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EZCORP Announces Third Fiscal Quarter Results

Jul 25, 2006

EZCORP, Inc. (NASDAQ: EZPW) announced today results for its third fiscal quarter and nine month period, which ended June 30, 2006.

For the quarter ended June 30, 2006, EZCORP's net income increased 163% to $5,608,000 ($0.40 per share) compared to $2,129,000 ($0.16 per share) for the quarter ended June 30, 2005. Total revenues for the third fiscal quarter increased 31% to $73,786,000 while operating income improved 155% to $8,040,000. Operating income margins for the quarter, measured as a percent of net revenues, improved approximately eight percentage points to 16%.

For the nine months ended June 30, 2006, EZCORP's net income increased 82% to $20,091,000 ($1.44 per share) compared to $11,047,000 ($0.82 per share) for the same nine month period a year ago. Total revenues grew 26% to $228,497,000 while operating income increased 79% to $29,895,000. Operating income margins for the nine months, measured as a percent of net revenue, improved approximately six percentage points to 20%.

Commenting on these results, President and Chief Executive Officer, Joe Rotunda, stated, "We continue to be pleased with our strong momentum and the continuation of our five-plus year trend of growing our earnings and profitably expanding our business. Our fiscal third quarter is the 16th consecutive quarter of year-over-year earnings growth. This quarter we increased earnings 163% over the prior year quarter. We are especially pleased with the strong performance of our pawn operation as well as the continued strong performance of our signature loan business."

Rotunda continued, "Our pawn contribution or pawn net revenues improved 17% in the third quarter as a result of a 35% increase in sales gross profit and a 2% increase in pawn service charges. Higher gold values assisted in delivering this strong pawn performance. Our signature loan contribution, or fees less bad debt and direct transaction expenses, increased 78% over the prior year quarter. The maturation of our 288 EZMONEY stores opened in the last three years fueled this significant growth."

Rotunda concluded, "Our earnings guidance for the fourth fiscal 2006 quarter is $0.43 to $0.46 per share compared to $0.27 per share for the fiscal 2005 fourth quarter. For our 2006 fiscal year, we are raising guidance to $1.87 to $1.90 per share compared to fiscal 2005's $1.09 per share. Included in our guidance is an expected earnings drag of approximately $0.07 to $0.10 per share for stores open less than nine months."

EZCORP is a lender and provider of credit services to individuals who do not have cash resources or access to credit to meet their short-term cash needs. In 280 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 288 EZMONEY locations and 82 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 the 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 25, 2006 at 3:30pm Central Time. The conference call can be accessed over the Internet (or replayed at your convenience) at the following address. http://www.videonewswire.com/event.asp?id=34480

  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,
                                                    2006              2005
   1  Revenues:
   2      Merchandise sales                       $29,612           $26,102
   3      Jewelry scrapping sales                  11,028             4,892
   4      Pawn service charges                     15,021            14,722
   5      Payday loan service charges               1,347            10,231
   6      Credit service fees                      16,474               ---
   7      Other                                       304               303
   8          Total revenues                       73,786            56,250
   9  Cost of goods sold:
   10     Cost of merchandise sales                16,868            14,777
   11     Cost of jewelry scrapping sales           6,830             3,644
   12         Total cost of goods sold             23,698            18,421
   13 Net revenues                                 50,088            37,829
   14
   15 Operations expense                           27,402            23,693
   16 Payday loan bad debt and direct
       transaction expenses                           635             3,413
   17 Credit service bad debt and
       direct transaction expenses                  5,038               ---
   18 Administrative expense                        6,830             5,506
   19 Depreciation and amortization                 2,143             2,058
   20     Operating income                          8,040             3,159
   21
   22 Interest expense (income), net                 (150)              302
   23 Equity in net income
       of unconsolidated affiliate                   (557)             (505)
   24 (Gain) loss on sale/disposal of assets          (70)               36
   25 Income before income taxes                    8,817             3,326
   26 Income tax expense                            3,209             1,197
   27 Net income                                   $5,608            $2,129
   28
   29 Net income per share, assuming dilution       $0.40             $0.16
   30
   31 Weighted average shares - assuming dilution  14,186            13,434



