Press Release Details

View all Investor News

EZCORP Announces Appointment of New Chief Executive Officer and Third Quarter Results

Aug 1, 2000

EZCORP, Inc. (NASDAQ: EZPW) announced today that Joseph L. (Joe) Rotunda was elected President and Chief Executive Officer succeeding Vincent Lambiase. Mr. Lambiase will remain a Director and serve as Vice Chairman.

Mr. Rotunda stated, "My goal is to build EZCORP into the premier financial institution serving the cash and credit constrained consumer. As I learned in my seven years with Rent-A-Center, this is a market segment with tremendous demand for products and services which satisfy their specific needs."

Rotunda was Chief Operating Officer of Thorn Americas, Inc. (d.b.a. Rent-A-Center, Remco, and U-Can Rent) as the company grew from 700 to 1400 stores and was eventually sold by its British parent to Renters Choice in 1998. Additionally, he served as Chief Operating Officer of G&K Services, Inc, a $500 million provider of uniform and textile products based in Minneapolis, MN. Rotunda also has 20 years retail experience with Montgomery Ward, holding numerous positions including Territory Vice President and Vice President of Customer Service and New Stores.

Rotunda added, "Over the last several years, the Company expanded rapidly and made operating decisions that with 20/20 hindsight were counter to the changing competitive environment. As a result, we diluted our organization, focus, and effectiveness."

"Our first priority is to grow our revenues. In the fall of this year, we plan to roll out a non-collateralized short-term loan product to all of our locations. These loans are in high demand and we believe our product will be superior to many offered today. In addition, we have adjusted our lending guidelines, taking into account specific product, market, and seasonal factors. This will make our current pawn loan product more competitive today; however, this entire process must be continually updated. We are also exploring new methods to drive demand by testing new marketing initiatives geared toward our customer segment."

Rotunda continued, "We realize that we can't drive the volume if we don't execute the proposition at a very high level in each of our stores every day. We recognize that superior customer service is a key competitive advantage. We will work to deliver world-class levels of execution defined by standards of operations and rewarded by appropriate incentives."

"We will also focus intensely on our cost structure and balance sheet. Over the next several months, we will examine every means to get our costs in line with our revenues and reduce our debt level. This will include rationalizing under-performing markets and stores as well as cost reductions in certain areas."

Concluding, Rotunda stated, "I'm confident in our ability to not only return to profitability but to build on our foundation and become the premier provider of financial services to the cash and credit constrained consumer."

For the quarter ended June 30, 2000, the Company is reporting a net loss of $2.2 million ($0.18 per share) compared to a pro forma net loss of $0.9 million ($0.08 per share) for the same period last year. During the Company's second fiscal 2000 quarter, it changed its method of revenue recognition on pawn loans. The pro forma 1999 results reflect the application of this accounting method change. For the nine-months ended June 30, 2000, the Company is reporting a net loss before the cumulative effect of the accounting method change of $2.2 million ($0.18 per share) compared to pro forma net income of $2.8 million ($0.24 per share). After the $14.3 million cumulative effect of the accounting change, the Company is reporting a net loss of $16.5 million for the nine month period.

                               EZCORP, Inc.
       Highlights of Consolidated Results of Operations (Unaudited)
          (in thousands, except per share data and store count)


                                            Three Months Ended June 30,

                                           2000        1999       1999
                                                   As Reported Pro Forma

  Total revenues                       $ 42,238    $ 53,902    $ 43,425
  Cost of goods sold                     16,085      25,382      17,083
  Net revenues                           26,153      28,520      26,342
  Operating Expenses                     25,486      24,599      24,599
    Operating income before
     depreciation and amortization          667       3,921       1,743
  Depreciation and amortization           2,492       2,458       2,458
   Operating income (loss)               (1,825)      1,463        (715)
  Interest expense, net                   1,196         849         849
  Equity in net income
   of unconsolidated affiliate              (69)        (75)        (75)
  (Gain) loss on sale of assets             208          60          60
  Income (loss) before income taxes      (3,160)        629      (1,549)
  Income tax expense (benefit)           (1,010)        160        (604)
  Income  (loss) before cumulative
   effect of a change in accounting
    principle                            (2,150)        469        (945)
  Cumulative effect of changing to a
   different revenue recognition method     ---         ---         ---
  Net income (loss)                    $ (2,150)   $    469    $   (945)

