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EZCORP Announces Fiscal Year Results

Nov 10, 2003

EZCORP, Inc. (NASDAQ: EZPW) announced today results for its fiscal fourth quarter and 2003 fiscal year, which ended September 30, 2003.

For the quarter ended September 30, 2003, EZCORP is reporting net income of $4,563,000 ($0.36 per share) compared to net income of $251,000 ($0.02 per share) for the prior year comparable period. During the quarter, the Company decreased its valuation allowance placed on its deferred tax asset by $3,700,000 based on the Company's improved operating results and outlook for continued earnings growth. This resulted in a $3,700,000 decrease to the tax provision for the quarter and had a favorable net income effect of $3,700,000 ($0.30 per share). Also during the quarter, the Company wrote off a $1,100,000 investment made in 2000 in an internet related startup. This write-off had an unfavorable effect on net income of $715,000 ($0.06 per share). Excluding these two items, net income for the quarter was $1,578,000 ($0.12 per share).

For the twelve month period ended September 30, 2003, income before the cumulative effect of an accounting change increased to $8,399,000 ($0.67 per share) compared to net income of $2,204,000 ($0.18 per share) for fiscal 2002. Excluding the two items discussed in the above paragraph, income before the cumulative effect of an accounting change for fiscal 2003 increased 146% to $5,414,000 ($0.43 per share). Effective October 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142 which deals with the accounting treatment of goodwill and other intangible assets. After a charge of $8,037,000 for the cumulative effect of adopting this new accounting principle, the Company realized net income of $362,000 for fiscal 2003.

Commenting on these results, President and Chief Executive Officer, Joe Rotunda, stated, "We are pleased with both our fourth quarter and fiscal year end results. For fiscal 2003, we exceeded our earnings per share guidance by three cents, generated cash flow from operating activities in excess of $13.0 million, and reduced debt by 27% from a year ago. Our payday loans, which are still a relatively new product for us, ended the year with a balance 56% above the same time last year."

Rotunda continued, "We are also excited about our growth opportunities. During our fourth quarter, we opened four new mono-line payday loan stores under the EZMONEY brand, including two stores linked to an existing pawn location with a separate entrance and different decor and signage. In fiscal 2004, we plan to open seventy-five to eighty-five additional mono-line stores: either freestanding locations or linked to an existing pawn location."

Rotunda concluded, "Even with the expansion plans for fiscal year 2004, we will continue to drive earnings growth through additional refinement of our core pawn business and growth in our payday loan product. Although the new locations will have an initial drag on earnings, we expect earnings for fiscal 2004 to be between fifty and fifty-five cents per share compared to a comparable forty-three cents per share for fiscal 2003. For our first fiscal 2004 quarter, we expect earnings between nineteen and twenty-one cents per share compared to eighteen cents per share for the first fiscal 2003 quarter."

EZCORP meets the short-term cash needs of the cash and credit constrained consumer by offering convenient, non-recourse loans collateralized by tangible personal property, commonly known as pawn loans, and short-term non- collateralized loans, often referred to as payday loans. The Company also sells merchandise, primarily collateral forfeited from its pawn lending operations, to consumers looking for good value. Currently, the Company operates 290 locations in eleven states under the EZPAWN and EZMONEY brands: 280 pawnshops and 10 mono-line payday loan locations.

On September 15th, Albemarle and Bond, EZCORP's UK affiliate, announced preliminary results for their fiscal year ended June 30, 2003. They reported profit after taxes of 3,043,000 British Pounds, an increase of 19% over the prior year period. They currently operate 53 locations in the United Kingdom that offer check cashing, pawn loans and short-term loans. EZCORP currently owns approximately 29% of the outstanding shares of Albemarle and Bond and holds three of seven board seats.

This announcement contains certain forward-looking statements regarding the Company's expected performance for future periods including, but not limited to, new unit growth and expected future earnings. 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 earnings conference call on November 11th at 11:00am EST. It will be webcast at http://www.firstcallevents.com/service/ajwz392675057gf12.html .

The conference call can be replayed at the same address.

Also, EZCORP will be presenting at The Robins Group LLC Small Cap Round-Up on November 12th at 3:00pm EST. You can listen to the webcast of this presentation at http://www.veracast.com/webcasts/robins/small-cap-roundup03/16108127.cfm .

