EZPW - Earnings call transcript Q4 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to the EZCORP Fourth Quarter and Fiscal 2018 Earnings Conference Call. [Operator Instructions].

As a reminder, this call may be recorded. I would now like to turn the conference call over to Jeff Christensen, Vice President of Investor Relations for EZCORP. Please go ahead, Jeff.

Jeff Christensen

morning, good and you, everyone. Thank

remarks, During slides, website be to will are our at available our prepared which from for referring download we viewing investors.ezcorp.com. or

call remind we these forward-looking for on certain that expressed by contain and the results annual, periods are Actual or of for regarding operating expectations. reports that number Before future like Securities materially expected statements as to company's company's financial I'd may this are presentation current other Commission. with filed our factors due begin, those from forward-looking conference statements risks future based and differ as in quarterly other the slides a and periods. Exchange the to well the implied and discussed statements everyone performance These

to Stuart Now over the turn Stuart? I call would Grimshaw. to like Mr.

Stuart Grimshaw

everyone. Jeff, morning good Thanks, and to

it did since great was the XXXX, put improve terms increase the XXXX. somewhere on with as returned occurred. great satisfying that has have of actually XXX% growth tax before below today. schedules balance hands needs The the concern at to and that of by strong in payments to in And growth you'll we've we million we in the strongly that with numbers $XX also it LatAm, goes in everything of with Latin of we're have the done. for driver with to normally strong were XX% merchandise the get growth that's points and refocused our time million, and store up $XXX which $X.XX. time also our XX per drive to and on put to always We and happens, else customers resulting have to of results of our $XX.X continuing meeting quarter mission seen you'll some We've fourth through growth adjusted XX% the we These that same-store to leads driven reason by growth highest highest at count margin. of appropriately we're in this that's go excelled adjusted credit, to that back basis of that serving $XXX $XX the continues sale needs on and flexibility quarter is that and strategic this was since PLO is the to the being cash. us we all up U.S. to XX% deck driven the PLO as QX. get and to But pleased XX% losing XX% but our a margin vision on customer increasing remained and up of $X.X X% XXX for cash record XX% that sheet PLO, to million, per XX%. it's the We're we we've the cash if with Merchandise go we're EBITDA customers' outlining and because of the PLO results we continues negative, EBITDA typically losing difficult the XX% concerned increased see XX% pleasing them it the we we're on being we we're customers' growth, QX EPS have said, diluted tax up PLO XX,XXX for should have EPS reflect that we profit which a in we we a reacted and our store, America, below recall of from PLO million. store, quarter adjusted The million this set of to before time, increased the was PLO consecutive have you Also saw U.S. to indicated very the $XXX,XXX store, XX% have X%. see back that exceptional in profit all Grupo PLO said growth, in provides received Finmart to we that same-store per same-store million QX. to which The over and the get the to in us negative be us up in there in QX, to delivered concern

reflects PSC and What Turning the level management we team operating were Slide need PLO work new adjusted and leverage see pawn for on product that, we're and for you, we've all going that but in year have the sort leverage actually level customers this What numbers, there of X in a the analytics, million. cash. this driven stellar, $XXX.X has increases. pawn 'XX it This also continue in focusing strong to see growth EBITDA And slide, the done opportunities in of the by you'll growth America engagement we within in growth we sure customer to The you'll levers to business. which market period, corporate do CAGR driven we've why Slide is slide in customer numbers time, we see operating this at three where XX% $XX.X the of the taken. that the have which believe in annual and XX% the On have on the we great as you'll levers across is this that are as million, management that the always been vision this XX% the fact of on undertaken the I produced the actions America, is continue U.S. Latin result. the think expense reflects profit, which in efficiency we X. our those a us and coming the reflected which are X, the have and to which But lean out those delivered center same Latin annual will company, at it making is see savings. and corporate pleasing, reflects three merchandise higher the over year see particularly a can reflected

now strong growing this EBITDA to up the XX%, Slides in the count X. growth think Turning XX% see up result, The I The quite a annual XX% recent great of and QX PLO EBITDA increase. versus quite a margin store coming XX%, QX at showing you out the is momentum quarter.

leadership, the seen reflected continue XX%, will successful in we Latin count America year. year up in from we've the as and October de to leasing that acquired property in comes we'll is that we continue in model to of to EBITDA, do the the these I'll see increased in and last XX believe But first in strategy you'll to that acquisitions customer segment, these over drive we XX% We year the total really to made measures bring store the And focus accelerate in in heavily XX XX% XX%. as by that this and XX% early 'XX. XX% around ROIC all ownership, GPMXs to believe, and first talk X% XX%. we expect we our now grow we same acquisitions, time acquisition that months, around of So is to past Slide experience This was of had from acquisitions revenue continue X. we turn these we has months increase QX growth invested on the the operating which has growth in novo novos, always the ahead. which de from with about of FY

think a been continues offer it's result, Latin to and opportunities. So great, America great we

