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EZCORP Reports Record Earnings

Nov 4, 2010

Annual Net Income Increases 42%

AUSTIN, Texas, Nov. 4, 2010 /PRNewswire-FirstCall/ -- EZCORP, Inc. (Nasdaq: EZPW), a leading provider of specialty financial services, today announced results for its fourth fiscal quarter and 2010 fiscal year ended September 30, 2010.

 

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EZCORP's net income for the quarter increased 33% to $27.9 million ($0.56 per share) compared to $20.9 million ($0.42 per share) for the prior year quarter. Total revenues for the quarter increased 20% over the prior year period to $198.2 million.

 

Consolidated operating income improved 32% to $40.1 million (33% of net revenue) from $30.3 million (31% of net revenue) in the prior year quarter. Store level operating income improved $9.3 million in the Company's U.S. Pawn operations, $0.4 million in its Empeno Facil Mexico Pawn segment and $3.9 million in its EZMONEY operations.

 

For the fiscal year ended September 30, 2010, net income increased 42% to a record $97.3 million ($1.96 per share) compared to $68.5 million ($1.42 per share) for the prior year. Total revenues grew 23% to $733.0 million while operating income increased 40% to $141.9 million. The pre-tax contribution from the Company's strategic affiliates, Albemarle & Bond and Cash Converters International, increased to $10.8 million from $5.0 million in the prior year.

 

Commenting on these results, President and Chief Executive Officer, Paul Rothamel, stated, "We are pleased to report another record year, with strong contributions from each of our operating segments. The keys to our successful year were driving strong top-line revenue growth, further leveraging our expense base to enhance margins, effectively managing bad debt to record lows, and the strong, quality growth in our earning assets. Overall, we delivered a 21% return on equity for the year."

 

Rothamel concluded, "In a year of significant transition at the top of the organization, the EZCORP team members delivered another outstanding performance. We had strong earnings growth, opened or acquired 127 new stores in the U.S., Mexico and Canada and acquired a 33% stake in Cash Converters, all while reducing our long term debt and maintaining a strong balance sheet."

 

The Company expects fiscal 2011 earnings per share to increase approximately 20% to $2.35, excluding the one-time charge described below.

 

As previously announced, in the first quarter of fiscal 2011, the Company will record a pre-tax charge of approximately $10.8 million related to the retirement of its former Chief Executive Officer, including $3.4 million attributable to cash payments and $7.4 million attributable to the vesting of restricted stock. After taxes, the charge will be approximately $7.0 million, or $0.14 per share, resulting in expected earnings per share for fiscal 2011 of approximately $2.21 on a GAAP basis.

 

ABOUT EZCORP

EZCORP is a leading provider of specialty consumer financial services. It provides collateralized non-recourse loans, commonly known as pawn loans, and a variety of short-term consumer loans including payday loans, installment loans and auto title loans, or fee-based credit services to customers seeking loans. At its pawn stores, the company also sells merchandise, primarily collateral forfeited from its pawn lending operations.

 

EZCORP operates more than 1,000 stores, including over 500 pawn stores in the U.S. and Mexico and over 500 short-term consumer loan stores in the U.S. and Canada. The company also has significant investments in Albemarle & Bond Holdings PLC (ABM.L), one of the U.K.'s largest pawnbroking businesses with over 120 stores, and Cash Converters International Limited (CCV.L and CCV.AUS), which franchises and operates a worldwide network of over 500 stores that provide financial services and sell pre-owned merchandise.

 

Special Note Regarding Forward-Looking Statements

This announcement contains certain forward-looking statements regarding the Company's expected operating and financial performance for future periods, including new store expansion and expected future earnings. These statements are based on the Company's current expectations. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of uncertainties and other factors, including 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 and changes in the regulatory environment. For a discussion of these and other factors affecting the Company's business and prospects, see the Company's annual, quarterly and other reports filed with the Securities and Exchange Commission.

 

For additional information, contact Investor Relations at (512) 314-2220.

 

 

 

                                      EZCORP, Inc.
             Highlights of Consolidated Statements of Operations (Unaudited)
                   (in thousands, except per share data and percents)
                              Three Months Ended
                                September 30,          Increase    Percent
                              ------------------
                              2010            2009  (Decrease)   Change
                              ----            ----  ----------   ------
    Revenues:
        Merchandise sales  $52,670         $48,381       $4,289      8.9
        Jewelry scrapping
         sales              53,968          40,313       13,655     33.9
        Pawn service
         charges            45,168          37,392        7,776     20.8
        Signature loan
         fees               36,699          34,935        1,764      5.0
        Auto title loan
         fees                5,991           1,923        4,068    211.5
        Other                3,672           1,857        1,815     97.7
            Total revenues 198,168         164,801       33,367     20.2
    Cost of goods
     sold:
        Cost of
         merchandise
         sales              32,229          30,214        2,015      6.7
        Cost of jewelry
         scrapping sales    35,176          25,559        9,617     37.6
                            ------          ------        -----     ----
            Total cost of
             goods sold     67,405          55,773       11,632     20.9
    Bad debt:
        Signature loan
         bad debt            9,605          10,379         (774)    (7.5)
        Auto title loan
         bad debt            1,119             227          892    393.0
                             -----             ---          ---    -----
            Total bad debt  10,724          10,606          118      1.1
                            ------          ------          ---      ---
    Net revenue            120,039          98,422       21,617     22.0

