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EZCORP Announces Third Quarter Earnings

Jul 24, 2001

EZCORP, Inc. (NASDAQ: EZPW) announced today results for its third fiscal 2001 quarter and the nine month period, which ended June 30, 2001.

For the three months ended June 30, 2001, EZCORP is reporting operating income before depreciation and amortization of $3.3 million compared to $0.7 million in the prior year period, an increase of $2.6 million. For the third quarter, the Company is reporting a net loss of $0.4 million ($0.04 per share) compared to a net loss of $2.2 million ($0.18 per share) for the same period a year ago. Total revenues for the three-month period increased to $43.1 million from $42.2 million.

For the nine months ended June 30, 2001, operating income before depreciation and amortization increased 90% to $14.6 million compared to $7.7 million for the prior year. Net income for the nine months is $0.6 million ($0.05 per share) compared to net loss of $2.2 million ($0.18 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, Joseph L. Rotunda, President and Chief Executive Officer, said, "We are pleased with the progress we have made in our core business. At quarter end, we have grown our pawn loans outstanding beyond last year's consolidated total with 47 less stores. We have recorded same store sales growth of 4% for the quarter, the strongest performance of the fiscal year. Our inventory turnover is 2.2 times for the quarter compared to 1.6 times last year. Our expenses continue to be well managed and reflect increasing levels of efficiency. Also, we have strengthened our organization during this period with the addition of two executives. Matt Campbell, formerly Chief Operating Officer of Spin Cycle, joined the Company as Vice President of Human Resources. Mike Record joined the Company as a Regional Director of Operations. Mike is a seasoned industry veteran with senior level experience at Cash America and Pawn Mart."

Mr. Rotunda went on to add, "During the quarter we continued the roll out of our short-term loan product, commonly referred to as payday loans. We are approximately six months behind in rolling out this product but now offer it in 212 locations. As a result of the rollout delay, short-term loans contributed minimally to earnings during the quarter and will not produce the anticipated significant benefit until our next fiscal year."

Concluding, Mr. Rotunda stated, "Our biggest challenge and priority is to refinance our debt facility and establish a long-term partnership with the appropriate financial institutions. We plan to have this completed prior to the end of the calendar year."

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 June 30, 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 June 30,
                                                2001              2000

   Total revenues                             $43,100           $42,238
   Cost of goods sold                          18,427            16,085
   Net revenues                                24,673            26,153
   Operating expenses                          21,355            25,486
       Operating income before
        depreciation and
        amortization                            3,318               667
   Depreciation and amortization                2,870             2,492
       Operating income (loss)                    448            (1,825)
   Interest expense, net                        2,028             1,196
   Equity in net income of
    unconsolidated affiliate                      (71)              (69)
   Loss on sale of assets                         166               208
   Restructuring expense                         (696)              ---
   Loss before income taxes                      (979)           (3,160)
   Income tax benefit                            (537)           (1,010)
   Loss before cumulative effect of
    a change in accounting principle             (442)           (2,150)
   Cumulative effect of changing to a
    different revenue recognition method          ---               ---
   Net loss                                     $(442)          $(2,150)

       Per share loss before cumulative
        effect of a change in accounting
        principle                              $(0.04)           $(0.18)
       Per share cumulative effect
        of changing to a different revenue
        recognition method                       $---              $---
       Per share net loss                      $(0.04)           $(0.18)


   Weighted average shares - fully diluted     12,113            12,012
   Store count - average for period               289               336


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

                                                 A                 B
                                             Nine Months Ended June 30,
                                               2001              2000

   Total revenues                            $139,160          $149,875
   Cost of goods sold                          57,960            63,455
   Net revenues                                81,200            86,420
   Operating expenses                          66,584            78,760
       Operating income before
        depreciation and amortization          14,616             7,660
   Depreciation and amortization                8,118             7,575
       Operating income                         6,498                85
   Interest expense, net                        6,548             3,728
   Equity in net income of
    unconsolidated affiliate                     (208)             (216)
   (Gain) / loss on sale of assets                162              (242)
   Restructuring expense                         (696)              ---
   Income (loss) before income taxes              692            (3,185)
   Income tax expense (benefit)                    48            (1,019)
   Income (loss) before cumulative effect
    of a change in accounting principle           644            (2,166)
   Cumulative effect of changing to
    a different revenue recognition method        ---           (14,344)
   Net income (loss)                             $644          $(16,510)

       Per share income (loss) before
        cumulative effect of a change
        in accounting principle                 $0.05            $(0.18)
       Per share cumulative effect
        of changing to a different revenue
        recognition method                       $---            $(1.19)
       Per share net income (loss)              $0.05            $(1.37)

   Weighted average shares - fully
    diluted                                    12,094            12,012
   Store count - average for period               294               335


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

                                                 A                 B
                                                       June 30,
                                                2001              2000

   Assets:
     Current assets:
     Cash and cash equivalents                 $2,626            $1,229
     Pawn loans                                47,199            45,770
     Short-term loans and finance
      charges receivable, net                   1,039                38
     Pawn service charges receivable            7,838             8,575
     Inventory, net                            33,711            39,976
     Deferred tax asset                         7,081             8,023
     Federal income tax receivable                ---             1,949
     Prepaid expenses and other assets          2,622             2,868
         Total current assets                 102,116           108,428

     Investment in unconsolidated
      affiliates                               13,716            14,488
     Property and equipment, net               52,384            65,265
     Other assets                              18,436            20,999
   Total assets                              $186,652          $209,180

   Liabilities and stockholders' equity:
     Current liabilities:
     Current maturities of long-term debt     $67,671           $76,012
     Accounts payable and other
      accrued expenses                          9,346             9,596
     Restructuring reserve                        481               ---
     Customer layaway deposits                  2,045             2,245
         Total current liabilities             79,543            87,853

     Long-term debt, less current maturities       91               103
     Deferred tax liability                       990             1,696
     Other long-term liabilities                2,897               387
         Total long-term liabilities            3,978             2,186

     Total stockholders' equity               103,131           119,141
   Total liabilities and
    stockholders' equity                     $186,652          $209,180

     Loan balance per ending store               $163              $136
     Inventory per ending store                  $117              $119
     Book value per share                       $8.50             $9.92
     Tangible book value per share              $7.29             $8.50
     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/event.asp?id=273 . 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

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

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