 

Operating income

 

24,205

 

 

 

10,627

 

 

 

46,421

 

 

 

19,648

 

Interest expense

 

2,527

 

 

 

5,518

 

 

 

4,958

 

 

 

10,973

 

Interest income

 

(255

)

 

 

(585

)

 

 

(559

)

 

 

(1,406

)

Equity in net loss (income) of unconsolidated affiliates

 

1,439

 

 

 

(1,250

)

 

 

301

 

 

 

(1,766

)

Other expense (income)

 

371

 

 

 

145

 

 

 

251

 

 

 

(454

)

Income before income taxes

 

20,123

 

 

 

6,799

 

 

 

41,470

 

 

 

12,301

 

Income tax expense

 

5,236

 

 

 

1,469

 

 

 

10,862

 

 

 

2,672

 

Net income

$

14,887

 

 

$

5,330

 

 

$

30,608

 

 

$

9,629

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

0.26

 

 

$

0.10

 

 

$

0.54

 

 

$

0.17

 

Diluted earnings per share

$

0.20

 

 

$

0.10

 

 

$

0.42

 

 

$

0.17

 

 

 

 

 

 

 

 

 

Weighted-average basic shares outstanding

 

56,561

 

 

 

55,661

 

 

 

56,370

 

 

 

55,509

 

Weighted-average diluted shares outstanding

 

82,407

 

 

 

55,665

 

 

 

82,270

 

 

 

55,511

 

 

 

 

 

 

 

 

 

EZCORP, Inc.

CONSOLIDATED BALANCE SHEETS

 

(in thousands, except share and per share amounts)

March 31,

2022

 

March 31,

2021

 

September 30,

2021

 

 

 

 

 

 

 

(Unaudited)

 

 

Assets:

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

254,964

 

 

$

335,638

 

 

$

253,667

 

Restricted cash

 

8,713

 

 

 

8,006

 

 

 

9,957

 

Pawn loans

 

173,618

 

 

 

125,268

 

 

 

175,901

 

Pawn service charges receivable, net

 

28,319

 

 

 

20,842

 

 

 

29,337

 

Inventory, net

 

119,890

 

 

 

86,214

 

 

 

110,989

 

Prepaid expenses and other current assets

 

27,267

 

 

 

30,676

 

 

 

31,010

 

Total current assets

 

612,771

 

 

 

606,644

 

 

 

610,861

 

Investments in unconsolidated affiliates

 

42,002

 

 

 

34,961

 

 

 

37,724

 

Other investments

 

18,000

 

 

 

 

 

 

 

Property and equipment, net

 

50,874

 

 

 

51,836

 

 

 

53,811

 

Right-of-use asset, net

 

204,343

 

 

 

170,479

 

 

 

200,990

 

Goodwill

 

286,214

 

 

 

258,199

 

 

 

285,758

 

Intangible assets, net

 

62,145

 

 

 

58,125

 

 

 

62,104

 

Notes receivable, net

 

1,198

 

 

 

1,164

 

 

 

1,181

 

Deferred tax asset, net

 

15,908

 

 

 

9,693

 

 

 

9,746

 

Other assets

 

6,541

 

 

 

5,152

 

 

 

4,736

 

Total assets

$

1,299,996

 

 

$

1,196,253

 

 

$

1,266,911

 

 

 

 

 

 

 

Liabilities and stockholders' equity:

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable, accrued expenses and other current liabilities

$

69,695

 

 

$

69,019

 

 

$

90,268

 

Customer layaway deposits

 

15,046

 

 

 

11,401

 

 

 

12,557

 

Lease liability

 

52,446

 

 

 

41,060

 

 

 

52,263

 

Total current liabilities

 

137,187

 

 

 

121,480

 

 

 

155,088

 

Long-term debt, net

 

312,168

 

 

 

257,143

 

 

 

264,186

 

Deferred tax liability, net

 

179

 

 

 

167

 

 

 

3,684

 

Lease liability

 

163,506

 

 

 

138,622

 

 

 

161,330

 

Other long-term liabilities

 

11,940

 

 

 

9,597

 

 

 

10,385

 

Total liabilities

 

624,980

 

 

 

527,009

 

