Exhibit 99.1
EZCORP REPORTS THIRD QUARTER REVENUES OF $241 MILLION,
AND EARNINGS PER SHARE OF $0.21
Company confirms Q4 EPS outlook of $0.37-$0.39 including the impact of its recent financing
AUSTIN, Texas (July 29, 2014) — EZCORP, Inc. (NASDAQ: EZPW), a leading provider of easy cash solutions for consumers, today announced its financial results for the third quarter of fiscal 2014.
For the quarter, total revenues were $241 million, with net income from continuing operations of $11.3 million and earnings per share of $0.21.
Mark Kuchenrither, EZCORP’s Interim President and Chief Executive Officer, stated, “We are pleased to have met our outlook for the third quarter. Our Pawn businesses and our Grupo Finmart business continued to drive our growth, representing 69% of our total revenues this quarter. During the quarter we strengthened our financial flexibility by raising $230 million through a private convertible debt offering which enabled us to pay off all amounts outstanding under our senior secured credit agreement and to buy back one million shares of stock. These capital structure enhancements in combination with our improving operational efficiencies enhance our ability to grow revenue and earnings, while improving the customer experience."
Consolidated Financial Highlights — Third Quarter Fiscal 2014 vs. Prior Year Quarter
| |
| • | Earning assets, including credit service organization (CSO) loans, were $443 million at quarter-end, an increase of 7% from continuing operations, as a result of growth in consumer loans at Grupo Finmart, as well as strong growth of installment loans in the U.S. |
| |
| • | Total revenues were $241 million, an increase of 3% compared to $235 million in the same period last year. Excluding an expected decrease in gold scrapping, total revenues were up 6%, driven by 3% increases in consumer loan fees and merchandise sales in the United States and Mexico. In addition, we had two structured financing transactions at Grupo Finmart from which we recognized $10 million of revenues. |
| |
| • | Cash and cash equivalents, including restricted cash, were $86 million at quarter-end, with aggregate consolidated debt of $382 million, comprised of the $230 million of our newly issued convertible debt and $152 million of Grupo Finmart third-party debt, which is non-recourse to EZCORP. |
U.S. & Canada
Pawn —
| |
| ▪ | Pawn loan balances were $141 million at quarter-end, up 2% in total and up 3% on a same-store basis due to transactional growth in new loans made in general merchandise and jewelry. |
| |
| ▪ | Redemption rates were 85%, up 100 basis points compared to a year ago, driven by a 200 basis point increase in the jewelry redemption rate to 89%, and a 100 basis point increase in general merchandise redemption rate to 78%. |
| |
| ▪ | Total merchandise sales increased 4% in total and 5% on a same-store basis over the same quarter last year, driven by growth in storefront jewelry sales and strong online performance. Gross margin on merchandise sales was 38%. |
| |
| ▪ | Jewelry sales increased 18% in total and 16% on a same-store basis compared to the same quarter last year, with gross margin of 43%. For the first nine months of the fiscal year, jewelry sales growth was 27% in total and 23% on a same-store basis. |
| |
| ▪ | Online sales grew 51% over the same quarter last year and accounted for roughly10% of the segment’s total merchandise sales. Gross margin was 43% as compared to 42% for the same quarter last year. |
Financial Services —
| |
| • | Total loan balances including CSO loans, net of reserves, were $48 million at quarter-end, a 5% increase over the same quarter last year. For the quarter, including CSO loans, installment loans were up 51% while auto title loans decreased 1% and traditional payday loans declined 9%. |
| |
| • | Total loan fees were $42 million, up 4% over the same quarter last year. The gap in growth between loan balances and fees year-over-year is the result of a shift in product mix to lower yielding products driven by a more competitive marketplace and regulatory impact. |
| |
| • | Bad debt as a percentage of fees was 31%, up 600 basis points over the same quarter last year, driven primarily by our online lending business. |
Latin America
Consumer Lending —
On the last day of the third quarter of fiscal 2014, EZCORP acquired an additional 16% percent ownership of Grupo Finmart and now owns 76% of the company. Grupo Finmart is a vertically integrated lender focused on the following core business activities:
| |
| • | Development and servicing of primarily government agency contracts authorizing Grupo Finmart to lend to agency employees. |
| |
| • | Origination of new loans through a number of expanding sales channels (direct/indirect sales teams, call center, mobile units and branches). |
| |
| • | Grupo Finmart is a financial intermediary that has developed a hybrid business comprised of a distributor model and a loan portfolio model. |
| |
| • | Grupo Finmart began using structured financing transactions in the first quarter of this year. As a result, Grupo Finmart operates as a distributor, while continuing to service customer loans. |
| |
| • | Grupo Finmart will continue to grow the loan portfolio as well as sell a portion of the portfolio on a regular basis. |
| |
| • | The hybrid approach is an important competitive advantage for the business that allows for maximum flexibility, healthy diversification in funding sources and consistent availability of capital for growth. |
In the third quarter, Grupo Finmart's financial results were driven by focusing on organic growth initiatives, optimizing financing strategy, and capitalizing on increasing market demand.
