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EZCORP Reports Fourth Quarter and Full Year 2022 Results

Record Year End Pawn Loans Outstanding Driving 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 fourth quarter and full year ended September 30, 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.

FOURTH QUARTER AND FULL YEAR HIGHLIGHTS

  • Pawn loans outstanding (PLO) up 19% to a record-high of $210.0 million.
  • Total revenue increased 21% for the quarter and for the full year, while gross profit1 increased 15% for the quarter and 18% for the full year.
  • Merchandise sales gross margin remains within our targeted range at 37% for the quarter and 38% for the full year.
  • Net income for the quarter was $7.3 million, an increase of $5.8 million, and $50.2 million for the year, an increase of $41.5 million.
  • Diluted earnings per share of $0.11 for the quarter was up from $0.03 and for the year was $0.70 up significantly from $0.15. On an adjusted basis2, diluted earnings per share for the quarter was $0.15, compared to $0.11, and for the year was $0.75, compared to $0.38.
  • Return on earning assets (ROEA) remains strong at 155% for the quarter and 167% for the full year.

CEO COMMENTARY AND OUTLOOK

Chief Executive Officer Lachie Given stated, “We continue to execute on our three-year strategic plan and closed the fiscal year with another outstanding quarter. PLO hit a record high driving increases in pawn service charges. Strong sales margins with a relentless focus on optimizing store operating costs translated into a significant increase in earnings for the fourth quarter and full year. Inflation and other economic pressures have had a significant impact on our customers' finances, and we are able to help them by providing a unique and essential service to address their short-term cash needs. In addition, we provide an environmentally friendly retail experience at our neighborhood re-commerce stores for our expanding customer base of environmentally and cost-conscious consumers.

“During the fourth quarter, we opened 16 de novo stores in Latin America bringing the total for 2022 to 28. In the US, we acquired three stores during fiscal 2022 and another nine stores in the Houston, Texas area after the end of the year. The rollout of the EZ+ Rewards program continues to be a success, now yielding 1.9 million members across all geographies.

“We are pleased that our strong cash flow and balance sheet has enabled us to return value to shareholders through share repurchases of $3.0 million as of November 15.

“During the quarter we celebrated a team member appreciation week, created engagement action plans on both the enterprise level and team level, and conducted leadership workshop sessions to improve bench strength. We believe we have the best, most passionate, productive team members and we are focused on recruitment, retention and incentivization. They are responsible for delivering the operating performance that underpins our strong financial results,” concluded Given.

CONSOLIDATED RESULTS

Three Months Ended September 30

As Reported

 

Adjusted2

in millions, except per share amounts

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

Total revenues

$

233.4

 

$

192.4

 

$

233.9

 

$

192.4

Gross profit1

$

137.6

 

$

119.3

 

$

137.9

 

$

119.3

Income before tax

$

13.2

 

$

4.5

 

$

12.9

 

$

9.4

Net income

$

7.3

 

$

1.6

 

$

10.6

 

$

6.2

Diluted earnings per share

$

0.11

 

$

0.03

 

$

0.15

 

$

0.11

EBITDA (non-GAAP measure)

$

24.8

 

$

17.2

 

$

24.6

 

$

18.5

Twelve Months Ended September 30

As Reported

 

Adjusted2

in millions, except per share amounts

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

Total revenues

$

886.2

 

$

729.6

 

$

887.4

 

$

729.6

Gross profit1

$

528.1

 

$

449.5

 

$

528.7

 

$

449.5

Income before tax

$

67.7

 

$

16.1

 

$

71.6

 

$

31.6

Net income

$

50.2

 

$

8.6

 

$

54.3

 

$

21.4

Diluted earnings per share

$

0.70

 

$

0.15

 

$

0.75

 

$

0.38

EBITDA

$

109.0

 

$

66.4

 

$

112.9

 

$

68.2

  • Diluted earnings per share were $0.11 for the fourth quarter, up from $0.03. On an adjusted basis, diluted earnings per share were $0.15, up from $0.11. For the full year, diluted earnings per share was $0.70, compared to $0.15. On an adjusted basis, diluted earnings per share for the year were $0.75, compared to $0.38.
  • For the fourth quarter, income before taxes improved to $13.2 million from $4.5 million, while adjusted EBITDA increased 33% to $24.6 million. For the full year, income before taxes improved to $67.7 million from $16.1 million and adjusted EBITDA increased 66% to $112.9 million.
  • PLO increased 19% to $210.0 million, up $34.1 million. On a same-store basis3, PLO increased 19% to its highest level due to increased loan demand reflecting continuing recovery above pre-COVID levels.
  • In the fourth quarter, total revenues increased 21% and gross profit increased 15%, reflecting improved pawn service charge (PSC) revenue and merchandise sales gross profit. Similarly for the full year, total revenues increased 21% and gross profit increased 18%.
  • PSC increased 21% in the fourth quarter and 23% for the year as a result of higher average PLO.
  • Merchandise sales gross margin remains within our targeted range at 37%, reflecting our 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. For the full year, merchandise sales gross profit margin was 38%, compared to 42%.
  • Net inventory increased 37%, reflecting a return towards normalized inventory levels. Inventory turnover remained strong at 2.6x for the quarter, down from 2.8x and decreased from 2.9x to 2.8x for the year.
  • For the fourth quarter, store expenses increased 8%, primarily due to increased labor in-line with store activity and rent associated with lease renewals. On a same-store basis, store expenses increased 7%. In addition, general and administrative expenses increased 14%, primarily due to asset write-downs associated with IT infrastructure migration and corporate office sublease. For the full year, store expenses increased 8%, primarily due to increased labor in-line with store activity and rent associated with lease renewals. On a same-store basis, store expenses increased 4%. In addition, general and administrative expenses for the year increased 14%, primarily due to asset write-downs associated with IT infrastructure migration and corporate office sublease, litigation accrual, increased labor and software licensing costs.
  • Cash and cash equivalents at the end of the quarter was $206.0 million, down 19% year-over-year. The decrease is primarily due to the increase in PLO and inventory, the acquisition of new stores, and strategic investments.

