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EZCORP Reports First Quarter Fiscal 2021 Results

Feb 3, 2021

AUSTIN, Texas--(BUSINESS WIRE)-- EZCORP, Inc. (NASDAQ: EZPW) today announced results for its first quarter ended December 31, 2020.

All amounts in this release are in conformity with U.S. generally accepted accounting principles ("GAAP") unless otherwise noted. Comparisons shown in this release are to the same period in the prior year unless otherwise noted.

CEO COMMENTARY AND OUTLOOK

Chief Executive Officer Jason Kulas stated, “We remain focused on strengthening and growing our core pawn business as we continue to strive to be our customers’ first and best choice for their short-term cash needs and for affordable pre-owned goods. The first quarter of fiscal 2021 was characterized by continuing growth in demand for pawn loans, building on the prior quarter’s inflection point, even as store expenses remained flat on a sequential basis. Pawn loans outstanding (PLO) ended the quarter at $148 million, up 13% on a sequential basis from $131 million at the end of September 2020, primarily reflecting continued efforts to enhance our value proposition to customers and the reduction of certain government stimulus programs. In the near term, the recently implemented second stimulus package has reduced demand for pawn loans and the upcoming tax refund season will likely further temporarily curb loan demand.

“Turning to our financial performance for the quarter, pawn service charges (PSC) and merchandise sales remained depressed relative to prior-year levels as we continue to work through rebuilding PLO following 2020 stimulus payments and other ongoing headwinds from the COVID-19 pandemic. Merchandise sales gross profits held steady on more effective inventory management. We remain on track to realize meaningful cost savings as a result of strategic initiatives we implemented last quarter and continued this quarter. Looking ahead, while store-level operating costs will rebuild as transaction activity increases, ongoing cost reduction and simplification efforts across the business generate operating leverage as revenue trends higher. Furthermore, we maintain a strong balance sheet with ample liquidity to continue to fund PLO growth, de novo store openings, and strategic inorganic growth opportunities, with an ongoing emphasis on generating strong returns on capital.

“We are there for our customers, with virtually all of our stores remaining open and with continued expansion of payment options. Moreover, we remain focused on enhancing our digital pawn servicing platform to broaden customer engagement and enhance the customer experience as we drive operating efficiencies. We also continue to leverage technology and data analytics across geographies to optimize pricing, productivity, and returns, and strengthen business development initiatives. Finally, building the most passionate and tenured store-level team in the industry remains one of our top priorities, with an ongoing focus on the health, safety, development, and retention of our team members through and beyond the pandemic.”

RESULTS FOR FIRST QUARTER OF FISCAL 2021

  • Diluted earnings per share was $0.08, compared to $0.02 in the prior-year quarter. On an adjusted basis1, diluted earnings per share was $0.13, down from $0.17 in the prior-year quarter. Income before taxes increased by $2.5 million to $5.5 million.
  • Total revenues decreased $44.3 million or 20%, primarily due to a $21.2 million or 25% decrease in PSC and a $18.9 million or 15% decrease in merchandise sales.
  • The decrease in PSC was due to a $47.7 million or 24% decrease in PLO. Pawn loan demand was significantly reduced in the third and fourth quarters of fiscal 2020 as a result of the impact of COVID-19 and the economic stimulus actions in the U.S. and constrained traffic in Latin America.
  • Although merchandise sales decreased by $18.9 million, merchandise sales gross profit improved by 1%, driven by effective inventory management and less aged inventory leading to a 600 bps improvement in merchandise sales gross profit margin to 40%. The sales margin in the prior year quarter was negatively impacted by 260 bps due to greater sales volume of aged merchandise.
  • On a sequential basis, total revenues increased $11.3 million or 7% to $178.1 million, largely driven by a 15% increase in PSC. The sequential increase in PSC was primarily due to a $16.5 million or 13% increase in the PLO balance to $147.9 million from the prior quarter.
  • Continued focus on expense control drove total operating expenses down 15% to $99.4 million. The decrease in total operating expenses was primarily the result of a $10.0 million or 11% decrease in store expenses and a $6.3 million or 34% decrease in general and administrative expenses. The decrease in expenses is primarily due to cost cutting initiatives over the last 12 months (especially in the fourth quarter of fiscal 2020) and a continued focus on expense control.
  • Net inventory was $95.0 million, down 49% year-over-year and 1% sequentially. Inventory turnover improved to 2.9x from 2.0x and on a sequential basis improved 4% from 2.8x.
  • Cash and cash equivalents at the end of the quarter was $290.5 million, an increase of $147.3 million or 103% from the prior-year quarter due to the year-over-year reduction in earning assets. On a sequential basis, cash and cash equivalents decreased $14.1 million or 5%, due to the sequential increase in PLO.

