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EZCORP Announces Fiscal 2008 Fourth Quarter and Yearend Results

Nov 6, 2008

EZCORP, Inc. (NASDAQ: EZPW) announced today results for its fourth fiscal quarter and 2008 fiscal year, which ended September 30, 2008.

For the quarter ended September 30, 2008, EZCORP's net income increased 44% to $16,031,000 ($0.37 per share) compared to $11,155,000 ($0.26 per share) for the quarter ended September 30, 2007. Total revenues for the quarter increased 19% to $123,402,000 while operating income improved 13% to $18,950,000.

Included in the results for the quarter are the impact of Hurricane Ike and the benefit of taking a previously under utilized foreign tax credit. On September 13th, the Company closed 154 stores in the hurricane threat area, with most of these closed on September 12th in advance of the hurricane. During the month, the Company lost 1,042 store days due to the hurricane and the resulting power outages. The Company estimates this adversely impacted pretax income approximately $2.5 million ($0.04 tax affected earnings per share).

During the quarter, the Company recognized the benefit of a previously under utilized foreign tax credit related to its investment in Albemarle and Bond Holdings Plc. This resulted in a reduction to income tax expense, not related to the quarter, of approximately $3.1 million ($0.07 per share). Of the $3.1 million tax expense reduction, approximately $2.4 million ($0.06 per share) pertained to the larger credit available on Albemarle and Bond's earnings prior to the Company's 2008 fiscal year.

For the twelve months ended September 30, 2008, net income increased 38% to $52,429,000 ($1.21 per share) compared to $37,874,000 ($0.88 per share) for the prior year twelve month period. Total revenues grew 23% to $457,403,000 while operating income increased 34% to $74,619,000.

Excluding the adverse impact of Hurricane Ike and the benefit of the foreign tax credit related to Albemarle and Bond's earnings in prior periods, the Company's fully diluted earnings per share for the fourth fiscal quarter and 2008 fiscal year would have been $0.34 and $1.19 per share.

Commenting on these results, President and Chief Executive Officer, Joe Rotunda, stated, "Our fourth fiscal 2008 quarter was our twenty-fifth consecutive quarter of year over year earnings growth. While the unfavorable impact of Hurricane Ike and the favorable impact of the foreign tax credit utilization resulted in a net favorable impact on our quarter's results, we still achieved our earnings expectation for the quarter excluding these two unusual items. Our pawn operations in the U.S. and Mexico drove our excellent results for the quarter."

Rotunda continued, "We have completed our due diligence and are moving ahead with our eleven store Pawn Plus acquisition and the acquisition of Value Financial Services. We expect to close on the Pawn Plus transaction later this month and close on the Value Financial Services acquisition in the latter half of December. We believe both of these acquisitions will be excellent additions to our store portfolio."

Rotunda concluded, "For our first fiscal quarter and 2009 fiscal year, we expect earnings per share, excluding the two pending acquisitions, to be approximately $0.35 and $1.45. Assuming a late November closing on the Las Vegas acquisition and a late December closing on the Value Financial Services transaction, the acquisitions will have a nominal earnings per share impact on our first fiscal quarter and an approximate $0.08 to $0.09 per share benefit on our fiscal year results."

"In addition to completing these two acquisitions, we plan to open 30 to 35 EZMONEY locations in the U.S. and 30 to 35 Empeno Facil locations in Mexico. In Canada we will continue to monitor the regulatory process in each province and enter provinces that adopt acceptable payday loan regulations."

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 294 U.S. EZPAWN and 38 Mexico Empeno Facil locations open on September 30, 2008, 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 477 EZMONEY locations and 71 EZPAWN locations open on September 30, 2008, 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, anticipated benefits of acquisitions 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 November 6, 2008 at 3:30 pm 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=52866