 

 

594,673

 

Commitments and Contingencies

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Class A Non-voting Common Stock, par value $0.01 per share; shares authorized: 100 million; issued and outstanding: 53,685,333 as of March 31, 2022; 52,873,568 as of March 31, 2021; and 53,086,438 as of September 30, 2021

 

537

 

 

 

528

 

 

 

530

 

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

 

341,913

 

 

 

399,439

 

 

 

403,312

 

Retained earnings

 

384,246

 

 

 

327,798

 

 

 

326,781

 

Accumulated other comprehensive loss

 

(51,710

)

 

 

(58,551

)

 

 

(58,415

)

Total stockholders' equity

 

675,016

 

 

 

669,244

 

 

 

672,238

 

Total liabilities and stockholders' equity

$

1,299,996

 

 

$

1,196,253

 

 

$

1,266,911

 

EZCORP, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

Six Months Ended

March 31,

(in thousands)

2022

 

2021

 

 

Operating activities:

 

 

 

Net income

$

30,608

 

 

$

9,629

 

Adjustments to reconcile net income to net cash flows from operating activities:

 

 

 

Depreciation and amortization

 

15,024

 

 

 

15,661

 

Amortization of debt discount and deferred financing costs

 

698

 

 

 

6,754

 

Amortization of lease right-of-use asset

 

25,746

 

 

 

23,835

 

Deferred income taxes

 

212

 

 

 

(1,119

)

Other adjustments

 

(708

)

 

 

(250

)

Provision for inventory reserve

 

(1,780

)

 

 

(5,265

)

Stock compensation expense

 

2,158

 

 

 

1,618

 

Equity in net loss (income) of unconsolidated affiliates

 

301

 

 

 

(1,766

)

Changes in operating assets and liabilities:

 

 

 

Service charges and fees receivable

 

687

 

 

 

(106

)

Inventory

 

(2,779

)

 

 

6,481

 

Prepaid expenses, other current assets and other assets

 

88

 

 

 

3,874

 

Accounts payable, accrued expenses and other liabilities

 

(50,258

)

 

 

(43,436

)

Customer layaway deposits

 

2,342

 

 

 

238

 

Income taxes

 

6,576

 

 

 

2,573

 

Dividends from unconsolidated affiliates

 

1,660

 

 

 

 

Net cash provided by operating activities

 

30,575

 

 

 

18,721

 

Investing activities:

 

 

 

Loans made

 

(329,459

)

 

 

(269,468

)

Loans repaid

 

199,836

 

 

 

177,888

 

Recovery of pawn loan principal through sale of forfeited collateral

 

129,311

 

 

 

109,019

 

Capital expenditures, net

 

(10,498

)

 

 

(8,359

)

Issuance of note receivable

 

(1,000

)

 

 

 

Investment in unconsolidated affiliates

 

(3,577

)

 

 

 

Investment in other investments

 

(16,500

)

 

 

 

Net cash (used in) provided by investing activities

 

(31,887

)

 

 

9,080

 

Financing activities:

 

 

 

Taxes paid related to net share settlement of equity awards

 

(792

)

 

 

(839

)

Payments on assumed debt and other borrowings

 

 

 

 

(871

)

Net cash used in financing activities

 

(792

)

 

 

(1,710

)

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

 

2,157

 

 

 

5,000

 

Net increase in cash, cash equivalents and restricted cash

 

53

 

 

 

31,091

 

Cash, cash equivalents and restricted cash at beginning of period

 

263,624

 

 

 

312,553

 

Cash, cash equivalents and restricted cash at end of period

$

263,677

 

 

$

343,644

 

 

 

 

 

Supplemental disclosure of cash flow information

 

 

 

Cash and cash equivalents

$

254,964

 

 

$

335,638

 

Restricted cash

 

8,713

 

 

 

8,006

 

Total cash and cash equivalents and restricted cash

$

263,677

 

 

$

343,644

 

 

 

 

 

 

 

 

 

Non-cash investing and financing activities:

 

 

 

Pawn loans forfeited and transferred to inventory

$

134,562

 

 

$

99,285

 

Transfer of consideration for other investment

 

1,500

 

 

 

 

EZCORP, Inc.