CONSOLIDATED RESULTS

Three Months Ended December 31

in millions, except per share amounts

 

     

As Reported

 

Adjusted1

 

     

2020

 

2019

 

2020

 

2019

 

     

 

 

 

 

 

 

 

Total Revenues

     

$

178.1

 

 

$

222.4

 

 

$

180.1

 

 

$

222.4

 

Net Revenues

     

$

108.4

 

 

$

130.1

 

 

$

109.5

 

 

$

130.1

 

Income, Before Tax

     

$

5.5

 

 

$

3.0

 

 

$

8.5

 

 

$

13.7

 

Net Income

     

$

4.3

 

 

$

1.2

 

 

$

7.4

 

 

$

9.3

 

Diluted Earnings Per Share

     

$

0.08

 

 

$

0.02

 

 

$

0.13

 

 

$

0.17

 

EBITDA

     

$

17.7

 

 

$

15.2

 

 

$

17.4

 

 

$

22.9

 

  • Total revenues decreased 20% to $178.1 million. PSC was down 25% to $63.5 million due to lower average PLO. On a sequential basis, PLO increased 13% from the prior quarter, compared to a 2% sequential decrease in the same period of the prior year.
  • Net revenues were down 17% to $108.4 million.
  • Consolidated merchandise sales gross profit increased 1% to $43.2 million.
  • Consolidated store expenses decreased 11% primarily due to a reduction of expenses in line with reduced activity at the store level. Total pawn store count decreased by 11 stores or 1% since the end of the prior-year quarter. General and administrative expense decreased 34% to $12.5 million, due to a continued focus on expense control.

SEGMENT RESULTS

U.S. Pawn

  • Total revenue was down 18% to $136.5 million, reflecting the impact of lower PLO driving a decrease in PSC revenue.
  • PLO decreased 21% year-over-year to $121.9 million. On a sequential basis, PLO increased 15% compared to a 1% sequential decrease in the prior-year quarter, reflecting improved loan demand.
  • PSC decreased 22% to $50.2 million as a result of lower average PLO for the quarter, offset by an increase in yield to 173% from 164%.
  • Merchandise sales declined 14% to $82.3 million. Inventory turnover improved to 2.6x from 1.8x. Merchandise sales gross margin grew from 36% to 42%, above our targeted range. Aged general merchandise inventory improved to 3.4% from 6.7%.
  • Net revenues decreased 14% to $85.6 million primarily due to lower PSC, partially offset by increased merchandise sales gross profit.
  • Store expenses were down 9% to $62.1 million driven by a reduction in labor expense.
  • Segment contribution decreased $7.8 million to $20.7 million as a result of the decrease in net revenue, partially offset by the reduction in store expenses.

