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EZCORP Announces Fiscal 2007 First Quarter Results

Jan 23, 2007

EZCORP, Inc. (NASDAQ: EZPW) announced today results for its fiscal first quarter, which ended December 31, 2006.

For the quarter ended December 31, 2006, EZCORP's net income increased 44% to $9,761,000 ($0.23 per share) compared to $6,756,000 ($0.17 per share) for the fiscal 2006 first quarter. Total revenues for the quarter increased 21% over the prior year period to $91,687,000 with signature loan revenues (payday loan and credit service fees) up 47%, total sales (merchandise and jewelry scrapping) up 16% and pawn service charges up 9%.

Operating income for the quarter improved 42% to $14,623,000 (24% of net revenue) compared to $10,315,000 (21% of net revenue) for the prior year quarter. Operating income margin improvement resulted from leveraging our store operating expense, primarily in our pawn operation, and administrative expense.

Commenting on these results, President and Chief Executive Officer, Joe Rotunda, stated, "The demand for our loan products continues to be strong as consumers seek lower cost alternatives to the fee-based services offered by traditional financial institutions. Our customer, who is well educated and informed, is choosing our short term loan products because they are a lower cost alternative and they enable them to maintain control over their finances. Satisfying this customer's needs and demonstrating that our loan products are their best alternative continues to drive our business."

Rotunda continued, "Both the pawn and signature loan products contributed to our earnings growth. Our pawn net revenues increased 12% or $3.9 million to approximately $37.5 million. Our signature loan contribution, signature loan fees less bad debt, increased 51% or $6.2 million to approximately $18.4 million. Our signature loan bad debt continues to show incremental year over year improvement. Signature loan bad debt as a percent of related fee revenue improved to 24.7% for the quarter from 26.4% for the prior year quarter."

Rotunda concluded, "We expect our second fiscal 2007 quarter's earnings to be approximately $0.23 per share compared to $0.19 for the fiscal 2006 second quarter. For our 2007 fiscal year, we are raising our guidance to approximately $0.85 per share compared to $0.69 per share for fiscal 2006. For the fiscal 2007 second quarter, we expect to open approximately 30 EZMONEY and one to two Mexico EZPAWN locations. For the fiscal year, we expect to open approximately 100 EZMONEY and four Mexico EZPAWN locations."

EZCORP is primarily 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 280 U.S. and one Mexico 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 340 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, expected future earnings and new store expansion. 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 January 23, 2007 at 3:30pm Central Standard 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=37311
  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,
                                                 2006              2005
   1  Revenues:
   2    Merchandise sales                      $37,879           $35,656
   3    Jewelry scrapping sales                 11,101             6,697
   4    Pawn service charges                    17,962            16,514
   5    Credit service fees                     22,027            15,422
   6    Payday loan fees                         2,368             1,152
   7    Other                                      350               329
   8        Total revenues                      91,687            75,770
   9  Cost of goods sold:
   10   Cost of merchandise sales               22,582            20,772
   11   Cost of jewelry scrapping sales          7,241             4,889
   12       Total cost of goods sold            29,823            25,661
   13 Net revenues                              61,864            50,109
   14
   15 Operations expense                        31,388            26,475
   16 Credit service bad debt                    5,204             3,770
   17 Payday loan bad debt                         824               604
   18 Administrative expense                     7,527             6,822
   19 Depreciation and amortization              2,298             2,123
   20   Operating income                        14,623            10,315
   21
   22 Interest income                             (314)              ---
   23 Interest expense                              64               222
   24 Equity in net income of unconsolidated
       affiliate                                  (645)             (515)
   25 (Gain) loss on sale/disposal of assets        24               (15)
   26 Income before income taxes                15,494            10,623
   27 Income tax expense                         5,733             3,867
   28 Net income                                $9,761            $6,756
   29
   30 Net income per share, diluted              $0.23             $0.17
   31
   32 Weighted average shares, diluted          43,306            40,613



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

                                                   As of December 31,
                                                 2006              2005
   1 Assets:
   2  Current assets:
   3   Cash and cash equivalents               $39,964            $4,270
   4   Pawn loans                               47,793            47,419
   5   Payday loans, net                         3,273             1,532
   6   Pawn service charges receivable,
        net                                      8,434             8,840
   7   Credit service fees receivable,
        net                                      4,550             3,337
   8   Payday loan fees receivable, net            591               251
   9   Inventory, net                           35,235            34,332
  10   Deferred tax asset                        7,150            10,629
  11   Prepaid expenses and other assets         5,786             4,028
  12     Total current assets                  152,776           114,638
  13  Investment in unconsolidated
       affiliate                                20,317            17,702
  14  Property and equipment, net               29,881            26,398
  15  Deferred tax asset, non-current            3,950             4,012
  16  Other assets, net                          3,747             3,610
  17     Total assets                         $210,671          $166,360
  18 Liabilities and stockholders'
      equity:
  19  Current liabilities:
  20   Accounts payable and other accrued
        expenses                               $19,689           $16,011
  21   Customer layaway deposits                 2,103             1,941
  22   Federal income taxes payable              4,305             4,116
  23     Total current liabilities              26,097            22,068
  24
  25  Deferred gains and other long-term
       liabilities                               3,158             3,515
  26  Total stockholders' equity               181,416           140,777
  27     Total liabilities and
          stockholders' equity                $210,671          $166,360
  28
  29 Pawn loan balance per ending
      pawn store                                  $170              $169
  30 Inventory per ending pawn store              $125              $122
  31 Book value per share                        $4.47             $3.64
  32 Tangible book value per share               $4.40             $3.57
  33 EZPAWN store count - end of period            281               281
  34 EZMoney signature loan store count
      - end of period                              340               242
  35 Shares outstanding - end of period         40,580            38,625

First Call Analyst:
FCMN Contact: sharon_lemond@ezcorp.com

SOURCE: EZCORP, Inc.

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

Web site: http://www.ezcorp.com/
http://www.videonewswire.com/event.asp?id=37311

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