OPERATING SEGMENT RESULTS

(Unaudited)

 

 

Three Months Ended March 31, 2022

(in thousands)

U.S. Pawn

 

Latin America

Pawn

 

Other

Investments

 

Total

Segments

 

Corporate

Items

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Merchandise sales

$

100,064

 

$

33,492

 

 

$

 

 

$

133,556

 

 

$

 

 

$

133,556

 

Jewelry scrapping sales

 

3,480

 

 

2,210

 

 

 

 

 

 

5,690

 

 

 

 

 

 

5,690

 

Pawn service charges

 

58,772

 

 

17,911

 

 

 

 

 

 

76,683

 

 

 

 

 

 

76,683

 

Other revenues

 

24

 

 

 

 

 

29

 

 

 

53

 

 

 

 

 

 

53

 

Total revenues

 

162,340

 

 

53,613

 

 

 

29

 

 

 

215,982

 

 

 

 

 

 

215,982

 

Merchandise cost of goods sold

 

58,613

 

 

23,633

 

 

 

 

 

 

82,246

 

 

 

 

 

 

82,246

 

Jewelry scrapping cost of goods sold

 

2,798

 

 

2,010

 

 

 

 

 

 

4,808

 

 

 

 

 

 

4,808

 

Net revenues

 

100,929

 

 

27,970

 

 

 

29

 

 

 

128,928

 

 

 

 

 

 

128,928

 

Segment and corporate expenses (income):

 

 

 

 

 

 

 

 

 

 

 

Store expenses

 

64,492

 

 

21,251

 

 

 

 

 

 

85,743

 

 

 

 

 

 

85,743

 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

12,227

 

 

 

12,227

 

Depreciation and amortization

 

2,625

 

 

1,891

 

 

 

 

 

 

4,516

 

 

 

2,934

 

 

 

7,450

 

Gain on sale or disposal of assets and other

 

 

 

(9

)

 

 

 

 

 

(9

)

 

 

(688

)

 

 

(697

)

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

2,527

 

 

 

2,527

 

Interest income

 

 

 

(255

)

 

 

 

 

 

(255

)

 

 

 

 

 

(255

)

Equity in net loss of unconsolidated affiliates

 

 

 

 

 

 

1,439

 

 

 

1,439

 

 

 

 

 

 

1,439

 

Other expense

 

 

 

334

 

 

 

8

 

 

 

342

 

 

 

29

 

 

 

371

 

Segment contribution (loss)

$

33,812

 

$

4,758

 

 

$

(1,418

)

 

$

37,152

 

 

 

 

 

Income (loss) before income taxes

 

 

 

 

 

 

$

37,152

 

 

$

(17,029

)

 

$

20,123

 

 

Three Months Ended March 31, 2021

(in thousands)

U.S. Pawn

 

Latin America

Pawn

 

Other

Investments

 

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

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended March 31, 2022

(in thousands)

U.S. Pawn

 

Latin America

Pawn

 

Other

Investments

 

Total

Segments

 

Corporate

Items

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Merchandise sales

$

202,142

 

$

69,134

 

 

$

 

 

$

271,276

 

 

$

 

 

$

271,276

 

Jewelry scrapping sales

 

8,460

 

 

4,174

 

 

 

 

 

 

12,634

 

 

 

 

 

 

12,634

 

Pawn service charges

 

115,329

 

 

37,379

 

 

 

 

 

 

152,708

 

 

 

 

 

 

152,708

 

Other revenues

 

46

 

 

240

 

 

 

72

 

 

 

358

 

 

 

 

 

 

358

 

Total revenues

 

325,977

 

 

110,927

 

 

 

72

 

 

 

436,976

 

 

 

 

 

 

436,976

 

Merchandise cost of goods sold

 

116,445

 

 

48,912

 

 

 

 

 

 

165,357

 

 

 

 

 

 

165,357

 

Jewelry scrapping cost of goods sold

 

6,773

 

 

3,807

 

 

 

 

 

 

10,580

 

 

 

 

 

 

10,580

 

Net revenues

 

202,759

 

 

58,208

 

 

 

72

 

 

 

261,039

 

 

 

 

 

 