Latin America Pawn

  • Total revenue was down 25% to $41.6 million, reflecting the impact of lower PLO driving a decrease in PSC revenue.
  • PLO decreased 36% year-over-year to $25.9 million. On a sequential basis, PLO increased 4% compared to a 3% sequential decrease in the prior-year quarter, reflecting improved loan demand.
  • PSC decreased 36% to $13.3 million (down 32% to $13.9 million on a constant currency basis) as a result of lower average PLO for the quarter, offset by an increase in yield to 200% from 192% in the prior year.
  • Merchandise sales declined 19% to $25.5 million (down 15% to $26.8 million on a constant currency basis), but merchandise sales gross margin was 35%, up from 28%. Inventory turnover improved to 3.8x from 2.7x. Aged general merchandise inventory increased to 9.4% from 8.5%.
  • Net revenues decreased 24% to $22.7 million (down 20% to $23.8 million on a constant currency basis) primarily due to lower PSC.
  • Store expenses were down 14% to $17.2 million driven by a reduction in labor expense.
  • Segment contribution for the quarter was $5.0 million ($5.0 million on a constant currency basis), compared to a contribution of $8.1 million in the prior year quarter, primarily reflecting lower net revenues offset by improvement in store expenses.
  • Latin America Pawn added two de novo stores in the quarter. New store openings typically pressure earnings in the short term as they ramp up, but drive higher profitability over time.

FORM 10-Q

EZCORP’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2020 has been filed with the Securities and Exchange Commission and is available in the Investor Relations section of the Company’s website at http://investors.ezcorp.com.

CONFERENCE CALL

EZCORP will host a conference call on Thursday, February 4, 2021, at 7:00 am Central Time to discuss fiscal first quarter results. Analysts and institutional investors may participate on the conference call by dialing (877) 407-0789, Conference ID: 13715451, or internationally by dialing (201) 689-8562. 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 end of the call.

ABOUT EZCORP

Formed in 1989, EZCORP has grown into a leading provider of pawn loans in the United States and Latin America. We also sell merchandise, primarily collateral forfeited from pawn lending operations and pre-owned merchandise purchased from customers. We are dedicated to satisfying the short-term cash needs of consumers who are both cash and credit constrained, focusing on an industry-leading customer experience. EZCORP is traded on NASDAQ under the symbol EZPW and is a member of the Russell 2000 Index, S&P 1000 Index and Nasdaq Composite Index.

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, current or future litigation and risks associated with the COVID-19 pandemic. 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.

1 “Adjusted” basis, which is a non-GAAP measure, excludes certain items. “Constant currency” basis, which is a non-GAAP measure, excludes the impact of foreign currency exchange rate fluctuations. “Free cash flow,” which is a non-GAAP measure, includes certain adjustments to cash flow from operating activities.

For additional information about these calculations, as well as a reconciliation to the most comparable GAAP financial measures, see “Non-GAAP Financial Information” at the end of this release. 

 

EZCORP, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

Three Months Ended

December 31,

(in thousands, except per share amount)

2020

 

2019

 

 

 

 

Revenues:

 

 

 

Merchandise sales

$

107,783

 

 

$

126,728

 

Jewelry scrapping sales

6,759

 

 

9,528

 

Pawn service charges

63,489

 

 

84,725

 

Other revenues

104

 

 

1,454

 

Total revenues

178,135

 

 

222,435

 

Merchandise cost of goods sold

64,543

 

 

84,076

 

Jewelry scrapping cost of goods sold

5,202

 

 

7,754

 

Other cost of revenues

 

 

536

 

Net revenues

108,390

 

 

130,069

 

Operating expenses:

 

 

 

Store expenses

79,309

 

 

89,275

 

General and administrative

12,510

 

 

18,839

 

Depreciation and amortization

7,572

 

 

7,733

 

(Gain) loss on sale or disposal of assets and other

(22

)

 

744

 

Total operating expenses

99,369

 

 

116,591

 

Operating income

9,021

 

 

13,478

 

Interest expense

5,455

 

 

5,329

 

Interest income

(821

)

 

(843

)

Equity in net (income) loss of unconsolidated affiliates

(516

)

 

5,897

 

Other (income) expense

(599

)

 

98

 

Income before income taxes

5,502

 

 

2,997

 

Income tax expense

1,203

 

 

1,759

 

Net income

$

4,299

 

 

$

1,238

 

 

 

 

 