| |
| • | New loan originations for the quarter grew 22% over last year to $22 million from $18 million. |
| |
| • | Total consumer loan fees and interest was $15 million, up 15% as compared to the same period last year. |
| |
| • | Three new government contracts were signed including one with the State of Tabasco. |
| |
| • | Bad debt as a percentage of fees was 9%, up from 5% in the same last quarter last year. |
| |
| • | Our planned structured financing transactions this quarter resulted in $38 million in accelerated cash flow to fund new loan originations, and a $10 million gain reported in “Consumer loan sales and other.” |
| |
| • | This quarter's structured asset sales represented less than 25% of the company's current loan portfolio. |
Pawn — Latin America
| |
| • | Pawn loan balances were $17 million, up 7% over the same quarter last year. The yield on the loan balance improved 1100 basis points to 195% as compared to the same period last year. |
| |
| • | Redemption rates were 76%, up 300 basis points compared to a year ago, driven by a 600 basis point increase in jewelry redemption rates to 75% and a 300 basis point increase in general merchandise to 76%. |
| |
| • | Merchandise sales decreased 4% compared to last year. |
Other International
Online Lending —
| |
| • | At Cash Genie, our U.K. online lending business, total loan fees were $5 million for the quarter. |
| |
| ▪ | Total loan balances at the end of the quarter were $3 million. |
| |
| ▪ | Bad debt as a percentage of fees was 66% for the quarter, as a result of business changes related to Financial Conduct Authority (FCA) regulations. |
Strategic Affiliates —
| |
| • | Our income from our Cash Converters International affiliate was $2 million. |
CEO Commentary
Mr. Kuchenrither added, “As we have announced, there have been significant changes to the management and board of EZCORP over the past two weeks. These strategic changes were made in order to refocus the company on building a sustainable growth model which creates long-term shareholder value. We will employ a capital allocation strategy that is focused on achieving a return on invested capital of at least 15%."
Outlook
The company confirms its outlook for Q4 earnings per share of $0.37 to $0.39 from continuing operations, including the impact of our recent financing. This outlook does not take into account any potential expenses related to the recent management and board changes at the company.
The company provides supplemental information on its website. For additional content, please see "Investor Resources & Supplemental Information" at http://investors.ezcorp.com/.
About EZCORP
EZCORP, Inc. is a leader in delivering easy cash solutions to our customers across channels, products, services and markets. With approximately 7,500 team members and approximately 1,400 locations and branches, we give our customers multiple ways to access instant cash, including pawn loans and consumer loans in the United States, Mexico, Canada and the United Kingdom. We offer these products through four primary channels: in-store, online, at the worksite and through our mobile platform. At our pawn and buy/sell stores and online, we also sell merchandise, primarily collateral forfeited from pawn lending operations and used merchandise purchased from customers.
EZCORP owns controlling interests in Prestaciones Finmart, S.A.P.I. de C.V., SOFOM, E.N.R. (doing business under the names “Crediamigo” and “Adex”), a leading provider of consumer loans in Mexico; and in Renueva Commercial, S.A.P.I. de C.V., an operator of buy/sell stores in Mexico under the name “TUYO.” The company also has a significant investment in Cash Converters International Limited (CCV.ASX), which franchises and operates a worldwide network of over 700 stores that provide personal financial services and sell pre-owned merchandise.
For the latest information on EZCORP, please visit our website at: http://investors.ezcorp.com/.
Forward-Looking Statements
This announcement contains certain forward-looking statements regarding the company’s expected operating and financial performance for future periods. 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 fluctuations in gold prices or the desire of our customers to pawn or sell their gold items, changes in the regulatory environment, changing market conditions in the overall economy and the industry, and consumer demand for the company’s services and merchandise. 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.
Contact:
Mark Trinske
Vice President, Investor Relations and Communications
EZCORP, Inc.
(512) 314-2220
Investor_Relations@ezcorp.com
http://investors.ezcorp.com/
EZCORP, Inc.
Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | | Nine Months Ended June 30, |
| | 2014 | | 2013 | | 2014 | | 2013 |
| Revenues: | | | | | | | |
| Merchandise sales | $ | 89,170 |
| | $ | 86,576 |
| | $ | 298,211 |
| | $ | 281,262 |
|
| Jewelry scrapping sales | 20,273 |
| | 26,288 |
| | 74,169 |
| | 113,579 |
|
| Pawn service charges | 59,917 |
| | 60,397 |
| | 183,212 |
| | 187,812 |
|
| Consumer loan fees and interest | 61,144 |
| | 59,234 |
| | 192,258 |
| | 183,119 |
|
| Consumer loan sales and other | 10,876 |
| | 2,671 |
| | 22,587 |
| | 10,169 |
|
| Total revenues | 241,380 |
| | 235,166 |
| | 770,437 |
| | 775,941 |
|
| Merchandise cost of goods sold | 55,751 |
| | 51,050 |
| | 183,196 |
| | 164,711 |
|
| Jewelry scrapping cost of goods sold | 15,131 |
| | 20,377 |
| | 55,262 |
| | 80,993 |
|
| Consumer loan bad debt | 17,246 |
| | 12,518 |
| | 46,100 |
| | 34,496 |
|
| Net revenues | 153,252 |
| | 151,221 |
| | 485,879 |
| | 495,741 |
|
| Operating expenses: | | | | | | | |
| Operations | 109,575 |
| | 104,230 |
| | 330,408 |
| | 309,346 |
|
| Administrative | 14,467 |
| | 12,644 |
| | 50,244 |
| | 34,918 |
|
| Depreciation | 7,551 |
| | 7,377 |
| | 22,556 |
| | 21,008 |
|
| Amortization | 1,640 |
| | 1,591 |
| | 5,555 |
| | 3,621 |
|
| (Gain) loss on sale or disposal of assets | (26 | ) | | 178 |
| | (5,974 | ) | | 220 |
|
| Total operating expenses | 133,207 |
| | 126,020 |
| | 402,789 |
| | 369,113 |
|
| Operating income | 20,045 |
| | 25,201 |
| | 83,090 |
| | 126,628 |
|
| Interest expense, net | 6,073 |
| | 3,637 |
| | 15,680 |
| | 11,027 |
|
| Equity in net income of unconsolidated affiliates | (2,117 | ) | | (4,328 | ) | | (3,880 | ) | | (13,491 | ) |
| Impairment of investments | — |
| | — |
| | 7,940 |
| | — |
|
| Other (income) expense | (370 | ) | | 96 |
| | 786 |
| | — |
|
| Income from continuing operations before income taxes | 16,459 |
|
| 25,796 |
|
| 62,564 |
| | 129,092 |
|
| Income tax expense | 4,302 |
| | 9,139 |
| | 18,387 |
| | 42,084 |
|
| Income from continuing operations, net of tax | 12,157 |
|
| 16,657 |
|
| 44,177 |
| | 87,008 |
|
| Income (loss) from discontinued operations, net of tax | 186 |
| | (21,497 | ) | | 1,628 |
| | (24,813 | ) |
| Net income (loss) | 12,343 |
|
| (4,840 | ) |
| 45,805 |
| | 62,195 |
|
| Net income from continuing operations attributable to redeemable noncontrolling interest | 837 |
| | 1,041 |
| | 3,738 |
| | 3,378 |
|
| Net income (loss) attributable to EZCORP, Inc. | $ | 11,506 |
|
| $ | (5,881 | ) |
| $ | 42,067 |
| | $ | 58,817 |
|
| | | | | | | | |
| Diluted earnings (loss) per share attributable to EZCORP, Inc.: | | | | | | | |
| Continuing operations | $ | 0.21 |
| | $ | 0.29 |
| | $ | 0.74 |
| | $ | 1.56 |
|
| Discontinued operations | — |
| | (0.40 | ) | | 0.03 |
| | (0.46 | ) |
| Diluted earnings per share | $ | 0.21 |
| | $ | (0.11 | ) | | $ | 0.77 |
| | $ | 1.10 |
|
| | | | | | | | |
| Weighted average shares outstanding diluted | 54,395 |
| | 54,255 |
| | 54,529 |
| | 53,540 |
|
| | | | | | | | |
| Net income from continuing operations attributable to EZCORP, Inc. | $ | 11,320 |
| | $ | 15,616 |
| | $ | 40,439 |
| | $ | 83,630 |
|
| Income (loss) from discontinued operations attributable to EZCORP, Inc. | 186 |
| | (21,497 | ) | | 1,628 |
| | (24,813 | ) |
| Net income (loss) attributable to EZCORP, Inc. | $ | 11,506 |
| | $ | (5,881 | ) | | $ | 42,067 |
| | $ | 58,817 |
|
EZCORP, Inc.
Consolidated Balance Sheets (Unaudited)
(in thousands)
|
| | | | | | | |
| | June 30, |
| | 2014 | | 2013 |
| Assets: | | | |
| Current assets: | | | |
| Cash and cash equivalents | $ | 49,999 |
| | $ | 45,955 |
|
| Restricted cash | 13,248 |
| | 3,132 |
|
| Pawn loans | 157,491 |
| | 154,095 |
|
| Consumer loans, net | 76,748 |
| | 42,883 |
|
| Pawn service charges receivable, net | 29,307 |
| | 28,590 |
|
| Consumer loan fees and interest receivable, net | 38,351 |
| | 35,315 |
|
| Inventory, net | 132,021 |
| | 122,503 |
|
| Deferred tax asset | 13,825 |
| | 15,716 |
|
| Income tax prepaid | 21,779 |
| | 12,937 |
|
| Prepaid expenses and other assets | 113,458 |
| | 37,377 |
|
| Total current assets | 646,227 |
| | 498,503 |
|
| Investments in unconsolidated affiliates | 90,730 |
| | 146,707 |
|
| Property and equipment, net | 109,458 |
| | 110,312 |
|
| Restricted cash, non-current | 22,473 |
| | 2,182 |
|
| Goodwill | 436,765 |
| | 430,940 |
|
| Intangible assets, net | 62,915 |
| | 60,687 |
|
| Non-current consumer loans, net | 51,798 |
| | 82,935 |
|
| Deferred tax asset | 9,308 |
| | — |
|
| Other assets, net | 92,693 |
| | 28,835 |
|
| Total assets | $ | 1,522,367 |
| | $ | 1,361,101 |
|
| Liabilities and stockholders’ equity: | | | |
| Current liabilities: | | | |
| Current maturities of long-term debt | $ | 21,029 |
| | $ | 33,525 |
|
| Current capital lease obligations | 520 |
| | 533 |
|
| Accounts payable and other accrued expenses | 90,234 |
| | 68,960 |
|
| Other current liabilities | 8,716 |
| | 22,640 |
|
| Customer layaway deposits | 8,206 |
| | 7,912 |
|
| Total current liabilities | 128,705 |
| | 133,570 |
|
| Long-term debt, less current maturities | 360,628 |
| | 198,374 |
|
| Long-term capital lease obligations | — |
| | 521 |
|
| Deferred tax liability | — |
| | 8,948 |
|
| Deferred gains and other long-term liabilities | 18,463 |
| | 23,351 |
|
| Total liabilities | 507,796 |
| | 364,764 |
|
| Temporary equity: | | | |
| Redeemable noncontrolling interest | 36,645 |
| | 56,837 |
|
| EZCORP, Inc. stockholders’ equity | 977,926 |
| | 939,500 |
|
| Total liabilities and stockholders’ equity | $ | 1,522,367 |
| | $ | 1,361,101 |
|
EZCORP, Inc.
