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EZCORP Announces Second Quarter Fiscal 2016 Results

May 9, 2016

EZCORP Announces Second Quarter Fiscal 2016 Results

– Pawn loans outstanding (PLO) up 10%; same store PLO up 8%.

– Pawn service charges (PSC) up 8%.

– Merchandise sales gross margin increased to 38% from 33%.

– Annualized return on pawn earning assets increased to 152% from 150%.

  • Grupo Finmart strategic review completed in April; company pursuing sale of this business.
  • Grupo Finmart non-cash goodwill impairment charge of $73.9 million led to $73.0 million loss from continuing operations for the quarter.

Austin, Texas (May 9, 2016) — EZCORP, Inc. (NASDAQ: EZPW), a leading provider of pawn loans in the United States and Mexico and consumer loans in Mexico, today announced results for its second quarter ended March 31, 2016.

CEO COMMENTARY AND OUTLOOK

Stuart Grimshaw, EZCORP’s Chief Executive Officer, said: “In July 2015 we announced significant strategic changes in our company’s direction which included a refocus on our pawn operations in the United States and Mexico, aimed at serving and satisfying our customers’ desire for access to cash.  This quarter’s results demonstrate continued momentum with further improvements to key pawn metrics, including return on pawn earnings assets.

"We have completed the strategic review of Grupo Finmart announced in February 2016. We have concluded that a sale of this business is the preferred alternative and have commenced a process to solicit proposals from interested buyers. UBS Investment Bank, which has been assisting us in the strategic review, is running the sale process.  Separately, we determined during the quarter that the goodwill associated with Grupo Finmart should be written-off and recorded an impairment charge of $73.9 million; goodwill related to Grupo Finmart is now zero.  This impairment, along with the quarterly operating results from Grupo Finmart, offset the positive performance in our U.S. and Mexico pawn businesses and resulted in a consolidated net loss for the quarter.

"Our focus on the customer experience and the fundamentals of the pawn business will continue in the months ahead, including further investment in talent, training and development, and customer-facing systems. We are confident these initiatives, along with the quality pawn fundamentals we have demonstrated in recent quarters, will help us continue to build our platform for profitable growth."

(All comparisons shown in this release are to the same period in the prior year unless otherwise noted)

CONSOLIDATED RESULTS

Three-Months Ended March 31, 2016

• For the quarter ended March 31, 2016, net loss from continuing operations attributable to EZCORP was $73.0 million ($1.33 per share), compared to a net loss of $3.4 million ($0.06 per share). This year-over-year difference reflects ongoing challenges in Grupo Finmart, including a non-cash goodwill impairment charge of $73.9 million ($1.26 per share impact). The U.S. and Mexico pawn businesses continue to deliver improved performance.

• Total revenue for the current quarter was $201.9 million, down 2%, and net revenue was flat at $113.8 million.  On a constant currency basis[1], total revenue was $209.6 million, up 2%, with net revenue of $117.5 million, up 3%. The increase in both total revenue and net revenue (stated in constant currency) is primarily due to higher pawn service charges and merchandise margin, offset by higher bad debt levels in Grupo Finmart.

• Operating expenses for the current quarter increased 3% (6% on a constant currency basis), primarily due to continued investment in store labor costs to improve employee and customer satisfaction and costs from new stores.

• Annualized return on pawn earning assets[2] increased to 152% in the current quarter versus 150%.

Six-Months Ended March 31, 2016

• For the six months ended March 31, 2016, net loss from continuing operations attributable to EZCORP was $80.3 million ($1.46 per share), compared to net income of $1.3 million ($0.02 per share). This year-over-year difference reflects continued improvement in our U.S. and Mexico pawn businesses (as discussed below) that was more than offset by losses attributable to Grupo Finmart, including the non-cash goodwill impairment charge of $73.9 million in the current quarter.

• Total revenue for the six months ended March 31, 2016 was $400.4 million, 4% lower, with net revenue of $225.3 million, a 2% decrease.  On a constant currency basis, total revenue was $415.5 million, 1% lower, and net revenue was flat at $231.7 million.

• Operating expenses for the six months ended March 31, 2016 increased 8% (13% on a constant currency basis), primarily due to continued investment in store labor costs to improve employee and customer satisfaction, as well as costs from new stores, restatement expenses, increased accrued incentive compensation and investment in strengthening the Grupo Finmart management team.

• Annualized return on pawn earning assets2 increased to 152% from 147%.

OPERATING METRICS

U.S. Pawn Segment          

Three-Months Ended March 31, 2016

• Focus on the customer experience drove pawn lending momentum, resulting in an increase in PLO of 9% in total and 7% on a same store basis. The pawn loan redemption rate for the quarter was 85%, unchanged from the prior-year period.

• PSC increased 8% in total, 6% on a same store basis, as a result of strong PLO growth. Annualized yield on PLO decreased to 168% from 169%.

• Merchandise sales gross margin improved to 39% from 34% attributable to discipline in pricing cadences and healthy loan valuations, driving merchandise sales gross profit growth.

• Net revenue growth of 8% led to a 15% improvement in segment contribution. Operations expenses increased 6% as we continue to invest in labor costs to improve employee and customer satisfaction.

• Aged inventory reduced to 10% of total inventory from 13%.

Six-Months Ended March 31, 2016

• Same store PLO growth has continued to strengthen from a 6% decline in the September 2015 quarter, to a 0.5% increase as of the December 2015 quarter, to a 7% increase in the March 2016 quarter, generating same store PSC growth of 3% in the six-month period ended March 31, 2016 .

• Annualized PLO yield and pawn loan redemption rate are both unchanged from the prior-year period at 166% and 84%, respectively.

• Merchandise sales gross margin increased to 39% from 34%, resulting in an 18% increase in merchandise sales gross profit.

• Net revenue was up 7%, driving a 7% increase in segment contribution. Store operations expenses increased 6%, primarily due to higher labor costs to drive customer and employee satisfaction, including store team member incentive programs.

Mexico Pawn Segment

Three-Months Ended March 31, 2016

• Focus on improving the customer experience along with operational execution refinements led to a 26% increase in total and a 28% increase in same-store PLO on a constant currency basis (up 11% in total and 13% in same-stores on a GAAP basis). This represents the seventh consecutive quarter with double-digit same store PLO growth on a constant currency basis. The redemption rate on pawn loans decreased slightly to 78% from 79%.