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

                                            Three Months Ended September 30,
                                                  2008              2007
   1  Revenues:
   2      Merchandise sales                      $34,926           $33,101
   3      Jewelry scrapping sales                 27,162            18,198
   4      Pawn service charges                    26,860            22,055
   5      Signature loan fees                     33,561            30,215
   6      Other                                      893               323
   7          Total revenues                     123,402           103,892
   8  Cost of goods sold:
   9      Cost of merchandise sales               20,490            19,598
   10     Cost of jewelry scrapping
           sales                                  17,180            12,791
   11         Total cost of goods sold            37,670            32,389
   12 Net revenues                                85,732            71,503
   13
   14 Operations expense                          40,235            34,515
   15 Signature loan bad debt                     12,303             9,422
   16 Administrative expense                      10,917             8,221
   17 Depreciation and amortization                3,327             2,618
   18     Operating income                        18,950            16,727
   19
   20 Interest income                               (118)             (155)
   21 Interest expense                               192                67
   22 Equity in net income of
       unconsolidated affiliate                   (1,180)             (760)
   23 Loss on sale/disposal of assets                412                59
   24 Other                                           (3)                -
   25 Income before income taxes                  19,647            17,516
   26 Income tax expense                           3,616             6,361
   27 Net income                                 $16,031           $11,155
   28
   29 Net income per share, diluted                $0.37             $0.26
   30
   31 Weighted average shares, diluted            43,468            43,215



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

                                                 Year Ended September 30,
                                                  2008              2007
   1  Revenues:
   2      Merchandise sales                     $155,828          $141,094
   3      Jewelry scrapping sales                 76,732            51,893
   4      Pawn service charges                    94,244            73,551
   5      Signature loan fees                    128,478           104,347
   6      Other                                    2,121             1,330
   7          Total revenues                     457,403           372,215
   8  Cost of goods sold:
   9      Cost of merchandise sales               92,612            83,501
   10     Cost of jewelry scrapping
           sales                                  46,790            34,506
   11         Total cost of goods sold           139,402           118,007
   12 Net revenues                               318,001           254,208
   13
   14 Operations expense                         153,420           128,602
   15 Signature loan bad debt                     37,150            28,508
   16 Administrative expense                      40,458            31,749
   17 Depreciation and amortization               12,354             9,812
   18     Operating income                        74,619            55,537
   19
   20 Interest income                               (477)           (1,654)
   21 Interest expense                               420               281
   22 Equity in net income of
       unconsolidated affiliate                   (4,342)           (2,945)
   23 (Gain) / loss on sale/disposal of
       assets                                        939               (72)
   24 Other                                            8                 -
   25 Income before income taxes                  78,071            59,927
   26 Income tax expense                          25,642            22,053
   27 Net income                                 $52,429           $37,874
   28
   29 Net income per share, diluted                $1.21             $0.88
   30
   31 Weighted average shares, diluted            43,327            43,230



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


                                                   As of September 30,
                                                  2008              2007
   1  Assets:
   2  Current assets:
   3    Cash and cash equivalents                $27,444           $22,533
   4    Pawn loans                                75,936            60,742
   5    Payday loans, net                          7,124             4,814
   6    Pawn service charges receivable,
         net                                      12,755            10,113
   7    Signature loan fees receivable,
         net                                       5,406             5,992
   8    Inventory, net                            43,209            37,942
   9    Deferred tax asset                        10,926             8,964
   10   Prepaid expenses and other assets          9,116             6,146
   11     Total current assets                   191,916           157,246
   12
   13 Investment in unconsolidated
       affiliate                                  38,439            35,746
   14 Property and equipment, net                 40,079            33,806
   15 Deferred tax asset, non-current              8,139             4,765
   16 Goodwill                                    24,376            16,211
   17 Other assets, net                            5,771             3,412
   18 Total assets                              $308,720          $251,186
   19 Liabilities and stockholders'
       equity:
   20 Current liabilities:
   21   Accounts payable and other
         accrued expenses                        $29,425           $25,592
   22   Customer layaway deposits                  2,327             1,988
   23   Federal income taxes payable                 246             4,795
   24     Total current liabilities               31,998            32,375
   25
   26 Deferred gains and other long-
       term liabilities                            3,672             2,886
   27 Total stockholders' equity                 273,050           215,925
   28     Total liabilities and
           stockholders' equity                 $308,720          $251,186
   29
   30 Pawn loan balance per ending pawn
       store                                        $229              $204
   31 Inventory per ending pawn store               $130              $127
   32 Book value per share                         $6.58             $5.23
   33 Tangible book value per share                $5.89             $4.77
   34 Pawn store count - end of period               332               298
   35 Signature loan store count - end
       of period                                     477               433
   36 Shares outstanding - end of
       period                                     41,525            41,306