Operating Segment Results (Unaudited)
(in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, 2014 |
| | U.S. & Canada | | Latin America | | Other International | | Total Segments | | Corporate Items | | Consolidated |
| Revenues: | | | | | | | | | | | |
| Merchandise sales | $ | 74,674 |
| | $ | 14,496 |
| | $ | — |
| | $ | 89,170 |
| | $ | — |
| | $ | 89,170 |
|
| Jewelry scrapping sales | 18,909 |
| | 1,364 |
| | — |
| | 20,273 |
| | — |
| | 20,273 |
|
| Pawn service charges | 51,894 |
| | 8,023 |
| | — |
| | 59,917 |
| | — |
| | 59,917 |
|
| Consumer loan fees and interest | 41,749 |
| | 14,839 |
| | 4,556 |
| | 61,144 |
| | — |
| | 61,144 |
|
| Consumer loan sales and other | 531 |
| | 10,333 |
| | 12 |
| | 10,876 |
| | — |
| | 10,876 |
|
| Total revenues | 187,757 |
| | 49,055 |
| | 4,568 |
| | 241,380 |
| | — |
| | 241,380 |
|
| Merchandise cost of goods sold | 45,927 |
| | 9,824 |
| | — |
| | 55,751 |
| | — |
| | 55,751 |
|
| Jewelry scrapping cost of goods sold | 13,894 |
| | 1,237 |
| | — |
| | 15,131 |
| | — |
| | 15,131 |
|
| Consumer loan bad debt | 12,894 |
| | 1,361 |
| | 2,991 |
| | 17,246 |
| | — |
| | 17,246 |
|
| Net revenues | 115,042 |
| | 36,633 |
| | 1,577 |
| | 153,252 |
| | — |
| | 153,252 |
|
| Operating expenses (income): | | | | | | |
| | | | — |
|
| Operations | 84,553 |
| | 22,112 |
| | 2,910 |
| | 109,575 |
| | — |
| | 109,575 |
|
| Administrative | — |
| | — |
| | — |
| | — |
| | 14,467 |
| | 14,467 |
|
| Depreciation | 4,305 |
| | 1,502 |
| | 80 |
| | 5,887 |
| | 1,664 |
| | 7,551 |
|
| Amortization | 414 |
| | 329 |
| | 4 |
| | 747 |
| | 893 |
| | 1,640 |
|
| Loss (gain) on sale or disposal of assets | 129 |
| | 11 |
| | (160 | ) | | (20 | ) | | (6 | ) | | (26 | ) |
| Interest expense (income), net | — |
| | 4,234 |
| | (2 | ) | | 4,232 |
| | 1,841 |
| | 6,073 |
|
| Equity in net income of unconsolidated affiliates | — |
| | — |
| | (2,117 | ) | | (2,117 | ) | | — |
| | (2,117 | ) |
| Other (income) expense | (7 | ) | | (167 | ) | | — |
| | (174 | ) | | (196 | ) | | (370 | ) |
| Segment contribution | $ | 25,648 |
| | $ | 8,612 |
| | $ | 862 |
| | $ | 35,122 |
| |
| | |
| Income (loss) from continuing operations before income taxes | | | | | | | $ | 35,122 |
| | $ | (18,663 | ) | | $ | 16,459 |
|
EZCORP, Inc.