Basic earnings per share

$

0.08

 

 

$

0.02

 

Diluted earnings per share

$

0.08

 

 

$

0.02

 

 

 

 

 

Weighted-average basic shares outstanding

55,361

 

 

55,666

 

Weighted-average diluted shares outstanding

55,428

 

 

55,687

 

 

EZCORP, Inc.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

December 31,

 

September 30,

(in thousands, except share and per share amounts)

2020

 

2019

 

2020

 

 

 

 

 

 

Assets:

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

290,450

 

 

$

143,141

 

 

$

304,542

 

Restricted cash

8,011

 

 

 

 

8,011

 

Pawn loans

147,852

 

 

195,586

 

 

131,323

 

Pawn service charges receivable, net

24,825

 

 

32,250

 

 

20,580

 

Inventory, net

94,980

 

 

187,369

 

 

95,891

 

Notes receivable, net

 

 

7,450

 

 

 

Prepaid expenses and other current assets

32,824

 

 

36,142

 

 

32,903

 

Total current assets

598,942

 

 

601,938

 

 

593,250

 

Investments in unconsolidated affiliates

31,773

 

 

29,272

 

 

32,458

 

Property and equipment, net

55,204

 

 

65,246

 

 

56,986

 

Lease right-of-use asset

177,308

 

 

225,950

 

 

183,809

 

Goodwill

258,453

 

 

301,282

 

 

257,582

 

Intangible assets, net

58,794

 

 

68,995

 

 

58,638

 

Notes receivable, net

1,156

 

 

1,124

 

 

1,148

 

Deferred tax asset, net

10,000

 

 

2,123

 

 

8,931

 

Other assets

5,534

 

 

5,012

 

 

4,221

 

Total assets

$

1,197,164

 

 

$

1,300,942

 

 

$

1,197,023

 

 

 

 

 

 

 

Liabilities and equity:

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current maturities of long-term debt, net

$

213

 

 

$

215

 

 

$

213

 

Accounts payable, accrued expenses and other current liabilities

67,777

 

 

51,621

 

 

71,504

 

Customer layaway deposits

9,904

 

 

12,548

 

 

11,008

 

Lease liability

45,351

 

 

48,052

 

 

49,742

 

Total current liabilities

123,245

 

 

112,436

 

 

132,467

 

Long-term debt, net

254,322

 

 

241,209

 

 

251,016

 

Deferred tax liability, net

172

 

 

2,119

 

 

524

 

Lease liability

143,620

 

 

186,352

 

 

153,040

 

Other long-term liabilities

11,303

 

 

7,226

 

 

10,849

 

Total liabilities

532,662

 

 

549,342

 

 

547,896

 

Commitments and Contingencies

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Class A Non-voting Common Stock, par value $0.01 per share; shares authorized: 100 million; issued and outstanding: 52,628,588 as of December 31, 2020; 52,886,122 as of December 31, 2019; and 52,332,848 as of September 30, 2020

526

 

 

529

 

 

521

 

Class B Voting Common Stock, convertible, par value $0.01 per share; shares authorized: 3 million; issued and outstanding: 2,970,171

30

 

 

30

 

 

30

 

Additional paid-in capital

398,269

 

 

407,440

 

 

398,475

 

Retained earnings

322,468

 

 

389,928

 

 

318,169

 

Accumulated other comprehensive loss

(56,791

)

 

(46,327

)

 

(68,068

)

Total equity

664,502

 

 

751,600

 

 

649,127

 

Total liabilities and equity

$

1,197,164

 

 

$

1,300,942

 

 

$

1,197,023

 

 

EZCORP, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

Three Months Ended

December 31,

(in thousands)

2020

 

2019

 

 

Operating activities:

 

 

 

Net income

$

4,299

 

 

$

1,238

 

Adjustments to reconcile net income to net cash flows from operating activities:

 

 

 

Depreciation and amortization

7,572

 

 

7,733

 

Amortization of debt discount and deferred financing costs

3,329

 

