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EZCORP THIRD QUARTER NET INCOME INCREASES 33%

Jul 21, 2011

AUSTIN, Texas, July 21, 2011 /PRNewswire/ -- EZCORP, Inc. (Nasdaq: EZPW), a leading provider of specialty consumer financial services, today announced financial results for its third fiscal quarter ended June 30, 2011.

(Logo: http://photos.prnewswire.com/prnh/20090713/EZCORPLOGO)

Commenting on the results, President and Chief Executive Officer, Paul Rothamel, said, "EZCORP generated another quarter of exceptional results, with net income and EPS growing 33% and 32%, respectively. This growth was driven by strong performance throughout our diverse product portfolio in all of our geographic markets. We remain on track to deliver another outstanding year, including 30% EPS growth in fiscal 2011."

Highlights for the quarter include:

Financials - Three months ended June 30, 2011 versus the prior year quarter

    --  Net income of $26.5 million, up 33%.
    --  Diluted earnings per share of $0.53, an increase of 32%.
    --  Total revenues of $203.2 million, up 17%, with same store revenue up 7%.
    --  Net revenues of $123.0 million, up 17%.
    --  Store level operating income of $56.2 million, up 20%, with margins
        improving 100 bps to 46%.
    --  Consolidated operating income increased 29% to $37.0 million, with
        operating margin improving 260 bps to 30%.
    --  Contribution from strategic affiliates of $4.1 million, an increase of
        40%.

Key Operating Metrics - Three months ended June 30, 2011 versus the prior year quarter

    --  US Pawn:
        --  Total revenue increased 16% to $149.4 million.
        --  Same store revenue growth of 6% driven by same store growth in
            merchandise sales, scrap sales and pawn service charges of 8%, 1%
            and 9%, respectively.
        --  Store level operating income increased 24% to $43.0 million with a
            230 bps margin improvement to 49%.
    --  Empeno Facil (Mexico pawn):
        --  Total revenue increased 87% to $15.2 million.
        --  Same store revenue growth of 32%, driven by same store growth in
            merchandise sales, scrap sales and pawn service charges of 29%, 32%
            and 43%, respectively.
        --  Store level operating income increased 94% to $2.5 million with a
            200 bps improvement in margin to 32%, despite the impact from
            opening 56 new stores in the past 12 months.
    --  EZMONEY (US and Canada financial services):
        --  Total revenue increased 6% to $38.6 million.
        --  Same store revenue growth of 4% driven by increases in signature
            loan fees and auto title loan fees of 4% and 2%, respectively.
        --  Bad debt as a percentage of fees increased to 28%, compared with 26%
            in the prior year quarter, primarily due to the transition from
            mature payday loan products to new installment loan products across
            a number of states.
        --  Store level operating income decreased 2% to $10.7 million primarily
            due to higher bad debt noted above and increased competitive
            pressures in Texas.  These factors were partially offset by improved
            expense control in the US and stronger performance in Canada.
    --  Balance Sheet and Liquidity:
        --  Combined pawn, signature and auto title loan balances (including
            CSO) at June 30 were $175.4 million, an increase of 15%.
        --  At June 30, cash and cash equivalents were $27.5 million, with debt
            outstanding of $26.5 million, compared with debt less cash of $12.6
            million a year ago.
        --  During the quarter, the Company closed on a four-year $175 million
            senior secured revolving credit facility.

Strategic Initiatives

    --  The previously announced strategic alliance with Cash Converters
        International Limited - designed to develop and introduce a suite of
        innovative financial services products under the "Cash Converters" brand
        - is progressing and is expected to close in the first quarter of fiscal
        2012. Separately, in April the Company acquired the Cash Converters
        franchise rights for Canada, including rights to receive fees from 13
        stores operated by franchisees. The Company plans to convert its 59
        CASHMAX stores into the Cash Converters brand and add the Cash
        Converters buy / sell model to its existing non-collateralized loan
        model.
    --  During the quarter, the Company acquired 23 pawn stores for a total cost
        of $31.6 million.  These acquisitions included 11 stores in Iowa, seven
        in Utah, three in Wisconsin, and one in each of Florida and Illinois.
        Including the five greenfield stores opened and the nine stores acquired
        in the first half of the fiscal year, the total US Pawn store count at
        June 30, 2011 was 432, compared to 389 at June 30, 2010.
    --  Empeno Facil opened eight greenfield stores in the third quarter. 
        Including the 32 greenfield stores opened in the first half of the
        fiscal year, the total Empeno Facil store count at June 30, 2011 was 155
        compared to 99 at June 30, 2010. In July, Empeno Facil acquired six
        additional stores in the states of Hidalgo and Tlaxcala.
    --  Following successful market tests in Colorado and Wisconsin, EZCORP's
        "Change" card - the Company's general purpose integrated and reloadable
        debit card - was successfully rolled into the Company's Texas stores,
        both US Pawn and EZMONEY, in the third quarter. As of June 30, 2011,
        approximately 69,000 Change cards had been issued to EZCORP customers.

Rothamel added, "Overall, we are pleased with our third quarter results as well as the progress we made toward improving both our near- and long-term competitive position. We also expect our quarterly performance in the US EZMONEY division to improve steadily as we respond to competitive pressures and continue the roll out of our new products. Our customers are under pressure on multiple fronts today and have many choices in the marketplace. We are committed to being the preferred option across all of our businesses and will continue to enhance our offering in order to meet their short-term cash needs."

Outlook for fiscal 2011

The Company reaffirmed that it expects fiscal 2011 earnings per share, excluding the first quarter one-time charge related to the retirement of the former Chief Executive Officer, to increase 30% year-over-year to $2.55 ($2.41 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 Cash Converters International Limited (CCV.L and CCV.ASX), which franchises and operates a worldwide network of over 600 stores in 21 countries that provide financial services and sell pre-owned merchandise, and Albemarle & Bond Holdings PLC (ABM.L), one of the U.K.'s largest pawnbroking businesses with over 140 stores.