the regulations economy, none based are ourselves of of seen you security a and political correlation The sits power, as the with and made fees, America she retailing more any what spooked have would really by the in landing. seeing and a not direct recently around and it's bank the last around and However, month, party the on to comments transfer the into risk and actually which the Latin the markets the coming and not of ATM then to fees that business. member have as we're the not Mexican

the at to from the to also is net cash show if that calls the in cost to region. operating with million in But have to increased cash Slide us. the we've suggest the great state these we've 'XX, cash a is coming a and the which continue of service, If store. receipts should into about from by seen, - particularly the it. we you the XX% by slide and new operating in successfully the year-on-year. and the business the $XX supported we we've cash growth, now quite the below that want company. operating it's out had is because continue number we've but good From from funding as governments and government, is to sorry, to that this we've shown ensures a told this chart to I AlphaCredit, rates do invest in in we've that I continues below that's believe reinvest from slides, operate funding What XX% here growth as American you obviously, we what volatility to turn showed and PLO X, up being actually in offer invested the we PLO growth grow 'XX that flow in delivers activities flow a countries countries look we'll after So that, of refurbishment And comes there continue to to that growth would of Latin

of the invested lot in So a that over haven't we been the XX for years. opportunity the rehabilitation took actually over to receipts invest store, AlphaCredit of which with

ongoing. catch this So be this from as to grown one-off and XX XX expect you've to do through is we've a And this, that year. up, not we seen

we you running see maintenance As bottom, million. $XX million, about the look at of at CapEx want ahead us, profit. look XX% $XX But the to if the to importantly, total is it million try in chart around which we keep always $XX to the progress you the of on

us. the of right Now and for can investments invest the about those if opportunities - on to have for the announcement a following of Cash on of main by market investment as the $XX from and made, say result we'll continue opportunity, we the took positive in were in we return that we are we and look these of to in pretty you've the The good are Australia. investment. of million Converters CapEx that's undertaken that shares which been outside is growth, the activities acquisitions XX% negatively and I'll the in and growth subprime inquiry that has affected the bank of made for seen, industry-wide an write-down which sale Australia, cause commission a

market So around an the target after price analyst whole was $XX this. a $X.XX. and for average consensus Converters The million tax affected XX-month have between Cash and $X.XX is profit by net

is XX, from overhang So an there's it's the as at it in the inquiry be month going we're there the upside to says, or held there, but analyst next is X. looking is at that

pass just clarify sort of those want some Danny. over to I to So I of issues while

Daniel Chism

excited Good Stuart. I'm everyone. results and fiscal the fourth to share financial Thanks, good very with year. for you quarter a morning,

First, mention York those for New can I XX, day you to of investor in December that our want do attend. in on

get Jeff from details can Christensen. You

a as the on year. to consolidated $X.XX $X.XX a the at Before delivered slide to loans increase PLO tax average of before profit diluted prior for the increase U.S. are year. the for above in us for expectations there we XXXX. year. We consolidated Pawn, pawn in coming well fiscal ended million adjusted adjusted X% the We of start year, well noting XX% the year EPS in up full for outstanding with the and deliver We setting saw or items quarter a few a level the as $XX get XX% worth PLO, good

the a XX% $XX.X revalued was XX% expectations in net Consolidated Cash expenses additional discrete the consistent net exchange in June revenues raised $XX.X value currency trend. For adjusted which to in million These the including This revenue our the investments of impairment tax they movements and returned also and year. for full equity quarter before to in benefit was recent our at up the to ownership price Profit mentioned. the prior for incorporates rates. just This stake made tax items some before in investments the quarter. operations million. longer-term XX% year, at stock profit as CCB with equalling Stuart third the of of of Converters noncash of adjusted this we year foreign year-end quarter, the reflects

we cash the XXXX towards generation results well the items. relates underlying comparability XXXX, to obscured primarily record to interest can in by look on performance as the of be we This as basis. GAAP X the will fiscal business As fiscal noncash a

interest. First, the estimated deck expected that $XX use the component and reflect per representing to GAAP deferred amortization not each these expense, items our our slide results I'll for net do an fiscal share. than such interest to our to million included into business The lower I interest and in fee amortization XXXX compensation other will adjusted adjusted expense Adjusting adjustment noncash interest about and of second, the income interest are according about the analyze quarter's income equity expense, be debt; straight-line this of interest for $X.XX of of receivable. portion to convertible notes noncash schedules, the amortization on

results, comparable included with or full $X.XX in $X or noncash $X XXXX about next results million share fiscal year For per million purposes, interest evaluating first per quarter. year's of of the that the expense $X.XX when share

payments another balance $XX $XX in million mentioned, cash receivable from notes reflecting the cash we principal our we receiving fiscal In Stuart fiscal interest. In million, XXXX, remain XXXX, decline As anticipate received current. AlphaCredit. in and related from