 

3,229

 

Amortization of lease right-of-use asset

11,504

 

 

11,474

 

Accretion of notes receivable discount and deferred compensation fee

 

 

(275

)

Deferred income taxes

(1,421

)

 

10

 

Impairment of goodwill and intangible assets

 

 

 

Other adjustments

(167

)

 

1,298

 

Provision for inventory reserve

(1,510

)

 

329

 

Stock compensation expense

524

 

 

1,695

 

Equity in net (income) loss of unconsolidated affiliates

(516

)

 

5,897

 

Changes in operating assets and liabilities:

 

 

 

Service charges and fees receivable

(4,034

)

 

(355

)

Inventory

1,323

 

 

(1,921

)

Prepaid expenses, other current assets and other assets

(713

)

 

(9,649

)

Accounts payable, accrued expenses and other liabilities

(23,460

)

 

(29,966

)

Customer layaway deposits

(1,311

)

 

(467

)

Income taxes

68

 

 

(1,188

)

Net cash used in operating activities

(4,513

)

 

(10,918

)

Investing activities:

 

 

 

Loans made

(142,936

)

 

(187,362

)

Loans repaid

77,116

 

 

109,623

 

Recovery of pawn loan principal through sale of forfeited collateral

53,981

 

 

76,515

 

Capital expenditures, net

(3,223

)

 

(5,574

)

Net cash used in investing activities

(15,062

)

 

(6,798

)

Financing activities:

 

 

 

Taxes paid related to net share settlement of equity awards

(730

)

 

(1,395

)

Payout of deferred consideration

 

 

(175

)

Proceeds from borrowings, net of issuance costs

 

 

(109

)

Payments on borrowings

(53

)

 

(292

)

Repurchase of common stock

 

 

(963

)

Net cash used in financing activities

(783

)

 

(2,934

)

Effect of exchange rate changes on cash and cash equivalents and restricted cash

6,266

 

 

1,349

 

Net decrease in cash, cash equivalents and restricted cash

(14,092

)

 

(19,301

)

Cash, cash equivalents and restricted cash at beginning of period

312,553

 

 

162,442

 

Cash, cash equivalents and restricted cash at end of period

$

298,461

 

 

$

143,141

 

 

 

 

 

Supplemental disclosure of cash flow information

 

 

 

Cash and cash equivalents

$

290,450

 

 

$

143,141

 

Restricted cash

8,011

 

 

 

Total cash and cash equivalents and restricted cash

$

298,461

 

 

$

143,141

 

 

 

 

 

Non-cash investing and financing activities:

 

 

 

Pawn loans forfeited and transferred to inventory

$

50,921

 

 

$

82,878

 

 

EZCORP, Inc.

OPERATING SEGMENT RESULTS

(Unaudited and in thousands)

 

 

Three Months Ended December 31, 2020

(in thousands)

U.S. Pawn

 

Latin America
Pawn

 

Other
International

 

Total Segments

 

Corporate
Items

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Merchandise sales

$

82,253

 

 

$

25,530

 

 

$

 

 

$

107,783

 

 

$

 

 

$

107,783

 

Jewelry scrapping sales

4,004

 

 

2,755

 

 

$

 

 

6,759

 

 

 

 

6,759

 

Pawn service charges

50,220

 

 

13,269

 

 

$

 

 

63,489

 

 

 

 

63,489

 

Other revenues

22

 

 

7

 

 

$

75

 

 

104

 

 

 

 

104

 

Total revenues

136,499

 

 

41,561

 

 

$

75

 

 

178,135

 

 

 

 

178,135

 

Merchandise cost of goods sold

48,059

 

 

16,484

 

 

$

 

 

64,543

 

 

 

 

64,543

 

Jewelry scrapping cost of goods sold

2,844

 

 

2,358

 

 

$

 

 

5,202

 

 

 

 

5,202

 

Other cost of revenues

 

 

 

 

$

 

 

 

 

 

 

 

Net revenues

85,596

 