• Same store PSC grew 27% on a constant currency basis (up 5% on a GAAP basis). Annualized PLO yield was a strong 197% compared to 203%.

• Merchandise sales gross margin increased to 31% from 28% as the result of continued improvement in pawn loan valuations and discipline in pricing cadences. Merchandise sales gross profit increased 30% on a constant currency basis (up 7% on a GAAP basis).

• Net revenue increased 25% on a constant currency basis (up 4% on a GAAP basis).

• Operating expenses increased 5% on a constant currency basis (decreased 13% on a GAAP basis), driven primarily by investments in labor to drive employee and customer satisfaction and increased advertising expense.

• Increase in segment contribution of $2.5 million on a constant currency basis (increase of $2.1 million from nominal loss in the prior-year quarter on a GAAP basis).

• Aged inventory ended the quarter at 3% of total inventory compared to 11%.

Six-Months Ended March 31, 2016

• Same store PSC increased 25% on a constant currency basis (up 4% on a GAAP basis). Annualized yield on pawn loans decreased to 195% from 199%. The redemption rate on pawn loans in the first half was unchanged at 78%.

• Merchandise sales gross margin increased to 33% from 30%, driving a merchandise sales gross profit increase of 21% on a constant currency basis (flat on a GAAP basis).

• Net revenue was up 21% on a constant currency basis (flat on a GAAP basis).

• Operations expense increased 17% on a constant currency basis (decreased 3% on a GAAP basis) driven primarily by investments in labor to drive employee and customer satisfaction and increased advertising expense.

• Increase in segment contribution of $2.4 million on a constant currency basis ($1.6 million on a GAAP basis).

 

 

 

Grupo Finmart Segment

Three Months Ended March 31, 2016

• Segment loss of $82.9 million on a constant currency basis ($81.2 million on a GAAP basis) compared to a segment loss of $2.6 million on a GAAP basis. The increase in the segment loss was due primarily to a non-cash goodwill impairment charge of $73.9 million, in addition to increased bad debt expenses driven predominately by delays in payment timing. A valuation of Grupo Finmart of $46.5 million was determined as part of the goodwill valuation process.

• During the quarter, operational initiatives yielded performance improvements. Comparison of current quarter to immediately preceding quarter showed:

  • Loan collections up 33%, including accelerated receipts on previously reserved loans more than doubling.
  • Cost reduction program delivering cash SG&A savings.
  • Originations focused on higher quality, better performing government agencies.

• Operations expenses increased 36% on a constant currency basis (13% increase on a GAAP basis) primarily attributed to investment in strengthening the management team and an increase in deferred commissions.

• EZCORP provided $6 million of funding to Grupo Finmart in the quarter, including $2 million for working capital requirements and $4 million to repay Grupo Finmart maturing debt.

• In light of the changing industry dynamics and business environment, a strategic review of Grupo Finmart was announced in February 2016 with a view toward maximizing long-term shareholder value. That strategic review was completed in April 2016, with sale of the business identified as the preferred alternative.

Six Months Ended March 31, 2016

• Segment loss of $102.4 million on a constant currency basis ($98.1 million on a GAAP basis) compared to a segment loss of $10.8 million on a GAAP basis in the prior year. The increase in the segment loss was primarily attributable to the goodwill impairment charge in addition to an increase in bad debt expense.

• The bad debt expense was offset by $10.2 million received in collections in the current six months on loans that were fully reserved.

• Operations expense increased 38% on a constant currency basis (14% increase on a GAAP basis) primarily attributed to investment in strengthening management team and increase in deferred commissions.

• EZCORP provided $17 million of funding to Grupo Finmart in the current six-month period, including $5 million for working capital requirements and $12 million to repay Grupo Finmart maturing debt.

 

 

 

CONFERENCE CALL

EZCORP will host a conference call on Tuesday, May 10, 2016, at 7:30am Central Time to discuss second quarter results.  Analysts and institutional investors may participate on the conference call by dialing (888) 734-0328, Conference ID:  8428284, International dialing (678) 894-3054. The conference call will be webcast simultaneously to the public through this link: http://investors.ezcorp.com/. A replay of the conference call will be available online at http://investors.ezcorp.com/ shortly after the call.

ABOUT EZCORP

EZCORP is a leading provider of pawn loans in the United States and Mexico and consumer loans in Mexico. At our pawn stores, we also sell merchandise, primarily collateral forfeited from pawn lending operations and used merchandise purchased from customers.

FORWARD LOOKING STATEMENTS

This announcement contains certain forward-looking statements regarding the company’s strategy, initiatives and expected performance. These statements are based on the company’s current expectations as to the outcome and timing of future events. All statements, other than statements of historical facts, including all statements regarding the company's strategy, initiatives and future performance, that address activities or results that the company plans, expects, believes, projects, estimates or anticipates, will, should or may occur in the future, including future financial or operating results, are forward-looking statements. 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 operating risks, liquidity risks, legislative or regulatory developments, market factors or current or future litigation. 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. The company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

 

Contact:

Jeff Christensen

Vice President, Investor Relations

Email: jeff_christensen@ezcorp.com

Phone: (512) 437-3545

 

 

 

 

 

 

 

EZCORP, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

Three Months Ended March 31,

 

Six Months Ended March 31,

 

2016

 

2015

 

2016

 

2015

 

 

 

 

 

 

 

 

 

(Unaudited)

 

(in thousands, except per share amounts)

Revenues:

 

 

 

 

 

 

 

Merchandise sales

$

109,343

 

 

$

107,852

 

 

$

217,927

 

 

$

217,491

 

Jewelry scrapping sales

12,780

 

 

18,399

 

 

22,401

 

 

36,933

 

Pawn service charges

64,130

 

 

59,470

 

 

130,724

 

 

124,397

 

Consumer loan fees and interest

15,616

 

 

18,544

 

 

28,804

 

 

37,515

 

Other revenues

30

 

 

910

 

 

497

 

 

1,565

 

Total revenues

201,899

 

 

205,175

 

 

400,353

 

 

417,901

 

Merchandise cost of goods sold

68,332

 

 

72,492

 

 

134,591

 

 

144,970

 

Jewelry scrapping cost of goods sold

11,085

 

 

14,354

 

 

19,161

 

 

29,029

 

Consumer loan bad debt

8,683

 

 

4,761

 

 

21,286

 

 

13,276

 

Net revenues

113,799

 

 