Operating Segment Results (Unaudited)
(in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, 2013 |
| | U.S. & Canada | | Latin America | | Other International | | Segments Total | | Corporate Items | | Consolidated |
| Revenues: | | | | | | | | | | | |
| Merchandise sales | $ | 71,464 |
| | $ | 15,112 |
| | $ | — |
| | $ | 86,576 |
| | $ | — |
| | $ | 86,576 |
|
| Jewelry scrapping sales | 26,288 |
| | — |
| | — |
| | 26,288 |
| | — |
| | 26,288 |
|
| Pawn service charges | 52,505 |
| | 7,892 |
| | — |
| | 60,397 |
| | — |
| | 60,397 |
|
| Consumer loan fees and interest | 40,279 |
| | 12,864 |
| | 6,091 |
| | 59,234 |
| | — |
| | 59,234 |
|
| Consumer loan sales and other | 1,058 |
| | 1,034 |
| | 579 |
| | 2,671 |
| | — |
| | 2,671 |
|
| Total revenues | 191,594 |
| | 36,902 |
| | 6,670 |
| | 235,166 |
| | — |
| | 235,166 |
|
| Merchandise cost of goods sold | 41,795 |
| | 9,255 |
| | — |
| | 51,050 |
| | — |
| | 51,050 |
|
| Jewelry scrapping cost of goods sold | 20,285 |
| | 92 |
| | — |
| | 20,377 |
| | — |
| | 20,377 |
|
| Consumer loan bad debt expense | 9,994 |
| | 685 |
| | 1,839 |
| | 12,518 |
| | — |
| | 12,518 |
|
| Net revenues | 119,520 |
| | 26,870 |
| | 4,831 |
| | 151,221 |
| | — |
| | 151,221 |
|
| Operating expenses (income): | | | | | | | | | | | |
| Operations | 84,194 |
| | 16,513 |
| | 3,523 |
| | 104,230 |
| | — |
| | 104,230 |
|
| Administrative | — |
| | — |
| | — |
| | — |
| | 12,644 |
| | 12,644 |
|
| Depreciation | 4,184 |
| | 1,420 |
| | 93 |
| | 5,697 |
| | 1,680 |
| | 7,377 |
|
| Amortization | 721 |
| | 434 |
| | 25 |
| | 1,180 |
| | 411 |
| | 1,591 |
|
| Loss on sale or disposal of assets | 174 |
| | 4 |
| | — |
| | 178 |
| | — |
| | 178 |
|
| Interest (income) expense, net | (25 | ) | | 2,790 |
| | — |
| | 2,765 |
| | 872 |
| | 3,637 |
|
| Equity in net income of unconsolidated affiliates | — |
| | — |
| | (4,328 | ) | | (4,328 | ) | | — |
| | (4,328 | ) |
| Other expense | — |
| | 57 |
| | — |
| | 57 |
| | 39 |
| | 96 |
|
| Segment contribution | $ | 30,272 |
| | $ | 5,652 |
| | $ | 5,518 |
| | $ | 41,442 |
| | | | |
| Income (loss) from continuing operations before income taxes | | | | | | | $ | 41,442 |
| | $ | (15,646 | ) | | $ | 25,796 |
|
EZCORP, Inc.
Operating Segment Results (Unaudited)
(in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Nine Months Ended June 30, 2014 |
| | U.S. & Canada | | Latin America | | Other International | | Total Segments | | Corporate Items | | Consolidated |
| Revenues: | | | | | | | | | | | |
| Merchandise sales | $ | 253,501 |
| | $ | 44,710 |
| | $ | — |
| | $ | 298,211 |
| | $ | — |
| | $ | 298,211 |
|
| Jewelry scrapping sales | 69,531 |
| | 4,638 |
| | — |
| | 74,169 |
| | — |
| | 74,169 |
|
| Pawn service charges | 161,117 |
| | 22,095 |
| | — |
| | 183,212 |
| | — |
| | 183,212 |
|
| Consumer loan fees and interest | 136,108 |
| | 43,460 |
| | 12,690 |
| | 192,258 |
| | — |
| | 192,258 |
|
| Consumer loan sales and other | 2,025 |
| | 20,520 |
| | 42 |
| | 22,587 |
| | — |
| | 22,587 |
|
| Total revenues | 622,282 |
| | 135,423 |
| | 12,732 |
| | 770,437 |
| | — |
| | 770,437 |
|
| Merchandise cost of goods sold | 153,864 |
| | 29,332 |
| | — |
| | 183,196 |
| | — |
| | 183,196 |
|
| Jewelry scrapping cost of goods sold | 51,257 |
| | 4,005 |
| | — |
| | 55,262 |
| | — |
| | 55,262 |
|
| Consumer loan bad debt | 37,571 |
| | 3,206 |
| | 5,323 |
| | 46,100 |
| | — |
| | 46,100 |
|
| Net revenues | 379,590 |
| | 98,880 |
| | 7,409 |
| | 485,879 |
| | — |
| | 485,879 |
|
| Operating expenses (income): | | | | | | | | | | |
|
| Operations | 261,161 |
| | 58,580 |
| | 10,667 |
| | 330,408 |
| | — |
| | 330,408 |
|
| Administrative | — |
| | — |
| | — |
| | — |
| | 50,244 |
| | 50,244 |
|
| Depreciation | 12,867 |
| | 4,411 |
| | 288 |
| | 17,566 |
| | 4,990 |
| | 22,556 |
|
| Amortization | 1,723 |
| | 1,553 |
| | 55 |
| | 3,331 |
| | 2,224 |
| | 5,555 |
|
| (Gain) loss on sale or disposal of assets | (6,630 | ) | | 15 |
| | (1 | ) | | (6,616 | ) | | 642 |
| | (5,974 | ) |
| Interest (income) expense, net | (11 | ) | | 11,628 |
| | (4 | ) | | 11,613 |
| | 4,067 |
| | 15,680 |
|
| Equity in net income of unconsolidated affiliates | — |
| | — |
| | (3,880 | ) | | (3,880 | ) | | — |
| | (3,880 | ) |
| Impairment of investments | — |
| | — |
| | 7,940 |
| | 7,940 |
| | — |
| | 7,940 |
|
| Other (income) expense | (7 | ) | | (208 | ) | | 346 |
| | 131 |
| | 655 |
| | 786 |
|
| Segment contribution (loss) | $ | 110,487 |
| | $ | 22,901 |
| | $ | (8,002 | ) | | $ | 125,386 |
| | | | |
| Income (loss) from continuing operations before income taxes | | | | | | | $ | 125,386 |
| | $ | (62,822 | ) | | $ | 62,564 |
|
EZCORP, Inc.