 

22,719

 

 

$

75

 

 

108,390

 

 

 

 

108,390

 

Segment and corporate expenses (income):

 

 

 

 

 

 

 

 

 

 

 

Store expenses

62,092

 

 

17,217

 

 

$

 

 

79,309

 

 

 

 

79,309

 

General and administrative

 

 

 

 

$

 

 

 

 

12,510

 

 

12,510

 

Depreciation and amortization

2,736

 

 

1,860

 

 

$

 

 

4,596

 

 

2,976

 

 

7,572

 

Loss (gain) on sale or disposal of assets and other

27

 

 

(101

)

 

$

 

 

(74

)

 

52

 

 

(22

)

Interest expense

 

 

 

 

$

 

 

 

 

5,455

 

 

5,455

 

Interest income

 

 

(764

)

 

$

 

 

(764

)

 

(57

)

 

(821

)

Equity in net income of unconsolidated affiliates

 

 

 

 

$

(516

)

 

(516

)

 

 

 

(516

)

Other (income) expense

 

 

(455

)

 

$

(210

)

 

(665

)

 

66

 

 

(599

)

Segment contribution

$

20,741

 

 

$

4,962

 

 

$

801

 

 

$

26,504

 

 

 

 

 

Income (loss) before income taxes

 

 

 

 

 

 

$

26,504

 

 

$

(21,002

)

 

$

5,502

 

 

Three Months Ended December 31, 2019

(in thousands)

U.S. Pawn

 

Latin America
Pawn

 

Other
International

 

Total Segments

 

Corporate
Items

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Merchandise sales

$

95,354

 

 

$

31,374

 

 

$

 

 

$

126,728

 

 

$

 

 

$

126,728

 

Jewelry scrapping sales

6,117

 

 

3,411

 

 

 

 

9,528

 

 

 

 

9,528

 

Pawn service charges

64,090

 

 

20,635

 

 

 

 

84,725

 

 

 

 

84,725

 

Other revenues

36

 

 

25

 

 

1,393

 

 

1,454

 

 

 

 

1,454

 

Total revenues

165,597

 

 

55,445

 

 

1,393

 

 

222,435

 

 

 

 

222,435

 

Merchandise cost of goods sold

61,364

 

 

22,712

 

 

 

 

84,076

 

 

 

 

84,076

 

Jewelry scrapping cost of goods sold

4,755

 

 

2,999

 

 

 

 

7,754

 

 

 

 

7,754

 

Other cost of revenues

 

 

 

 

536

 

 

536

 

 

 

 

536

 

Net revenues

99,478

 

 

29,734

 

 

857

 

 

130,069

 

 

 

 

130,069

 

Segment and corporate expenses (income):

 

 

 

 

 

 

 

 

 

 

 

Store expenses

68,059

 

 

19,983

 

 

1,233

 

 

89,275

 

 

 

 

89,275

 

General and administrative

 

 

 

 

 

 

 

 

18,839

 

 

18,839

 

Impairment of goodwill, intangible and other assets

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

2,865

 

 

1,889

 

 

34

 

 

4,788

 

 

2,945

 

 

7,733

 

Loss on sale or disposal of assets and other

 

 

28

 

 

 

 

28

 

 

716

 

 

744

 

Interest expense

 

 

28

 

 

170

 

 

198

 

 

5,131

 

 

5,329

 

Interest income

 

 

(388

)

 

 

 

(388

)

 

(455

)

 

(843

)

Equity in net loss of unconsolidated affiliates

 

 

 

 

5,897

 

 

5,897

 

 

 

 

5,897

 

Other expense (income)

 

 

67

 

 

(1

)

 

66

 

 

32

 

 

98

 

Segment contribution (loss)

$

28,554

 

 

$

8,127

 

 

$

(6,476

)

 

$

30,205

 

 

 

 

 

Income (loss) before income taxes

 

 

 

 

 

 

$

30,205

 

 

$

(27,208

)

 

$

2,997

 

 

 

 

 

 

 

 

 

 

 

 

 

EZCORP, Inc.

