EZCORP
EZCORP ANNOUNCES FISCAL FOURTH QUARTER AND YEAREND RESULTS
AUSTIN, TEXAS (NOVEMBER 9, 2004) -- EZCORP, Inc. (Nasdaq: EZPW) announced today
results for its fiscal fourth quarter and 2004 fiscal year, which ended
September 30, 2004.
For the quarter ended September 30, 2004, net income increased 66% to $2,621,000
($0.20 per share) from fiscal 2003 fourth quarter's comparable net income of
$1,578,000 ($0.12 per share). Total revenues for the fourth quarter increased
20% to $64,053,000 compared to $53,225,000 for the fiscal 2003 fourth quarter.
For the twelve month period ended September 30, 2004, net income increased 64%
to $8,871,000 ($0.68 per share) from fiscal 2003's comparable net income of
$5,414,000 ($0.43 per share). Total revenues for the fiscal year increased 10%
to $227,797,000 from $206,349,000 for fiscal 2003.
Comparable net income for the fiscal 2003 periods excludes the impact of several
unusual items. For a reconciliation of comparable net income to net income, see
the Statement of Operations for the three and twelve month periods that follow.
Commenting on these results, President and Chief Executive Officer, Joe Rotunda,
stated, "We are quite pleased with our results for the year with all revenue
sources improving over the prior year. Total sales increased nearly seven
percent with approximately a two and a half percentage point improvement in
margins resulting in a fourteen percent increase in sales gross profit. Pawn
service charge revenue improved approximately two percent and our ending pawn
loan balance was approximately two percent above the prior year. Payday loan
service charges increased 90% and our ending payday loan balance was double the
prior year's ending balance."
Rotunda continued, "During the year, we opened 121 new EZMONEY Payday Loan
stores, bringing our total EZMONEY locations to 125. As a group, the performance
of these stores is meeting our expectations."
Rotunda concluded, "Looking forward to fiscal 2005, we expect to generate
earnings per share in the range of $0.90 to $0.95. For our first fiscal 2005
quarter, we expect to generate earnings per share of $0.25 to $0.28. We expect
to open between 120 and 140 EZMONEY Payday Loan stores this fiscal year, with
approximately 30 of these opening in the first quarter."
EZCORP meets the short-term cash needs of the cash and credit constrained
consumer by offering convenient, non-recourse loans collateralized by tangible
personal property, commonly known as pawn loans, and short-term
non-collateralized loans, often referred to as payday loans. The Company also
sells merchandise, primarily collateral forfeited from its pawn lending
operations, to consumers looking for good value. At September 30, 2004, the
Company operated 280 EZPAWN and 125 EZMONEY Payday Loan stores, 95 of which
adjoin an EZPAWN location.
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On September 13th, Albemarle and Bond ("A&B"), EZCORP's UK affiliate, announced
results for their fiscal year ended June 30, 2004. A&B reported profit after
taxes for their fiscal 2004 of 3,461,000 British Pounds (7.46p per share)
compared to 3,043,000 British Pounds (6.67p per share) for their fiscal 2003. At
June 30, 2004, A&B operated 55 locations in the United Kingdom that offer
jewelry only pawn loans, check cashing, and short-term loans. EZCORP owns
approximately 29% of the outstanding shares of A&B.
This announcement contains certain forward-looking statements regarding the
Company's expected performance for future periods including, but not limited to,
new unit growth and expected future earnings. Actual results for these periods
may materially differ from these statements. Such forward-looking statements
involve risks and uncertainties such as changing market conditions in the
overall economy and the industry, consumer demand for the Company's services and
merchandise, changes in regulatory environment, and other factors periodically
discussed in the Company's annual, quarterly and other reports filed with the
Securities and Exchange Commission.
You are invited to listen to a conference call discussing these results on
November 9, 2004 at 3:30pm Central Time. The conference call can be accessed
over the Internet (or replay it at your convenience) at the following address.
http://phx.corporate-ir.net/playerlink.zhtml?c=69434&s=wm&e=961492
For additional information, contact Dan Tonissen at (512) 314-2289.
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EZCORP, Inc.
HIGHLIGHTS OF CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data and store counts)
- --------------------------------------------------------------------------------
Three Months Ended September 30,
----------------------------------
2004 2003
----------------------------------
Revenues:
Merchandise sales $ 26,721 $ 25,797
Jewelry scrapping sales 14,040 8,813
Pawn service charges 15,215 14,599
Payday loan service charges 7,750 3,739
Other revenues 327 277
----------------------------------
Total revenues 64,053 53,225
Cost of goods sold:
Cost of merchandise sales 15,675 15,227
Cost of jewelry scrapping sales 11,397 7,167
----------------------------------
Total cost of goods sold 27,072 22,394
----------------------------------
Net revenues 36,981 30,831
Operations expense 22,480 20,193
Bad debt and other direct expenses on payday loans 3,146 1,510
Administrative expense 5,391 4,297
Depreciation and amortization 1,874 2,137
----------------------------------
Operating income 4,090 2,694
Interest expense, net 375 472
Equity in net income of unconsolidated affiliate (448) (350)
Loss on sale of assets 3 144
Impairment of investment -- 1,100
----------------------------------
Income before income taxes 4,160 1,328
Income tax expense 1,539 (3,235)
----------------------------------
Income before cumulative effect of adopting a new accounting principle 2,621 4,563
Cumulative effect of adopting a new accounting principle, net of tax -- --
----------------------------------
Net income $ 2,621 $ 4,563
=================================
Income per share, assuming dilution:
Income before cumulative effect of adopting a new accounting principle $ 0.20 $ 0.36
Cumulative effect of adopting a new accounting principle, net of tax -- --
----------------------------------
Net income $ 0.20 $ 0.36
=================================
Reconciliation of net income to comparable net income (a non-GAAP measure):
Net income, as reported $ 2,621 $ 4,563
Add back: Cumulative effect of adopting a new accounting principle, net of tax -- --
Add back: Impairment of investment, net of tax benefit -- 715
Subtract: Reduction of valuation allowance on deferred tax asset -- (3,700)
----------------------------------
Comparable net income (a non-GAAP measure) $ 2,621 $ 1,578
=================================
----------------------------------
Comparable net income per share, assuming dilution (a non-GAAP measure) $ 0.20 $ 0.12
=================================
Weighted average shares - assuming dilution 13,083 12,694
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EZCORP, Inc.