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 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 changes in the regulatory environment, changing market conditions in the overall economy and the industry, consumer demand for the Company's services and merchandise, and actions of third parties who offer services and products in the Company's locations. 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.

Change to Presentation and Reclassification of Prior Year Comparatives

The Company has historically included fees from its Product Protection Plan and Jewelry VIP Program as well as layaway fees in "Other revenue" in its Consolidated Statements of Operations and its Operating Segment Results. Beginning in the second fiscal quarter of 2011 the Company has included these fees in "Merchandise sales" on the basis that fees from these products are incidental to sales of merchandise. Prior year figures have been reclassified to conform to this presentation and margins have been recalculated accordingly.

Use of Non-GAAP Financial Measures

In addition to reporting financial results in accordance with generally accepted accounting principles (GAAP), the Company has provided non-GAAP net income and non-GAAP earnings per share for the nine-month period ended June 30, 2011, as well as non-GAAP expected earnings per share for fiscal 2011. The only difference between the presented non-GAAP measures and the most closely comparable GAAP measures is the exclusion of a one-time charge related to the retirement of the Company's former Chief Executive Officer and the related tax benefit included in the quarter ended December 31, 2011. The Company's management uses these non-GAAP financial measures to understand its financial performance from period to period. Management does not believe that the excluded one-time charge is reflective of underlying operating performance. The non-GAAP financial measures are not meant to be considered in isolation or as a substitute for the corresponding GAAP measures, but rather are provided to facilitate an enhanced understanding of the Company's actual and expected performance and to enable more meaningful period-to-period comparisons. A reconciliation of the non-GAAP financial measures to the most closely comparable GAAP financial measures is provided in the accompanying financial schedules.

EZCORP Investor Relations(512) 314-2220

                                    EZCORP, Inc.
          Highlights of Consolidated Statements of Operations (Unaudited)
                 (in thousands, except per share data and percents)
                                       Three Months Ended
                                            June 30,
                                       ------------------
                                        2011          2010
                                        ----          ----

    Revenues:
      Merchandise sales              $64,574       $53,278
      Jewelry scrapping sales         50,771        43,773
      Pawn service charges            48,365        39,424
      Signature loan fees             34,195        32,296
      Auto title loan fees             4,675         4,658
      Other                              572           113
                                         ---           ---
        Total revenues               203,152       173,542

    Cost of goods sold:
      Cost of merchandise sales       36,691        29,710
      Cost of jewelry scrapping
       sales                          32,437        29,275
                                      ------        ------
        Total cost of goods sold      69,128        58,985

    Bad debt:
      Signature loan bad debt         10,491         8,917
      Auto title loan bad debt           536           836
                                         ---           ---
        Total bad debt                11,027         9,753
                                      ------         -----

    Net revenue                      122,997       104,804

    Operations expense                66,753        57,952
    Administrative expense            14,379        13,576
    Depreciation and amortization      4,679         3,759
    (Gain) /loss on sales /
     disposal of assets                  169           734
                                         ---           ---

      Operating income                37,017        28,783

    Interest income                      (21)         (135)
    Interest expense                     586           311
    Equity in net income of
     unconsolidated affiliates        (4,099)       (2,930)
    Other                               (103)         (100)
                                        ----          ----

    Income before income taxes        40,654        31,637
    Income tax expense                14,127        11,675


    Net income                       $26,527       $19,962
                                     =======       =======

    Net income per share, diluted      $0.53         $0.40
                                       =====         =====

    Weighted average shares,
     diluted                          50,385        49,640

    OTHER DATA:
    -----------
    Gross margin on merchandise
     sales                              43.2%         44.2%
    Gross margin on jewelry
     scrapping sales                    36.1%         33.1%
    Gross margin on total sales         40.1%         39.2%

    Signature loan bad debt as
     percent of fees                    30.7%         27.6%
    Auto title loan bad debt as
     percent of fees                    11.5%         17.9%

                                      Nine Months Ended June
                                                30,
                                     -----------------------
                                         2011           2010
                                         ----           ----

    Revenues:
      Merchandise sales              $214,227       $184,202
      Jewelry scrapping sales         149,431        117,443
      Pawn service charges            144,944        118,527
      Signature loan fees             109,364        102,616
      Auto title loan fees             16,288         11,716
      Other                               978            373
                                          ---            ---
        Total revenues                635,232        534,877

    Cost of goods sold:
      Cost of merchandise sales       122,641        108,055
      Cost of jewelry scrapping
       sales                           96,617         75,662
                                       ------         ------
        Total cost of goods sold      219,258        183,717

    Bad debt:
      Signature loan bad debt          25,975         22,104
      Auto title loan bad debt          1,820          1,616
                                        -----          -----
        Total bad debt                 27,795         23,720
                                       ------         ------

    Net revenue                       388,179        327,440

    Operations expense                197,302        174,338
    Administrative expense             56,250         39,356
    Depreciation and amortization      13,324         10,688
    (Gain) /loss on sales /
     disposal of assets                    (2)         1,301
                                          ---          -----

      Operating income                121,305        101,757

    Interest income                       (35)          (151)
    Interest expense                    1,186          1,071
    Equity in net income of
     unconsolidated affiliates        (12,157)        (7,519)
    Other                                (160)          (103)
                                         ----           ----

    Income before income taxes        132,471        108,459
    Income tax expense                 46,677         39,017


    Net income                        $85,794        $69,442
                                      =======        =======

    Net income per share, diluted       $1.71          $1.40
                                        =====          =====

    Weighted average shares,
     diluted                           50,292         49,541

    OTHER DATA:
    -----------
    Gross margin on merchandise
     sales                               42.8%          41.3%
    Gross margin on jewelry
     scrapping sales                     35.3%          35.6%
    Gross margin on total sales          39.7%          39.1%

    Signature loan bad debt as
     percent of fees                     23.8%          21.5%
    Auto title loan bad debt as
     percent of fees                     11.2%          13.8%