    Operations
     expense                62,326          54,282        8,044     14.8
    Administrative
     expense                13,384          10,605        2,779     26.2
    Depreciation and
     amortization            3,973           3,275          698     21.3
    (Gain) / Loss on
     sale/disposal
     of assets                 227             (57)         284  (498.2)
                               ---             ---          ---   ------
        Operating income    40,129          30,317        9,812     32.4

    Interest income            (35)            (24)         (11)    45.8
    Interest expense           314             361          (47)   (13.0)
    Equity in net
     income of
     unconsolidated
     affiliates             (3,231)         (1,853)      (1,378)    74.4
    Other                       10               -           10        -
    Income before
     income taxes           43,071          31,833       11,238     35.3
    Income tax
     expense                15,219          10,894        4,325     39.7
                            ------          ------        -----     ----
    Net income             $27,852         $20,939       $6,913     33.0
                           =======         =======       ======     ====

    Net income per
     share, diluted          $0.56           $0.42        $0.14     33.3
                             =====           =====        =====     ====
    Weighted average
     shares, diluted        49,672          49,287

 

 

 

 

 

                                                           Amount or
                                                        Percentage Point
                                                        (ppt)
                                                        Increase
    OTHER DATA:                                         (Decrease)
    -----------                                         ----------
    Gross margin on merchandise sales       38.8% 37.5%              1.3  ppts
    Gross margin on jewelry scrapping sales 34.8% 36.6%             (1.8) ppts
    Gross margin on total sales             36.8% 37.1%             (0.3) ppts

    Signature loan bad debt as percent of
     fees                                   26.2% 29.7%             (3.5) ppts
    Auto title loan bad debt as percent of
     fees                                   18.7% 11.8%              6.9  ppts

    Annualized inventory turnover            4.0   3.6               0.4

    Operating income margin                 33.4% 30.8%              2.6  ppts



 

 

 

 

 

                               EZCORP, Inc.
     Highlights of Consolidated Statements of Operations (Unaudited)
            (in thousands, except per share data and percents)
                              Year Ended September
                                      30,            Increase        Percent
                             ---------------------
                               2010           2009  (Decrease)       Change
                               ----           ----  ----------       ------
    Revenues:
        Merchandise sales  $228,120       $204,674          $23,446     11.5
        Jewelry scrapping
         sales              171,411        118,922           52,489     44.1
        Pawn service
         charges            163,695        130,169           33,526     25.8
        Signature loan
         fees               139,315        133,344            5,971      4.5
        Auto title loan
         fees                17,707          3,589           14,118    393.4
        Other                12,797          6,758            6,039     89.4
            Total revenues  733,045        597,456          135,589     22.7
    Cost of goods
     sold:
        Cost of
         merchandise sales  140,284        126,562           13,722     10.8
        Cost of jewelry
         scrapping sales    110,838         77,027           33,811     43.9
                            -------         ------           ------     ----
            Total cost of
             goods sold     251,122        203,589           47,533     23.3
    Bad debt:
        Signature loan bad
         debt                31,709         33,553           (1,844)    (5.5)
        Auto title loan
         bad debt             2,735            380            2,355    619.7
                              -----            ---            -----    -----
            Total bad debt   34,444         33,933              511      1.5
                             ------         ------              ---      ---
    Net revenue             447,479        359,934           87,545     24.3

    Operations expense      236,664        206,237           30,427     14.8
    Administrative
     expense                 52,740         40,497           12,243     30.2
    Depreciation and
     amortization            14,661         12,746            1,915     15.0
    (Gain) / Loss on
     sale/disposal of
     assets                   1,528         (1,024)           2,552  (249.2)
                              -----         ------            -----   ------
        Operating income    141,886        101,478           40,408     39.8

    Interest income            (186)          (281)              95    (33.8)
    Interest expense          1,385          1,425              (40)    (2.8)
    Equity in net
     income of
     unconsolidated
     affiliates             (10,750)        (5,016)          (5,734)   114.3
    Other                       (93)            38             (131) (344.7)
    Income before
     income taxes           151,530        105,312           46,218     43.9
    Income tax expense       54,236         36,840           17,396     47.2
                             ------         ------           ------     ----
    Net income              $97,294        $68,472          $28,822     42.1
                            =======        =======          =======     ====

    Net income per
     share, diluted           $1.96          $1.42            $0.54     38.0
                              =====          =====            =====     ====
    Weighted average
     shares, diluted         49,576         48,076

 

 

 

 

                                                              Amount or
                                                        Percentage Point
                                                        (ppt)
                                                        Increase
    OTHER DATA:                                         (Decrease)
    -----------                                         ----------
    Gross margin on merchandise sales       38.5% 38.2%              0.3  ppts
    Gross margin on jewelry scrapping sales 35.3% 35.2%              0.1  ppts
    Gross margin on total sales             37.1% 37.1%              0.0  ppts