113,568

 

 

225,315

 

 

230,626

 

Operating expenses:

 

 

 

 

 

 

 

Operations

80,282

 

 

77,190

 

 

165,888

 

 

157,277

 

Administrative

15,621

 

 

14,800

 

 

35,604

 

 

27,352

 

Depreciation and amortization

7,082

 

 

8,095

 

 

15,141

 

 

16,103

 

Loss on sale or disposal of assets

649

 

 

387

 

 

682

 

 

643

 

Restructuring

218

 

 

704

 

 

1,910

 

 

726

 

Total operating expenses

103,852

 

 

101,176

 

 

219,225

 

 

202,101

 

Operating income

9,947

 

 

12,392

 

 

6,090

 

 

28,525

 

Interest expense

8,449

 

 

11,296

 

 

17,641

 

 

23,330

 

Interest income

(127

)

 

(512

)

 

(267

)

 

(1,043

)

Equity in net (income) loss of unconsolidated affiliate

(1,877

)

 

3,678

 

 

(3,932

)

 

1,484

 

Impairment of goodwill

73,921

 

 

 

 

73,921

 

 

 

Other expense

89

 

 

1,862

 

 

959

 

 

2,621

 

(Loss) income from continuing operations before income taxes

(70,508

)

 

(3,932

)

 

(82,232

)

 

2,133

 

Income tax expense

6,189

 

 

362

 

 

2,493

 

 

3,626

 

Loss from continuing operations, net of tax

(76,697

)

 

(4,294

)

 

(84,725

)

 

(1,493

)

(Loss) income from discontinued operations, net of tax

(1,094

)

 

4,731

 

 

(1,332

)

 

11,608

 

Net (loss) income

(77,791

)

 

437

 

 

(86,057

)

 

10,115

 

Net loss from continuing operations attributable to noncontrolling interest

(3,666

)

 

(906

)

 

(4,458

)

 

(2,840

)

Net (loss) income attributable to EZCORP, Inc.

$

(74,125

)

 

$

1,343

 

 

$

(81,599

)

 

$

12,955

 

 

 

 

 

 

 

 

 

Basic (loss) earnings per share attributable to EZCORP, Inc.:

 

 

 

 

 

 

 

Continuing operations

$

(1.33

)

 

$

(0.06

)

 

$

(1.46

)

 

$

0.02

 

Discontinued operations

(0.02

)

 

0.09

 

 

(0.02

)

 

0.22

 

Basic (loss) earnings per share

$

(1.35

)

 

$

0.03

 

 

$

(1.48

)

 

$

0.24

 

 

 

 

 

 

 

 

 

Diluted (loss) earnings per share attributable to EZCORP, Inc.:

 

 

 

 

 

 

 

Continuing operations

$

(1.33

)

 

$

(0.06

)

 

$

(1.46

)

 

$

0.02

 

Discontinued operations

(0.02

)

 

0.09

 

 

(0.02

)

 

0.22

 

Diluted (loss) earnings per share

$

(1.35

)

 

$

0.03

 

 

$

(1.48

)

 

$

0.24

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

Basic

54,843

 

 

54,184

 

 

54,869

 

 

53,915

 

Diluted

54,843

 

 

54,184

 

 

54,869

 

 

53,972

 

 

 

 

 

 

 

 

 

Net (loss) income from continuing operations attributable to EZCORP, Inc.

$

(73,031

)

 

$

(3,388

)

 

$

(80,267

)

 

$

1,347

 

Net (loss) income from discontinued operations attributable to EZCORP, Inc.

(1,094

)

 

4,731

 

 

(1,332

)

 

11,608

 

Net (loss) income attributable to EZCORP, Inc.

$

(74,125

)

 

$

1,343

 

 

$

(81,599

)

 

$

12,955

 

 

 

EZCORP, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

 

March 31,
 2016

 

March 31,
 2015

 

September 30,
 2015

 

 

 

 

 

 

 

(Unaudited)

 

 

Assets:

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

75,336

 

 

$

138,173

 

 

$

59,124

 

Restricted cash

13,817

 

 

47,909

 

 

15,137

 

Pawn loans

140,195

 

 

127,929

 

 

159,964

 

Consumer loans, net

26,362

 

 

55,529

 

 

36,533

 

Pawn service charges receivable, net

27,626

 

 

24,909

 

 

30,852

 

Consumer loan fees and interest receivable, net

13,226

 

 

13,063

 

 

19,802

 

Inventory, net

126,446

 

 

116,144

 

 

124,084

 

Income taxes receivable

557

 

 

52,234

 

 

45,175

 

Prepaid expenses and other current assets

32,505

 

 

32,383

 

 

21,076

 

Total current assets

456,070

 

 

608,273

 

 

511,747

 

Investment in unconsolidated affiliate

56,677

 

 

94,510

 

 

56,182

 

Property and equipment, net

64,962

 

 

102,252

 

 

75,594

 

Restricted cash, non-current

2,308

 

 

2,880

 

 

2,883

 

Goodwill

254,782

 

 

344,931

 

 

327,460

 

Intangible assets, net

40,197

 

 

49,674

 

 

41,263

 

Non-current consumer loans, net

62,673

 

 

79,860

 

 

75,824

 

Deferred tax asset, net

77,125

 

 

35,213

 

 

69,121

 

Other assets, net

19,655

 

 

60,041

 

 

42,985

 

Total assets

$

1,034,449

 

 

$

1,377,634

 

 

$

1,203,059

 

 

 

 

 

 

 

Liabilities, temporary equity and equity:

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current maturities of long-term debt

$

82,174

 

 

$

71,471

 

 

$

74,345

 

Current capital lease obligations

 

 

93

 

 

 

Accounts payable and other accrued expenses

85,836

 

 

89,711

 

 

107,871

 

Other current liabilities

2,595

 

 

6,230

 

 

15,384

 

Customer layaway deposits

11,370

 

 

10,484

 

 

10,470

 

Income taxes payable

6,632

 

 

 

 

 

Total current liabilities

188,607

 

 

177,989

 

 

208,070

 

Long-term debt, less current maturities, net

252,808

 

 

344,960

 

 

297,166

 

Deferred gains and other long-term liabilities

2,751

 

 

7,673

 

 

6,157

 

Total liabilities

444,166

 

 

530,622

 

 

511,393

 

Commitments and contingencies

 

 

 

 

 

Temporary equity:

 

