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EZCORP Announces Second Quarter Earnings

Apr 24, 2001

AUSTIN, Texas, April 24 /PRNewswire Interactive News Release/ -- EZCORP, Inc. (NASDAQ: EZPW) announced today results for its second fiscal 2001 quarter and the six month period, which ended March 31, 2001.

For the three months ended March 31, 2001, EZCORP is reporting operating income before depreciation and amortization of $5.1 million compared to $1.9 million in the prior year period, an increase of $3.2 million. After higher depreciation, amortization, and interest expense, net income for the period increased to $33,000 ($0.00 per diluted share) compared to a prior year net loss of $1.3 million ($0.11 per diluted share). Total revenues for the three month period decreased to $48.8 million from $53.7 million primarily due to the closure of forty-seven under performing stores. Total revenues per store increased 5% over the prior year quarter to $168,000 compared to $160,000.

For the six months ended March 31, 2001, operating income before depreciation and amortization increased 62% to $11.3 million compared to prior year operating income before depreciation and amortization of $7.0 million. Net income for the six month fiscal 2001 period is $1.1 million ($0.09 per diluted share) compared to a prior year net loss of $14.4 million after the $14.3 million charge for the cumulative effect of the accounting change adopted at the start of the fiscal 2000 year.

Commenting on these results, Joseph L. Rotunda, President and Chief Executive Officer, said, "We are pleased with the progress we have made in our core business, in both earnings and day to day operations. Our loan growth is healthy with same store loan balances up 9% from the same period a year ago. We have managed our operating expenses exceptionally well and have seen them decline in total, as a percent of net revenues, and on a per store basis compared to a year ago. Store inventory levels at the end of the quarter are slightly above last year, $118,000 per store v. $117,000, but we turned our inventory for the quarter faster, 2.4 v. 2.3 times annualized, with three percentage points of margin improvement. While our sales are softer than we would have liked, down 5% on a same store basis for the quarter, we had same store growth in March and expect same store growth in April."

Mr. Rotunda went on to add, "During the quarter we began to roll out our short term loan product, commonly referred to as payday loans, and now have it available in over 200 stores. While this will have a negligible impact on our third quarter, we expect it to be a key contributor to earnings growth in the future as this product ramps up over the next several months."

Concluding, Mr. Rotunda stated, "We continue to be optimistic about our business. Many of the initiatives we have implemented are having the desired impact, as demonstrated in the business results. Despite this, we continue to have room for improvement and our greatest potential is still in front of us."

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 March 31, 2001, the Company operated 289 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 March 31,
                                                   2001              2000

   1  Total revenues                             $48,819           $53,697
   2  Cost of goods sold                          21,435            24,687
   3  Net revenues                                27,384            29,010
   4  Operating expenses                          22,274            27,141
   5    Operating income before depreciation
         and amortization                          5,110             1,869
   6  Depreciation and amortization                2,814             2,561
   7    Operating income (loss)                    2,296              (692)
   8  Interest expense, net                        2,332             1,200
   9  Equity in net income of
       unconsolidated affiliate                     (110)              (83)
   10 (Gain) / loss on sale of assets                 (1)              129
   11 Income (loss) before income taxes               75            (1,938)
   12 Income tax expense (benefit)                    42              (659)
   13 Income (loss) before cumulative effect
       of a change in accounting principle            33            (1,279)
   14 Cumulative effect of changing to
       a different revenue recognition method        ---               ---
   15 Net income (loss)                              $33           $(1,279)

   16   Per share income (loss) before cumulative
         effect of a change in accounting
         principle                                 $0.00            $(0.11)
   17   Per share cumulative effect of changing
         to a different revenue recognition
         method                                     $---              $---
   18   Per share net income (loss)                $0.00            $(0.11)

   19 Weighted average shares - fully diluted     12,087            12,014
   20 Store count - average for period               290               335


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

                                                     A                 B
                                                 Six Months Ended March 31,
                                                   2001              2000

   1  Total revenues                             $96,060           $107,637
   2  Cost of goods sold                          39,533             47,370
   3  Net revenues                                56,527             60,267
   4  Operating expenses                          45,229             53,276
   5    Operating income before depreciation
         and amortization                         11,298              6,991
   6  Depreciation and amortization                5,248              5,083
   7    Operating income (loss)                    6,050              1,908
   8  Interest expense, net                        4,520              2,532
   9  Equity in net income of
       unconsolidated affiliate                     (137)              (148)
   10 (Gain) / loss on sale of assets                 (4)              (451)
   11 Income (loss) before income taxes            1,671                (25)
   12 Income tax expense (benefit)                   585                 (9)
   13 Income (loss) before cumulative effect
       of a change in accounting principle         1,086                (16)
   14 Cumulative effect of changing to
       a different revenue recognition method        ---            (14,344)
   15 Net income (loss)                           $1,086           $(14,360)

   16   Per share income (loss) before cumulative
         effect of a change in accounting
         principle                                 $0.09             $(0.01)
   17   Per share cumulative effect of changing
         to a different revenue recognition
         method                                     $---             $(1.19)
   18     Per share net income (loss)              $0.09             $(1.20)

   19 Weighted average shares - fully
       diluted                                    12,087             12,013
   20 Store count - average for period               301                334


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

                                                     A                 B
                                                         March 31,
                                                   2001              2000
      Assets:
        Current assets:
   1    Cash and cash equivalents                 $2,785            $1,816
   2    Pawn loans                                40,477            39,227
   3    Short-term loans                             106                36
   4    Pawn service charges receivable            7,205             7,466
   5    Short-term loan finance charges
         receivable                                   15               ---
   6    Inventory, net                            34,148            39,455
   7    Deferred tax asset                         6,135             7,759
   8    Federal income tax receivable                ---             1,202
   9    Prepaid expenses and other assets          2,170             2,845
   10     Total current assets                    93,041            99,806

   11   Investment in unconsolidated affiliates   14,002            13,480
   12   Property and equipment, net               58,378            64,501
   13   Other assets                              18,061            21,190
   14 Total assets                              $183,482          $198,977

      Liabilities and stockholders' equity:
        Current liabilities:
   15   Current maturities of long-term debt     $66,773               $11
   16   Accounts payable and other accrued
         expenses                                  8,815             9,325
   17   Restructuring reserve                        355               ---
   18   Customer layaway deposits                  2,486             2,591
   19     Total current liabilities               78,429            11,927

   20   Long-term debt, less current maturities       94            63,606
   21   Deferred tax liability                       599             1,696
   22   Other long-term liabilities                  614               394
   23     Total long-term liabilities              1,307            65,696

   24   Total stockholders' equity               103,746           121,354
   25 Total liabilities and stockholders'
       equity                                   $183,482          $198,977

   26   Loan balance per ending store               $140              $117
   27   Inventory per ending store                  $118              $117
   28   Book value per share                       $8.58            $10.10
   29   Tangible book value per share              $7.39             $8.62
   30   Store count - end of period                  289               336

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/EZCORP/042401/. The conference call can be replayed at the same address.

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SOURCE: EZCORP, Inc.

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

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

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