SEGMENT RESULTS

U.S. Pawn

  • PLO continued to increase, ending the year at $163.5 million, up 20% and on a same store basis.
  • In the fourth quarter, total revenue was up 25% and gross profit increased 18%, reflecting increasing PSC, higher sales and improved merchandise sales gross profit. For the full year, total revenues increased 19% and gross profit increased 16%, reflecting higher average PLO for the year driving higher PSC.
  • PSC increased 25% in the fourth quarter and 22% for the year as a result of higher average PLO.
  • During the fourth quarter, merchandise sales gross margin decreased to 40% from 43%. For the year, merchandise sales gross profit gross margins decreased 300 bps to 41%, reflecting a focus on improving retailing and lower levels of aged general merchandise inventory (which continues to be less than 1% of total merchandise inventory).
  • Net inventory increased 40% reflecting a return towards normalized inventory levels. Inventory turnover decreased to 2.5x from 2.7x in the quarter and decreased to 2.6x from 2.7x for the year.
  • In the fourth quarter, store expenses increased 9%, primarily due to increased labor in-line with store activity and rent associated with lease renewals. Similarly for the full year, store expenses increased 5% (4% on a same store basis).
  • Segment contribution increased 49% to $31.0 million in the fourth quarter and increased 51% to $129.1 million for the year.
  • Segment store count decreased by one store due to the net impact of the acquisition of three stores and consolidation of four stores during the year.

Latin America Pawn

  • PLO improved to $46.6 million, up 17% (15% on constant currency basis). On a same store basis, PLO increased 15% (13% on a constant currency basis).
  • In the fourth quarter, total revenue was up 13% and on a constant currency basis, while gross profit increased 8% and on a constant currency basis. For the year, total revenues were up 30% and on a constant currency basis, while gross profit increased by 23% and on a constant currency basis.
  • PSC increased to $21.5 million, up 8% (9% on a constant currency basis) as a result of higher average PLO. Similarly for the full year, PSC increased 26% and on a constant currency basis.
  • Merchandise sales gross margin decreased in the fourth quarter from 34% to 31%, and for the year it decreased 500 bps to 30%, reflecting a return to more normalized margins. Aged general merchandise inventory increased to 1.9% from 0.3% of total merchandise inventory.
  • Net inventory increased 28% (26% on a constant currency basis) reflecting a return towards normalized inventory levels. Inventory turnover remains strong at 3.1x, down from 3.3x for the quarter and decreased for the year to 3.5x from 3.7x.
  • In the fourth quarter, store expenses increased 5% (6% on a constant currency basis) primarily due to increased labor in-line with store activity. Same-store expenses increased $0.7 million or 3% (5% on a constant currency basis). For the year, store expenses increased 18% (18% on a constant currency basis) primarily due to increased labor in-line with store activity and rent associated with lease renewals and annual inflation adjustments. Same-store expenses increased 5% and on a constant currency basis).
  • For the fourth quarter, segment contribution increased to $6.7 million, up 9% (10% on a constant currency basis). For the year, segment contribution was up 39% to $24.1 million (40% increase to $24.2 million on a constant currency basis). On an adjusted basis, segment contribution for the fourth quarter was $6.7 million, flat from prior year, and the increase for the year was 33% to $24.2 million.
  • Segment store count increased by 28 de novo stores opened during the year.

FORM 10-K

EZCORP’s Annual Report on Form 10-K for the year ended September 30, 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, November 17, 2022, at 7:00 am Central Time to discuss Fourth Quarter and Full Year Fiscal 2022 results. Analysts and institutional investors may participate on the conference call by dialing (844) 200-6205, Conference ID: 977401, or internationally by dialing (929) 526-1599. 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/

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

1”We have relabeled "net revenues" to "gross profit" throughout our filings, which we believe will improve comparability across industries and companies. This change is effective for this and future filings.

2”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.

3”Same Store” basis, which is a financial measure, includes stores open the entirety of the comparable periods.