                               EZCORP, Inc.
                 Highlights of Consolidated Balance Sheets
                              (in thousands)
                                                   June 30,
                                                  (unaudited)
                                                   -----------
                                               2011         2010
                                               ----         ----
    Assets:
      Current assets:
        Cash and cash equivalents           $27,492      $14,912
        Pawn loans                          134,633      112,807
        Signature loans, net                 12,089        8,915
        Auto title loans, net                 2,348        2,802
        Pawn service charges receivable,
         net                                 24,372       19,899
        Signature loan fees receivable,
         net                                  5,646        5,493
        Auto title loan fees receivable,
         net                                  1,238        1,314
        Inventory, net                       79,031       61,027
        Deferred tax asset                   16,150       15,857
        Federal income taxes receivable       3,099       10,655
        Prepaid expenses and other assets    21,932       15,179
                                             ------       ------
          Total current assets              328,030      268,860

      Investments in unconsolidated
       affiliates                           114,777       99,773
      Property and equipment, net            75,049       59,045
      Deferred tax asset, non-current             -        5,472
      Goodwill                              167,017      115,570
      Other assets, net                      28,748       22,663

          Total assets                     $713,621     $571,383
                                           ========     ========

    Liabilities and stockholders'
     equity:
      Current liabilities:
        Current maturities of long term
         debt                                     -       10,000
        Accounts payable and other
         accrued expenses                    53,242       44,194
        Customer layaway deposits             6,131        5,404
        Federal income taxes payable              -            -
                                                ---          ---
          Total current liabilities          59,373       59,598

      Long-term debt, less current
       maturities                            26,500       17,500
      Deferred tax liability                  1,237            -
      Deferred gains and other long-
       term liabilities                       2,209        2,630
      Total stockholders' equity            624,302      491,655


        Total liabilities and
         stockholders' equity              $713,621     $571,383
                                           ========     ========



    Other Data:
    -----------
    Pawn loan balance per ending pawn
     store                                     $232         $234
    Inventory per ending pawn store            $136         $127
    Book value per share                     $12.50       $10.00

                                            September
                                                30,
                                           ----------
                                                  2010
                                                  ----
    Assets:
      Current assets:
        Cash and cash equivalents              $25,854
        Pawn loans                             121,201
        Signature loans, net                    10,775
        Auto title loans, net                    3,145
        Pawn service charges receivable,
         net                                    21,626
        Signature loan fees receivable,
         net                                     5,818
        Auto title loan fees receivable,
         net                                     1,616
        Inventory, net                          71,502
        Deferred tax asset                      23,208
        Federal income taxes receivable              -
        Prepaid expenses and other assets       17,427
                                                ------
          Total current assets                 302,172

      Investments in unconsolidated
       affiliates                              101,386
      Property and equipment, net               62,293
      Deferred tax asset, non-current               60
      Goodwill                                 117,305
      Other assets, net                         23,196

          Total assets                        $606,412
                                              ========

    Liabilities and stockholders'
     equity:
      Current liabilities:
        Current maturities of long term
         debt                                   10,000
        Accounts payable and other
         accrued expenses                       49,663
        Customer layaway deposits                6,109
        Federal income taxes payable             3,687
                                                 -----
          Total current liabilities             69,459

      Long-term debt, less current
       maturities                               15,000
      Deferred tax liability                         -
      Deferred gains and other long-
       term liabilities                          2,525
      Total stockholders' equity               519,428


        Total liabilities and
         stockholders' equity                 $606,412
                                              ========



    Other Data:
    -----------
    Pawn loan balance per ending pawn
     store                                        $240
    Inventory per ending pawn store               $142
    Book value per share                        $10.55

                                          EZCORP, Inc.
                              Operating Segment Results (Unaudited)
                                (in thousands, except  percents)
                         Three Months Ended June 30,
                         ---------------------------

                                    US Pawn
                                    -------
                               2011            2010
                               ----            ----

    Revenues:
      Merchandise sales     $58,168         $49,749
      Scrap sales            46,157          41,423
      Pawn service
       charges               43,846          37,014
      Signature loan
       fees                     691             455
      Auto title loan
       fees                     352             359
      Other                     161             105
                                ---             ---
        Total revenues      149,375         129,105

    Merchandise cost
     of goods sold           32,911          27,749
    Scrap cost of
     goods sold              28,754          27,328
    Signature loan
     bad debt                   325             159
    Auto title loan
     bad debt                    69              44
                                ---             ---

      Net revenue            87,316          73,825

    Operations
     expense                 44,280          39,148


      Store operating
       income               $43,036         $34,677
                            =======         =======

    OTHER DATA
    ----------
    Gross margin on
     merchandise
     sales                     43.4%           44.2%
    Gross margin on
     scrap sales               37.7%           34.0%
    Gross margin on
     total sales               40.9%           39.6%
    Signature loan
     bad debt as a
     percent of fees           47.0%           34.9%
    Auto title loan
     bad debt as
     percent of fees           19.6%           12.3%
    Operating income
     margin                    49.3%           47.0%

                         Three Months Ended June 30,
                         ---------------------------

                                Empeno Facil
                                ------------
                              2011           2010
                              ----           ----

    Revenues:
      Merchandise sales     $6,401         $3,529
      Scrap sales            4,257          2,181
      Pawn service
       charges               4,519          2,410
      Signature loan
       fees                      -              -
      Auto title loan
       fees                      -              -
      Other                      6              -
                               ---            ---
        Total revenues      15,183          8,120

    Merchandise cost
     of goods sold           3,767          1,961
    Scrap cost of
     goods sold              3,486          1,862
    Signature loan
     bad debt                    -              -
    Auto title loan
     bad debt                    -              -
                               ---            ---

      Net revenue            7,930          4,297

    Operations
     expense                 5,406          2,999


      Store operating
       income               $2,524         $1,298
                            ======         ======