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

                                            Three Months Ended September 30,
                                                 2003              2002

   1 Total revenues                             $53,225           $51,695
   2 Cost of goods sold                          22,394            24,344
   3 Net revenues                                30,831            27,351
   4 Operating expenses                          26,000            23,612
   5   Operating income before
        depreciation and amortization             4,831             3,739
   6 Depreciation and amortization                2,137             2,457
   7   Operating income                           2,694             1,282
   8 Interest expense, net                          472             1,059
   9 Equity in net income of
      unconsolidated affiliate                     (350)             (182)
  10 Loss on sale of assets                         144                 7
  11 Impairment of investment                     1,100               ---
  12 Income before income taxes                   1,328               398
  13 Income tax expense (benefit)                (3,235)              147
  14 Income before cumulative effect of
      a change in accounting principle           $4,563              $251
  15 Cumulative effect of adopting a
      new accounting principle, net of
      tax                                           ---               ---
  16 Net income                                  $4,563              $251
  17
  18 Income per share, assuming
      dilution:
  19   Income before cumulative effect of
        a change in accounting principle          $0.36             $0.02
  20   Cumulative effect of adopting a
        new accounting principle, net of tax       $---              $---
  21   Net income                                 $0.36             $0.02
  22
  23 Weighted average shares - assuming
      dilution:                                  12,694            12,334
  24 Store count - average for period               281               280
  25
  26 Pro forma results, as if the new
      accounting principle were in
      effect for all periods:
  27   Net income as reported                    $4,563              $251
  28   Add back:  goodwill and pawn
        license amortization, net of tax            ---                99
  29   Add back:  amortization of
        goodwill related to equity
        investee, net of tax                        ---                75
  30   Add back:  cumulative effect of
        adopting a new accounting
        principle, net of tax                       ---               ---
  31   Adjusted net income                       $4,563              $425
  32
  33 Per share amounts - assuming
      dilution:
  34   Net income as reported                     $0.36             $0.02
  35   Add back:  goodwill and pawn
        license amortization, net of tax            ---              0.01
  36   Add back:  amortization of
        goodwill related to equity
        investee, net of tax                        ---               ---
  37   Add back:  cumulative effect of
        adopting a new accounting
        principle, net of tax                       ---               ---
  38   Adjusted net income                        $0.36             $0.03
  39
  40
  41 Below is a reconciliation of reported net
      income to net income excluding unusual
      items for the quarter ended September 30, 2003:
  42                                             $000's              EPS
  43 Net income, as reported                     $4,563             $0.36
  44 Add back unusual items:
  45   Cumulative effect of adopting
        a new accounting principal
        for goodwill, net of tax                    ---               ---
  46   Removal of valuation allowance
        on deferred tax asset                    (3,700)            (0.30)
  47   Impairment of $1.1 million
        investment, net of related
        tax benefit                                 715              0.06
  48 Net income, adjusted for unusual items      $1,578             $0.12


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

                                           Twelve Months Ended September 30,
                                                 2003              2002