 

 

 

 

Class A Non-voting Common Stock, subject to possible redemption at $10.06 per share; none as of March 31, 2016 and 1,168,456 shares issued and outstanding at redemption value as of March 31, 2015 and September 30, 2015

 

 

11,696

 

 

11,696

 

Redeemable noncontrolling interest

(1,229

)

 

16,827

 

 

3,235

 

Total temporary equity

(1,229

)

 

28,523

 

 

14,931

 

Stockholders’ equity:

 

 

 

 

 

Class A Non-voting Common Stock, par value $.01 per share; shares authorized: 100 million as of March 31, 2016 and 2015 and September 30, 2015; issued and outstanding: 50,989,430 as of March 31, 2016; 50,681,477 as of March 31, 2015; and 50,726,289 as of September 30, 2015

510

 

 

506

 

 

507

 

Class B Voting Common Stock, convertible, par value $.01 per share; 3 million shares authorized; issued and outstanding: 2,970,171

30

 

 

30

 

 

30

 

Additional paid-in capital

312,569

 

 

329,973

 

 

307,080

 

Retained earnings

341,538

 

 

522,541

 

 

423,137

 

Accumulated other comprehensive loss

(62,805

)

 

(34,561

)

 

(54,019

)

EZCORP, Inc. stockholders’ equity

591,842

 

 

818,489

 

 

676,735

 

Noncontrolling interest

(330

)

 

 

 

 

Total equity

591,512

 

 

818,489

 

 

676,735

 

Total liabilities, temporary equity and equity

$

1,034,449

 

 

$

1,377,634

 

 

$

1,203,059

 

 

 

EZCORP, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

Six Months Ended March 31,

 

2016

 

2015

 

 

 

 

 

(Unaudited)

 

(in thousands)

Operating activities:

 

 

 

Net (loss) income

$

(86,057

)

 

$

10,115

 

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

15,141

 

 

18,097

 

Amortization of debt discount and consumer loan premium, net

4,357

 

 

4,229

 

Consumer loan loss provision

18,662

 

 

14,023

 

Deferred income taxes

(8,004

)

 

(5,536

)

Impairment of goodwill

73,921

 

 

 

Amortization of deferred financing costs

1,575

 

 

2,625

 

Amortization of prepaid commissions

7,754

 

 

6,200

 

Other adjustments

(2,149

)

 

380

 

Loss on sale or disposal of assets

682

 

 

950

 

Stock compensation expense (benefit)

2,149

 

 

(1,928

)

(Income) loss from investment in unconsolidated affiliate

(3,932

)

 

1,484

 

Changes in operating assets and liabilities, net of business acquisitions:

 

 

 

Service charges and fees receivable

10,140

 

 

2,542

 

Inventory

(993

)

 

2,499

 

Prepaid expenses, other current assets and other assets

(5,935

)

 

(16,949

)

Accounts payable, other accrued expenses, deferred gains and other long-term liabilities

(12,112

)

 

(5,925

)

Customer layaway deposits

851

 

 

1,947

 

Restricted cash

(4,860

)

 

(835

)

Income taxes receivable

51,250

 

 

4,427

 

Payments of restructuring charges

(6,701

)

 

(2,962

)

Dividends from unconsolidated affiliate

 

 

2,407

 

Net cash provided by operating activities

55,739

 

 

37,790

 

Investing activities:

 

 

 

Loans made

(323,980

)

 

(417,014

)

Loans repaid

225,138

 

 

334,888

 

Recovery of pawn loan principal through sale of forfeited collateral

121,830

 

 

138,885

 

Additions to property and equipment

(2,976

)

 

(15,934

)

Acquisitions, net of cash acquired

(6,000

)

 

(4,750

)

Investment in unconsolidated affiliate

 

 

(12,140

)

Proceeds from sale of assets

26

 

 

 

Net cash provided by investing activities

14,038

 

 

23,935

 

Financing activities:

 

 

 

Payout of deferred consideration

(14,875

)

 

(6,000

)

Repurchase of redeemable common stock issued due to acquisitions

(11,750

)

 

 

Proceeds from settlement of forward currency contracts

3,557

 

 

2,313

 

Change in restricted cash

6,519

 

 

11,476

 

Proceeds from bank borrowings, net of debt issuance costs

14,302

 

 

69,384

 

Payments on bank borrowings and capital lease obligations

(47,698

)

 

(51,677

)

Net cash (used in) provided by financing activities

(49,945

)

 

25,496

 

Effect of exchange rate changes on cash and cash equivalents

(3,620

)

 

(4,373

)

Net increase in cash and cash equivalents

16,212

 

 

82,848

 

Cash and cash equivalents at beginning of period

59,124

 

 

55,325

 

Cash and cash equivalents at end of period

$

75,336

 

 

$

138,173

 

 

 

 

 

Non-cash investing and financing activities:

 

 

 

Pawn loans forfeited and transferred to inventory

$

122,709

 

 

$

119,028

 

Issuance of common stock, subject to possible redemption, due to acquisition

 

 

11,696

 

Deferred consideration

 

 

250

 

 

 

EZCORP, Inc.

SELECTED OPERATING SEGMENT RESULTS (UNAUDITED)

 

U.S. Pawn

The following table presents selected summary financial data from continuing operations for the U.S. Pawn segment:

 

Three Months Ended March 31,

 

Percentage Change

 

2016

 

2015

 

 

 

 

 

 

 

 

(in thousands)

 

 

Net revenues:

 

 

 

 

 

Pawn service charges

$

56,614

 

 

$

52,317

 

 

8

%

 

 

 

 

 

 

Merchandise sales

94,740

 

 

92,472

 

 

2

%

Merchandise sales gross profit

36,499

 

 

30,982

 

 

18

%

Gross margin on merchandise sales

39

%

 

34

%

 

15

%

 

 

 

 

 

 

 

 

 

 

 

 

Jewelry scrapping sales

11,599

 

 

17,391

 

 

(33

)%

Jewelry scrapping sales gross profit

1,471

 

 

3,928

 

 

(63

)%

Gross margin on jewelry scrapping sales

13

%

 

23

%

 

(43

)%

 

 

 

 

 

 

Other revenues

49

 

 

224

 

 

(78

)%

Net revenues

94,633

 

 

87,451

 

 

8

%

 

 

 

 

 

 

Segment operating expenses:

 

 

 

 

 

Operations

61,240

 