    OTHER DATA
    ----------
    Gross margin on
     merchandise
     sales                    41.1%          44.4%
    Gross margin on
     scrap sales              18.1%          14.6%
    Gross margin on
     total sales              31.9%          33.0%
    Signature loan
     bad debt as a
     percent of fees           N/A            N/A
    Auto title loan
     bad debt as
     percent of fees           N/A            N/A
    Operating income
     margin                   31.8%          30.2%

                         Three Months Ended June 30,
                         ---------------------------

                                   EZMONEY
                                   -------
                              2011           2010
                              ----           ----

    Revenues:
      Merchandise sales         $5             $-
      Scrap sales              357            169
      Pawn service
       charges                   -              -
      Signature loan
       fees                 33,504         31,841
      Auto title loan
       fees                  4,323          4,299
      Other                    405              8
                               ---            ---
        Total revenues      38,594         36,317

    Merchandise cost
     of goods sold              13              -
    Scrap cost of
     goods sold                197             85
    Signature loan
     bad debt               10,166          8,758
    Auto title loan
     bad debt                  467            792
                               ---            ---

      Net revenue           27,751         26,682

    Operations
     expense                17,067         15,805


      Store operating
       income              $10,684        $10,877
                           =======        =======

    OTHER DATA
    ----------
    Gross margin on
     merchandise
     sales                     N/A            N/A
    Gross margin on
     scrap sales              44.8%          53.8%
    Gross margin on
     total sales              42.0%          49.7%
    Signature loan
     bad debt as a
     percent of fees          30.3%          27.5%
    Auto title loan
     bad debt as
     percent of fees          10.8%          18.4%
    Operating income
     margin                   38.5%          40.8%

                          Nine Months Ended June 30,
                          --------------------------

                                    US Pawn
                                    -------
                               2011            2010
                               ----            ----

    Revenues:
      Merchandise sales    $196,893        $174,060
      Scrap sales           137,221         112,660
      Pawn service
       charges              133,355         112,211
      Signature loan
       fees                   1,607           1,442
      Auto title loan
       fees                   1,092           1,261
      Other                     420             365
                                ---             ---
        Total revenues      470,588         401,999

    Merchandise cost
     of goods sold          112,592         101,713
    Scrap cost of
     goods sold              86,979          71,635
    Signature loan
     bad debt                   583             446
    Auto title loan
     bad debt                   110             166
                                ---             ---

      Net revenue           270,324         228,039

    Operations
     expense                131,293         119,259


      Store operating
       income              $139,031        $108,780
                           ========        ========

    OTHER DATA
    ----------
    Gross margin on
     merchandise
     sales                     42.8%           41.6%
    Gross margin on
     scrap sales               36.6%           36.4%
    Gross margin on
     total sales               40.3%           39.5%
    Signature loan
     bad debt as
     percent of fees           36.3%           30.9%
    Auto title loan
     bad debt as
     percent of fees           10.1%           13.2%
    Operating income
     margin                    51.4%           47.7%

                         Nine Months Ended June 30,
                         --------------------------

                                Empeno Facil
                                ------------
                              2011           2010
                              ----           ----

    Revenues:
      Merchandise sales    $17,329        $10,142
      Scrap sales           11,363          4,550
      Pawn service
       charges              11,589          6,316
      Signature loan
       fees                      -              -
      Auto title loan
       fees                      -              -
      Other                     34              -
                               ---            ---
        Total revenues      40,315         21,008

    Merchandise cost
     of goods sold          10,036          6,342
    Scrap cost of
     goods sold              9,201          3,911
    Signature loan
     bad debt                    -              -
    Auto title loan
     bad debt                    -              -
                               ---            ---

      Net revenue           21,078         10,755

    Operations
     expense                14,533          7,736


      Store operating
       income               $6,545         $3,019
                            ======         ======

    OTHER DATA
    ----------
    Gross margin on
     merchandise
     sales                    42.1%          37.5%
    Gross margin on
     scrap sales              19.0%          14.0%
    Gross margin on
     total sales              33.0%          30.2%
    Signature loan
     bad debt as
     percent of fees           N/A            N/A
    Auto title loan
     bad debt as
     percent of fees           N/A            N/A
    Operating income
     margin                   31.1%          28.1%

                         Nine Months Ended June 30,
                         --------------------------

                                   EZMONEY
                                   -------
                              2011           2010
                              ----           ----

    Revenues:
      Merchandise sales         $5             $-
      Scrap sales              847            233
      Pawn service
       charges                   -              -
      Signature loan
       fees                107,757        101,174
      Auto title loan
       fees                 15,196         10,455
      Other                    524              8
                               ---            ---
        Total revenues     124,329        111,870

    Merchandise cost
     of goods sold              13              -
    Scrap cost of
     goods sold                437            116
    Signature loan
     bad debt               25,392         21,658
    Auto title loan
     bad debt                1,710          1,450
                             -----          -----

      Net revenue           96,777         88,646

    Operations
     expense                51,476         47,343


      Store operating
       income              $45,301        $41,303
                           =======        =======

    OTHER DATA
    ----------
    Gross margin on
     merchandise
     sales                     N/A            N/A
    Gross margin on
     scrap sales              48.4%          50.2%
    Gross margin on
     total sales              47.2%          50.2%
    Signature loan
     bad debt as
     percent of fees          23.6%          21.4%
    Auto title loan
     bad debt as
     percent of fees          11.3%          13.9%
    Operating income
     margin                   46.8%          46.6%

                                    EZCORP, Inc.
                                Store Count Activity
                          Three Months Ended June 30, 2011
                          --------------------------------

                              Company-owned Stores
                              --------------------
                                           Empeno
                          US Pawn           Facil
                          -------         -------

     Beginning of
      period                   409              147
       New openings              -                8
       Acquired                 23                -
       Sold, combined or
        closed                   -                -


     End of period             432              155
                               ===              ===

                          Three Months Ended June 30, 2011
                          --------------------------------

                              Company-owned Stores
                              --------------------
                           EZMONEY        Consolidated
                           -------        ------------

