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EZCORP Announces Higher Earnings for Fiscal 2004

Dec 13, 2004

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

During fiscal 2004, the Company withheld payments to a vendor pending a review of prior expense payments. Based on the findings of this review, the Company made the decision to not pay $400,000 of withheld payments. Since the condition existed at September 30, 2004 and was resolved prior to the issuance of the Company's financial statements, the benefit of not paying these accrued expenses is recognized in the fiscal 2004 period.

As a result, EZCORP increased its reported net income for the quarter and fiscal year ended September 30, 2004 to $2,873,000 ($0.22 per share) and $9,123,000 ($0.70 per share). In a November 9, 2004 earnings announcement, the Company had announced net income for the quarter and fiscal year ended September 30, 2004 of $2,621,000 ($0.20 per share) and $8,871,000 ($0.68 per share).

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 280 EZPAWN and 151 EZMONEY Payday Loan stores, 118 of which adjoin an EZPAWN location.

  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                           4,991          4,297
   17 Depreciation and amortization                    1,874          2,137
   18     Operating income                             4,490          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                       4,560          1,328
   25 Income tax expense                               1,687         (3,235)
   26 Income before cumulative effect
       of adopting a new accounting principle          2,873          4,563
   27 Cumulative effect of adopting
       a new accounting principle, net of tax            ---            ---
   28 Net income                                   $   2,873      $   4,563
   29
   30 Income per share, assuming dilution:
   31     Income before cumulative effect
           of adopting a new accounting principle  $    0.22      $    0.36
   32     Cumulative effect of adopting a new
           accounting principle, net of tax              ---            ---
   33     Net income                               $    0.22      $    0.36
   34
   35 Reconciliation of net income to
       comparable net income
       (a non-GAAP measure):
   36   Net income, as reported                    $   2,873      $   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)                      $   2,873      $   1,578
   41
   42   Comparable net income per share,
         assuming dilution (a non-GAAP measure)    $    0.22      $    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                          21,845         17,008
   17 Depreciation and amortization                    7,512          8,775
   18     Operating income                            14,273          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                      14,481          7,229
   25 Income tax expense                               5,358         (1,170)
   26 Income before cumulative effect of
       adopting a new accounting principle             9,123          8,399
   27 Cumulative effect of adopting a new
       accounting principle, net of tax                  ---         (8,037)
   28 Net income                                   $   9,123      $     362
   29
   30 Income per share, assuming dilution:
   31 Income before cumulative effect of
       adopting a new accounting principle         $    0.70      $    0.67
   32 Cumulative effect of adopting a
       new accounting principle, net of tax              ---          (0.64)
   33 Net income                                   $    0.70      $    0.03
   34
   35 Reconciliation of net income to
      comparable net income
      (a non-GAAP measure):
   36   Net income, as reported                    $   9,123      $     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)                      $   9,123      $   5,414
   41
   42   Comparable net income per share,
         assuming dilution (a non-GAAP measure)    $    0.70      $    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  $  14,947      $  11,101
   21 Customer layaway deposits                        1,645          1,792
   22 Federal income taxes payable                     2,043            ---
   23     Total current liabilities                   18,635         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                     116,729        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                         $    9.44      $    8.65
   33 Tangible book value per share                $    9.23      $    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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