EZCORP, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

Three Months Ended

September 30,

 

Twelve Months Ended

September 30,

(in thousands, except per share amounts)

2022

 

2021

 

2022

 

2021

 

(Unaudited)

 

 

 

 

Revenues:

 

 

 

 

 

 

 

Merchandise sales

$

133,276

 

 

$

111,982

 

 

$

532,886

 

 

$

442,798

 

Jewelry scrapping sales

 

12,231

 

 

 

7,518

 

 

 

32,033

 

 

 

26,025

 

Pawn service charges

 

87,866

 

 

 

72,840

 

 

 

320,865

 

 

 

260,196

 

Other revenues, net

 

34

 

 

 

104

 

 

 

441

 

 

 

532

 

Total revenues

 

233,407

 

 

 

192,444

 

 

 

886,225

 

 

 

729,551

 

Merchandise cost of goods sold

 

83,858

 

 

 

66,346

 

 

 

329,382

 

 

 

257,218

 

Jewelry scrapping cost of goods sold

 

11,949

 

 

 

6,772

 

 

 

28,696

 

 

 

22,848

 

Gross profit

 

137,600

 

 

 

119,326

 

 

 

528,147

 

 

 

449,485

 

Operating expenses:

 

 

 

 

 

 

 

Store expenses

 

95,473

 

 

 

88,576

 

 

 

357,417

 

 

 

330,837

 

General and administrative

 

17,855

 

 

 

15,625

 

 

 

64,342

 

 

 

56,495

 

Depreciation and amortization

 

9,370

 

 

 

7,592

 

 

 

32,140

 

 

 

30,672

 

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

 

18

 

 

 

(7

)

 

 

(674

)

 

 

83

 

Other charges

 

 

 

 

(268

)

 

 

 

 

 

229

 

Total operating expenses

 

122,716

 

 

 

111,518

 

 

 

453,225

 

 

 

418,316

 

Operating income

 

14,884

 

 

 

7,808

 

 

 

74,922

 

 

 

31,169

 

Interest expense

 

2,321

 

 

 

5,635

 

 

 

9,972

 

 

 

22,177

 

Interest income

 

(68

)

 

 

(559

)

 

 

(817

)

 

 

(2,477

)

Equity in net income of unconsolidated affiliates

 

(322

)

 

 

(1,394

)

 

 

(1,779

)

 

 

(3,803

)

Other income

 

(208

)

 

 

(401

)

 

 

(167

)

 

 

(790

)

Income before income taxes

 

13,161

 

 

 

4,527

 

 

 

67,713

 

 

 

16,062

 

Income tax expense

 

5,824

 

 

 

2,974

 

 

 

17,553

 

 

 

7,450

 

Net income

$

7,337

 

 

$

1,553

 

 

$

50,160

 

 

$

8,612

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

0.13

 

 

$

0.03

 

 

$

0.89

 

 

$

0.15

 

Diluted earnings per share

$

0.11

 

 

$

0.03

 

 

$

0.70

 

 

$

0.15

 

 

 

 

 

 

 

 

 

Weighted-average basic shares outstanding

 

56,598

 

 

 

56,057

 

 

 

56,498

 

 

 

55,744

 

Weighted-average diluted shares outstanding

 

82,539

 

 

 

56,441

 

 

 

82,400

 

 

 

55,949

 

EZCORP, Inc.

CONSOLIDATED BALANCE SHEETS

 

(in thousands, except share and per share amounts)

September 30,

2022

 

September 30,

2021

 

 

 

 

Assets:

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

206,028

 

 

$

253,667

 

Restricted cash

 

8,341

 

 

 

9,957

 

Pawn loans

 

210,009

 

 

 

175,901

 

Pawn service charges receivable, net

 

33,476

 

 

 

29,337

 

Inventory, net

 

151,615

 

 

 

110,989

 

Prepaid expenses and other current assets

 

34,694

 

 

 

31,010

 

Total current assets

 

644,163

 

 

 

610,861

 

Investments in unconsolidated affiliates

 

37,733

 

 

 

37,724

 

Other investments

 

24,220

 

 

 

 

Property and equipment, net

 

56,725

 

 

 

53,811

 

Right-of-use asset, net

 

221,586

 

 

 

200,990

 

Goodwill

 

286,828

 

 

 

285,758

 

Intangible assets, net

 

56,819

 

 

 

62,104

 

Notes receivable, net

 

1,215

 

 

 

1,181

 

Deferred tax asset, net

 

12,145

 

 

 

9,746

 

Other assets

 

6,444

 

 

 

4,736

 

Total assets

$

1,347,878

 

 

$

1,266,911

 

 

 

 

 

Liabilities and stockholders' equity:

 

 

 

Current liabilities:

 

 

 

Accounts payable, accrued expenses and other current liabilities

$

84,509

 

 

$

90,268

 

Customer layaway deposits

 

16,023

 

 

 

12,557

 

Operating lease liabilities, current

 

52,334

 

 

 

52,263

 

Total current liabilities

 

152,866

 

 

 

155,088

 

Long-term debt, net

 

312,903

 

 

 

264,186

 

Deferred tax liability, net

 

373

 

 

 

3,684

 

Operating lease liabilities

 

180,756

 