    Signature loan bad debt as percent of
     fees                                   22.8% 25.2%             (2.4) ppts
    Auto title loan bad debt as percent of
     fees                                   15.4% 10.6%              4.8  ppts

    Annualized inventory turnover            4.0   3.6               0.4

    Operating income margin                 31.7% 28.2%              3.5  ppts

 

 

 

 

 

                          EZCORP, Inc.
     Highlights of Consolidated Balance Sheets (Unaudited)
     (in thousands, except per share data and store counts)
                                                     September 30,
                                                    2010         2009
                                                    ----         ----
    Assets:
      Current assets:
        Cash and cash equivalents                $25,854      $44,764
        Pawn loans                               121,201      101,684
        Signature loans, net                      10,775        8,357
        Auto title loans, net                      3,145        1,663
        Pawn service charges receivable, net      21,626       18,187
        Signature loan fees receivable, net        5,818        5,599
        Auto title loan fees receivable, net       1,616          529
        Inventory, net                            71,502       64,001
        Deferred tax asset                        23,208       15,670
        Prepaid expenses and other assets         17,427       16,927
             Total current assets                302,172      277,381

      Investments in unconsolidated
       affiliates                                101,386       38,851
      Property and equipment, net                 62,293       51,154
      Deferred tax asset, non-current                 60        6,311
      Goodwill                                   117,305      100,719
      Other assets, net                           23,196       18,101
           Total assets                         $606,412     $492,517
                                                ========     ========
    Liabilities and stockholders' equity:
      Current liabilities:
        Current maturities of long-term debt     $10,000      $10,000
        Accounts payable and other accrued
         expenses                                 49,663       33,838
        Customer layaway deposits                  6,109        4,175
        Federal income taxes payable               3,687          572
             Total current liabilities            69,459       48,585

      Long-term debt, less current
       maturities                                 15,000       25,000
      Deferred gains and other long-term
       liabilities                                 2,525        3,247
      Total stockholders' equity                 519,428      415,685
                                                 -------      -------
           Total liabilities and stockholders'
            equity                              $606,412     $492,517
                                                ========     ========

    Pawn loan balance per ending pawn
     store                                          $240         $236
    Inventory per ending pawn store                 $142         $148
    Book value per share                          $10.55        $8.54
    Tangible book value per share                  $7.83        $6.14
    Pawn store count - end of period                 505          431
    Signature loan store count -end of
     period                                          501          479
    Shares outstanding - end of period            49,226       48,703

 

 

 

 

 

                                       EZCORP, Inc.
                           Operating Segment Results (Unaudited)
                     (in thousands, except store counts and percents)
                                      U.S. Pawn         Empeno
    Three months ended September
     30, 2010:                       Operations          Facil
                                     ----------          -----
      Revenues:
        Merchandise Sales                $48,944         $3,726
        Scrap Sales                       51,007          2,839
        Pawn service charges              42,294          2,874
        Signature loan fees                  488              -
        Auto title loan fees                 398              -
        Other                              3,497            162
            Total revenues               146,628          9,601

      Merchandise cost of goods
       sold                               30,112          2,117
      Scrap cost of goods sold            32,896          2,226
      Signature loan bad debt                195              -
      Auto title loan bad debt                70              -
                                             ---            ---
            Net revenues                  83,355          5,258

      Operations expense                  41,886          3,922
                                          ------          -----
            Store operating income       $41,469         $1,336
                                         =======         ======

      Gross margin on merchandise
       sales                                38.5%          43.2%
      Gross margin on scrap sales           35.5%          21.6%
      Gross margin on total sales           37.0%          33.8%
      Annualized inventory turnover          4.0            4.0
      Signature loan bad debt as
       percent of fees                      40.0%           N/A
      Auto title loan bad debt as
       percent of fees                      17.6%           N/A
      Store operating income margin         49.7%          25.4%
      Pawn store count -end of
       period                                390            115
      Signature loan store count -
       end of period                           6              -


    Three months ended September
     30, 2009:
      Revenues:
        Merchandise Sales                $45,909         $2,472
        Scrap Sales                       39,645            659
        Pawn service charges              35,838          1,554
        Signature loan fees                  527              -
        Auto title loan fees                 322              -
        Other                              1,780             77
            Total revenues               124,021          4,762

      Merchandise cost of goods
       sold                               28,649          1,565
      Scrap cost of goods sold            25,098            455
      Signature loan bad debt                247              -
      Auto title loan bad debt                52              -
                                             ---            ---
            Net revenues                  69,975          2,742

      Operations expense                  37,761          1,809
                                          ------          -----
            Store operating income       $32,214           $933
                                         =======           ====

      Gross margin on merchandise
       sales                                37.6%          36.7%
      Gross margin on scrap sales           36.7%          31.0%
      Gross margin on total sales           37.2%          35.5%
      Annualized inventory turnover          3.6            2.7
      Signature loan bad debt as
       percent of fees                      46.9%           N/A
      Auto title loan bad debt as
       percent of fees                      16.1%           N/A
      Store operating income margin         46.0%          34.0%
      Pawn store count -end of
       period                                369             62
      Signature loan store count -
       end of period                           6              -

 

 

 

