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EZCORP Announces Fiscal Fourth Quarter and Yearend Results

Nov 9, 2004

EZCORP, Inc. (NASDAQ: EZPW) announced today results for its fiscal fourth quarter and 2004 fiscal year, which ended September 30, 2004.

For the quarter ended September 30, 2004, net income increased 66% to $2,621,000 ($0.20 per share) from fiscal 2003 fourth quarter's comparable net income of $1,578,000 ($0.12 per share). Total revenues for the fourth quarter increased 20% to $64,053,000 compared to $53,225,000 for the fiscal 2003 fourth quarter.

For the twelve month period ended September 30, 2004, net income increased 64% to $8,871,000 ($0.68 per share) from fiscal 2003's comparable net income of $5,414,000 ($0.43 per share). Total revenues for the fiscal year increased 10% to $227,797,000 from $206,349,000 for fiscal 2003.

Comparable net income for the fiscal 2003 periods excludes the impact of several unusual items. For a reconciliation of comparable net income to net income, see the Statement of Operations for the three and twelve month periods that follow.

Commenting on these results, President and Chief Executive Officer, Joe Rotunda, stated, "We are quite pleased with our results for the year with all revenue sources improving over the prior year. Total sales increased nearly seven percent with approximately a two and a half percentage point improvement in margins resulting in a fourteen percent increase in sales gross profit. Pawn service charge revenue improved approximately two percent and our ending pawn loan balance was approximately two percent above the prior year. Payday loan service charges increased 90% and our ending payday loan balance was double the prior year's ending balance."

Rotunda continued, "During the year, we opened 121 new EZMONEY Payday Loan stores, bringing our total EZMONEY locations to 125. As a group, the performance of these stores is meeting our expectations."

Rotunda concluded, "Looking forward to fiscal 2005, we expect to generate earnings per share in the range of $0.90 to $0.95. For our first fiscal 2005 quarter, we expect to generate earnings per share of $0.25 to $0.28. We expect to open between 120 and 140 EZMONEY Payday Loan stores this fiscal year, with approximately 30 of these opening in the first 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. At September 30, 2004, the Company operated 280 EZPAWN and 125 EZMONEY Payday Loan stores, 95 of which adjoin an EZPAWN location.

On September 13th, Albemarle and Bond ("A&B"), EZCORP's UK affiliate, announced results for their fiscal year ended June 30, 2004. A&B reported profit after taxes for their fiscal 2004 of 3,461,000 British Pounds (7.46p per share) compared to 3,043,000 British Pounds (6.67p per share) for their fiscal 2003. At June 30, 2004, A&B operated 55 locations in the United Kingdom that offer jewelry only pawn loans, check cashing, and short-term loans. EZCORP owns approximately 29% of the outstanding shares of A&B.

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 a conference call discussing these results on November 9, 2004 at 3:30pm Central Time. The conference call can be accessed over the Internet (or replay it at your convenience) at the following address.

   http://phx.corporate-ir.net/playerlink.zhtml?c=69434&s=wm&e=961492

  For additional information, contact Dan Tonissen at (512) 314-2289.


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

                                            Three Months Ended September 30,
                                                  2004              2003
   1 Revenues:
   2     Merchandise sales                      $ 26,721          $ 25,797
   3     Jewelry scrapping sales                  14,040             8,813
   4     Pawn service charges                     15,215            14,599
   5     Payday loan service charges               7,750             3,739
   6     Other revenues                              327               277
   7         Total revenues                       64,053            53,225
   8 Cost of goods sold:
   9     Cost of merchandise sales                15,675            15,227
  10     Cost of jewelry scrapping sales          11,397             7,167
  11         Total cost of goods sold             27,072            22,394
  12 Net revenues                                 36,981            30,831
  13
  14 Operations expense                           22,480            20,193
  15 Bad debt and other direct expenses
      on payday loans                              3,146             1,510
  16 Administrative expense                        5,391             4,297
  17 Depreciation and amortization                 1,874             2,137
  18     Operating income                          4,090             2,694
  19
  20 Interest expense, net                           375               472
  21 Equity in net income of
      unconsolidated affiliate                      (448)             (350)
  22 Loss on sale of assets                            3               144
  23 Impairment of investment                        ---             1,100
  24 Income before income taxes                    4,160             1,328
  25 Income tax expense                            1,539            (3,235)
  26 Income before cumulative effect of
      adopting a new accounting principle          2,621             4,563
  27 Cumulative effect of adopting a new
      accounting principle, net of tax               ---               ---
  28 Net income                                 $  2,621          $  4,563
  29
  30 Income per share, assuming dilution:
  31     Income before cumulative effect of
          adopting a new accounting principle   $   0.20          $   0.36
  32     Cumulative effect of adopting a new
          accounting principle, net of tax           ---               ---
  33     Net income                             $   0.20          $   0.36
  34
  35 Reconciliation of net income to
      comparable net income
      (a non-GAAP measure):
  36   Net income, as reported                  $  2,621          $  4,563
  37     Add back:  Cumulative effect
          of adopting a new accounting
          principle, net of tax                      ---               ---
  38     Add back:  Impairment of
          investment, net of tax benefit             ---               715
  39     Subtract:  Reduction of
          valuation allowance on
          deferred tax asset                         ---            (3,700)
  40   Comparable net income
        (a non-GAAP measure)                    $  2,621          $  1,578
  41
  42   Comparable net income per share,
        assuming dilution (a non-GAAP
        measure)                                $   0.20          $   0.12
  43
  44 Weighted average shares - assuming
      dilution                                    13,083            12,694