STORE COUNT ACTIVITY

(Unaudited)

   

 

 

Three Months Ended December 31, 2020

 

 

U.S. Pawn

 

Latin America
Pawn

 

Consolidated

 

 

 

 

 

 

 

As of September 30, 2020

 

505

 

 

500

 

 

1,005

 

New locations opened

 

 

 

2

 

 

2

 

As of December 31, 2020

 

505

 

 

502

 

 

1,007

 

 

 

Three Months Ended December 31, 2019

 

 

U.S. Pawn

 

Latin America
Pawn

 

Other
International

 

Consolidated

 

 

 

 

 

 

 

 

 

As of September 30, 2019

 

512

 

 

480

 

 

22

 

 

1,014

 

New locations opened

 

 

 

4

 

 

 

 

4

 

As of December 31, 2019

 

512

 

 

484

 

 

22

 

 

1,018

 

Non-GAAP Financial Information (Unaudited)

In addition to the financial information prepared in conformity with accounting principles generally accepted in the United States ("GAAP"), we provide certain other non-GAAP financial information on a constant currency ("constant currency") and adjusted basis. We use constant currency results to evaluate our Latin America Pawn operations, which are denominated primarily in Mexican pesos and other Latin American currencies. We believe that presentation of constant currency and adjusted results is meaningful and useful in understanding the activities and business metrics of our operations and reflect an additional way of viewing aspects of our business that, when viewed with 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 primarily 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 consolidated balance sheet and consolidated statement of operations items denominated in local currency to U.S. dollars using the exchange rate from the prior-year comparable period, as opposed to the current period, in order to exclude the effects of foreign currency rate fluctuations. We used the end-of-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. The end-of-period and approximate average exchange rates for each applicable currency as compared to U.S. dollars as of and for the three months ended December 31, 2020 and 2019 and September 30, 2020 and 2019 were as follows:

 

 

December 31,

 

Three Months Ended

December 31,

 

September 30,

 

Three Months Ended
September 30,

 

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexican peso

 

19.9

 

 

18.9

 

 

20.5

 

 

19.2

 

 

21.6

 

19.7

 

22.1

 

 

19.4

 

Guatemalan quetzal

 

7.6

 

 

7.5

 

 

7.6

 

 

7.5

 

 

7.6

 

7.6

 

7.5

 

 

7.5

 

Honduran lempira

 

23.8

 

 

24.4

 

 

24.1

 

 

24.3

 

 

24.3

 

24.2

 

24.3

 

 

24.1

 

Peruvian sol

 

3.6

 

 

3.3

 

 

3.6

 

 

3.3

 

 

3.5

 

3.4

 

3.5

 

 

3.3

 

Our statement of operations constant currency results reflect the monthly exchange rate fluctuations and so are not directly calculable from the above rates. Constant currency results, where presented, also exclude the foreign currency gain or loss.

Miscellaneous Non-GAAP Financial Measures

 

2021 Q1

 

2020 Q1

 

 

 

 

 

(in millions)

Net income

$

4.3

 

 

$

1.2

 

Interest expense

5.4

 

 

5.3

 

Interest income

(0.8

)

 

(0.8

)

Income tax expense

1.2

 

 

1.8

 

Depreciation and amortization

7.6

 

 

7.7

 

EBITDA

$

17.7

 

 

$

15.2

 

 

Total
Revenues

 

Net
Revenues

 

Income
Before Tax

 

Tax Effect

 

Net
Income

 

Diluted EPS

 

EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2021 Q1 Reported

$

178.1

 

 

$

108.4

 

 

$

5.5

 

 

$

1.2

 

 

$

4.3

 

 

$

0.08

 

 

$

17.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract termination costs

 

 

 

 

(0.4

)

 

(0.1

)

 

(0.3

)

 

(0.01

)

 

(0.4

)

Non cash interest

 

 

 

 