                                       EZMONEY
    Three months ended September
     30, 2010:                       Operations       Consolidated
                                     ----------       ------------
      Revenues:
        Merchandise Sales                     $-            $52,670
        Scrap Sales                          122             53,968
        Pawn service charges                   -             45,168
        Signature loan fees               36,211             36,699
        Auto title loan fees               5,593              5,991
        Other                                 13              3,672
            Total revenues                41,939            198,168

      Merchandise cost of goods
       sold                                    -             32,229
      Scrap cost of goods sold                54             35,176
      Signature loan bad debt              9,410              9,605
      Auto title loan bad debt             1,049              1,119
                                           -----              -----
            Net revenues                  31,426            120,039

      Operations expense                  16,518             62,326
                                          ------             ------
            Store operating income       $14,908            $57,713
                                         =======            =======

      Gross margin on merchandise
       sales                                 N/A               38.8%
      Gross margin on scrap sales           55.7%              34.8%
      Gross margin on total sales           55.7%              36.8%
      Annualized inventory turnover          N/A                4.0
      Signature loan bad debt as
       percent of fees                      26.0%              26.2%
      Auto title loan bad debt as
       percent of fees                      18.8%              18.7%
      Store operating income margin         47.4%              48.1%
      Pawn store count -end of
       period                                  -                505
      Signature loan store count -
       end of period                         495                501


    Three months ended September
     30, 2009:
      Revenues:
        Merchandise Sales                     $-            $48,381
        Scrap Sales                            9             40,313
        Pawn service charges                   -             37,392
        Signature loan fees               34,408             34,935
        Auto title loan fees               1,601              1,923
        Other                                  -              1,857
            Total revenues                36,018            164,801

      Merchandise cost of goods
       sold                                    -             30,214
      Scrap cost of goods sold                 6             25,559
      Signature loan bad debt             10,132             10,379
      Auto title loan bad debt               175                227
                                             ---                ---
            Net revenues                  25,705             98,422

      Operations expense                  14,712             54,282
                                          ------             ------
            Store operating income       $10,993            $44,140
                                         =======            =======

      Gross margin on merchandise
       sales                                 N/A               37.5%
      Gross margin on scrap sales           33.3%              36.6%
      Gross margin on total sales           33.3%              37.1%
      Annualized inventory turnover          N/A                3.6
      Signature loan bad debt as
       percent of fees                      29.4%              29.7%
      Auto title loan bad debt as
       percent of fees                      10.9%              11.8%
      Store operating income margin         42.8%              44.8%
      Pawn store count -end of
       period                                  -                431
      Signature loan store count -
       end of period                         473                479

 

 

 

 

                                          EZCORP, Inc.
                             Operating Segment Results (Unaudited)
                        (in thousands, except store counts and percents)
                                       U.S. Pawn           Empeno
    Year ended September 30, 2010:    Operations            Facil
                                      ----------            -----
      Revenues:
        Merchandise Sales                $214,598            $13,522
        Scrap Sales                       163,667              7,389
        Pawn service charges              154,505              9,190
        Signature loan fees                 1,930                  -
        Auto title loan fees                1,659                  -
        Other                              12,268                508
            Total revenues                548,627             30,609

      Merchandise cost of goods sold      131,825              8,459
      Scrap cost of goods sold            104,531              6,137
      Signature loan bad debt                 641                  -
      Auto title loan bad debt                236                  -
                                              ---                ---
            Net revenues                  311,394             16,013

      Operations expense                  161,145             11,658
                                          -------             ------
            Store operating income       $150,249             $4,355
                                         ========             ======

      Gross margin on merchandise
       sales                                 38.6%              37.4%
      Gross margin on scrap sales            36.1%              16.9%
      Gross margin on total sales            37.5%              30.2%
      Annualized inventory turnover           3.9                4.3
      Signature loan bad debt as
       percent of fees                       33.2%               N/A
      Auto title loan bad debt as
       percent of fees                       14.2%               N/A
      Store operating income margin          48.3%              27.2%
      Pawn store count -end of
       period                                 390                115
      Signature loan store count -
       end of period                            6                  -


    Year ended September 30, 2009:
      Revenues:
        Merchandise Sales                $196,035             $8,639
        Scrap Sales                       117,013              1,900
        Pawn service charges              124,396              5,773
        Signature loan fees                 2,293                  -
        Auto title loan fees                1,313                  -
        Other                               6,646                112
            Total revenues                447,696             16,424

      Merchandise cost of goods sold      121,170              5,392
      Scrap cost of goods sold             75,744              1,277
      Signature loan bad debt                 828                  -
      Auto title loan bad debt                124                  -
                                              ---                ---
            Net revenues                  249,830              9,755

      Operations expense                  140,525              5,833
                                          -------              -----
            Store operating income       $109,305             $3,922
                                         ========             ======

      Gross margin on merchandise
       sales                                 38.2%              37.6%
      Gross margin on scrap sales            35.3%              32.8%
      Gross margin on total sales            37.1%              36.7%
      Annualized inventory turnover           3.7                2.4
      Signature loan bad debt as
       percent of fees                       36.1%               N/A
      Auto title loan bad debt as
       percent of fees                        9.4%               N/A
      Store operating income margin          43.8%              40.2%
      Pawn store count -end of
       period                                 369                 62
      Signature loan store count -
       end of period                            6                  -