     Beginning of
      period                    501              1,057
       New openings               1                  9
       Acquired                   -                 23
       Sold, combined or
        closed                   (6)                (6)


     End of period              496              1,083
                                ===              =====

                         Three Months Ended June 30, 2011
                         --------------------------------

                                    Franchises
                                    ----------


     Beginning of
      period                                                -
       New openings                                         -
       Acquired                                            13
       Sold, combined or
        closed                                              -


     End of period                                         13
                                                          ===

                           Nine Months Ended June 30, 2011
                           -------------------------------
                              Company-owned Stores
                              --------------------

                                           Empeno
                          US Pawn           Facil
                          -------         -------

     Beginning of
      period                   396              115
       New openings              5               40
       Acquired                 32                -
       Sold, combined or
        closed                  (1)               -


     End of period             432              155
                               ===              ===

                           Nine Months Ended June 30, 2011
                           -------------------------------
                              Company-owned Stores
                              --------------------

                           EZMONEY        Consolidated
                           -------        ------------

     Beginning of
      period                    495              1,006
       New openings              11                 56
       Acquired                   -                 32
       Sold, combined or
        closed                  (10)               (11)


     End of period              496              1,083
                                ===              =====

                         Nine Months Ended June 30, 2011
                         -------------------------------
                                   Franchises
                                   ----------



     Beginning of
      period                                               -
       New openings                                        -
       Acquired                                           13
       Sold, combined or
        closed                                             -


     End of period                                        13
                                                         ===

    Reconciliation of GAAP to Non-GAAP
             Results (Unaudited)
      (in thousands, except  per share
                    data)

    The following tables provide a
     reconciliation of the differences
     between the reported or projected
     non-GAAP financial measures for
     the periods indicated and the most
     comparable GAAP financial
     measures.  The non-GAAP financial
     measures presented may not be
     directly comparable to similarly
     titled measures reported by other
     companies and their usefulness for
     such purposes are therefore
     limited.  EZCORP management
     believes presentation of the non-
     GAAP financial measures enhances
     investors' ability to analyze the
     Company's operating results.
     However, non-GAAP financial
     measures are not an alternative to
     GAAP financial measures and should
     be read only in conjunction with
     financial measures presented on a
     GAAP basis.


                                 Three Months Ended June 30, 2011
                                 --------------------------------
                                            Non-GAAP
                             GAAP         Adjustments       Non-GAAP
                             ----         -----------       --------
    Net revenue              $122,997            -             $122,997

    Operations expense         66,753                 -          66,753
    Administrative
     expense                   14,379                 -          14,379
    Depreciation and
     amortization             4,679                 -           4,679
    (Gain) / loss on
     sale/disposal of
     assets                     169                 -             169
                                ---               ---             ---

        Operating income     37,017                 -          37,017

    Interest income             (21)                -             (21)
    Interest expense            586                 -             586
    Equity in net
     income of
     unconsolidated
     affiliates              (4,099)                -          (4,099)
    Other                      (103)                -            (103)
                               ----               ---            ----

    Income before
     income taxes            40,654                 -          40,654
    Income tax expense       14,127                 -          14,127


    Net income              $26,527                $-         $26,527
                            =======               ===         =======

    Net income per
     share, diluted           $0.53                $-           $0.53
                              =====               ===           =====
    Weighted average
     shares, diluted         50,385                 -          50,385


                                 Nine Months Ended June 30, 2011
                                 -------------------------------
                                            Non-GAAP
                             GAAP          Adjustments         Non-GAAP
                             ----          -----------         --------
    Net revenue              $388,179             -               $388,179

    Operations expense        197,302                  -           197,302
    Administrative
     expense                   56,250            (10,945)           45,305
    Depreciation and
     amortization            13,324                  -            13,324
    (Gain) / loss on
     sale/disposal of
     assets                      (2)                 -                (2)
                                ---                ---               ---

        Operating income    121,305             10,945           132,250

    Interest income             (35)                 -               (35)
    Interest expense          1,186                  -             1,186
    Equity in net
     income of
     unconsolidated
     affiliates             (12,157)                 -           (12,157)
    Other                      (160)                 -              (160)
                               ----                ---              ----

    Income before
     income taxes           132,471             10,945           143,416
    Income tax expense       46,677              3,831            50,508


    Net income              $85,794             $7,114           $92,908
                            =======             ======           =======

    Net income per
     share, diluted           $1.71              $0.14             $1.85
                              =====              =====             =====
    Weighted average
     shares, diluted         50,292                  -            50,292

                                Projected Year Ending September 30,
                                                2011
                                ------------------------------------
                          Projected         Non-GAAP        Projected
                             GAAP         Adjustments       Non-GAAP
                             ----         -----------       --------


    Net income per
     share, diluted             $2.41             $0.14           $2.55
                                =====             =====           =====

SOURCE EZCORP, Inc.

Photo:http://photos.prnewswire.com/prnh/20090713/EZCORPLOGO
http://photoarchive.ap.org/

SOURCE: EZCORP, Inc.

EZCORP THIRD QUARTER NET INCOME INCREASES 33%

PR Newswire

AUSTIN, Texas, July 21, 2011 /PRNewswire/ -- EZCORP, Inc. (Nasdaq: EZPW), a leading provider of specialty consumer financial services, today announced financial results for its third fiscal quarter ended June 30, 2011.

(Logo:  http://photos.prnewswire.com/prnh/20090713/EZCORPLOGO)

Commenting on the results, President and Chief Executive Officer, Paul Rothamel, said, "EZCORP generated another quarter of exceptional results, with net income and EPS growing 33% and 32%, respectively. This growth was driven by strong performance throughout our diverse product portfolio in all of our geographic markets. We remain on track to deliver another outstanding year, including 30% EPS growth in fiscal 2011."