3.3

 

 

 

 

3.3

 

 

0.06

 

 

 

Other adjustments

 

 

 

 

0.1

 

 

 

 

0.1

 

 

 

 

0.1

 

Constant currency impact

2.0

 

 

1.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2021 Q1 Adjusted

$

180.1

 

 

$

109.5

 

 

$

8.5

 

 

$

1.1

 

 

$

7.4

 

 

$

0.13

 

 

$

17.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total
Revenues

 

Net
Revenues

 

Income
Before Tax

 

Tax Effect

 

Net
Income

 

Diluted EPS

 

EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020 Q1 Reported

$

222.4

 

 

$

130.1

 

 

$

3.0

 

 

$

1.8

 

 

$

1.2

 

 

$

0.02

 

 

$

15.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact on CCV earnings from litigation settlement

 

 

 

 

7.1

 

 

2.1

 

 

5.0

 

 

0.09

 

 

7.1

 

Termination of non-core software project

 

 

 

 

0.6

 

 

0.1

 

 

0.5

 

 

0.01

 

 

0.6

 

Non cash interest

 

 

 

 

3.0

 

 

0.4

 

 

2.6

 

 

0.05

 

 

 

Constant currency impact

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020 Q1 Adjusted

$

222.4

 

 

$

130.1

 

 

$

13.7

 

 

$

4.4

 

 

$

9.3

 

 

$

0.17

 

 

$

22.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2021 Q1:

U.S. Dollar
Amount

 

Percentage
Change YOY

 

 

 

 

 

(in millions)

 

 

Consolidated revenue (three months ended December 31, 2020)

$

178.1

 

 

(20)

%

Currency exchange rate fluctuations

2.0

 

 

 

Constant currency consolidated revenue (three months ended December 31, 2020)

$

180.1

 

 

(19)

%

 

 

 

 

Consolidated net revenue (three months ended December 31, 2020)

$

108.4

 

 

(17)

%

Currency exchange rate fluctuations

$

1.1

 

 

 

Constant currency consolidated net revenue (three months ended December 31, 2020)

$

109.5

 

 

(16)

%

 

 

 

 

Consolidated net inventory

$

95.0

 

 

(49)

%

Currency exchange rate fluctuations

$

0.7

 

 

 

Constant currency consolidated net inventory

$

95.7

 

 

(49)

%

 

 

 

 

Latin America Pawn net revenue (three months ended December 31, 2020)

$

22.7

 

 

(24)

%

Currency exchange rate fluctuations

$

1.1

 

 

 

Constant currency Latin America Pawn net revenue (three months ended December 31, 2020)

$

23.8

 

 

(20)

%

 

 

 

 

Latin America Pawn PLO

$

25.9

 

 

(36)

%

Currency exchange rate fluctuations

$

1.1

 

 

 

Constant currency Latin America Pawn PLO

$

27.0

 

 

(33)

%

 

 

 

 

Latin America Pawn PSC revenues (three months ended December 31, 2020)

$

13.3

 

 

(36)

%

Currency exchange rate fluctuations

$

0.6

 

 

 

Constant currency Latin America Pawn PSC revenues (three months ended December 31, 2020)

$

13.9

 

 

(32)

%

 

 

 

 

Latin America Pawn merchandise sales (three months ended December 31, 2020)

$

25.5

 

 

(19)

%

Currency exchange rate fluctuations

$

1.3

 

 

 

Constant currency Latin America Pawn merchandise sales (three months ended December 31, 2020)

$

26.8

 

 

(15)

%

 

 

 

 

Latin America Pawn segment profit before tax (three months ended December 31, 2020)

$

5.0

 

 

(39)

%

Currency exchange rate fluctuations

$

 

 

 

Constant currency Latin America Pawn segment profit before tax (three months ended December 31, 2020)

$

5.0

 

 

(38)

%

 

Email: Investor_Relations@ezcorp.com
Phone: (512) 314-2220

Source: EZCORP, Inc.

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