HIGHLIGHTS OF CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data and store counts)
- --------------------------------------------------------------------------------
Year Ended September 30,
-----------------------------
2004 2003
-----------------------------
Revenues:
Merchandise sales $ 116,816 $ 113,792
Jewelry scrapping sales 26,656 20,799
Pawn service charges 59,090 58,175
Payday loan service charges 23,874 12,538
Other revenues 1,361 1,045
-----------------------------
Total revenues 227,797 206,349
Cost of goods sold:
Cost of merchandise sales 67,682 68,606
Cost of jewelry scrapping sales 20,520 17,494
-----------------------------
Total cost of goods sold 88,202 86,100
-----------------------------
Net revenues 139,595 120,249
Operations expense 86,862 80,688
Bad debt and other direct expenses on payday loans 9,103 4,685
Administrative expense 22,245 17,008
Depreciation and amortization 7,512 8,775
-----------------------------
Operating income 13,873 9,093
Interest expense, net 1,528 2,006
Equity in net income of unconsolidated affiliate (1,739) (1,412)
Loss on sale of assets 3 170
Impairment of investment -- 1,100
-----------------------------
Income before income taxes 14,081 7,229
Income tax expense 5,210 (1,170)
-----------------------------
Income before cumulative effect of adopting a new accounting principle 8,871 8,399
Cumulative effect of adopting a new accounting principle, net of tax -- (8,037)
-----------------------------
Net income $ 8,871 $ 362
=============================
Income per share, assuming dilution:
Income before cumulative effect of adopting a new accounting principle $ 0.68 $ 0.67
Cumulative effect of adopting a new accounting principle, net of tax -- (0.64)
-----------------------------
Net income $ 0.68 $ 0.03
=============================
Reconciliation of net income to comparable net income (a non-GAAP measure):
Net income, as reported $ 8,871 $ 362
Add back: Cumulative effect of adopting a new accounting principle, net of tax -- 8,037
Add back: Impairment of investment, net of tax benefit -- 715
Subtract: Reduction of valuation allowance on deferred tax asset -- (3,700)
-----------------------------
Comparable net income (a non-GAAP measure) $ 8,871 $ 5,414
=============================
-----------------------------
Comparable net income per share, assuming dilution (a non-GAAP measure) $ 0.68 $ 0.43
=============================
Weighted average shares - assuming dilution 13,122 12,552
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EZCORP, Inc.
Highlights of Consolidated Balance Sheets (Unaudited)
(in thousands, except per share data and store counts)
- --------------------------------------------------------------------------------
As of September 30,
2004 2003
--------------------------
Assets:
Current assets:
Cash and cash equivalents $ 2,506 $ 2,496
Pawn loans 49,078 47,955
Payday loans 7,292 3,630
Pawn service charges receivable, net 8,679 8,990
Payday loan service charges receivable, net 1,474 735
Inventory, net 30,636 29,755
Deferred tax asset 9,711 8,163
Federal income taxes receivable -- 328
Prepaid expenses and other assets 2,321 1,726
--------------------------
Total current assets 111,697 103,778
Investment in unconsolidated affiliates 16,101 14,700
Property and equipment, net 25,846 25,369
Deferred tax asset, non-current 4,946 4,391
Other assets 5,732 5,452
--------------------------
Total assets $ 164,322 $ 153,690
==========================
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable and other accrued expenses $ 15,347 $ 11,101
Customer layaway deposits 1,645 1,792
Federal income taxes payable 1,895 --
--------------------------
Total current liabilities 18,887 12,893
Long-term debt, less current maturities 25,000 31,000
Deferred gains and other long-term liabilities 3,958 4,319
--------------------------
Total long-term liabilities 28,958 35,319
Total stockholders' equity 116,477 105,478
--------------------------
Total liabilities and stockholders' equity $ 164,322 $ 153,690
==========================
Pawn loan balance per ending pawn store $ 175 $ 171
Inventory per ending pawn store $ 109 $ 106
Book value per share $ 9.42 $ 8.65
Tangible book value per share $ 9.21 $ 8.44
Pawn store count - end of period 280 280
Mono-line payday loan store count - end of period 125 4
Shares outstanding - end of period 12,362 12,188
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