Highlights for the quarter include:

Financials – Three months ended June 30, 2011 versus the prior year quarter

  • Net income of $26.5 million, up 33%.
  • Diluted earnings per share of $0.53, an increase of 32%.
  • Total revenues of $203.2 million, up 17%, with same store revenue up 7%.
  • Net revenues of $123.0 million, up 17%.
  • Store level operating income of $56.2 million, up 20%, with margins improving 100 bps to 46%.
  • Consolidated operating income increased 29% to $37.0 million, with operating margin improving 260 bps to 30%.
  • Contribution from strategic affiliates of $4.1 million, an increase of 40%.

Key Operating Metrics – Three months ended June 30, 2011 versus the prior year quarter

  • US Pawn:
    • Total revenue increased 16% to $149.4 million.
    • Same store revenue growth of 6% driven by same store growth in merchandise sales, scrap sales and pawn service charges of 8%, 1% and 9%, respectively.
    • Store level operating income increased 24% to $43.0 million with a 230 bps margin improvement to 49%.
  • Empeno Facil (Mexico pawn):
    • Total revenue increased 87% to $15.2 million.
    • Same store revenue growth of 32%, driven by same store growth in merchandise sales, scrap sales and pawn service charges of 29%, 32% and 43%, respectively.
    • Store level operating income increased 94% to $2.5 million with a 200 bps improvement in margin to 32%, despite the impact from opening 56 new stores in the past 12 months.
  • EZMONEY (US and Canada financial services):
    • Total revenue increased 6% to $38.6 million.
    • Same store revenue growth of 4% driven by increases in signature loan fees and auto title loan fees of 4% and 2%, respectively.
    • Bad debt as a percentage of fees increased to 28%, compared with 26% in the prior year quarter, primarily due to the transition from mature payday loan products to new installment loan products across a number of states.
    • Store level operating income decreased 2% to $10.7 million primarily due to higher bad debt noted above and increased competitive pressures in Texas.  These factors were partially offset by improved expense control in the US and stronger performance in Canada.
  • Balance Sheet and Liquidity:
    • Combined pawn, signature and auto title loan balances (including CSO) at June 30 were $175.4 million, an increase of 15%.
    • At June 30, cash and cash equivalents were $27.5 million, with debt outstanding of $26.5 million, compared with debt less cash of $12.6 million a year ago.
    • During the quarter, the Company closed on a four-year $175 million senior secured revolving credit facility.

Strategic Initiatives

  • The previously announced strategic alliance with Cash Converters International Limited – designed to develop and introduce a suite of innovative financial services products under the "Cash Converters" brand – is progressing and is expected to close in the first quarter of fiscal 2012. Separately, in April the Company acquired the Cash Converters franchise rights for Canada, including rights to receive fees from 13 stores operated by franchisees. The Company plans to convert its 59 CASHMAX stores into the Cash Converters brand and add the Cash Converters buy / sell model to its existing non-collateralized loan model.
  • During the quarter, the Company acquired 23 pawn stores for a total cost of $31.6 million.  These acquisitions included 11 stores in Iowa, seven in Utah, three in Wisconsin, and one in each of Florida and Illinois. Including the five greenfield stores opened and the nine stores acquired in the first half of the fiscal year, the total US Pawn store count at June 30, 2011 was 432, compared to 389 at June 30, 2010.
  • Empeno Facil opened eight greenfield stores in the third quarter.  Including the 32 greenfield stores opened in the first half of the fiscal year, the total Empeno Facil store count at June 30, 2011 was 155 compared to 99 at June 30, 2010. In July, Empeno Facil acquired six additional stores in the states of Hidalgo and Tlaxcala.
  • Following successful market tests in Colorado and Wisconsin, EZCORP's "Change" card – the Company's general purpose integrated and reloadable debit card – was successfully rolled into the Company's Texas stores, both US Pawn and EZMONEY, in the third quarter. As of June 30, 2011, approximately 69,000 Change cards had been issued to EZCORP customers.

Rothamel added, "Overall, we are pleased with our third quarter results as well as the progress we made toward improving both our near- and long-term competitive position. We also expect our quarterly performance in the US EZMONEY division to improve steadily as we respond to competitive pressures and continue the roll out of our new products. Our customers are under pressure on multiple fronts today and have many choices in the marketplace. We are committed to being the preferred option across all of our businesses and will continue to enhance our offering in order to meet their short-term cash needs."

Outlook for fiscal 2011

The Company reaffirmed that it expects fiscal 2011 earnings per share, excluding the first quarter one-time charge related to the retirement of the former Chief Executive Officer, to increase 30% year-over-year to $2.55 ($2.41 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 Cash Converters International Limited (CCV.L and CCV.ASX), which franchises and operates a worldwide network of over 600 stores in 21 countries that provide financial services and sell pre-owned merchandise, and Albemarle & Bond Holdings PLC (ABM.L), one of the U.K.'s largest pawnbroking businesses with over 140 stores.

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 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 changes in the regulatory environment, changing market conditions in the overall economy and the industry, consumer demand for the Company's services and merchandise, and actions of third parties who offer services and products in the Company's locations.  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.

Change to Presentation and Reclassification of Prior Year Comparatives

The Company has historically included fees from its Product Protection Plan and Jewelry VIP Program as well as layaway fees in "Other revenue" in its Consolidated Statements of Operations and its Operating Segment Results.  Beginning in the second fiscal quarter of 2011 the Company has included these fees in "Merchandise sales" on the basis that fees from these products are incidental to sales of merchandise.  Prior year figures have been reclassified to conform to this presentation and margins have been recalculated accordingly.

