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EZCORP Announces Fiscal 2006 First Quarter Results

Jan 24, 2006

EZCORP, Inc. (NASDAQ: EZPW) announced today results for its fiscal first quarter, which ended December 31, 2005.

For the quarter ended December 31, 2005, EZCORP's net income increased 37% to $6,756,000 ($0.50 per share) compared to $4,949,000 ($0.37 per share) for the fiscal 2005 first quarter. Total revenues for the quarter increased 23% over the prior year period to $75,770,000 with total sales (merchandise and jewelry scrapping) up 17% and signature loan revenues (payday loan service charges and credit service fees) up 100%.

Effective October 1, 2005, the Company adopted Financial Accounting Standard 123R, which requires the expensing of stock options. Included in the results for the fiscal 2006 first quarter is the pretax impact of $555,000 (included in operations expense) or $460,000 after taxes ($0.03 per share) related to this accounting pronouncement. Since the Company implemented this standard prospectively, no similar impact is reflected in the fiscal 2005 results.

During the fiscal 2005 first quarter, the Company sold a portfolio of old payday loan bad debt for approximately $905,000. Excluding the benefit of this sale, net income for the 2005 quarter would have been $4,370,000 ($0.33 per share).

Commenting on these results, President and Chief Executive Officer, Joe Rotunda, stated, "Our results for the first fiscal 2006 quarter were outstanding with our signature loan business making the largest contribution to our earnings growth. Signature loan revenues doubled to approximately $16.6 million and the signature loan contribution after bad debt and direct transaction expenses improved eighty percent to approximately $12.0 million. Bad debt and direct transaction expense as a percent of related revenues improved to 27% from 30%, excluding the sale of old bad debt, for the prior year quarter."

Rotunda continued, "Sales growth in our pawn stores also made a significant contribution to the quarter's strong results. For the quarter we had an 11% increase in inventory available for sale compared to the prior year period and a better selection of jewelry and general merchandise. This fueled a 17% and 16% increase in total sales and sales gross profit. Same store merchandise sales were 11% greater than the fiscal 2005 first quarter."

Rotunda concluded, "We expect our second fiscal 2006 quarter's earnings to be in the range of $0.40 to $0.43 per share compared to $0.29 for the fiscal 2005 second quarter. For our 2006 fiscal year, we are raising our guidance to $1.50 to $1.55 per share compared to fiscal 2005's $1.09 per share. For fiscal 2006, we expect to open 115 to 125 EZMONEY locations."

EZCORP is a lender or provider of credit services to individuals who do not have cash resources or access to credit to meet their short-term cash needs. In 281 EZPAWN locations, the Company offers non-recourse loans collateralized by tangible personal property, commonly known as pawn loans. At these locations, the Company also sells merchandise, primarily collateral forfeited from its pawn lending operations, to consumers looking for good value. In 242 EZMONEY locations and 83 EZPAWN locations, the Company offers short-term non-collateralized loans, often referred to as payday loans, or fee based credit services to customers seeking loans.

This announcement contains certain forward-looking statements regarding the Company's expected performance for future periods including, but not limited to, new store expansion 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 January 24, 2006 at 3:30pm Central Standard 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=1196622

  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
                                                          December 31,
                                                      2005           2004
  1 Revenues:
  2    Merchandise sales                           $ 35,656       $ 32,018
  3    Jewelry scrapping sales                        6,697          4,306
  4    Pawn service charges                          16,514         16,669
  5    Payday loan service charges                    1,152          8,290
  6    Credit service fees                           15,422            ---
  7    Other                                            329            345
  8       Total revenues                             75,770         61,628
  9 Cost of goods sold:
  10   Cost of merchandise sales                     20,772         18,780
  11   Cost of jewelry scrapping sales                4,889          3,133
  12      Total cost of goods sold                   25,661         21,913
  13 Net revenues                                    50,109         39,715
  14
  15 Operations expense                              26,313         22,703
  16 Payday loan bad debt and direct
      transaction expenses                              732          1,609
  17 Credit service bad debt and direct
      transaction expenses                            3,804            ---
  18 Administrative expense                           6,822          5,867
  19 Depreciation and amortization                    2,123          1,887
  20   Operating income                              10,315          7,649
  21
  22 Interest expense, net                              222            339
  23 Equity in net income of unconsolidated affiliate  (515)          (460)
  24 (Gain) loss on sale/disposal of assets             (15)            37
  25 Income before income taxes                      10,623          7,733
  26 Income tax expense                               3,867          2,784
  27 Net income                                    $  6,756       $  4,949
  28
  29 Net income per share, assuming dilution       $   0.50       $   0.37
  30
  31 Weighted average shares - assuming dilution     13,538         13,237



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

                                                       As of December 31,
                                                      2005           2004
  1 Assets:
  2   Current assets:
  3     Cash and cash equivalents                  $  4,270       $  3,115
  4     Pawn loans                                   47,419         44,714
  5     Payday loans, net                             1,532          8,666
  6     Pawn service charges receivable, net          8,840          9,465
  7     Payday loan service charges receivable, net     251          1,759
  8     Credit service fees receivable, net           3,337            ---
  9     Inventory, net                               34,332         32,317
  10    Deferred tax asset                           10,629          9,711
  11    Prepaid expenses and other assets             4,028          5,233
  12      Total current assets                      114,638        114,980
  13  Investment in unconsolidated affiliate         17,702         16,527
  14  Property and equipment, net                    26,398         26,049
  15  Deferred tax asset, non-current                 4,012          4,946
  16  Other assets, net                               3,610          4,016
  17      Total assets                             $166,360       $166,518
  18 Liabilities and stockholders' equity:
  19  Current liabilities:
  20    Accounts payable and other
         accrued expenses                          $ 16,011       $ 13,831
  21    Customer layaway deposits                     1,941          1,686
  22    Federal income taxes payable                  4,116          3,336
  23      Total current liabilities                  22,068         18,853
  24
  25  Long-term debt                                    ---         22,000
  26  Deferred gains and other long-term liabilities  3,515          3,868
  27      Total long-term liabilities                 3,515         25,868
  28  Total stockholders' equity                    140,777        121,797
  29      Total liabilities and
           stockholders' equity                    $166,360       $166,518
  30
  31 Pawn loan balance per ending pawn store       $    169       $    160
  32 Inventory per ending pawn store               $    122       $    115
  33 Book value per share                          $  10.93       $   9.85
  34 Tangible book value per share                 $  10.72       $   9.64
  35 Pawn store count - end of period                   281            280
  36 Mono-line payday loan store count -
      end of period                                     242            165
  37 Shares outstanding - end of period              12,875         12,365

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=1196622

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