Press Release Details

View all Investor News

EZCORP Announces Strong Earnings Growth for Third Quarter

Jul 20, 2005

EZCORP, Inc. (NASDAQ: EZPW) announced today results for its third fiscal quarter and nine month period, which ended June 30, 2005.

For the quarter ended June 30, 2005, EZCORP's net income improved to $2,129,000 (sixteen cents per share) compared to $253,000 (two cents per share) for the prior year period. Total revenues for the third fiscal quarter increased 10% to $56,250,000 compared to $51,141,000 for the prior year third fiscal quarter. After lower cost of goods sold and higher operating expense, operating income improved $2,492,000 to $3,159,000. Operating income margins for the quarter, measured as a percent of net revenues, improved approximately six percentage points to 8%.

For the nine months ended June 30, 2005, net income increased 77% to $11,047,000 (eighty-two cents per share) compared to $6,250,000 (forty-eight cents per share) for the same nine month period a year ago. Total revenues increased 11% to $180,976,000 while operating income increased 70% to $16,655,000. Operating income margins for the nine months, measured as a percent of net revenue, improved approximately four percentage points to 14%.

Commenting on these results, President and Chief Executive Officer, Joe Rotunda, stated, "The third quarter is our twelfth consecutive quarter of year-over-year earnings growth. All revenue elements contributed to our strong performance for the quarter; payday loan service charges increased 65% while bad debt increased only 21%; gross profit on sales increased 10% primarily due to better sales margins; and pawn service charges improved 6% on significantly stronger yields."

Rotunda continued, "As we announced on July 14th, we have stopped marketing County Bank payday loans in 177 Texas EZMoney locations. These locations are now registered as Credit Services Organizations that provide fee based advice or assistance to consumers in obtaining a loan from an unaffiliated lender. We anticipate some transitional cost, either in lower fee revenues or higher bad debt, while moving to this operating model; however, this change will enable us to continue growing our unsecured loans and loan services in Texas."

Rotunda concluded, "Considering the impact of the new product and anticipated transitional costs, we expect our earnings for the year to be between $1.05 and $1.10. Through June, we have opened 78 EZMoney stores. In our fourth fiscal quarter, we expect to open an additional 25 to 30 EZMoney stores."

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. In addition, the Company provides fee based credit services for customers seeking loans. The Company also sells merchandise, primarily collateral forfeited from its pawn lending operations, to consumers looking for good value. As of June 30, 2005, the Company operated 280 EZPAWN and 203 EZMONEY stores.

This announcement contains certain forward-looking statements regarding the Company's expected performance for future periods including, but not limited to, 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, actions of third parties who offer services and products in the Company's locations, 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 July 20, 2005 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=1097543

  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)

                                                 Three Months Ended June 30,
                                                      2005         2004
  1 Revenues:
  2   Merchandise sales                             $26,102      $25,845
  3   Jewelry scrapping sales                         4,892        4,937
  4   Pawn service charges                           14,722       13,835
  5   Payday loan service charges                    10,231        6,191
  6   Other                                             303          333
  7     Total revenues                               56,250       51,141
  8 Cost of goods sold:
  9   Cost of merchandise sales                      14,777       15,566
  10  Cost of jewelry scrapping sales                 3,644        3,774
  11    Total cost of goods sold                     18,421       19,340
  12 Net revenues                                    37,829       31,801
  13
  14 Operations expense                              23,693       21,830
  15 Bad debt and other payday loan direct expenses   3,413        2,832
  16 Administrative expense                           5,506        4,614
  17 Depreciation and amortization                    2,058        1,858
  18   Operating income                               3,159          667
  19
  20 Interest expense, net                              302          332
  21 Equity in net income of unconsolidated affiliate  (505)        (430)
  22 Loss on sale/disposal of assets                     36          ---
  23 Income before income taxes                       3,326          765
  24 Income tax expense                               1,197          512
  25 Net income                                      $2,129         $253
  26
  27 Net income per share, assuming dilution          $0.16        $0.02
  28
  29 Weighted average shares - assuming dilution     13,434       13,221



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

                                                  Nine Months Ended June 30,
                                                      2005         2004
  1 Revenues:
  2   Merchandise sales                             $91,413      $90,095
  3   Jewelry scrapping sales                        16,164       12,616
  4   Pawn service charges                           46,073       43,875
  5   Payday loan service charges                    26,349       16,124
  6   Other                                             977        1,034
  7     Total revenues                              180,976      163,744
  8 Cost of goods sold:
  9   Cost of merchandise sales                      52,518       52,007
  10  Cost of jewelry scrapping sales                11,717        9,123
  11    Total cost of goods sold                     64,235       61,130
  12 Net revenues                                   116,741      102,614
  13
  14 Operations expense                              70,384       64,382
  15 Bad debt and other payday loan direct expenses   6,517        5,957
  16 Administrative expense                          17,169       16,854
  17 Depreciation and amortization                    6,016        5,638
  18   Operating income                              16,655        9,783
  19
  20 Interest expense, net                              916        1,153
  21 Equity in net income of unconsolidated
      affiliate                                      (1,601)      (1,291)
  22 Loss on sale/disposal of assets                     79          ---
  23 Income before income taxes                      17,261        9,921
  24 Income tax expense                               6,214        3,671
  25 Net income                                     $11,047       $6,250
  26
  27 Net income per share, assuming dilution          $0.82        $0.48
  28
  29 Weighted average shares - assuming dilution     13,507       13,138



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

                                                        As of June 30,
                                                      2005         2004
  1 Assets:
  2   Current assets:
  3     Cash and cash equivalents                    $1,972       $1,692
  4     Pawn loans                                   50,888       51,101
  5     Payday loans, net                            11,089        6,720
  6     Pawn service charges receivable, net          9,020        8,557
  7     Payday loan service charges receivable, net   2,244        1,336
  8     Inventory, net                               28,956       30,997
  9     Deferred tax asset                            9,711        8,163
  10    Federal income taxes receivable                 ---          253
  11    Prepaid expenses and other assets             4,697        2,287
  12      Total current assets                      118,577      111,106
  13  Investment in unconsolidated affiliate         17,110       15,734
  14  Property and equipment, net                    26,147       25,222
  15  Deferred tax asset, non-current                 4,946        4,391
  16  Other assets, net                               4,205        5,602
  17      Total assets                             $170,985     $162,055
  18 Liabilities and stockholders' equity:
  19  Current liabilities:
  20    Accounts payable and other accrued expenses $13,651      $11,465
  21    Customer layaway deposits                     1,559        1,554
  22    Federal income taxes payable                  1,452          ---
  23      Total current liabilities                  16,662       13,019
  24
  25 Long-term debt                                  21,900       31,200
  26 Deferred gains and other long-term liabilities   3,687        4,048
  27      Total long-term liabilities                25,587       35,248
  28 Total stockholders' equity                     128,736      113,788
  29      Total liabilities and stockholders'
           equity                                  $170,985     $162,055
  30
  31 Pawn loan balance per ending pawn store           $182         $183
  32 Inventory per ending pawn store                   $103         $111
  33 Book value per share                            $10.34        $9.21
  34 Tangible book value per share                   $10.16        $8.98
  35 Pawn store count - end of period                   280          280
  36 Mono-line payday loan store count - end of period  203           85
  37 Shares outstanding - end of period              12,446       12,361

SOURCE: EZCORP, Inc.

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

Web site: http://www.ezcorp.com/
http://phx.corporate-ir.net/playerlink.zhtml?c=69434&s=wm&e=1097543

Categories: Press Releases
View all Investor News