   1 Total revenues                            $206,349          $196,898
   2 Cost of goods sold                          86,100            84,936
   3 Net revenues                               120,249           111,962
   4 Operating expenses                         102,381            93,884
   5   Operating income before
        depreciation and amortization            17,868            18,078
   6 Depreciation and amortization                8,775            10,087
   7   Operating income                           9,093             7,991
   8 Interest expense, net                        2,006             4,770
   9 Equity in net income of
      unconsolidated affiliate                   (1,412)             (604)
  10 Loss on sale of assets                         170               327
  11 Impairment of investment                     1,100               ---
  12 Income before income taxes                   7,229             3,498
  13 Income tax expense (benefit)                (1,170)            1,294
  14 Income before cumulative effect of
      a change in accounting principle           $8,399            $2,204
  15 Cumulative effect of adopting a
      new accounting principle, net of
      tax                                        (8,037)              ---
  16 Net income                                    $362            $2,204
  17
  18 Income per share, assuming dilution:
  19   Income before cumulative effect of
        a change in accounting principle          $0.67             $0.18
  20   Cumulative effect of adopting a
        new accounting principle, net of tax     $(0.64)             $---
  21   Net income                                 $0.03             $0.18
  22
  23 Weighted average shares - assuming
      dilution                                   12,552            12,292
  24 Store count - average for period               280               281
  25
  26 Pro forma results, as if the new
      accounting principle were in
      effect for all periods:
  27   Net income as reported                      $362            $2,204
  28   Add back:  goodwill and pawn
        license amortization, net of tax            ---               398
  29   Add back:  amortization of
        goodwill related to equity
        investee, net of tax                        ---               299
  30   Add back:  cumulative effect of
        adopting a new accounting
        principle, net of tax                     8,037               ---
  31   Adjusted net income                       $8,399            $2,901
  32
  33 Per share amounts - assuming
      dilution:
  34   Net income as reported                     $0.03             $0.18
  35   Add back:  goodwill and pawn
        license amortization, net of tax            ---              0.03
  36   Add back:  amortization of
        goodwill related to equity
        investee, net of tax                        ---              0.03
  37   Add back:  cumulative effect of
        adopting a new accounting
        principle, net of tax                      0.64               ---
  38   Adjusted net income                        $0.67             $0.24
  39
  40
  41 Below is a reconciliation of reported net
      income to net income excluding unusual
      items for the year ended September 30, 2003:
  42                                             $000's              EPS
  43 Net income, as reported                       $362             $0.03
  44 Add back unusual items:
  45   Cumulative effect of adopting
        a new accounting principal
        for goodwill, net of tax                  8,037              0.64
  46   Removal of valuation allowance
        on deferred tax asset                    (3,700)            (0.30)
  47   Impairment of $1.1 million
        investment, net of related
        tax benefit                                 715              0.06
  48 Net income, adjusted for unusual items      $5,414             $0.43


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

                                                    As of September 30,
                                                  2003              2002
    1 Assets:
    2   Current assets:
    3     Cash and cash equivalents              $2,496            $1,492
    4     Pawn loans                             47,955            49,248
    5     Payday loans                            3,630             2,326
    6     Pawn service charges receivable, net    8,990             8,819
    7     Payday loan service charges
           receivable, net                          735               485
    8     Inventory, net                         29,755            32,097
    9     Deferred tax asset                      8,163             6,418
   10     Federal income tax receivable             328               359
   11     Prepaid expenses and other assets       1,726             1,898
   12       Total current assets                103,778           103,142
   13   Investment in unconsolidated
         affiliates                              14,700            14,406
   14   Property and equipment, net              25,369            32,190
   15   Deferred tax asset, non-current           4,391               ---
   16   Goodwill, net                               ---            11,148
   17   Other assets                              5,452             5,084
   18       Total assets                       $153,690          $165,970
   19 Liabilities and stockholders' equity:
   20   Current liabilities:
   21     Current maturities of long-term debt     $---            $2,936
   22     Accounts payable and other
           accrued expenses                      11,101            11,615
   23     Customer layaway deposits               1,792             2,166
   24       Total current liabilities            12,893            16,717
   25   Long-term debt, less current
         maturities                              31,000            39,309
   26   Deferred tax liability                      ---             1,191
   27   Deferred gains and other long-
         term liabilities                         4,319             4,209
   28       Total long-term liabilities          35,319            44,709
   29 Total stockholders' equity                105,478           104,544
   30       Total liabilities and
             stockholders' equity              $153,690          $165,970
   31
   32 Pawn loan balance per ending pawn store      $171              $176
   33 Inventory per ending pawn store              $106              $115
   34 Book value per share                        $8.65             $8.59
   35 Tangible book value per share               $8.44             $7.48
   36 Pawn store count - end of period              280               280
   37 Monoline payday loan store count -
       end of period                                  4               ---
   38 Shares outstanding - end of period         12,188            12,167

   For additional information, contact Dan Tonissen at (512) 314-2289.
Audio: http://www.firstcallevents.com/service/ajwz392675057gf12.html

SOURCE: EZCORP, Inc.

CONTACT: Dan Tonissen of EZCORP, Inc., +1-512-314-2289

Web site: http://www.ezcorp.com/
http://www.veracast.com/webcasts/robins/small-cap-roundup03/16108127.cfm

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