 

 

 

                                         EZMONEY
    Year ended September 30, 2010:     Operations       Consolidated
                                       ----------       ------------
      Revenues:
        Merchandise Sales                       $-           $228,120
        Scrap Sales                            355            171,411
        Pawn service charges                     -            163,695
        Signature loan fees                137,385            139,315
        Auto title loan fees                16,048             17,707
        Other                                   21             12,797
            Total revenues                 153,809            733,045

      Merchandise cost of goods sold             -            140,284
      Scrap cost of goods sold                 170            110,838
      Signature loan bad debt               31,068             31,709
      Auto title loan bad debt               2,499              2,735
                                             -----              -----
            Net revenues                   120,072            447,479

      Operations expense                    63,861            236,664
                                            ------            -------
            Store operating income         $56,211           $210,815
                                           =======           ========

      Gross margin on merchandise
       sales                                   N/A               38.5%
      Gross margin on scrap sales             52.1%              35.3%
      Gross margin on total sales             52.1%              37.1%
      Annualized inventory turnover            N/A                4.0
      Signature loan bad debt as
       percent of fees                        22.6%              22.8%
      Auto title loan bad debt as
       percent of fees                        15.6%              15.4%
      Store operating income margin           46.8%              47.1%
      Pawn store count -end of
       period                                    -                505
      Signature loan store count -
       end of period                           495                501


    Year ended September 30, 2009:
      Revenues:
        Merchandise Sales                       $-           $204,674
        Scrap Sales                              9            118,922
        Pawn service charges                     -            130,169
        Signature loan fees                131,051            133,344
        Auto title loan fees                 2,276              3,589
        Other                                    -              6,758
            Total revenues                 133,336            597,456

      Merchandise cost of goods sold             -            126,562
      Scrap cost of goods sold                   6             77,027
      Signature loan bad debt               32,725             33,553
      Auto title loan bad debt                 256                380
                                               ---                ---
            Net revenues                   100,349            359,934

      Operations expense                    59,879            206,237
                                            ------            -------
            Store operating income         $40,470           $153,697
                                           =======           ========

      Gross margin on merchandise
       sales                                   N/A               38.2%
      Gross margin on scrap sales             33.3%              35.2%
      Gross margin on total sales             33.3%              37.1%
      Annualized inventory turnover            N/A                3.6
      Signature loan bad debt as
       percent of fees                        25.0%              25.2%
      Auto title loan bad debt as
       percent of fees                        11.2%              10.6%
      Store operating income margin           40.3%              42.7%
      Pawn store count -end of
       period                                    -                431
      Signature loan store count -
       end of period                           473                479

 

 

 

 

SOURCE EZCORP, Inc.

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SOURCE: EZCORP, Inc.

 

EZCORP Reports Record Earnings Annual Net Income Increases 42%

PR Newswire

AUSTIN, Texas, Nov. 4, 2010 /PRNewswire-FirstCall/ -- EZCORP, Inc. (Nasdaq: EZPW), a leading provider of specialty financial services, today announced results for its fourth fiscal quarter and 2010 fiscal year ended September 30, 2010.

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(Logo:  http://www.newscom.com/cgi-bin/prnh/20090713/EZCORPLOGO)

EZCORP's net income for the quarter increased 33% to $27.9 million ($0.56 per share) compared to $20.9 million ($0.42 per share) for the prior year quarter.  Total revenues for the quarter increased 20% over the prior year period to $198.2 million.

Consolidated operating income improved 32% to $40.1 million (33% of net revenue) from $30.3 million (31% of net revenue) in the prior year quarter.  Store level operating income improved $9.3 million in the Company's U.S. Pawn operations, $0.4 million in its Empeno Facil Mexico Pawn segment and $3.9 million in its EZMONEY operations.

For the fiscal year ended September 30, 2010, net income increased 42% to a record $97.3 million ($1.96 per share) compared to $68.5 million ($1.42 per share) for the prior year.  Total revenues grew 23% to $733.0 million while operating income increased 40% to $141.9 million.  The pre-tax contribution from the Company's strategic affiliates, Albemarle & Bond and Cash Converters International, increased to $10.8 million from $5.0 million in the prior year.

Commenting on these results, President and Chief Executive Officer, Paul Rothamel, stated, "We are pleased to report another record year, with strong contributions from each of our operating segments.  The keys to our successful year were driving strong top-line revenue growth, further leveraging our expense base to enhance margins, effectively managing bad debt to record lows, and the strong, quality growth in our earning assets.  Overall, we delivered a 21% return on equity for the year."

Rothamel concluded, "In a year of significant transition at the top of the organization, the EZCORP team members delivered another outstanding performance.  We had strong earnings growth, opened or acquired 127 new stores in the U.S., Mexico and Canada and acquired a 33% stake in Cash Converters, all while reducing our long term debt and maintaining a strong balance sheet."

The Company expects fiscal 2011 earnings per share to increase approximately 20% to $2.35, excluding the one-time charge described below.