 

57,920

 

 

6

%

Depreciation and amortization

3,042

 

 

3,607

 

 

(16

)%

Segment operating contribution

30,351

 

 

25,924

 

 

17

%

 

 

 

 

 

 

Other segment expenses

676

 

 

7

 

 

*

Segment contribution

$

29,675

 

 

$

25,917

 

 

15

%

 

 

 

 

 

 

Other data:

 

 

 

 

 

Net earning assets — continuing operations

$

231,956

 

 

$

210,728

 

 

10

%

Inventory turnover — general merchandise (b)

2.8

 

 

3.2

 

(13

)%

Inventory turnover — jewelry (b)

1.2

 

 

1.3

 

(8

)%

Average monthly ending pawn loan balance per store (a)

$

254

 

 

$

234

 

 

9

%

Average annual yield on pawn loans outstanding

168

%

 

169

%

 

-100bps

Pawn loan redemption rate (c)

85

%

 

85

%

 

0bps

 

*

Represents an increase or decrease in excess of 100% or not meaningful.

(a)

Balance is calculated based upon the average of the monthly ending balance averages during the applicable period.

(b)

Calculation of inventory turnover excludes the effects of scrapping.

(c)

Our pawn loan redemption rate represents the percentage of loans made that are repaid, renewed or extended.

 

 

Mexico Pawn

The following table presents selected summary financial data from continuing operations for the Mexico Pawn segment, including constant currency results, after translation to U.S. dollars from its functional currency of the Mexican peso. See “Non-GAAP Financial Information” below.

 

Three Months Ended March 31,

 

Percentage Change GAAP

 

Percentage Change Constant Currency

 

2016

 

2016 Constant Currency (a)

 

2015

 

 

 

 

 

 

 

 

 

 

 

 

 

(in USD thousands)

 

 

 

 

Net revenues:

 

 

 

 

 

 

 

 

 

Pawn service charges

$

7,516

 

 

$

9,080

 

 

$

7,153

 

 

5

%

 

27

%

 

 

 

 

 

 

 

 

 

 

Merchandise sales

14,603

 

 

17,641

 

 

14,883

 

 

(2

)%

 

19

%

Merchandise sales gross profit

4,513

 

 

5,452

 

 

4,203

 

 

7

%

 

30

%

Gross margin on merchandise sales

31

%

 

31

%

 

28

%

 

11

%

 

11

%

 

 

 

 

 

 

 

 

 

 

Jewelry scrapping sales

1,181

 

 

1,427

 

 

917

 

 

29

%

 

56

%

Jewelry scrapping sales gross profit

224

 

 

271

 

 

97

 

 

*

 

*

Gross margin on jewelry scrapping sales

19

%

 

19

%

 

11

%

 

73

%

 

73

%

 

 

 

 

 

 

 

 

 

 

Other revenues

(117

)

 

(141

)

 

269

 

 

*

 

*

Net revenues

12,136

 

 

14,662

 

 

11,722

 

 

4

%

 

25

%

 

 

 

 

 

 

 

 

 

 

Segment operating expenses:

 

 

 

 

 

 

 

 

 

Operations

9,024

 

 

10,901

 

 

10,406

 

 

(13

)%

 

5

%

Depreciation and amortization

764

 

 

923

 

 

1,101

 

 

(31

)%

 

(16

)%

Segment operating contribution

2,348

 

 

2,838

 

 

215

 

 

*

 

*

 

 

 

 

 

 

 

 

 

 

Other segment expenses (b)

277

 

 

430

 

 

260

 

 

7

%

 

65

%

Segment contribution (loss)

$

2,071

 

 

$

2,408

 

 

$

(45

)

 

*

 

*

 

 

 

 

 

 

 

 

 

 

Other data:

 

 

 

 

 

 

 

 

 

Net earning assets — continuing operations

$

34,793

 

 

$

39,600

 

 

$

33,032

 

 

5

%

 

20

%

Inventory turnover (e)

2.4

 

 

2.4

 

 

2.2

 

 

9

%

 

9

%

Average monthly ending pawn loan balance per store (c)

$

66

 

 

$

75

 

 

$

64

 

 

3

%

 

17

%

Average annual yield on pawn loans outstanding

197

%

 

202

%

 

203

%

 

-600bps

 

-100bps

Pawn loan redemption rate (d)

78

%

 

78

%

 

79

%

 

-100bps

 

-100bps

 

*

Represents an increase or decrease in excess of 100% or not meaningful.

(a)

For income statement items, the average closing daily exchange rate for the applicable period was used. For balance sheet items, the end of the period rate for the applicable period end was used.

(b)

The three-months ended March 31, 2016 constant currency balance excludes $0.1 million of net foreign currency transaction gains resulting from movement in exchange rates. The net foreign currency transaction losses for the three-months ended March 31, 2015 were $0.3 million and are not excluded from the above results.

(c)

Balance is calculated based upon the average of the monthly ending balance averages during the applicable period.

(d)

Our pawn loan redemption rate represents the percentage of loans made that are repaid, renewed or extended.

(e)

Calculation of inventory turnover excludes the effects of scrapping.

 

Grupo Finmart

The table below presents selected summary financial data from continuing operations for the Grupo Finmart segment, including constant currency results, after translation to U.S. dollars from its functional currency of the Mexican peso. See “Non-GAAP Financial Information” below.

 

Three Months Ended March 31,

 

Percentage Change GAAP

 

Percentage Change Constant Currency

 

2016

 

2016 Constant Currency (a)

 

2015

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Consumer loan fees and interest

$

13,589

 

 

$

16,416

 

 

$

16,391

 

 

(17

)%

 

%

Other revenues

98

 

 

118

 

 

49

 

 

100

%

 

 

*

Total revenues

13,687

 

 

16,534

 

 

16,440

 

 

(17

)%

 

1

%

Consumer loan bad debt

8,252

 

 

9,969

 

 

4,110

 

 

*

 

*

Net revenues

5,435

 

 

6,565

 

 

12,330

 

 

(56

)%

 

(47

)%

 

 

 

 

 

 

 

 

 

 

Segment expenses (income):

 

 

 

 

 

 

 

 

 

Operations

8,026

 

 

9,696

 

 

7,109

 

 

13

%

 

36

%

Depreciation and amortization

476

 

 

575

 

 

626

 

 

(24

)%

 

(8

)%

Impairment of goodwill (e)