Operating Segment Results (Unaudited)
(in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Nine Months Ended June 30, 2013 |
| | U.S. & Canada | | Latin America | | Other International | | Segments Total | | Corporate Items | | Consolidated |
| Revenues: | | | | | | | | | | | |
| Merchandise sales | $ | 237,577 |
| | $ | 43,685 |
| | $ | — |
| | $ | 281,262 |
| | $ | — |
| | $ | 281,262 |
|
| Jewelry scrapping sales | 108,777 |
| | 4,802 |
| | — |
| | 113,579 |
| | — |
| | 113,579 |
|
| Pawn service charges | 165,202 |
| | 22,610 |
| | — |
| | 187,812 |
| | — |
| | 187,812 |
|
| Consumer loan fees and interest | 126,873 |
| | 36,583 |
| | 19,663 |
| | 183,119 |
| | — |
| | 183,119 |
|
| Consumer loan sales and other | 5,469 |
| | 2,880 |
| | 1,820 |
| | 10,169 |
| | — |
| | 10,169 |
|
| Total revenues | 643,898 |
| | 110,560 |
| | 21,483 |
| | 775,941 |
| | — |
| | 775,941 |
|
| Merchandise cost of goods sold | 138,936 |
| | 25,775 |
| | — |
| | 164,711 |
| | — |
| | 164,711 |
|
| Jewelry scrapping cost of goods sold | 76,922 |
| | 4,071 |
| | — |
| | 80,993 |
| | — |
| | 80,993 |
|
| Consumer loan bad debt expense (benefit) | 27,363 |
| | (1,024 | ) | | 8,157 |
| | 34,496 |
| | — |
| | 34,496 |
|
| Net revenues | 400,677 |
| | 81,738 |
| | 13,326 |
| | 495,741 |
| | — |
| | 495,741 |
|
| Operating expenses (income): | | | | | | | | | | | |
| Operations | 251,593 |
| | 46,483 |
| | 11,270 |
| | 309,346 |
| | — |
| | 309,346 |
|
| Administrative | — |
| | — |
| | — |
| | — |
| | 34,918 |
| | 34,918 |
|
| Depreciation | 11,905 |
| | 3,782 |
| | 263 |
| | 15,950 |
| | 5,058 |
| | 21,008 |
|
| Amortization | 1,490 |
| | 1,285 |
| | 74 |
| | 2,849 |
| | 772 |
| | 3,621 |
|
| Loss on sale or disposal of assets | 202 |
| | 18 |
| | — |
| | 220 |
| | — |
| | 220 |
|
| Interest expense (income), net | 7 |
| | 8,205 |
| | (1 | ) | | 8,211 |
| | 2,816 |
| | 11,027 |
|
| Equity in net income of unconsolidated affiliates | — |
| | — |
| | (13,491 | ) | | (13,491 | ) | | — |
| | (13,491 | ) |
| Other (income) expense | (5 | ) | | (238 | ) | | (69 | ) | | (312 | ) | | 312 |
| | — |
|
| Segment contribution | $ | 135,485 |
| | $ | 22,203 |
| | $ | 15,280 |
| | $ | 172,968 |
| | | | |
| Income (loss) from continuing operations before income taxes | | | | | | | $ | 172,968 |
| | $ | (43,876 | ) | | $ | 129,092 |
|
EZCORP, Inc.