                               EZCORP, Inc.
                  Operating Segment Results (Unaudited)
                   (in thousands, except store counts)

                                 EZPAWN
                                 United    Empeno
                                 States     Facil     EZMONEY
   Three months ended          Operations Operations Operations Consolidated
    September 30,
     2008:
   1   Revenues:
   2     Sales                  $59,997     $2,091          $-     $62,088
   3     Pawn service charges    25,342      1,518           -      26,860
   4     Signature loan fees        651          -      32,910       33,561
   5     Other                      892          1           -          893
   6         Total revenues      86,882      3,610      32,910      123,402
   7
   8   Cost of goods sold        36,289      1,381           -       37,670
   9         Net revenues        50,593      2,229      32,910       85,732
  10
  11   Operating expenses:
  12     Operations expense      25,273      1,287      13,675       40,235
  13     Signature loan bad debt    367          -      11,936       12,303
  14         Total direct
              expenses           25,640      1,287      25,611       52,538
  15         Store operating
              income            $24,953       $942      $7,299      $33,194
  16
  17   Pawn store count -
        end of period               294         38           -          332
  18   Signature loan store
        count - end of period         6          -         471          477
  19
  20 Three months ended September 30,
      2007:
  21   Revenues:
  22     Sales                  $51,212        $87          $-      $51,299
  23     Pawn service charges    22,007         48           -       22,055
  24     Signature loan fees        828          -      29,387       30,215
  25     Other                      322          1           -          323
  26         Total revenues      74,369        136      29,387      103,892
  27
  28   Cost of goods sold        32,341         48           -       32,389
  29         Net revenues        42,028         88      29,387       71,503
  30
  31   Operating expenses:
  32     Operations expense      22,510        161      11,844       34,515
  33     Signature loan bad debt    347          -       9,075        9,422
  34         Total direct
              expenses           22,857        161      20,919       43,937
  35         Store operating
              income            $19,171       $(73)     $8,468      $27,566
  36
  37   Pawn store count -
        end of period               294          4           -           98
  38   Signature loan store
        count - end of period         6          -         427          433



                                 EZCORP, Inc.
                    Operating Segment Results (Unaudited)
                     (in thousands, except store counts)


                                EZPAWN
                                United    Empeno
                                States     Facil     EZMONEY
   Year ended September 30,   Operations Operations Operations Consolidated
    2008:
   1   Revenues:
   2     Sales                 $225,747     $6,813         $-      $232,560
   3     Pawn service charges    89,431   4,813             -        94,244
   4     Signature loan fees      2,782       -       125,696       128,478
   5     Other                    2,116       5             -         2,121
   6         Total revenues     320,076  11,631       125,696       457,403
   7
   8   Cost of goods sold       135,142   4,260             -       139,402
   9         Net revenues       184,934   7,371       125,696       318,001
  10
  11   Operating expenses:
  12     Operations expense      96,674   4,066        52,680       153,420
  13     Signature loan bad debt  1,108       -        36,042        37,150
  14         Total direct
              expenses           97,782   4,066        88,722       190,570
  15         Store operating
              income            $87,152  $3,305       $36,974      $127,431
  16
  17   Pawn store count -
        end of period               294      38             -           332
  18   Signature loan store
        count - end of period b       6       -           471           477
  19
  20 Year ended September 30, 2007:
  21   Revenues:
  22     Sales                  $192,832   $155            $-      $192,987
  23     Pawn service charges     73,471     80             -        73,551
  24     Signature loan fees       3,314      -       101,033       104,347
  25     Other                     1,328      2             -         1,330
  26         Total revenues      270,945    237       101,033       372,215
  27
  28   Cost of goods sold        117,923     84             -       118,007
  29         Net revenues        153,022    153       101,033       254,208
  30
  31   Operating expenses:
  32     Operations expense       87,151    404        41,047       128,602
  33     Signature loan bad debt   1,390      -        27,118        28,508
  34         Total direct
              expenses            88,541    404        68,165       157,110
  35         Store operating
              income             $64,481  $(251)      $32,868       $97,098
  36
  37   Pawn store count -
        end of period                294      4             -           298
  38   Signature loan store
        count - end of period          6      -           427           433



  For additional information, contact Dan Tonissen at (512) 314-2289.

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

SOURCE: EZCORP, Inc.

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

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

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