73,921

 

 

73,921

 

 

 

 

*

 

*

Interest expense

4,498

 

 

5,434

 

 

6,376

 

 

(29

)%

 

(15

)%

Interest income

(120

)

 

(145

)

 

(423

)

 

(72

)%

 

(66

)%

Other (income) expense (b)

(124

)

 

 

 

1,272

 

 

*

 

*

Segment loss

$

(81,242

)

 

$

(82,916

)

 

$

(2,630

)

 

*

 

*

 

 

 

 

 

 

 

 

 

 

Other data:

 

 

 

 

 

 

 

 

 

Net earning assets — continuing operations

$

86,771

 

 

$

98,759

 

 

$

116,857

 

 

(26

)%

 

(15

)%

Consumer loan originations (c)

5,349

 

 

6,462

 

 

20,061

 

 

(73

)%

 

(68

)%

Consumer loan bad debt as a percentage of gross average consumer loan balance (d)

14

%

 

14

%

 

4

%

 

*

 

*

 

*

Represents an increase or decrease in excess of 100% or not meaningful.

(a)

For income statement items, the average closing daily exchange rate for the applicable period was used. For balance sheet items, the end of the period rate for the applicable period end was used.

(b)

The three-months ended March 31, 2016 constant currency balance excludes a $0.1 million of net foreign currency transaction gains resulting from movement in exchange rates. The net foreign currency transaction losses for the three-months ended March 31, 2015 were $1.3 million and are not excluded from the above results.

(c)

Constant currency result is calculated as the average monthly consumer loan origination balance translated at the average closing daily exchange rate for the applicable period.

(d)

Represents consumer loan bad debt expense during the applicable period as a percentage of the average monthly consumer loan balance during the applicable period. Constant currency consumer loan balance is calculated using the end of period rate for each month.

(e)

Amount not adjusted on a constant currency basis as charge occurred at a single point in time.

 

 

 

U.S. Pawn

The following table presents selected summary financial data from continuing operations for the U.S. Pawn segment:

 

Six Months Ended March 31,

 

Percentage
Change

 

2016

 

2015

 

 

 

 

 

 

 

 

(in thousands)

 

 

Net revenues:

 

 

 

 

 

Pawn service charges

$

115,235

 

 

$

109,352

 

 

5

%

 

 

 

 

 

 

Merchandise sales

186,734

 

 

181,914

 

 

3

%

Merchandise sales gross profit

73,032

 

 

61,807

 

 

18

%

Gross margin on merchandise sales

39

%

 

34

%

 

15

%

 

 

 

 

 

 

Jewelry scrapping sales

21,199

 

 

34,398

 

 

(38

)%

Jewelry scrapping sales gross profit

3,011

 

 

7,602

 

 

(60

)%

Gross margin on jewelry scrapping sales

14

%

 

22

%

 

(36

)%

 

 

 

 

 

 

Other revenues

242

 

 

408

 

 

(41

)%

Net revenues

191,520

 

 

179,169

 

 

7

%

 

 

 

 

 

 

Segment operating expenses:

 

 

 

 

 

Operations

124,785

 

 

117,427

 

 

6

%

Depreciation and amortization

6,602

 

 

7,059

 

 

(6

)%

Segment operating contribution

60,133

 

 

54,683

 

 

10

%

 

 

 

 

 

 

Other segment expenses (income)

1,659

 

 

(1

)

 

*

Segment contribution

$

58,474

 

 

$

54,684

 

 

7

%

 

 

 

 

 

 

Other data:

 

 

 

 

 

Average monthly ending pawn loan balance per store (a)

$

265

 

 

$

254

 

 

4

%

Average annual yield on pawn loans outstanding

166

%

 

166

%

 

0bps

Pawn loan redemption rate (b)

84

%

 

84

%

 

0bps

 

*

Represents an increase or decrease in excess of 100% or not meaningful.

(a)

Balance is calculated based upon the average of the monthly ending balance averages during the applicable period.

(b)

Our pawn loan redemption rate represents the percentage of loans made that are repaid, renewed or extended.

 

 

Mexico Pawn

The following table presents selected summary financial data from continuing operations for the Mexico Pawn segment, including constant currency results, after translation to U.S. dollars from its functional currency of the Mexican peso. See “Non-GAAP Financial Information” below.

 

Six Months Ended March 31,

 

Percentage Change GAAP

 

Percentage Change Constant Currency

 

2016

 

2016 Constant Currency (a)

 

2015

 

 

 

 

 

 

 

 

 

 

 

 

 

(in USD thousands)

 

 

 

 

Net revenues:

 

 

 

 

 

 

 

 

 

Pawn service charges

$

15,489

 

 

$

18,716

 

 

$

15,045

 

 

3

%

 

24

%

 

 

 

 

 

 

 

 

 

 

Merchandise sales

31,189

 

 

37,687

 

 

34,463

 

 

(10

)%

 

9

%

Merchandise sales gross profit

10,301

 

 

12,447

 

 

10,299

 

 

%

 

21

%

Gross margin on merchandise sales

33

%

 

33

%

 

30

%

 

10

%

 

10

%

 

 

 

 

 

 

 

 

 

 

Jewelry scrapping sales

1,181

 

 

1,427

 

 

2,324

 

 

(49

)%

 

(39

)%

Jewelry scrapping sales gross profit

224

 

 

271

 

 

243

 

 

(8

)%

 

12

%

Gross margin on jewelry scrapping sales

19

%

 

19

%

 

10

%

 

90

%

 

90

%

 

 

 

 

 

 

 

 

 

 

Other revenues

74

 

 

89

 

 

509

 

 

(85

)%

 

(83

)%

Net revenues

26,088

 

 

31,523

 

 

26,096

 

 

%

 

21

%

 

 

 

 

 

 

 

 

 

 

Segment operating expenses:

 

 

 

 

 

 

 

 

 

Operations

20,217

 

 

24,429

 

 

20,926

 

 

(3

)%

 

17

%

Depreciation and amortization

1,565

 

 

1,891

 

 

2,345

 

 

(33

)%

 

(19

)%

Segment operating contribution

4,306

 

 

5,203

 

 

2,825

 

 

52

%

 

84

%

 

 

 

 

 

 

 

 

 

 

Other segment expenses (b)

799

 

 

906

 

 

955

 

 

(16

)%

 

(5

)%

Segment contribution

$

3,507

 

 

$

4,297

 

 

$

1,870

 

 

88

%

 

*

 

 

 

 

 

 

 

 

 

 

Other data:

 

 

 

 

 

 

 

 

 

Average monthly ending pawn loan balance per store (c)

$

67

 

 

$

76

 

 

$

62

 

 

8

%

 

23

%

Average annual yield on pawn loans outstanding

195

%

 

196

%

 

199

%

 

-400bps

 

-300bps

Pawn loan redemption rate (d)

78

%

 

78

%

 

78

%

 

0bps

 

0bps

 

*

Represents an increase or decrease in excess of 100% or not meaningful.

