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EZCORP Announces Fiscal Year Results

Nov 13, 2001

EZCORP, Inc. (NASDAQ: EZPW) announced today results for its 2001 fiscal year and fourth quarter, which ended September 30, 2001.

Operating income before depreciation and amortization for the 2001 fiscal year increased $13.3 million over the 2000 fiscal year to approximately $17.8 million. Same store net revenue growth, expense management and the closure of under performing stores contributed to the earnings turnaround. After depreciation and amortization, interest expense, and other non-operating items, EZCORP is reporting a net loss for the 2001 fiscal year of approximately $0.6 million ($0.05 per share) compared to net loss of $18.2 million ($1.52 per share) before the $14.3 million charge for the cumulative effect of the accounting change adopted at the start of the 2000 fiscal year.

Commenting on these results and his outlook for the future, President and Chief Executive Officer, Joseph L. Rotunda, stated, "A year ago, I talked about the actions we were taking to execute a turnaround plan. Last year, we ended the year with approximately $81 million in debt, our administrative expense was $58,000 per store, our operating income before depreciation and amortization was $4.5 million, and our per store loan balance was $146,000. A year later, our debt is down to just over $60 million, our administrative expense is $48,000 per store, our operating income before depreciation and amortization is $17.8 million, and our per store loan balance is $171,000. We have accomplished a tremendous amount in a short period of time. We have made our turnaround plans a reality and the result is a healthy company, well positioned for continued growth and improvement."

For the three months ended September 30, 2001, EZCORP is reporting a net loss of $1.2 million ($0.10 per share) compared to a net loss of $16.1 million ($1.34 per share) for the same period a year ago. Operating income before depreciation and amortization for the fourth quarter increased to $3.2 million compared to an operating loss of $3.2 million for the prior year period.

Rotunda concluded, "The fourth quarter amplified this momentum with a 13% increase in net revenues and operating income before depreciation and amortization up approximately $6.3 million from a year ago. Our plans are to focus now on continued improvement with our store operations while working diligently on growing our revenues. We have demonstrated our viability and are well on our way to becoming the premier provider of financial services to the cash and credit constrained consumer."

EZCORP offers consumers convenient, non-recourse loans collateralized by tangible personal property, and short-term non-collateralized loans, often referred to as payday loans. A secondary, but related, business activity is the selling of previously owned merchandise consisting primarily of forfeited collateral. At September 30, 2001, the Company operated 283 stores in twelve states.

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

                                                   A                  B
                                            Three Months Ended September 30,
                                                  2001              2000

   1   Total revenues                           $47,010            $47,525
   2   Cost of goods sold                        21,129             24,599
   3   Net revenues                              25,881             22,926
   4   Operating expenses                        22,704             26,078
   5     Operating income (loss)
          before depreciation and
          amortization                            3,177             (3,152)
   6   Depreciation and amortization              2,690              2,680
   7     Operating income (loss)                    487             (5,832)
   8   Interest expense, net                      1,697              2,473
   9   Equity in net income of
        unconsolidated affiliate                    (59)                (9)
   10  (Gain) / loss on sale of assets              251                (38)
   11  Restructuring expense                        ---             10,572
   12  Loss before income taxes                  (1,402)           (18,830)
   13  Income tax benefit                          (190)            (2,766)
   14  Loss before cumulative effect of
        a change in accounting principle         (1,212)           (16,064)
   15  Cumulative effect of changing to
        a different revenue recognition
        method                                      ---                ---
   16  Net loss                                 $(1,212)          $(16,064)

   17    Per share loss before
          cumulative effect of a
          change in accounting
          principle                              $(0.10)            $(1.34)
   18    Per share cumulative effect
          of changing to a
          different revenue
          recognition method                       $---               $---
   19    Per share net loss                      $(0.10)            $(1.34)

   20  Weighted average shares                   12,128             12,032
   21  Store count - average for period             288                328


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

                                                   A                 B
                                           Twelve Months Ended September 30,
                                                  2001              2000