 

 

161,330

 

Other long-term liabilities

 

8,749

 

 

 

10,385

 

Total liabilities

 

655,647

 

 

 

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: 53,454,885 as of September 30, 2022; 53,086,438 as of September 30, 2021; and 53,086,438 as of September 30, 2021

 

534

 

 

 

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

 

Additional paid-in capital

 

345,330

 

 

 

403,312

 

Retained earnings

 

402,006

 

 

 

326,781

 

Accumulated other comprehensive loss

 

(55,669

)

 

 

(58,415

)

Total stockholders' equity

 

692,231

 

 

 

672,238

 

Total liabilities and stockholders' equity

$

1,347,878

 

 

$

1,266,911

 

EZCORP, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

Twelve Months Ended

September 30,

(in thousands)

2022

 

2021

 

 

Operating activities:

 

 

 

Net income

$

50,160

 

 

$

8,612

 

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

 

 

 

Depreciation and amortization

 

32,140

 

 

 

30,672

 

Amortization of debt discount and deferred financing costs

 

1,433

 

 

 

13,797

 

Amortization of lease right-of-use asset

 

52,201

 

 

 

48,480

 

Deferred income taxes

 

4,945

 

 

 

3,283

 

Other adjustments

 

2,511

 

 

 

(185

)

Provision for inventory reserve

 

(2,253

)

 

 

(8,003

)

Stock compensation expense

 

5,053

 

 

 

3,946

 

Equity in net income of unconsolidated affiliates

 

(1,779

)

 

 

(3,803

)

Changes in operating assets and liabilities:

 

 

 

Service charges and fees receivable

 

(4,572

)

 

 

(7,332

)

Inventory

 

(15,341

)

 

 

371

 

Prepaid expenses, other current assets and other assets

 

3,238

 

 

 

7,373

 

Accounts payable, accrued expenses and other liabilities

 

(65,141

)

 

 

(54,209

)

Customer layaway deposits

 

3,359

 

 

 

1,256

 

Income taxes

 

(2,785

)

 

 

2,180

 

Dividends from unconsolidated affiliates

 

3,366

 

 

 

Net cash provided by operating activities

 

66,535

 

 

 

46,438

 

Investing activities:

 

 

 

Loans made

 

(740,057

)

 

 

(601,638

)

Loans repaid

 

410,523

 

 

 

351,092

 

Recovery of pawn loan principal through sale of forfeited collateral

 

274,423

 

 

 

208,551

 

Capital expenditures, net

 

(31,895

)

 

 

(23,601

)

Acquisitions, net of cash acquired

 

(1,850

)

 

 

(19,015

)

Issuance of note receivable

 

(1,000

)

 

 

 

Investment in unconsolidated affiliates

 

(6,927

)

 

 

 

Investment in other investments

 

(16,500

)

 

 

 

Net cash used in investing activities

 

(113,283

)

 

 

(84,611

)

Financing activities:

 

 

 

Taxes paid related to net share settlement of equity awards

 

(792

)

 

 

(839

)

Payments on assumed debt and other borrowings

 

 

 

 

(15,414

)

Repurchase of common stock

 

(2,040

)

 

 

 

Net cash used in financing activities

 

(2,832

)

 

 

(16,253

)

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

 

325

 

 

 

5,497

 

Net decrease in cash, cash equivalents and restricted cash

 

(49,255

)

 

 

(48,929

)

Cash, cash equivalents and restricted cash at beginning of period

 

263,624

 

 

 

312,553

 

Cash, cash equivalents and restricted cash at end of period

$

214,369

 

 

$

263,624

 

 

 

 

 

EZCORP, Inc.

OPERATING SEGMENT RESULTS

 

 

Three Months Ended September 30, 2022

(Unaudited)

(in thousands)

U.S. Pawn

 

Latin America

Pawn

 

Other

Investments

 

Total Segments

 

Corporate

Items

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Merchandise sales

$

95,811

 

 

$

37,465

 

 

$

 

 

$

133,276

 

 

$

 

 

$

133,276

 

Jewelry scrapping sales

 

11,875

 

 

 

356

 

 

 

 

 

 

12,231

 

 

 

 

 

 

12,231

 

Pawn service charges

 

66,331

 

 

 

21,535

 

 

 

 

 

 

87,866

 

 

 

 

 

 

87,866

 

Other revenues

 

16

 

 

 

 

 

 

18

 

 

 

34

 

 

 

 

 

 

34

 

Total revenues

 

174,033

 

 

 

59,356

 

 

 

18

 

 

 

233,407

 

 

 

 

 

 

233,407

 

Merchandise cost of goods sold

 

57,911

 

 

 

25,947

 

 

 

 

 

 

83,858

 

 

 

 

 

 

83,858

 

Jewelry scrapping cost of goods sold

 

11,476

 

 

 

473

 

 

 

 

 

 

11,949

 

 

 

 

 

 

11,949

 

Other cost of revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

104,646

 

 

 

32,936

 

 

 

18

 

 

 

137,600

 

 

 

 

 

 

137,600

 

Store expenses

 

70,897

 

 

 