(a)

For income statement items, the average closing daily exchange rate for the applicable period was used. For balance sheet items, the end of the period rate for the applicable period end was used.

(b)

The six-months ended March 31, 2016 constant currency balance excludes nominal net foreign currency transaction losses resulting from movement in exchange rates. The net foreign currency transaction losses for the six-months ended March 31, 2015 were $0.7 million and are not excluded from the above results.

(c)

Balance is calculated based upon the average of the monthly ending balance averages during the applicable period.

(d)

Our pawn loan redemption rate represents the percentage of loans made that are repaid, renewed or extended.

 

Grupo Finmart

The table below presents selected summary financial data from continuing operations for the Grupo Finmart segment, including constant currency results, after translation to U.S. dollars from its functional currency of the Mexican peso. See “Non-GAAP Financial Information” below.

 

Six Months Ended March 31,

 

Percentage Change GAAP

 

Percentage Change Constant Currency

 

2016

 

2016 Constant Currency (a)

 

2015

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Consumer loan fees and interest

$

24,403

 

 

$

29,487

 

 

$

32,706

 

 

(25

)%

 

(10

)%

Other revenues

181

 

 

219

 

 

105

 

 

72

%

 

*

Total revenues

24,584

 

 

29,706

 

 

32,811

 

 

(25

)%

 

(9

)%

Consumer loan bad debt

20,243

 

 

24,460

 

 

11,850

 

 

71

%

 

*

Net revenues

4,341

 

 

5,246

 

 

20,961

 

 

(79

)%

 

(75

)%

 

 

 

 

 

 

 

 

 

 

Segment expenses (income):

 

 

 

 

 

 

 

 

 

Operations

17,614

 

 

21,284

 

 

15,397

 

 

14

%

 

38

%

Depreciation and amortization

993

 

 

1,200

 

 

1,192

 

 

(17

)%

 

1

%

Impairment of goodwill (e)

73,921

 

 

73,921

 

 

 

 

*

 

*

Interest expense

9,563

 

 

11,555

 

 

14,657

 

 

(35

)%

 

(21

)%

Interest income

(251

)

 

(303

)

 

(904

)

 

(72

)%

 

(66

)%

Other expense (b)

644

 

 

 

 

1,446

 

 

(55

)%

 

*

Segment loss

$

(98,143

)

 

$

(102,411

)

 

$

(10,827

)

 

*

 

*

 

 

 

 

 

 

 

 

 

 

Other data:

 

 

 

 

 

 

 

 

 

Consumer loan originations (c)

$

21,319

 

 

$

25,761

 

 

$

41,958

 

 

(49

)%

 

(39

)%

Consumer loan bad debt as a percentage of gross average consumer loan balance (d)

26

%

 

26

%

 

10

%

 

*

 

*

 

*

Represents an increase or decrease in excess of 100% or not meaningful.

(a)

For income statement items, the average closing daily exchange rate for the applicable period was used. For balance sheet items, the end of the period rate for the applicable period end was used.

(b)

The six-months ended March 31, 2016 constant currency balance excludes a $0.6 million of net foreign currency transaction losses resulting from movement in exchange rates. The net foreign currency transaction losses for the six-months ended March 31, 2015 were $1.4 million and are not excluded from the above results.

(c)

Constant currency result is calculated as the average monthly consumer loan origination balance translated at the average closing daily exchange rate for the applicable period.

(d)

Represents consumer loan bad debt expense during the applicable period as a percentage of the average monthly consumer loan balance during the applicable period. Constant currency consumer loan balance is calculated using the end of period rate for each month.

(e)

Amount not adjusted on a constant currency basis as charge occurred at a single point in time.

 

 

EZCORP, Inc.

STORE COUNT ACTIVITY

 

Three Months Ended March 31, 2016

 

Company-owned Stores

 

 

 

U.S. Pawn

 

Mexico Pawn*

 

Grupo Finmart

 

Other International

 

Consolidated

 

Franchises

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2015

516

 

 

237

 

*

46

 

 

27

 

 

826

 

 

1

 

Locations acquired

6

 

 

 

 

 

 

 

 

6

 

 

 

Locations sold, combined or closed

 

 

 

 

(3

)

 

 

 

(3

)

 

(1

)

As of March 31, 2016

522

 

 

237

 

 

43

 

 

27

 

 

829

 

 

 

 

* Includes five buy/sell stores which were converted to Mexico Pawn stores during the period.

 

Three Months Ended March 31, 2015

 

Company-owned Stores

 

 

 

U.S. Pawn

 

Mexico Pawn*

 

Grupo Finmart

 

Other International

 

Consolidated

 

Franchises

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2014

509

 

 

262

 

*

53

 

 

39

 

 

863

 

 

4

 

New locations opened

 

 

1

 

 

1

 

 

 

 

2

 

 

 

Locations acquired

12

 

 

 

 

 

 

 

 

12

 

 

 

Locations sold, combined or closed

(2

)

 

(1

)

 

(4

)

 

 

 

(7

)

 

(2

)

As of March 31, 2015

519

 

 

262

 

 

50

 

 

39

 

 

870

 

 

2

 

* Includes 21 buy/sell stores.

 

Six Months Ended March 31, 2016

 

Company-owned Stores

 

 

 

U.S. Pawn

 

Mexico Pawn*

 

Grupo Finmart

 

Other International

 

Consolidated

 

Franchises

 

 

 

 

 

 

 

 

 

 

 

 

As of September 30, 2015

522

 

 

237

 

*

53

 

 

27

 

 

839

 

 

1

 

Locations acquired

6

 

 

1

 

 

 

 

 

 

7

 

 

 

Locations sold, combined or closed

(6

)

 

(1

)

 

(10

)

 

 

 

(17

)

 

(1

)

As of March 31, 2016

522

 

 

237

 

 

43

 

 

27

 

 

829

 

 

 

* Includes five buy/sell stores which were converted to Mexico Pawn stores during the period.