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

                                                 Year Ended September 30,
                                                  2004              2003
   1 Revenues:
   2     Merchandise sales                      $116,816          $113,792
   3     Jewelry scrapping sales                  26,656            20,799
   4     Pawn service charges                     59,090            58,175
   5     Payday loan service charges              23,874            12,538
   6     Other revenues                            1,361             1,045
   7         Total revenues                      227,797           206,349
   8 Cost of goods sold:
   9     Cost of merchandise sales                67,682            68,606
  10     Cost of jewelry scrapping sales          20,520            17,494
  11         Total cost of goods sold             88,202            86,100
  12 Net revenues                                139,595           120,249
  13
  14 Operations expense                           86,862            80,688
  15 Bad debt and other direct expenses
      on payday loans                              9,103             4,685
  16 Administrative expense                       22,245            17,008
  17 Depreciation and amortization                 7,512             8,775
  18     Operating income                         13,873             9,093
  19
  20 Interest expense, net                         1,528             2,006
  21 Equity in net income of
      unconsolidated affiliate                    (1,739)           (1,412)
  22 Loss on sale of assets                            3               170
  23 Impairment of investment                        ---             1,100
  24 Income before income taxes                   14,081             7,229
  25 Income tax expense                            5,210            (1,170)
  26 Income before cumulative effect of
      adopting a new accounting principle          8,871             8,399
  27 Cumulative effect of adopting a new
      accounting principle, net of tax               ---            (8,037)
  28 Net income                                 $  8,871          $    362
  29
  30 Income per share, assuming dilution:
  31     Income before cumulative effect of
          adopting a new accounting principle   $   0.68          $   0.67
  32     Cumulative effect of adopting a new
          accounting principle, net of tax           ---             (0.64)
  33     Net income                             $   0.68          $   0.03
  34
  35 Reconciliation of net income to
      comparable net income
      (a non-GAAP measure):
  36   Net income, as reported                  $  8,871          $    362
  37     Add back:  Cumulative effect
          of adopting a new accounting
          principle, net of tax                      ---             8,037
  38     Add back:  Impairment of
          investment, net of tax benefit             ---               715
  39     Subtract:  Reduction of
          valuation allowance on
          deferred tax asset                         ---            (3,700)
  40   Comparable net income (a non-
        GAAP measure)                           $  8,871          $  5,414
  41
  42   Comparable net income per share,
        assuming dilution
        (a non-GAAP measure)                    $   0.68          $   0.43
  43
  44 Weighted average shares -
      assuming dilution                           13,122            12,552


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

                                                    As of September 30,
                                                  2004              2003
   1  Assets:
   2      Current assets:
   3          Cash and cash equivalents         $  2,506          $  2,496
   4          Pawn loans                          49,078            47,955
   5          Payday loans                         7,292             3,630
   6          Pawn service charges
               receivable, net                     8,679             8,990
   7          Payday loan service charges
               receivable, net                     1,474               735
   8          Inventory, net                      30,636            29,755
   9          Deferred tax asset                   9,711             8,163
   10         Federal income taxes receivable        ---               328
   11         Prepaid expenses and other assets    2,321             1,726
   12             Total current assets           111,697           103,778
   13     Investment in unconsolidated
           affiliates                             16,101            14,700
   14     Property and equipment, net             25,846            25,369
   15     Deferred tax asset, non-current          4,946             4,391
   16     Other assets                             5,732             5,452
   17             Total assets                  $164,322          $153,690
   18 Liabilities and stockholders' equity:
   19     Current liabilities:
   20         Accounts payable and other
               accrued expenses                 $ 15,347          $ 11,101
   21         Customer layaway deposits            1,645             1,792
   22         Federal income taxes payable         1,895               ---
   23             Total current liabilities       18,887            12,893
   24     Long-term debt, less
           current maturities                     25,000            31,000
   25     Deferred gains and other
           long-term liabilities                   3,958             4,319
   26             Total long-term liabilities     28,958            35,319
   27     Total stockholders' equity             116,477           105,478
   28             Total liabilities and
                   stockholders' equity         $164,322          $153,690
   29
   30 Pawn loan balance per ending pawn store   $    175          $    171
   31 Inventory per ending pawn store           $    109          $    106
   32 Book value per share                      $   9.42          $   8.65
   33 Tangible book value per share             $   9.21          $   8.44
   34 Pawn store count - end of period               280               280
   35 Mono-line payday loan store count - end
       of period                                     125                 4
   36 Shares outstanding - end of period          12,362            12,188

SOURCE: EZCORP, Inc.

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

Web site: http://www.ezcorp.com/

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