  Amounts per common share:
    Income (loss) before cumulative
     effect of a change in accounting
      principle                        $  (0.18)   $   0.04    $  (0.08)
  Cumulative effect of changing to a
   different revenue recognition
    method                             $    ---    $    ---    $    ---
  Net income (loss)                    $  (0.18)   $   0.04    $  (0.08)

  Weighted average shares
   - fully diluted                       12,012      12,015      12,015

  Other data, as of the end of the period:
    Pawn loans outstanding             $ 45,770    $ 51,891    $ 51,891
    Loan balance per ending store      $    136    $    159    $    159
    Inventory                          $ 39,976    $ 50,212    $ 37,732
    Inventory per ending store         $    119    $    154    $    116
    Store count                             336         326         326


                               EZCORP, Inc.
 Highlights of Consolidated Results of Operations (Unaudited), Continued
          (in thousands, except per share data and store count)

                                          Nine Months Ended June 30,

                                          2000        1999        1999
                                                  As Reported  Pro Forma

  Total revenues                        $149,875    $174,400    $143,589
  Cost of goods sold                      63,455      85,504      57,958
  Net revenues                            86,420      88,896      85,631
  Operating Expenses                      78,760      71,708      71,708
   Operating income before depreciation
    and amortization                       7,660      17,188      13,923
  Depreciation and amortization            7,575       6,939       6,939
   Operating income (loss)                    85      10,249       6,984
  Interest expense, net                    3,728       2,514       2,514
  Equity in net income
   of unconsolidated affiliate              (216)       (348)       (348)
  (Gain) loss on sale of assets             (242)        148         148
  Income (loss) before income taxes       (3,185)      7,935       4,670
  Income tax expense (benefit)            (1,019)      2,936       1,821
  Income  (loss) before cumulative effect
   of a change in accounting principle    (2,166)      4,999       2,849
  Cumulative effect of changing to a
   different revenue recognition method  (14,344)        ---     (10,501)
  Net income (loss)                     $(16,510)   $  4,999    $ (7,652)

  Amounts per common share:
    Income (loss) before cumulative
     effect of a change in accounting
      principle                         $  (0.18)   $   0.42    $   0.24
  Cumulative effect of changing to a
    different revenue recognition
      method                            $  (1.19)   $    ---    $  (0.88)
  Net income (loss)                     $  (1.37)   $   0.42    $  (0.64)

  Weighted average shares
   - fully diluted                        12,012      12,010      12,010

  Other data, as of the end of the period:
    Pawn loans outstanding              $ 45,770    $ 51,891    $ 51,891
    Loan balance per ending store       $    136    $    159    $    159
    Inventory                           $ 39,976    $ 50,212    $ 37,732
    Inventory per ending store          $    119    $    154    $    116
    Store count                              336         326         326

EZCORP offers consumers convenient, non-recourse loans collateralized by tangible personal property. A secondary, but related, business activity is the selling of previously owned merchandise consisting primarily of forfeited collateral. The Company currently operates 332 stores located in Texas (192), Colorado (24), Oklahoma (22), Indiana (21), Florida (18), Georgia (13), Alabama (12), California (8), Tennessee (8), Nevada (4), Louisiana (3), Mississippi (3), North Carolina (3) and Arkansas (1).

This announcement contains certain forward-looking statements regarding the Company's expected performance for future periods. Actual results for these periods may materially differ from these statements. Such forward- looking statements involve risks and uncertainties such as changing market conditions in the overall economy and the industry, consumer demand for the Company's services and merchandise, changes in the regulatory environment, new store openings and other factors periodically discussed in the Company's annual, quarterly and other reports filed with the Securities and Exchange Commission.

  For more information, contact:  Dan Tonissen
                                  Chief Financial Officer
                                  (512) 314-2220
http://www.newscom.com/cgi-bin/prnh/19981014/DAW003

PR Newswire Photo Desk, 888-776-6555 or 201-369-3467

SOURCE: EZCORP, Inc.

Contact: Dan Tonissen, Chief Financial Officer of EZCORP, Inc.,
512-314-2220

Website: http://www.ezcorp.com/

Categories: Press Releases
View all Investor News