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


                                                 Nine Months Ended June 30,
                                                   2006              2005
   1  Revenues:
   2      Merchandise sales                      $104,304           $91,413
   3      Jewelry scrapping sales                  26,294            16,164
   4      Pawn service charges                     46,988            46,073
   5      Payday loan service charges               3,602            26,349
   6      Credit service fees                      46,347               ---
   7      Other                                       962               977
   8          Total revenues                      228,497           180,976
   9  Cost of goods sold:
   10     Cost of merchandise sales                60,415            52,518
   11     Cost of jewelry scrapping sales          17,281            11,717
   12         Total cost of goods sold             77,696            64,235
   13 Net revenues                                150,801           116,741
   14
   15 Operations expense                           81,623            70,384
   16 Payday loan bad debt and direct
       transaction expenses                         1,757             6,517
   17 Credit service bad debt and
       direct transaction expenses                 10,777               ---
   18 Administrative expense                       20,347            17,169
   19 Depreciation and amortization                 6,402             6,016
   20     Operating income                         29,895            16,655
   21
   22 Interest expense, net                           113               916
   23 Equity in net income
       of unconsolidated affiliate                 (1,745)           (1,601)
   24 (Gain) loss on sale/disposal of assets          (62)               79
   25 Income before income taxes                   31,589            17,261
   26 Income tax expense                           11,498             6,214
   27 Net income                                  $20,091           $11,047
   28
   29 Net income per share, assuming dilution       $1.44             $0.82
   30
   31 Weighted average shares - assuming dilution  13,974            13,507



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


                                                       As of June 30,
                                                   2006              2005
   1  Assets:
   2   Current assets:
   3    Cash and cash equivalents                $22,731            $1,972
   4    Pawn loans                                48,932            50,888
   5    Payday loans, net                          1,966            11,089
   6    Pawn service charges receivable, net       7,037             9,020
   7    Payday loan service charges receivable, net  329             2,244
   8    Credit service fees receivable, net        3,379               ---
   9    Inventory, net                            32,937            28,956
   10   Deferred tax asset                         8,365             9,711
   11   Note receivable from related party           ---             1,500
   12   Prepaid expenses and other assets          3,340             3,197
   13     Total current assets                   129,016           118,577
   14 Investment in unconsolidated affiliate      17,870            17,110
   15 Property and equipment, net                 27,283            26,147
   16 Deferred tax asset, non-current              3,669             4,946
   17 Other assets, net                            3,245             4,205
   18     Total assets                          $181,083          $170,985
   19 Liabilities and stockholders' equity:
   20  Current liabilities:
   21   Accounts payable and other
         accrued expenses                        $18,517           $13,651
   22   Customer layaway deposits                  1,734             1,559
   23   Federal income taxes payable                 752             1,452
   24     Total current liabilities               21,003            16,662
   25
   26 Long-term debt                                 ---            21,900
   27 Deferred gains and other
       long-term liabilities                       3,339             3,687
   28     Total long-term liabilities              3,339            25,587
   29 Total stockholders' equity                 156,741           128,736
   30     Total liabilities and
           stockholders' equity                 $181,083          $170,985
   31
   32 Pawn loan balance per ending pawn store       $175              $182
   33 Inventory per ending pawn store               $118              $103
   34 Book value per share                        $11.85            $10.34
   35 Tangible book value per share               $11.65            $10.15
   36 Pawn store count - end of period               280               280
   37 Mono-line payday loan store count
       - end of period                               288               203
   38 Shares outstanding - end of period          13,226            12,446
Audio: http://www.videonewswire.com/event.asp?id=34480

SOURCE: EZCORP, Inc.

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

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

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