Store Count Activity
|
| | | | | | | | | | | | | | |
| | Three Months Ended June 30, 2014 |
| | Company-owned Stores | | Franchises |
| | U.S. & Canada | | Latin America | | Other
International | | Consolidated | | |
| Beginning of period | 1,037 |
| | 318 |
| | — |
| | 1,355 |
| | 5 |
|
| De novo | 5 |
| | — |
| | — |
| | 5 |
| | — |
|
| Acquired | — |
| | — |
| | — |
| | — |
| | — |
|
| Sold, combined, or closed | (1 | ) | | (3 | ) | | — |
| | (4 | ) | | — |
|
| End of period | 1,041 |
| | 315 |
| | — |
| | 1,356 |
| | 5 |
|
| | | | | | | | | | |
| | Three Months Ended June 30, 2013 |
| | Company-owned Stores | | Franchises |
| | U.S. & Canada | | Latin America | | Other
International | | Consolidated | | |
| Beginning of period | 1,058 |
| | 345 |
| | — |
| | 1,403 |
| | 9 |
|
| De novo | 5 |
| | 15 |
| | — |
| | 20 |
| | — |
|
| Acquired | — |
| | 6 |
| | — |
| | 6 |
| | — |
|
| Sold, combined, or closed | (2 | ) | | (3 | ) | | — |
| | (5 | ) | | (1 | ) |
| End of period | 1,061 |
| | 363 |
| | — |
| | 1,424 |
| | 8 |
|
| | | | | | | | | | |
| Discontinued operations | (50 | ) | | (57 | ) | | — |
| | (107 | ) | | — |
|
| Stores in continuing operations: | 1,011 |
| | 306 |
| | — |
| | 1,317 |
| | 8 |
|
|
| | | | | | | | | | | | | | |
| | Nine Months Ended June 30, 2014 |
| | Company-owned Stores | | Franchises |
| | U.S. & Canada | | Latin America | | Other International | | Consolidated | | |
| Beginning of period | 1,030 |
| | 312 |
| | — |
| | 1,342 |
| | 8 |
|
| De novo | 19 |
| | 6 |
| | — |
| | 25 |
| | — |
|
| Acquired | — |
| | — |
| | — |
| | — |
| | — |
|
| Sold, combined, or closed | (8 | ) | | (3 | ) | | — |
| | (11 | ) | | (3 | ) |
| End of period | 1,041 |
| | 315 |
| | — |
| | 1,356 |
| | 5 |
|
| | | | | | | | | | |
| | Nine Months Ended June 30, 2013 |
| | Company-owned Stores | | Franchises |
| | U.S. & Canada | | Latin America | | Other International | | Consolidated | | |
| Beginning of period | 987 |
| | 275 |
| | — |
| | 1,262 |
| | 10 |
|
| De novo | 68 |
| | 66 |
| | — |
| | 134 |
| | — |
|
| Acquired | 12 |
| | 26 |
| | — |
| | 38 |
| | — |
|
| Sold, combined, or closed | (6 | ) | | (4 | ) | | — |
| | (10 | ) | | (2 | ) |
| End of period | 1,061 |
| | 363 |
| | — |
| | 1,424 |
| | 8 |
|
| | | | | | | | | | |
| Discontinued operations | (50 | ) | | (57 | ) | | — |
| | (107 | ) | | — |
|
| Stores in continuing operations: | 1,011 |
| | 306 |
| | — |
| | 1,317 |
| | 8 |
|
EZCORP, Inc.
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, 2014 | | Three Months Ended June 30, 2013 |
| | GAAP | | Non-GAAP Adjustment | | Non-GAAP | | GAAP | | Non-GAAP Adjustment | | Non-GAAP |
| Segment Contribution: | | | | | | | | | | | |
| U.S. & Canada | $ | 25,648 |
| | $ | — |
| | $ | 25,648 |
| | $ | 30,272 |
| | $ | — |
| | $ | 30,272 |
|
| Latin America | 8,612 |
| | — |
| | 8,612 |
| | 5,652 |
| | — |
| | 5,652 |
|
| Other International* | 862 |
| | — |
| | 862 |
| | 5,518 |
| | (1,493 | ) | | 4,025 |
|
| Total Segment Contribution (Loss) | 35,122 |
| | — |
| | 35,122 |
| | 41,442 |
| | (1,493 | ) | | 39,949 |
|
| | | | | | | | | | | | |
| Administrative expense | 14,467 |
| | — |
| | 14,467 |
| | 12,644 |
| | — |
| | 12,644 |
|
| Depreciation | 1,664 |
| | — |
| | 1,664 |
| | 1,680 |
| | — |
| | 1,680 |
|
| Amortization | 893 |
| | — |
| | 893 |
| | 411 |
| | — |
| | 411 |
|
| Gain on sale or disposal of assets | (6 | ) | | — |
| | (6 | ) | | — |
| | — |
| | — |
|
| Interest expense, net | 1,841 |
| | — |
| | 1,841 |
| | 872 |
| | — |
| | 872 |
|
| Other (income) expense | (196 | ) | | — |
| | (196 | ) | | 39 |
| | — |
| | 39 |
|
| Income (loss) from continuing operations before income taxes | 16,459 |
| | — |
| | 16,459 |
| | 25,796 |
| | (1,493 | ) | | 24,303 |
|
| Income tax expense (benefit) | 4,302 |
| | — |
| | 4,302 |
| | 9,139 |
| | (529 | ) | | 8,610 |
|
| Income (loss) from continuing operations, net of tax | 12,157 |
| | — |
| | 12,157 |
| | 16,657 |
| | (964 | ) | | 15,693 |
|
| Income (loss) from discontinued operations, net of tax | 186 |
| | — |
| | 186 |
| | (21,497 | ) | | — |
| | (21,497 | ) |
| Net income (loss) | 12,343 |
| | — |
| | 12,343 |
| | (4,840 | ) | | (964 | ) | | (5,804 | ) |
| Net income from continuing operations attributable to redeemable noncontrolling interest | 837 |
| | — |
| | 837 |
| | 1,041 |
| | — |
| | 1,041 |
|
| Net income (loss) attributable to EZCORP, Inc. | $ | 11,506 |
| | $ | — |
| | $ | 11,506 |
| | $ | (5,881 | ) | | $ | (964 | ) | | $ | (6,845 | ) |
| | | | | | | | | | | | |
| Weighted Average Shares Outstanding - Diluted | 54,395 |
| | — |
| | 54,395 |
| | 54,255 |
| | — |
| | 54,255 |
|
| EPS - Diluted | $ | 0.21 |
| | $ | — |
| | $ | 0.21 |
| | $ | (0.11 | ) | | $ | (0.02 | ) | | $ | (0.13 | ) |
* The Other International non-GAAP adjustment includes our equity in the net income of Albemarle & Bond for the three months ended June 30, 2013.