 

Six Months Ended March 31, 2015

 

Company-owned Stores

 

 

 

U.S. Pawn

 

Mexico Pawn*

 

Grupo Finmart

 

Other International

 

Consolidated

 

Franchises

 

 

 

 

 

 

 

 

 

 

 

 

As of September 30, 2014

504

 

 

261

 

*

53

 

 

39

 

 

857

 

 

5

 

New locations opened

5

 

 

2

 

*

1

 

 

 

 

8

 

 

 

Locations acquired

12

 

 

 

 

 

 

 

 

12

 

 

 

Locations sold, combined or closed

(2

)

 

(1

)

 

(4

)

 

 

 

(7

)

 

(3

)

As of March 31, 2015

519

 

 

262

 

 

50

 

 

39

 

 

870

 

 

2

 

* Includes 19 buy/sell stores. We acquired two additional buy/sell stores during the period.

 

NON-GAAP FINANCIAL INFORMATION

In addition to the financial information prepared in conformity with generally accepted accounting principles in the United States of America ("GAAP"), we provide certain other non-GAAP financial information on a constant currency basis ("constant currency"). We use constant currency results to evaluate results of the Mexico Pawn and Grupo Finmart segment operations, which are denominated in Mexican pesos and believe that presentation of constant currency results is meaningful and useful in understanding the activities and business metrics of our Mexico Pawn and Grupo Finmart operations and reflect an additional way of viewing aspects of our business that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting our business. We provide non-GAAP financial information for informational purposes and to enhance understanding of our GAAP consolidated financial statements. We use this non-GAAP financial information to evaluate and compare operating results across accounting periods. Readers should consider the information in addition to, but not instead of or superior to, our financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.

Constant currency results reported herein are calculated by translating condensed consolidated balance sheet and condensed consolidated statement of operations items denominated in Mexican pesos to U.S. dollars using the exchange rate from the prior-year comparable period, as opposed to the current comparable period, in order to exclude the effects of foreign currency rate fluctuations. For balance sheet items, the end of period rate as of March 31, 2016 of 17.3 to 1 was used, compared to the end of period rate as of March 31, 2015 of 15.2 to 1. For statement of operations items, the average closing daily exchange rate for the appropriate period was used. The average exchange rates for the current three and six-months ended March 31, 2016 were 18.0 to 1 and 17.4 to 1, respectively, as compared to the prior year three and six-months ended March 31, 2015 rates of 14.9 to 1 and 14.4 to 1, respectively. Constant currency results, where presented, also exclude foreign currency gain or loss and the related foreign currency derivative gain or loss impact.

The following information provides reconciliations of certain non-GAAP financial measures presented in this press release to the most directly comparable financial measures calculated and presented in accordance with GAAP, where not already included in constant currency segment results above.

Miscellaneous Non-GAAP Financial Measures

 

U.S. Dollar Amount

 

Percentage Change YOY

 

 

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

Consolidated revenue (three-months ended March 31, 2016)

$

201,899

 

 

(2

)%

Currency exchange rate fluctuations

7,671

 

 

 

Constant currency consolidated revenue (three-months ended March 31, 2016)

$

209,570

 

 

2

%

 

 

 

 

Consolidated net revenue (three-months ended March 31, 2016)

$

113,799

 

 

%

Currency exchange rate fluctuations

3,657

 

 

 

Constant currency consolidated net revenue (three-months ended March 31, 2016)

$

117,456

 

 

3

%

 

 

 

 

Consolidated operating expenses (three-months ended March 31, 2016)

$

103,852

 

 

3

%

Currency exchange rate fluctuations

3,871

 

 

 

Constant currency consolidated operating expenses (three-months ended March 31, 2016)

$

107,723

 

 

6

%

 

 

 

 

Consolidated revenue (six-months ended March 31, 2016)

$

400,353

 

 

(4

)%

Currency exchange rate fluctuations

15,108

 

 

 

Constant currency consolidated revenue (six-months ended March 31, 2016)

$

415,461

 

 

(1

)%

 

 

 

 

Consolidated net revenue (six-months ended March 31, 2016)

$

225,315

 

 

(2

)%

Currency exchange rate fluctuations

6,340

 

 

 

Constant currency consolidated net revenue (six-months ended March 31, 2016)

$

231,655

 

 

%

 

 

 

 

Consolidated operating expenses (six-months ended March 31, 2016)

$

219,225

 

 

8

%

Currency exchange rate fluctuations

8,554

 

 

 

Constant currency consolidated operating expenses (six-months ended March 31, 2016)

$

227,779

 

 

13

%

Mexico Pawn loans outstanding as of March 31, 2016

$

17,271

 

 

11

%

Currency exchange rate fluctuations

2,386

 

 

 

Constant currency Mexico Pawn loans outstanding as of March 31, 2016

$

19,657

 

 

26

%

Same store Mexico Pawn loans outstanding as of March 31, 2016

$

17,205

 

 

13

%

Currency exchange rate fluctuations

2,266

 

 

 

Constant currency same store Mexico Pawn loans outstanding as of March 31, 2016

$

19,471

 

 

28

%

Same store Mexico Pawn service charges (three-months ended March 31, 2016)

$

7,380

 

 

5

%

Currency exchange rate fluctuations

1,508

 

 

 

Constant currency same store Mexico Pawn service charges (three-months ended March 31, 2016)

$

8,888

 

 

27

%

Same store Mexico Pawn service charges (six-months ended March 31, 2016)

$

15,288

 

 

4

%

Currency exchange rate fluctuations

3,175

 

 

 

Constant currency same store Mexico Pawn service charges (six-months ended March 31, 2016)

$

18,463

 

 

25

%

 

 

 

 

 

 

[1] In addition to the financial information prepared in conformity with U.S. generally accepted accounting principles (“GAAP”), we provide certain financial information on a “constant currency” basis, which excludes the impact of foreign currency exchange rate fluctuations.  For additional information about the constant currency calculations, as well as a reconciliation of the constant currency financial measures to the comparable GAAP financial measures, see “Non-GAAP Financial Information” at the end of this release.

[2] Annualized return on pawn earning assets is equal to the annualized merchandise and scrap sales gross profit and pawn service charges, divided by average pawn loans and inventory balances outstanding.

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