Use of Non-GAAP Financial Measures

In addition to reporting financial results in accordance with generally accepted accounting principles (GAAP), the Company has provided non-GAAP net income and non-GAAP earnings per share for the nine-month period ended June 30, 2011, as well as non-GAAP expected earnings per share for fiscal 2011.  The only difference between the presented non-GAAP measures and the most closely comparable GAAP measures is the exclusion of a one-time charge related to the retirement of the Company's former Chief Executive Officer and the related tax benefit included in the quarter ended December 31, 2011.  The Company's management uses these non-GAAP financial measures to understand its financial performance from period to period.  Management does not believe that the excluded one-time charge is reflective of underlying operating performance.  The non-GAAP financial measures are not meant to be considered in isolation or as a substitute for the corresponding GAAP measures, but rather are provided to facilitate an enhanced understanding of the Company's actual and expected performance and to enable more meaningful period-to-period comparisons.  A reconciliation of the non-GAAP financial measures to the most closely comparable GAAP financial measures is provided in the accompanying financial schedules.

EZCORP Investor Relations
(512) 314-2220

EZCORP, Inc.

Highlights of Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data and percents)














Three Months Ended June 30,


Nine Months Ended June 30,




2011


2010


2011


2010











Revenues:









Merchandise sales

$ 64,574


$ 53,278


$ 214,227


$ 184,202


Jewelry scrapping sales

50,771


43,773


149,431


117,443


Pawn service charges

48,365


39,424


144,944


118,527


Signature loan fees

34,195


32,296


109,364


102,616


Auto title loan fees

4,675


4,658


16,288


11,716


Other

572


113


978


373



Total revenues

203,152


173,542


635,232


534,877











Cost of goods sold:









Cost of merchandise sales

36,691


29,710


122,641


108,055


Cost of jewelry scrapping sales

32,437


29,275


96,617


75,662



Total cost of goods sold

69,128


58,985


219,258


183,717











Bad debt:









Signature loan bad debt

10,491


8,917


25,975


22,104


Auto title loan bad debt

536


836


1,820


1,616



Total bad debt

11,027


9,753


27,795


23,720











Net revenue

122,997


104,804


388,179


327,440











Operations expense

66,753


57,952


197,302


174,338

Administrative expense

14,379


13,576


56,250


39,356

Depreciation and amortization

4,679


3,759


13,324


10,688

(Gain) / loss on sales / disposal of assets

169


734


(2)


1,301












Operating income

37,017


28,783


121,305


101,757











Interest income

(21)


(135)


(35)


(151)

Interest expense

586


311


1,186


1,071

Equity in net income of unconsolidated affiliates

(4,099)


(2,930)


(12,157)


(7,519)

Other

(103)


(100)


(160)


(103)











Income before income taxes

40,654


31,637


132,471


108,459

Income tax expense

14,127


11,675


46,677


39,017











Net income

$ 26,527


$ 19,962


$   85,794


$   69,442











Net income per share, diluted

$     0.53


$     0.40


$       1.71


$       1.40











Weighted average shares, diluted

50,385


49,640


50,292


49,541











OTHER DATA:








Gross margin on merchandise sales

43.2%


44.2%


42.8%


41.3%

Gross margin on jewelry scrapping sales

36.1%


33.1%


35.3%


35.6%

Gross margin on total sales

40.1%


39.2%


39.7%


39.1%











Signature loan bad debt as percent of fees

30.7%


27.6%


23.8%


21.5%

Auto title loan bad debt as percent of fees

11.5%


17.9%


11.2%


13.8%



EZCORP, Inc.

Highlights of Consolidated Balance Sheets

(in thousands)














June 30, (unaudited)


September 30,





2011


2010


2010

Assets:







Current assets:








Cash and cash equivalents

$   27,492


$   14,912


$            25,854



Pawn loans

134,633


112,807


121,201



Signature loans, net

12,089


8,915


10,775



Auto title loans, net

2,348


2,802


3,145



Pawn service charges receivable, net

24,372


19,899


21,626



Signature loan fees receivable, net

5,646


5,493


5,818



Auto title loan fees receivable, net

1,238


1,314


1,616



Inventory, net

79,031


61,027


71,502



Deferred tax asset

16,150


15,857


23,208



Federal income taxes receivable

3,099


10,655


-



Prepaid expenses and other assets

21,932


15,179


17,427




Total current assets

328,030


268,860


302,172











Investments in unconsolidated affiliates

114,777


99,773


101,386


Property and equipment, net

75,049


59,045


62,293


Deferred tax asset, non-current

-


5,472


60


Goodwill

167,017


115,570


117,305


Other assets, net

28,748


22,663


23,196













Total assets

$ 713,621


$ 571,383


$          606,412










Liabilities and stockholders' equity:







Current liabilities:








Current maturities of long term debt

-


10,000


10,000



Accounts payable and other accrued expenses

53,242


44,194


49,663



Customer layaway deposits

6,131


5,404


6,109



Federal income taxes payable

-


-


3,687




Total current liabilities

59,373


59,598


69,459











Long-term debt, less current maturities

26,500


17,500


15,000


Deferred tax liability

1,237


-


-


Deferred gains and other long-term liabilities

2,209


2,630


2,525


Total stockholders' equity

624,302


491,655


519,428












Total liabilities and stockholders' equity

$ 713,621


$ 571,383


$          606,412




























Other Data:






Pawn loan balance per ending pawn store

$        232


$        234


$                 240

Inventory per ending pawn store

$        136


$        127


$                 142

Book value per share

$     12.50


$     10.00


$              10.55



EZCORP, Inc.