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Nine Months Ended June 30, 2014 | | Nine Months Ended June 30, 2013 |
| | GAAP | | Non-GAAP Adjustment | | Non-GAAP | | GAAP | | Non-GAAP Adjustment | | Non-GAAP |
| Segment Contribution: | | | | | | | | | | | |
| U.S. & Canada | $ | 110,487 |
| | $ | — |
| | $ | 110,487 |
| | $ | 135,485 |
| | $ | — |
| | $ | 135,485 |
|
| Latin America | 22,901 |
| | — |
| | 22,901 |
| | 22,203 |
| | — |
| | 22,203 |
|
| Other International* | (8,002 | ) | | 9,489 |
| | 1,487 |
| | 15,280 |
| | (4,430 | ) | | 10,850 |
|
| Total Segment Contribution (Loss) | 125,386 |
| | 9,489 |
| | 134,875 |
| | 172,968 |
| | (4,430 | ) | | 168,538 |
|
| | | | | | | | | | | | |
| Administrative expense (income)** | 50,244 |
| | (7,951 | ) | | 42,293 |
| | 34,918 |
| | — |
| | 34,918 |
|
| Depreciation | 4,990 |
| | — |
| | 4,990 |
| | 5,058 |
| | — |
| | 5,058 |
|
| Amortization | 2,224 |
| | — |
| | 2,224 |
| | 772 |
| | — |
| | 772 |
|
| Loss on sale or disposal of assets | 642 |
| | — |
| | 642 |
| | — |
| | — |
| | — |
|
| Interest expense, net | 4,067 |
| | — |
| | 4,067 |
| | 2,816 |
| | — |
| | 2,816 |
|
| Other expense | 655 |
| | — |
| | 655 |
| | 312 |
| | — |
| | 312 |
|
| Income (loss) from continuing operations before income taxes | 62,564 |
| | 17,440 |
| | 80,004 |
| | 129,092 |
| | (4,430 | ) | | 124,662 |
|
| Income tax expense (benefit) | 18,387 |
| | 5,125 |
| | 23,512 |
| | 42,084 |
| | (1,444 | ) | | 40,640 |
|
| Income (loss) from continuing operations, net of tax | 44,177 |
| | 12,315 |
| | 56,492 |
| | 87,008 |
| | (2,986 | ) | | 84,022 |
|
| Income (loss) from discontinued operations, net of tax | 1,628 |
| | — |
| | 1,628 |
| | (24,813 | ) | | — |
| | (24,813 | ) |
| Net income (loss) | 45,805 |
| | 12,315 |
| | 58,120 |
| | 62,195 |
| | (2,986 | ) | | 59,209 |
|
| Net income from continuing operations attributable to redeemable noncontrolling interest | 3,738 |
| | — |
| | 3,738 |
| | 3,378 |
| | — |
| | 3,378 |
|
| Net income (loss) attributable to EZCORP, Inc. | $ | 42,067 |
| | $ | 12,315 |
| | $ | 54,382 |
| | $ | 58,817 |
| | $ | (2,986 | ) | | $ | 55,831 |
|
| | | | | | | | | | | | |
| Weighted Average Shares Outstanding - Diluted | 54,529 |
| | — |
| | 54,529 |
| | 53,540 |
| | — |
| | 53,540 |
|
| EPS - Diluted | $ | 0.77 |
| | $ | 0.23 |
| | $ | 1.00 |
| | $ | 1.10 |
| | $ | (0.06 | ) | | $ | 1.04 |
|
* The Other International non-GAAP adjustment includes the Albemarle & Bond impairment charge and its related foreign currency exchange loss during the nine months ended June 30, 2014 and our equity in the net income of Albemarle & Bond for the nine months ended June 30, 2013.
** The administrative expense (income) non-GAAP adjustment is due to the compensatory benefits charge recorded in the second quarter of fiscal 2014 related to Sterling B. Brinkley's retirement.