24,576

 

 

 

 

 

 

95,473

 

 

 

 

 

 

95,473

 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

 

17,855

 

 

 

17,855

 

Depreciation and amortization

 

2,685

 

 

 

2,055

 

 

 

 

 

 

4,740

 

 

 

4,630

 

 

 

9,370

 

Gain on sale or disposal of assets and other

 

51

 

 

 

(33

)

 

 

 

 

 

18

 

 

 

 

 

 

18

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

2,321

 

 

 

2,321

 

Interest income

 

(1

)

 

 

(189

)

 

 

 

 

 

(190

)

 

 

122

 

 

 

(68

)

Equity in net income of unconsolidated affiliates

 

 

 

 

 

 

 

(322

)

 

 

(322

)

 

 

 

 

 

(322

)

Other (income) expense

 

 

 

 

(185

)

 

 

37

 

 

 

(148

)

 

 

(60

)

 

 

(208

)

Segment contribution

$

31,014

 

 

$

6,712

 

 

$

303

 

 

$

38,029

 

 

 

 

 

Income (loss) before income taxes

 

 

 

 

 

 

$

38,029

 

 

$

(24,868

)

 

$

13,161

 

 

Three Months Ended September 30, 2021

(Unaudited)

(in thousands)

U.S. Pawn

 

Latin America

Pawn

 

Other

Investments

 

Total Segments

 

Corporate

Items

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Merchandise sales

$

80,950

 

$

31,032

 

 

$

 

 

$

111,982

 

 

$

 

 

$

111,982

 

Jewelry scrapping sales

 

5,767

 

 

1,751

 

 

 

 

 

 

7,518

 

 

 

 

 

 

7,518

 

Pawn service charges

 

52,885

 

 

19,955

 

 

 

 

 

 

72,840

 

 

 

 

 

 

72,840

 

Other revenues

 

22

 

 

 

 

 

82

 

 

 

104

 

 

 

 

 

 

104

 

Total revenues

 

139,624

 

 

52,738

 

 

 

82

 

 

 

192,444

 

 

 

 

 

 

192,444

 

Merchandise cost of goods sold

 

45,858

 

 

20,488

 

 

 

 

 

 

66,346

 

 

 

 

 

 

66,346

 

Jewelry scrapping cost of goods sold

 

5,130

 

 

1,642

 

 

 

 

 

 

6,772

 

 

 

 

 

 

6,772

 

Gross profit

 

88,636

 

 

30,608

 

 

 

82

 

 

 

119,326

 

 

 

 

 

 

119,326

 

Segment and corporate expenses (income):

 

 

 

 

 

 

 

 

 

 

 

Store expenses

 

65,088

 

 

23,488

 

 

 

 

 

 

88,576

 

 

 

 

 

 

88,576

 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

15,625

 

 

 

15,625

 

Depreciation and amortization

 

2,678

 

 

1,912

 

 

 

 

 

 

4,590

 

 

 

3,002

 

 

 

7,592

 

Gain on sale of disposal of assets and other

 

 

 

(6

)

 

 

 

 

 

(6

)

 

 

(1

)

 

 

(7

)

Other Charges

 

 

 

(268

)

 

 

 

 

 

(268

)

 

 

 

 

 

(268

)

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

5,635

 

 

 

5,635

 

Interest income

 

 

 

(197

)

 

 

 

 

 

(197

)

 

 

(362

)

 

 

(559

)

Equity in net income of unconsolidated affiliates

 

 

 

 

 

 

(1,394

)

 

 

(1,394

)

 

 

 

 

 

(1,394

)

Other (income) expense

 

 

 

(465

)

 

 

10

 

 

 

(455

)

 

 

54

 

 

 

(401

)

Segment contribution

$

20,870

 

$

6,144

 

 

$

1,466

 

 

$

28,480

 

 

 

 

 

Income (loss) before income taxes

 

 

 

 

 

 

$

28,480

 

 

$

(23,953

)

 

$

4,527

 

 

Twelve Months Ended September 30, 2022

(in thousands)

U.S. Pawn

 

Latin America

Pawn

 

Other

Investments

 

Total Segments

 

Corporate

Items

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Merchandise sales

$

391,958

 

 

$

140,928

 

 

$

 

 

$

532,886

 

 

$

 

 

$

532,886

 

Jewelry scrapping sales

 

25,739

 

 

 

6,294

 

 

 

 

 

 

32,033

 

 

 

 

 

 

32,033

 

Pawn service charges

 

240,982

 

 

 

79,883

 

 

 

 

 

 

320,865

 

 

 

 

 

 

320,865

 

Other revenues

 

83

 

 

 

247

 

 

 

111

 

 

 

441

 

 

 

 

 

 

441

 

Total revenues

 

658,762

 

 

 

227,352

 

 

 

111

 

 

 

886,225

 

 

 

 

 

 

886,225

 

Merchandise cost of goods sold

 

230,241

 

 

 

99,141

 

 

 

 

 

 

329,382

 

 

 

 

 

 

329,382

 

Jewelry scrapping cost of goods sold

 

22,755

 

 

 