   1   Total revenues                          $186,170          $197,399
   2   Cost of goods sold                        79,089            88,054
   3   Net revenues                             107,081           109,345
   4   Operating expenses                        89,288           104,837
   5     Operating income before
          depreciation and
          amortization                           17,793             4,508
   6   Depreciation and amortization             10,808            10,255
   7     Operating income (loss)                  6,985            (5,747)
   8   Interest expense, net                      8,245             6,201
   9   Equity in net income of
       unconsolidated affiliate                    (267)             (225)
   10  (Gain) / loss on sale of assets              413              (280)
   11  Restructuring expense                       (696)           10,572
   12  Loss before income taxes                    (710)          (22,015)
   13  Income tax benefit                          (142)           (3,785)
   14  Loss before cumulative effect of
        a change in accounting principle           (568)          (18,230)
   15  Cumulative effect of changing to
        a different revenue recognition
        method                                      ---           (14,344)
   16  Net loss                                   $(568)         $(32,574)

   17    Per share loss before
          cumulative effect of a
          change in accounting
          principle                              $(0.05)           $(1.52)
   18    Per share cumulative effect
          of changing to a
          different revenue
          recognition method                       $---            $(1.19)
   19    Per share net loss                      $(0.05)           $(2.71)

   20  Weighted average shares                   12,104            12,017
   21  Store count - average for period             292               332


                               EZCORP, Inc.
          Highlights of Consolidated Balance Sheets (Unaudited)
                    (in thousands, except store count)

                                                   A                 B
                                                       September 30,
                                                  2001              2000
      Assets:
       Current assets:
   1   Cash and cash equivalents                 $2,186            $3,126
   2   Pawn loans                                47,144            46,916
   3   Short-term loans receivable,
        net                                       1,250                33
   4   Service charges receivable, net            8,841             8,636
   5   Inventory, net                            34,231            35,660
   6   Deferred tax asset                         7,413             9,636
   7   Federal income tax receivable                ---             5,045
   8   Prepaid expenses and other
        assets                                    2,180             1,525
   9     Total current assets                   103,245           110,577

   10  Investment in unconsolidated
        affiliates                               13,812            14,021
   11  Property and equipment, net               44,965            61,130
   12  Other assets                              16,538            18,065
   13  Total assets                            $178,560          $203,793

      Liabilities and stockholders' equity:
        Current liabilities:
   14   Current maturities of long-term
         debt                                   $60,192           $22,087
   15   Accounts payable and other
         accrued expenses                         9,666            12,011
   16   Restructuring reserve                       217             1,649
   17   Customer layaway deposits                 2,081             2,332
   18     Total current liabilities              72,156            38,079

   19   Long-term debt, less current
         maturities                                 ---            59,025
   20   Deferred tax liability                    1,193             3,639
   21   Other long-term liabilities               3,254               379
   22     Total long-term liabilities             4,447            63,043

   23   Total stockholders' equity              101,957           102,671
   24   Total liabilities and
         stockholders' equity                  $178,560          $203,793

   25   Loan balance per ending store              $171              $146
   26   Inventory per ending store                 $121              $111
   27   Book value per share                      $8.41             $8.49
   28   Tangible book value per share             $7.22             $7.29
   29   Store count - end of period                 283               322

EZCORP is in the process of extending its credit facility beyond its 2002 fiscal year. Extension discussions to date indicate that approximately $15 million of total debt would remain classified as current, with the remainder reclassified as non-current. The final allocation may be different than the current presentation and these estimates, and will be reflected correctly in the Company's Form 10-K.

This announcement contains certain forward-looking statements regarding the Company's expected performance for future periods including, but not limited to, the success of new products or services. 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 regulatory environment, and other factors periodically discussed in the Company's annual, quarterly and other reports filed with the Securities and Exchange Commission.

You are invited to listen to the conference call that will be broadcast over the Internet at http://www.videonewswire.com/event.asp?id=1979 . The conference call can be replayed at the same address. For additional information, contact Dan Tonissen at (512) 314-2220.

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SOURCE: EZCORP, Inc.

Contact: Dan Tonissen of EZCORP, Inc., +1-512-314-2220

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