As previously announced, in the first quarter of fiscal 2011, the Company will record a pre-tax charge of approximately $10.8 million related to the retirement of its former Chief Executive Officer, including $3.4 million attributable to cash payments and $7.4 million attributable to the vesting of restricted stock.  After taxes, the charge will be approximately $7.0 million, or $0.14 per share, resulting in expected earnings per share for fiscal 2011 of approximately $2.21 on a GAAP basis.  

ABOUT EZCORP

EZCORP is a leading provider of specialty consumer financial services.  It provides collateralized non-recourse loans, commonly known as pawn loans, and a variety of short-term consumer loans including payday loans, installment loans and auto title loans, or fee-based credit services to customers seeking loans.  At its pawn stores, the company also sells merchandise, primarily collateral forfeited from its pawn lending operations.

EZCORP operates more than 1,000 stores, including over 500 pawn stores in the U.S. and Mexico and over 500 short-term consumer loan stores in the U.S. and Canada.  The company also has significant investments in Albemarle & Bond Holdings PLC (ABM.L), one of the U.K.'s largest pawnbroking businesses with over 120 stores, and Cash Converters International Limited (CCV.L and CCV.AUS), which franchises and operates a worldwide network of over 500 stores that provide financial services and sell pre-owned merchandise.

Special Note Regarding Forward-Looking Statements

This announcement contains certain forward-looking statements regarding the Company's expected operating and financial performance for future periods, including new store expansion and expected future earnings.  These statements are based on the Company's current expectations.  Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of uncertainties and other factors, including 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 and changes in the regulatory environment.  For a discussion of these and other factors affecting the Company's business and prospects, see the Company's annual, quarterly and other reports filed with the Securities and Exchange Commission.

For additional information, contact Investor Relations at (512) 314-2220.

EZCORP, Inc. 

Highlights of Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data and percents)










Three Months Ended September 30,


Increase


Percent


2010


2009


(Decrease)


Change

Revenues:








   Merchandise sales

$ 52,670


$ 48,381


$                             4,289


8.9

   Jewelry scrapping sales

53,968


40,313


13,655


33.9

   Pawn service charges

45,168


37,392


7,776


20.8

   Signature loan fees

36,699


34,935


1,764


5.0

   Auto title loan fees

5,991


1,923


4,068


211.5

   Other

3,672


1,857


1,815


97.7

       Total revenues

198,168


164,801


33,367


20.2

Cost of goods sold:








   Cost of merchandise sales

32,229


30,214


2,015


6.7

   Cost of jewelry scrapping sales

35,176


25,559


9,617


37.6

       Total cost of goods sold

67,405


55,773


11,632


20.9

Bad debt:








   Signature loan bad debt

9,605


10,379


(774)


(7.5)

   Auto title loan bad debt

1,119


227


892


393.0

       Total bad debt

10,724


10,606


118


1.1

Net revenue

120,039


98,422


21,617


22.0









Operations expense

62,326


54,282


8,044


14.8

Administrative expense

13,384


10,605


2,779


26.2

Depreciation and amortization

3,973


3,275


698


21.3

(Gain) / Loss on sale/disposal of assets

227


(57)


284


(498.2)

   Operating income

40,129


30,317


9,812


32.4









Interest income

(35)


(24)


(11)


45.8

Interest expense

314


361


(47)


(13.0)

Equity in net income of unconsolidated affiliates

(3,231)


(1,853)


(1,378)


74.4

Other

10


-


10


-

Income before income taxes

43,071


31,833


11,238


35.3

Income tax expense

15,219


10,894


4,325


39.7

Net income

$ 27,852


$ 20,939


$                             6,913


33.0









Net income per share, diluted

$     0.56


$     0.42


$                               0.14


33.3

Weighted average shares, diluted

49,672


49,287




















Amount or








Percentage Point (ppt)



OTHER DATA:





Increase (Decrease)



Gross margin on merchandise sales

38.8%


37.5%


1.3


ppts

Gross margin on jewelry scrapping sales

34.8%


36.6%


(1.8)


ppts

Gross margin on total sales

36.8%


37.1%


(0.3)


ppts









Signature loan bad debt as percent of fees

26.2%


29.7%


(3.5)


ppts

Auto title loan bad debt as percent of fees

18.7%


11.8%


6.9


ppts









Annualized inventory turnover

4.0


3.6


0.4











Operating income margin

33.4%


30.8%


2.6


ppts



















EZCORP, Inc. 

Highlights of Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data and percents)










Year Ended September 30,


Increase


Percent


2010


2009


(Decrease)


Change

Revenues:








   Merchandise sales

$ 228,120


$ 204,674


$                           23,446


11.5

   Jewelry scrapping sales

171,411


118,922


52,489


44.1

   Pawn service charges

163,695


130,169


33,526


25.8

   Signature loan fees

139,315


133,344


5,971


4.5

   Auto title loan fees

17,707


3,589


14,118


393.4

   Other

12,797


6,758


6,039


89.4

       Total revenues

733,045


597,456


135,589


22.7

Cost of goods sold:








   Cost of merchandise sales

140,284


126,562


13,722


10.8

   Cost of jewelry scrapping sales

110,838


77,027


33,811


43.9

       Total cost of goods sold

251,122


203,589


47,533


23.3

Bad debt:








   Signature loan bad debt

31,709


33,553


(1,844)


(5.5)

   Auto title loan bad debt

2,735


380


2,355


619.7

       Total bad debt

34,444


33,933


511


1.5

Net revenue

447,479


359,934


87,545


24.3









Operations expense

236,664


206,237


30,427


14.8

Administrative expense

52,740


40,497


12,243


30.2

Depreciation and amortization

14,661


12,746


1,915


15.0

(Gain) / Loss on sale/disposal of assets

1,528


(1,024)


2,552


(249.2)

   Operating income

141,886


101,478


40,408


39.8









Interest income

(186)


(281)


95


(33.8)

Interest expense

1,385


1,425


(40)


(2.8)

Equity in net income of unconsolidated affiliates

(10,750)


(5,016)


(5,734)


114.3

Other

(93)


38


(131)


(344.7)

Income before income taxes

151,530


105,312


46,218


43.9

Income tax expense

54,236


36,840


17,396


47.2

Net income

$   97,294


$   68,472


$                           28,822


42.1









Net income per share, diluted

$       1.96


$       1.42


$                               0.54


38.0

Weighted average shares, diluted

49,576


48,076




















      Amount or








Percentage Point (ppt)



OTHER DATA:





Increase (Decrease)



Gross margin on merchandise sales

38.5%


38.2%


0.3


ppts

Gross margin on jewelry scrapping sales

35.3%


35.2%


0.1


ppts

Gross margin on total sales

37.1%


37.1%


0.0


ppts









Signature loan bad debt as percent of fees

22.8%


25.2%


(2.4)


ppts

Auto title loan bad debt as percent of fees

15.4%


10.6%


4.8


ppts









Annualized inventory turnover

4.0


3.6


0.4











Operating income margin

31.7%


28.2%


3.5


ppts



 EZCORP, Inc.

Highlights of Consolidated Balance Sheets (Unaudited)

 (in thousands, except per share data and store counts)






September 30,


2010


2009

Assets:




Current assets:




Cash and cash equivalents

$   25,854


$   44,764

Pawn loans

121,201


101,684

Signature loans, net

10,775


8,357

Auto title loans, net

3,145


1,663

Pawn service charges receivable, net

21,626


18,187

Signature loan fees receivable, net

5,818


5,599

Auto title loan fees receivable, net

1,616


529

Inventory, net

71,502


64,001

Deferred tax asset

23,208


15,670

Prepaid expenses and other assets

17,427


16,927

   Total current assets

302,172


277,381





Investments in unconsolidated affiliates

101,386


38,851

Property and equipment, net

62,293


51,154

Deferred tax asset, non-current

60


6,311

Goodwill

117,305


100,719

Other assets, net

23,196


18,101

Total assets

$ 606,412


$ 492,517

Liabilities and stockholders' equity:




Current liabilities:




Current maturities of long-term debt

$   10,000


$   10,000

Accounts payable and other accrued expenses

49,663


33,838

Customer layaway deposits

6,109


4,175

Federal income taxes payable

3,687


572

   Total current liabilities

69,459


48,585





Long-term debt, less current maturities

15,000


25,000

Deferred gains and other long-term liabilities

2,525


3,247

Total stockholders' equity

519,428


415,685

Total liabilities and stockholders' equity

$ 606,412


$ 492,517





Pawn loan balance per ending pawn store

$        240


$        236

Inventory per ending pawn store

$        142


$        148

Book value per share

$     10.55


$       8.54

Tangible book value per share

$       7.83


$       6.14

Pawn store count - end of period

505


431

Signature loan store count - end of period

501


479

Shares outstanding - end of period

49,226


48,703



EZCORP, Inc. 

Operating Segment Results (Unaudited)

(in thousands, except store counts and percents)














U.S. Pawn


Empeno


EZMONEY



Three months ended September 30, 2010:

Operations


Facil


Operations


Consolidated


Revenues:










Merchandise Sales

$      48,944


$  3,726


$             -


$          52,670



Scrap Sales

51,007


2,839


122


53,968



Pawn service charges

42,294


2,874


-


45,168



Signature loan fees

488


-


36,211


36,699



Auto title loan fees

398


-


5,593


5,991



Other

3,497


162


13


3,672



   Total revenues

146,628


9,601


41,939


198,168












Merchandise cost of goods sold

30,112


2,117


-


32,229


Scrap cost of goods sold

32,896


2,226


54


35,176


Signature loan bad debt

195


-


9,410


9,605


Auto title loan bad debt

70


-


1,049


1,119



   Net revenues

83,355


5,258


31,426


120,039












Operations expense

41,886


3,922


16,518


62,326



   Store operating income

$      41,469


$  1,336


$      14,908


$          57,713












Gross margin on merchandise sales

38.5%


43.2%


N/A


38.8%


Gross margin on scrap sales

35.5%


21.6%


55.7%


34.8%


Gross margin on total sales

37.0%


33.8%


55.7%


36.8%


Annualized inventory turnover

4.0


4.0


N/A


4.0


Signature loan bad debt as percent of fees

40.0%


N/A


26.0%


26.2%


Auto title loan bad debt as percent of fees

17.6%


N/A


18.8%


18.7%


Store operating income margin

49.7%


25.4%


47.4%


48.1%


Pawn store count - end of period

390


115


-


505


Signature loan store count - end of period

6


-


495


501





















Three months ended September 30, 2009:









Revenues:










Merchandise Sales

$      45,909


$  2,472


$             -


$          48,381



Scrap Sales

39,645


659


9


40,313



Pawn service charges

35,838


1,554


-


37,392



Signature loan fees

527


-


34,408


34,935



Auto title loan fees

322


-


1,601


1,923



Other

1,780


77


-


1,857



   Total revenues

124,021


4,762


36,018


164,801












Merchandise cost of goods sold

28,649


1,565


-


30,214


Scrap cost of goods sold

25,098


455


6


25,559


Signature loan bad debt

247


-


10,132


10,379


Auto title loan bad debt

52


-


175


227



   Net revenues

69,975


2,742


25,705


98,422












Operations expense

37,761


1,809


14,712


54,282



   Store operating income

$      32,214


$     933


$      10,993


$          44,140












Gross margin on merchandise sales

37.6%


36.7%


N/A


37.5%


Gross margin on scrap sales

36.7%


31.0%


33.3%


36.6%


Gross margin on total sales

37.2%


35.5%


33.3%


37.1%


Annualized inventory turnover

3.6


2.7


N/A


3.6


Signature loan bad debt as percent of fees

46.9%


N/A


29.4%


29.7%


Auto title loan bad debt as percent of fees

16.1%


N/A


10.9%


11.8%


Store operating income margin

46.0%


34.0%


42.8%


44.8%


Pawn store count - end of period

369


62


-


431


Signature loan store count - end of period

6


-


473


479



EZCORP, Inc.

Operating Segment Results (Unaudited)

(in thousands, except store counts and percents)














U.S. Pawn


Empeno


EZMONEY



Year ended September 30, 2010:

Operations


Facil


Operations


Consolidated


Revenues:










Merchandise Sales

$    214,598


$               13,522


$             -


$        228,120



Scrap Sales

163,667


7,389


355


171,411



Pawn service charges

154,505


9,190


-


163,695



Signature loan fees

1,930


-


137,385


139,315



Auto title loan fees

1,659


-


16,048


17,707



Other

12,268


508


21


12,797



   Total revenues

548,627


30,609


153,809


733,045












Merchandise cost of goods sold

131,825


8,459


-


140,284


Scrap cost of goods sold

104,531


6,137


170


110,838


Signature loan bad debt

641


-


31,068


31,709


Auto title loan bad debt

236


-


2,499


2,735



   Net revenues

311,394


16,013


120,072


447,479












Operations expense

161,145


11,658


63,861


236,664



   Store operating income

$    150,249


$                 4,355


$      56,211


$        210,815












Gross margin on merchandise sales

38.6%


37.4%


N/A


38.5%


Gross margin on scrap sales

36.1%


16.9%


52.1%


35.3%


Gross margin on total sales

37.5%


30.2%


52.1%


37.1%


Annualized inventory turnover

3.9


4.3


N/A


4.0


Signature loan bad debt as percent of fees

33.2%


N/A


22.6%


22.8%


Auto title loan bad debt as percent of fees

14.2%


N/A


15.6%


15.4%


Store operating income margin

48.3%


27.2%


46.8%


47.1%


Pawn store count - end of period

390


115


-


505


Signature loan store count - end of period

6


-


495


501





















Year ended September 30, 2009:









Revenues:










Merchandise Sales

$    196,035


$                 8,639


$             -


$        204,674



Scrap Sales

117,013


1,900


9


118,922



Pawn service charges

124,396


5,773


-


130,169



Signature loan fees

2,293


-


131,051


133,344



Auto title loan fees

1,313


-


2,276


3,589



Other

6,646


112


-


6,758



   Total revenues

447,696


16,424


133,336


597,456












Merchandise cost of goods sold

121,170


5,392


-


126,562


Scrap cost of goods sold

75,744


1,277


6


77,027


Signature loan bad debt

828


-


32,725


33,553


Auto title loan bad debt

124


-


256


380



   Net revenues

249,830


9,755


100,349


359,934












Operations expense

140,525


5,833


59,879


206,237



   Store operating income

$    109,305


$                 3,922


$      40,470


$        153,697












Gross margin on merchandise sales

38.2%


37.6%


N/A


38.2%


Gross margin on scrap sales

35.3%


32.8%


33.3%


35.2%


Gross margin on total sales

37.1%


36.7%


33.3%


37.1%


Annualized inventory turnover

3.7


2.4


N/A


3.6


Signature loan bad debt as percent of fees

36.1%


N/A


25.0%


25.2%


Auto title loan bad debt as percent of fees

9.4%


N/A


11.2%


10.6%


Store operating income margin

43.8%


40.2%


40.3%


42.7%


Pawn store count - end of period

369


62


-


431


Signature loan store count - end of period

6


-


473


479



SOURCE EZCORP, Inc.

CONTACT: Investor Relations, +1-512-314-2220, for EZCORP, Inc.

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

Categories: Press Releases
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