5,941

 

 

 

 

 

 

28,696

 

 

 

 

 

 

28,696

 

Gross profit

 

405,766

 

 

 

122,270

 

 

 

111

 

 

 

528,147

 

 

 

 

 

 

528,147

 

Segment and corporate expenses (income):

 

 

 

 

 

 

 

 

 

 

 

Store expenses

 

266,114

 

 

 

91,303

 

 

 

 

 

 

357,417

 

 

 

 

 

 

357,417

 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

 

64,342

 

 

 

64,342

 

Depreciation and amortization

 

10,552

 

 

 

7,913

 

 

 

 

 

 

18,465

 

 

 

13,675

 

 

 

32,140

 

Gain on sale or disposal of assets and other

 

51

 

 

 

(37

)

 

 

 

 

 

14

 

 

 

(688

)

 

 

(674

)

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

9,972

 

 

 

9,972

 

Interest income

 

(2

)

 

 

(815

)

 

 

 

 

 

(817

)

 

 

 

 

 

(817

)

Equity in net income of unconsolidated affiliates

 

 

 

 

 

 

 

(1,779

)

 

 

(1,779

)

 

 

 

 

 

(1,779

)

Other expense (income)

 

 

 

 

(148

)

 

 

52

 

 

 

(96

)

 

 

(71

)

 

 

(167

)

Segment contribution

$

129,051

 

 

$

24,054

 

 

$

1,838

 

 

$

154,943

 

 

 

 

 

Income (loss) before income taxes

 

 

 

 

 

 

$

154,943

 

 

$

(87,230

)

 

$

67,713

 

 

Twelve Months Ended September 30, 2021

(in thousands)

U.S. Pawn

 

Latin America

Pawn

 

Other

Investments

 

Total Segments

 

Corporate

Items

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Merchandise sales

$

341,495

 

$

101,303

 

 

$

 

 

$

442,798

 

 

$

 

 

$

442,798

 

Jewelry scrapping sales

 

15,260

 

 

10,765

 

 

 

 

 

 

26,025

 

 

 

 

 

 

26,025

 

Pawn service charges

 

196,721

 

 

63,475

 

 

 

 

 

 

260,196

 

 

 

 

 

 

260,196

 

Other revenues

 

105

 

 

7

 

 

 

420

 

 

 

532

 

 

 

 

 

 

532

 

Total revenues

 

553,581

 

 

175,550

 

 

 

420

 

 

 

729,551

 

 

 

 

 

 

729,551

 

Merchandise cost of goods sold

 

191,039

 

 

66,179

 

 

 

 

 

 

257,218

 

 

 

 

 

 

257,218

 

Jewelry scrapping cost of goods sold

 

13,001

 

 

9,847

 

 

 

 

 

 

22,848

 

 

 

 

 

 

22,848

 

Gross profit

 

349,541

 

 

99,524

 

 

 

420

 

 

 

449,485

 

 

 

 

 

 

449,485

 

Segment and corporate expenses (income):

 

 

 

 

 

 

 

 

 

 

 

Store expenses

 

253,344

 

 

77,493

 

 

 

 

 

 

330,837

 

 

 

 

 

 

330,837

 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

56,495

 

 

 

56,495

 

Depreciation and amortization

 

10,650

 

 

7,371

 

 

 

 

 

 

18,021

 

 

 

12,651

 

 

 

30,672

 

Loss on sale or disposal of assets and other

 

27

 

 

(6

)

 

 

 

 

 

21

 

 

 

62

 

 

 

83

 

Other Charges

 

 

 

229

 

 

 

 

 

 

229

 

 

 

 

 

 

229

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

22,177

 

 

 

22,177

 

Interest income

 

 

 

(2,016

)

 

 

 

 

 

(2,016

)

 

 

(461

)

 

 

(2,477

)

Equity in net income of unconsolidated affiliates

 

 

 

 

 

 

(3,803

)

 

 

(3,803

)

 

 

 

 

 

(3,803

)

Other (income) expense

 

 

 

(840

)

 

 

(173

)

 

 

(1,013

)

 

 

223

 

 

 

(790

)

Segment contribution

$

85,520

 

$

17,293

 

 

$

4,396

 

 

$

107,209

 

 

 

 

 

Income (loss) before income taxes

 

 

 

 

 

 

$

107,209

 

 

$

(91,147

)

 

$

16,062

 

EZCORP, Inc.