Operating Segment Results (Unaudited)

(in thousands, except  percents)


















Three Months Ended June 30,


















US Pawn


Empeno Facil


EZMONEY




2011


2010


2011


2010


2011


2010















Revenues:













Merchandise sales

$   58,168


$   49,749


$   6,401


$   3,529


$          5


$           -


Scrap sales

46,157


41,423


4,257


2,181


357


169


Pawn service charges

43,846


37,014


4,519


2,410


-


-


Signature loan fees

691


455


-


-


33,504


31,841


Auto title loan fees

352


359


-


-


4,323


4,299


Other

161


105


6


-


405


8



Total revenues

149,375


129,105


15,183


8,120


38,594


36,317















Merchandise cost of goods sold

32,911


27,749


3,767


1,961


13


-

Scrap cost of goods sold

28,754


27,328


3,486


1,862


197


85

Signature loan bad debt

325


159


-


-


10,166


8,758

Auto title loan bad debt

69


44


-


-


467


792
















Net revenue

87,316


73,825


7,930


4,297


27,751


26,682















Operations expense

44,280


39,148


5,406


2,999


17,067


15,805
















Store operating income

$   43,036


$   34,677


$   2,524


$   1,298


$ 10,684


$ 10,877















OTHER DATA












Gross margin on merchandise sales

43.4%


44.2%


41.1%


44.4%


N/A


N/A

Gross margin on scrap sales

37.7%


34.0%


18.1%


14.6%


44.8%


53.8%

Gross margin on total sales

40.9%


39.6%


31.9%


33.0%


42.0%


49.7%

Signature loan bad debt as a percent of fees

47.0%


34.9%


N/A


N/A


30.3%


27.5%

Auto title loan bad debt as percent of fees

19.6%


12.3%


N/A


N/A


10.8%


18.4%

Operating income margin

49.3%


47.0%


31.8%


30.2%


38.5%


40.8%


































Nine Months Ended June 30,


















US Pawn


Empeno Facil


EZMONEY




2011


2010


2011


2010


2011


2010















Revenues:













Merchandise sales

$ 196,893


$ 174,060


$ 17,329


$ 10,142


$          5


$           -


Scrap sales

137,221


112,660


11,363


4,550


847


233


Pawn service charges

133,355


112,211


11,589


6,316


-


-


Signature loan fees

1,607


1,442


-


-


107,757


101,174


Auto title loan fees

1,092


1,261


-


-


15,196


10,455


Other

420


365


34


-


524


8



Total revenues

470,588


401,999


40,315


21,008


124,329


111,870















Merchandise cost of goods sold

112,592


101,713


10,036


6,342


13


-

Scrap cost of goods sold

86,979


71,635


9,201


3,911


437


116

Signature loan bad debt

583


446


-


-


25,392


21,658

Auto title loan bad debt

110


166


-


-


1,710


1,450
















Net revenue

270,324


228,039


21,078


10,755


96,777


88,646















Operations expense

131,293


119,259


14,533


7,736


51,476


47,343
















Store operating income

$ 139,031


$ 108,780


$   6,545


$   3,019


$ 45,301


$ 41,303















OTHER DATA












Gross margin on merchandise sales

42.8%


41.6%


42.1%


37.5%


N/A


N/A

Gross margin on scrap sales

36.6%


36.4%


19.0%


14.0%


48.4%


50.2%

Gross margin on total sales

40.3%


39.5%


33.0%


30.2%


47.2%


50.2%

Signature loan bad debt as percent of fees

36.3%


30.9%


N/A


N/A


23.6%


21.4%

Auto title loan bad debt as percent of fees

10.1%


13.2%


N/A


N/A


11.3%


13.9%

Operating income margin

51.4%


47.7%


31.1%


28.1%


46.8%


46.6%



EZCORP, Inc.

Store Count Activity
















Three Months Ended June 30, 2011
















Company-owned Stores


Franchises




US Pawn


Empeno Facil


EZMONEY


Consolidated















Beginning of period

409


147


501


1,057


-


New openings

-


8


1


9


-


Acquired

23


-


-


23


13


Sold, combined or closed

-


-


(6)


(6)


-













End of period

432


155


496


1,083


13


















Nine Months Ended June 30, 2011




Company-owned Stores


Franchises
















US Pawn


Empeno Facil


EZMONEY


Consolidated















Beginning of period

396


115


495


1,006


-


New openings

5


40


11


56


-


Acquired

32


-


-


32


13


Sold, combined or closed

(1)


-


(10)


(11)


-













End of period

432


155


496


1,083


13



Reconciliation of GAAP to Non-GAAP Results (Unaudited)

(in thousands, except  per share data)


The following tables provide a reconciliation of the differences between the reported or projected non-GAAP financial measures for the periods indicated and the most comparable GAAP financial measures.  The non-GAAP financial measures presented may not be directly comparable to similarly titled measures reported by other companies and their usefulness for such purposes are therefore limited.  EZCORP management believes presentation of the non-GAAP financial measures enhances investors' ability to analyze the Company's operating results.  However, non-GAAP financial measures are not an alternative to GAAP financial measures and should be read only in conjunction with financial measures presented on a GAAP basis.  




















Three Months Ended June 30, 2011


Nine Months Ended June 30, 2011






Non-GAAP






Non-GAAP






GAAP


Adjustments


Non-GAAP


GAAP


Adjustments


Non-GAAP

Net revenue

$ 122,997


-


$ 122,997


$    388,179


-


$          388,179















Operations expense

66,753


-


66,753


197,302


-


197,302

Administrative expense

14,379


-


14,379


56,250


(10,945)


45,305

Depreciation and amortization

4,679


-


4,679


13,324


-


13,324

(Gain) / loss on sale/disposal of assets

169


-


169


(2)


-


(2)















   Operating income

37,017


-


37,017


121,305


10,945


132,250















Interest income

(21)


-


(21)


(35)


-


(35)

Interest expense

586


-


586


1,186


-


1,186

Equity in net income of unconsolidated affiliates

(4,099)


-


(4,099)


(12,157)


-


(12,157)

Other

(103)


-


(103)


(160)


-


(160)















Income before income taxes

40,654


-


40,654


132,471


10,945


143,416

Income tax expense

14,127


-


14,127


46,677


3,831


50,508















Net income

$   26,527


$                -


$   26,527


$      85,794


$       7,114


$            92,908















Net income per share, diluted

$       0.53


$              -


$       0.53


$          1.71


$         0.14


$                1.85

Weighted average shares, diluted

50,385


-


50,385


50,292


-


50,292


































Projected Year Ending September 30, 2011




Projected


Non-GAAP


Projected




GAAP


Adjustments


Non-GAAP









Net income per share, diluted

$       2.41


$          0.14


$       2.55



SOURCE EZCORP, Inc.

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

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