261,039

 

Segment and corporate expenses (income):

 

 

 

 

 

 

 

 

 

 

 

Store expenses

 

129,181

 

 

43,333

 

 

 

 

 

 

172,514

 

 

 

 

 

 

172,514

 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

27,772

 

 

 

27,772

 

Depreciation and amortization

 

5,295

 

 

3,871

 

 

 

 

 

 

9,166

 

 

 

5,858

 

 

 

15,024

 

Gain on sale or disposal of assets and other

 

 

 

(4

)

 

 

 

 

 

(4

)

 

 

(688

)

 

 

(692

)

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

4,958

 

 

 

4,958

 

Interest income

 

 

 

(437

)

 

 

 

 

 

(437

)

 

 

(122

)

 

 

(559

)

Equity in net loss of unconsolidated affiliates

 

 

 

 

 

 

301

 

 

 

301

 

 

 

 

 

 

301

 

Other expense (income)

 

 

 

200

 

 

 

(4

)

 

 

196

 

 

 

55

 

 

 

251

 

Segment contribution (loss)

$

68,283

 

$

11,245

 

 

$

(225

)

 

$

79,303

 

 

 

 

 

Income (loss) before income taxes

 

 

 

 

 

 

$

79,303

 

 

$

(37,833

)

 

$

41,470

 

 

Six Months Ended March 31, 2021

(in thousands)

U.S. Pawn

 

Latin America

Pawn

 

Other

Investments

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

EZCORP, Inc.

STORE COUNT ACTIVITY

(Unaudited)

 

 

Three Months Ended March 31, 2022

 

U.S. Pawn

 

Latin America

Pawn

 

Consolidated

 

 

 

 

 

 

As of December 31, 2021

516

 

633

 

1,149

New locations opened

 

3

 

3

As of March 31, 2022

516

 

636

 

1,152

 

Three Months Ended March 31, 2021

 

U.S. Pawn

 

Latin America

Pawn

 

Consolidated

 

 

 

 

 

 

As of December 31, 2020

505

 

500

 

1,005

New locations opened

 

6

 

6

As of March 31, 2021

505

 

506

 

1,011

 

Six Months Ended March 31, 2022

 

U.S. Pawn

 

Latin America

Pawn

 

Consolidated

 

 

 

 

 

 

As of September 30, 2021

516

 

632

 

1,148

New locations opened

 

4

 

4

As of March 31, 2022

516

 

636

 

1,152

 

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

As of March 31, 2021

505

 

506

 

1,011

Non-GAAP Financial Information (Unaudited)

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

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

Constant currency results reported herein are calculated by translating consolidated balance sheet and consolidated statement of operations items denominated in local currency to U.S. dollars using the exchange rate from the prior-year comparable period, as opposed to the current period, in order to exclude the effects of foreign currency rate fluctuations. We used the end-of-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. The end-of-period and approximate average exchange rates for each applicable currency as compared to U.S. dollars as of and for the three and six months ended March 31, 2022 and 2021 were as follows:

 

 

March 31,

 

Three Months Ended

March 31,

 

Six Months Ended

March 31,

 

 

2022

 

2021

 

2022

 

2021

 

2021

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexican peso

 

19.9

 

20.5

 

20.5

 

20.3

 

20.6

 

20.4

Guatemalan quetzal

 

7.5

 

7.6

 

7.5

 

7.6

 

7.5

 

7.6

Honduran lempira

 

24.1

 

23.7

 

24.2

 

23.8

 

24.0

 

23.9

Peruvian sol

 

3.7

 

3.7

 

3.8

 

3.6

 

3.9

 

3.6

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

March 31,

(in millions)

2022

 

2021

 

 

 

 

Net income

$

14.9

 

 

$

5.3

 

Interest expense

 

2.5

 

 

 

5.5

 

Interest income

 

(0.3

)

 

 

(0.6

)

Income tax expense

 

5.2

 

 

 

1.5

 

Depreciation and amortization

 

7.5

 

 

 

8.1

 

EBITDA

$

29.8

 

 

$

19.8

 

 

Total

Revenues

 

Net

Revenues

 

Income

Before Tax

 

Tax Effect

 

Net

Income

 