STORE COUNT ACTIVITY

(Unaudited)

 

 

Three Months Ended September 30, 2022

 

U.S. Pawn

 

Latin America

Pawn

 

Consolidated

 

 

 

 

 

 

As of June 30, 2022

519

 

 

644

 

 

1,163

 

New locations opened

 

 

16

 

 

16

 

Locations acquired

 

 

 

 

 

Locations sold, combined or closed

(4

)

 

 

 

(4

)

As of September 30, 2022

515

 

 

660

 

 

1,175

 

 

 

Three Months Ended September 30, 2021

 

U.S. Pawn

 

Latin America

Pawn

 

Consolidated

 

 

 

 

 

 

As of June 30, 2021

516

 

 

627

 

 

1,143

 

New locations opened

 

 

5

 

 

5

 

Locations acquired

 

 

 

 

 

Locations sold, combined or closed

 

 

 

 

 

As of September 30, 2021

516

 

 

632

 

 

1,148

 

 

 

Twelve Months Ended September 30, 2022

 

U.S. Pawn

 

Latin America

Pawn

 

Consolidated

 

 

 

 

 

 

As of September 30, 2021

516

 

 

632

 

 

1,148

 

New locations opened

 

 

28

 

 

28

 

Locations acquired

3

 

 

 

 

3

 

Locations sold, combined or closed

(4

)

 

 

 

(4

)

As of September 30, 2022

515

 

 

660

 

 

1,175

 

 

 

Twelve Months Ended September 30, 2021

 

U.S. Pawn

 

Latin America

Pawn

 

Consolidated

 

 

 

 

 

 

As of September 30, 2020

505

 

 

500

 

 

1,005

 

New locations opened

 

 

15

 

 

15

 

Locations acquired

11

 

 

128

 

 

139

 

Locations sold, combined or closed

 

 

(11

)

 

(11

)

As of September 30, 2021

516

 

 

632

 

 

1,148

 

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 twelve months ended September 30, 2022 and 2021 were as follows:

 

 

September 30,

 

Three Months Ended

September 30,

 

Twelve Months Ended

September 30,

 

 

2022

 

2021

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexican peso

 

20.1

 

20.5

 

20.2

 

20.0

 

20.4

 

20.2

Guatemalan quetzal

 

7.6

 

7.6

 

7.6

 

7.6

 

7.5

 

7.6

Honduran lempira

 

24.1

 

23.9

 

24.2

 

23.5

 

24.1

 

23.8

Peruvian sol

 

3.9

 

4.1

 

3.8

 

4.0

 

3.8

 

3.7

Our statement of operations constant currency results reflect the monthly exchange rate fluctuations and so are not directly calculable from the above rates. Constant currency results, where presented, also exclude the foreign currency gain or loss.

Miscellaneous Non-GAAP Financial Measures

 

Three Months Ended

September 30,

 

Twelve Months Ended

September 30,

(in millions)

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

Net income

$

7.3

 

 

$

1.6

 

 

$

50.2

 

 

$

8.6

 

Interest expense

 

2.3

 

 

 

5.6

 

 

 

10.0

 

 

 

22.2

 

Interest income

 

(0.1

)

 

 

(0.6

)

 

 

(0.8

)

 

 

(2.5

)

Income tax expense

 

5.8

 

 

 

3.0

 

 

 

17.6

 

 

 

7.5

 

Depreciation and amortization

 

9.4

 

 

 

7.6

 

 

 

32.1

 

 

 

30.7

 

EBITDA

$

24.8

 

 

$

17.2

 

 

$

109.0

 

 

$

66.5

 

 

Total

Revenues

 

Gross

Profit

Income

Before Tax

 

Tax Effect

 

Net

Income

 

Diluted EPS

 

EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

2022 Q4 Reported

$

233.4

 

$

137.6

$

13.2

 

 

$

5.9

 

 

$

7.3

 

 

$

0.11

 

 

$

24.8

 

Tax impact

 

 

 

 

 

 

 

(3.5

)

 

 

3.5

 

 

 

0.04

 

 

 

 

Constant currency impact

 

0.5

 

 

0.3

 

(0.3

)

 

 

(0.1

)

 

 

(0.2

)

 

 

 

 

 

(0.2

)

2022 Q4 Adjusted

$

233.9

 

$

137.9

$

12.9

 

 

$

2.3

 

 

$

10.6

 

 

$

0.15

 

 

$

24.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

Revenues

 

Gross

Profit

Income

Before Tax

 

Tax Effect

 

Net

Income

 

Diluted EPS

 

EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

2022 Full Year Reported

$

886.2

 

$

528.1

$

67.7

 

 

$

17.5

 

 

$

50.2

 

 

$

0.70

 

 

$

109.0

 

Litigation Accrual

 

 

 

 

2.0

 

 

 

0.5

 

 

 

1.5

 

 

 

0.02

 

 

 

2.0

 

CCV Adjustment for Impairment

 

 

 

 

2.1

 

 

 

0.5

 

 

 

1.6

 

 

 

0.02

 

 

 

2.1

 

Tax Impact

 

 

 

 

 

 

 

(1.3

)

 

 

0.4

 

 

 

 

 

 

 

Constant Currency and other impact

 

1.2

 

 

0.6

 

(0.2

)

 

 

 

 

 

0.6

 

 

 

0.01

 

 

 

(0.2

)

2022 Full Year Adjusted

$

887.4

 

$

528.7

$

71.6

 

 

$

17.3

 

 

$

54.3

 

 

$

0.75

 

 

$

112.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

Revenues

Gross

Profit

 

Income

Before Tax

 

Tax Effect

 

Net

Income

 

Diluted EPS

 

EBITDA

 

 

 

 

 

 

 

 

 

 

 

2021 Q4 Reported

$ 192.4 $ 119.3

 