Diluted EPS

 

EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022 Q2 Reported

$

216.0

 

$

128.9

 

$

20.1

 

$

5.2

 

$

14.9

 

 

$

0.20

 

$

29.8

CCV Adjustment

 

 

 

 

 

2.1

 

 

0.1

 

 

2.0

 

 

 

0.02

 

 

2.1

FX impact

 

 

 

 

 

0.1

 

 

0.1

 

 

 

 

 

 

 

0.1

Constant currency impact

 

0.3

 

 

0.2

 

 

 

 

0.3

 

 

(0.3

)

 

 

 

 

0.1

2022 Q2 Adjusted

$

216.3

 

$

129.1

 

$

22.3

 

$

5.7

 

$

16.6

 

 

$

0.22

 

$

32.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

(1.3

)

 

 

1.4

 

 

0.02

 

 

2021 Q2 Adjusted

$

184.9

 

$

113.7

 

$

10.4

 

$

1.0

 

 

$

9.5

 

$

0.17

 

$

20.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

March 31, 2022

 

Six Months Ended

March 31, 2022

(in millions)

U.S. Dollar

Amount

 

Percentage

Change YOY

 

U.S. Dollar

Amount

 

Percentage

Change YOY

 

 

 

 

 

 

 

 

Consolidated revenue

$

216.0

 

 

17

%

 

$

437.0

 

 

20

%

Currency exchange rate fluctuations

 

0.3

 

 

 

 

 

0.8

 

 

 

Constant currency consolidated revenue

$

216.3

 

 

17

%

 

$

437.8

 

 

21

%

 

 

 

 

 

 

 

 

Consolidated net revenue

$

128.9

 

 

13

%

 

$

261.0

 

 

18

%

Currency exchange rate fluctuations

 

0.1

 

 

 

 

 

0.3

 

 

 

Constant currency consolidated net revenue

$

129.0

 

 

14

%

 

$

261.3

 

 

18

%

 

 

 

 

 

 

 

 

Consolidated net inventory

$

119.9

 

 

39

%

 

$

119.9

 

 

39

%

Currency exchange rate fluctuations

 

(0.7

)

 

 

 

 

(0.7

)

 

 

Constant currency consolidated net inventory

$

119.2

 

 

38

%

 

$

109.2

 

 

38

%

 

 

 

 

 

 

 

 

Latin America Pawn net revenue

$

28.0

 

 

30

%

 

$

58.2

 

 

32

%

Currency exchange rate fluctuations

 

0.1

 

 

 

 

 

0.3

 

 

 

Constant currency Latin America Pawn net revenue

$

28.1

 

 

31

%

 

$

58.5

 

 

32

%

 

 

 

 

 

 

 

 

Latin America Pawn PLO

$

40.1

 

 

34

%

 

$

40.1

 

 

34

%

Currency exchange rate fluctuations

 

(0.9

)

 

 

 

 

(0.9

)

 

 

Constant currency Latin America Pawn PLO

$

39.2

 

 

31

%

 

$

39.2

 

 

31

%

 

 

 

 

 

 

 

 

Latin America Pawn PSC revenues

$

17.9

 

 

29

%

 

$

37.4

 

 

38

%

Currency exchange rate fluctuations

 

0.1

 

 

 

 

 

0.2

 

 

 

Constant currency Latin America Pawn PSC revenues

$

18.0

 

 

29

%

 

$

37.6

 

 

38

%

 

 

 

 

 

 

 

 

Latin America Pawn merchandise sales

$

33.5

 

 

57

%

 

$

69.1

 

 

47

%

Currency exchange rate fluctuations

 

0.2

 

 

 

 

 

0.6

 

 

 

Constant currency Latin America Pawn merchandise sales

$

33.7

 

 

57

%

 

$

69.7

 

 

49

%

 

 

 

 

 

 

 

 

Latin America Pawn segment profit before tax

$

4.8

 

 

85

%

 

$

11.2

 

 

48

%

Currency exchange rate fluctuations

 

 

 

 

 

 

 

 

 

Constant currency Latin America Pawn segment profit before tax

$

4.8

 

 

85

%

 

$

11.2

 

 

48

%

 

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