$

4.5

 

 

$

2.9

 

 

$

1.6

 

 

$

0.03

 

 

$

17.2

 

Acquisition expenses

 

 

1.6

 

 

 

0.1

 

 

 

1.5

 

 

 

0.03

 

 

 

1.6

 

Peru Reserve

 

 

(0.3

)

 

 

 

 

 

(0.3

)

 

 

 

 

 

(0.3

)

Non cash Interest

 

 

3.6

 

 

 

0.2

 

 

 

3.4

 

 

 

0.06

 

 

 

 

2021 Q4 Adjusted

$ 192.4 $ 119.3

 

$

9.4

 

 

$

3.2

 

 

$

6.2

 

 

$

0.11

 

 

$

18.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

Revenues

Gross

Profit

 

Income

Before Tax

 

Tax Effect

 

Net

Income

 

Diluted EPS

 

EBITDA

 

 

 

 

 

 

 

 

 

 

 

2021 Full Year Reported

$ 729.6 $ 449.5

 

$

16.1

 

 

$

7.5

 

 

$

8.6

 

 

$

0.15

 

 

$

66.4

 

Acquisition expenses

 

 

1.9

 

 

 

0.5

 

 

 

1.4

 

 

 

0.02

 

 

 

2.0

 

Peru Reserve

 

 

0.2

 

 

 

0.1

 

 

 

0.1

 

 

 

 

 

 

0.2

 

FY20 Contract write-off over-accrual

 

 

(0.4

)

 

 

(0.1

)

 

 

(0.3

)

 

 

(0.01

)

 

 

(0.4

)

Non cash net interest

 

 

13.8

 

 

 

2.3

 

 

 

11.6

 

 

 

0.21

 

 

 

 

2021 Full Year Adjusted

$ 729.6 $ 449.5

 

$

31.6

 

 

$

10.3

 

 

$

21.4

 

 

$

0.38

 

 

$

68.2

 

Three Months Ended

September 30, 2022

 

Twelve Months Ended

September 30, 2022

(in millions)

U.S. Dollar

Amount

 

Percentage

Change YOY

 

U.S. Dollar

Amount

 

Percentage

Change YOY

 

 

 

 

 

 

 

 

Consolidated revenue

$

233.4

 

 

21

%

 

$

886.2

 

 

21

%

Currency exchange rate fluctuations

 

0.5

 

 

 

 

 

1.2

 

 

 

Constant currency consolidated revenue

$

233.9

 

 

22

%

 

$

887.4

 

 

22

%

 

 

 

 

 

 

 

 

Consolidated gross profit

$

137.6

 

 

15

%

 

$

528.1

 

 

18

%

Currency exchange rate fluctuations

 

0.3

 

 

 

 

 

0.6

 

 

 

Constant currency consolidated gross profit

$

137.9

 

 

16

%

 

$

528.7

 

 

18

%

 

 

 

 

 

 

 

 

Consolidated net inventory

$

151.6

 

 

37

%

 

$

151.6

 

 

37

%

Currency exchange rate fluctuations

 

(0.5

)

 

 

 

 

(0.5

)

 

 

Constant currency consolidated net inventory

$

151.1

 

 

36

%

 

$

151.1

 

 

36

%

 

 

 

 

 

 

 

 

Latin America Pawn gross profit

$

32.9

 

 

8

%

 

$

122.3

 

 

23

%

Currency exchange rate fluctuations

 

0.3

 

 

 

 

 

0.6

 

 

 

Constant currency Latin America Pawn gross profit

$

33.2

 

 

8

%

 

$

122.9

 

 

23

%

 

 

 

 

 

 

 

 

Latin America Pawn PLO

$

46.6

 

 

17

%

 

$

46.6

 

 

17

%

Currency exchange rate fluctuations

 

(0.6

)

 

 

 

 

(0.6

)

 

 

Constant currency Latin America Pawn PLO

$

46.0

 

 

15

%

 

$

46.0

 

 

15

%

 

 

 

 

 

 

 

 

Latin America Pawn PSC revenues

$

21.5

 

 

8

%

 

$

79.9

 

 

26

%

Currency exchange rate fluctuations

 

0.2

 

 

 

 

 

0.3

 

 

 

Constant currency Latin America Pawn PSC revenues

$

21.7

 

 

9

%

 

$

80.2

 

 

26

%

 

 

 

 

 

 

 

 

Latin America Pawn merchandise sales

$

37.5

 

 

21

%

 

$

140.9

 

 

39

%

Currency exchange rate fluctuations

 

0.3

 

 

 

 

 

0.9

 

 

 

Constant currency Latin America Pawn merchandise sales

$

37.8

 

 

22

%

 

$

141.8

 

 

40

%

 

 

 

 

 

 

 

 

Latin America Pawn segment profit before tax

$

6.7

 

 

9

%

 

$

24.1

 

 

39

%

Currency exchange rate fluctuations

 

 

 

 

 

 

0.1

 

 

 

Constant currency Latin America Pawn segment profit before tax

$

6.7

 

 

10

%

 

$

24.2

 

 

39

%

 

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