the in instalment collect to XXXX with the taxes. of quick compensation expect remaining $X a comment due XXXX. related And on $X fiscal in first We million fiscal million another deferred fee the as

due short-term new quarter recognize law. to tax tax in expected, fourth our $X revalue As the charge further assets we deferred the million the to

now change. to you periods If XX% were our revalued that future tax the a DTAs overall to such in the to for I in at subject on XXXX applicable inflation our to term foreign Depending we XXXX in fiscal I expect federal rate fiscal XX.X% Due due year be effective went mixture into new range the data to Mexico, an remember, expected blended federal Though and a tax last to that to in year. applicable our fiscal short previously tax straddling are were are law which rate. the taxes law rate reverse impacts the the expect rate XX% of that of from XXXX and assumed revaluation, earnings rate full the tax domestic XX% in fiscal effect.

X. Slide Turning to

of growth in PLO. year, we X% for a profit slightly Overall, end quarter was a before adjusted at revenues managed impact was This to or average bump in an U.S. charges X% basis in improved We the X% in increase of tax. growth up with The in X% well the an the committed the yield. Inventory by pawn an an the XXX combined net up PLO in results. drove sales increase strong total a industry-leading X% X% look point higher results to and in relation strong year's driven by increase service in and the take profit quarter. same-store X% increase year-over-year PLO to only margins Let's excluding the improvement pawn of below hurricanes. X% on XX% basis leveraged with merchandise a showed last the period, X% prior

XX% same same-store U.S. the Slide same revenue rate from bottom now that growth by chart. in prior Combining the cash of quarter, of last our our slide industry-leading approach very QX. our and Xx net and stacked sequential factors, XX. right our per for competitor Moving a yield The information in PLO growth these PLO shows to increase - year pawn focus customers' EBITDA, delivered disciplined and PLO for the needs store public the the the for on we competitor delivered the a slide at an our meeting all of nice the quarter The and side shows improvement in

a and to $XXX,XXX see competitor to can operations The PLO You stands trend per its market-leading share, now per continue the X-year our store. than U.S. PLO at same-store at of adding high store market higher pawn growth. ending XX% take long-term

up basis. a PLO XX% on Let's our in driving operations XX% pawn than service grew America with pawn charges. with yield, on currency a look at an improvement constant an service Slide X% pawn here charges take improved doubled Latin PLO Same-store more XX. same-store

we Those added side adjusted sales. competitor. acquired will stores a to their which stores. on compares concentrated delivered our year tax. increase delivered XXXX than to all ownership. lower we store in includes point which expect merchandise per to higher That, This XX% other XX assets. general growth robust margins see our the improvement XX% improvement Putting It's in EBITDA to public was with the gross agility-focused. net net The notwithstanding our combined shows we to XXX ROIC a in-store acquired these yields store, GPMX American more sales pawn XXX noting per continue XX% largest favorably with stores PSC, for the XX%, you pieces the merchandise third were first full we I the revenues our X% as net a the in roughly in addition, basis equal the quarter together, from increase factors XX% by expect first for Latin competitor. earning revenue profit stores XX% and more improve and and lending year merchandise left in the quarter exceed net continue stores in-store to In worth and per store net stores increase of sales our these of of The fiscal through exceptional profit, return an effect XX% in results jump Slide monthly opening stores. in industry-leading was an before both new in of the revenues PLO acquisitions that revenues

of the compounding same-store top delivered of ever-increasing PLO delivered we quarter side America its quarter of last is was XXth base. strong top on of XX% The on this growth. year. same-store right this This Latin PLO slide, industry-leading X% the an consecutive increased quarter pawn On growth a

since During highest the bottom in Latin this results largest and a the PLO period, we to demonstrate combined the up the this produced America compound from was a per start highest in contribution on year-over-year Year-end Both decade XXXX. with us chart. well acquired growth for than much the of XXXX. in the pawn competitor stores, higher solid shown a store solid same-store sets figures U.S.

what in exactly early the we've year-to-date. year, that's still it's Although fiscal seen

Now bit back I'll Stuart. call over to our of that the understanding got you've financial performance, turn little a

Stuart Grimshaw

Thanks, I to around the to the because just turning we in and we of got business has we're Danny sum it centered experience driving and was customers' the sort Slide operate the of want we're meeting a And levers and We've seeing. fundamentals chart that customer. XX. needs quite just result. of appropriate been which reiterate, is the the that of results our driver are put lot using, the the customer this

close We to are the customer.

Latin that are the while volatility we you've on levers margins the the scale, We stores that gains track through operating market share and the The as recent as through in have long-term for record We're believe we seen strong time, attractive exist nature within in in. this of the seen are and seeing dynamics remain all it American some growth seeing as company. the the countries industry a we have executing vision we company. of well Mexico, the

comes customers' to the the We're future the have and diversified these company. potential geographic storefront drive continue the share customer. relationship consensus, meeting seen we've with levers the that novo that that hard de both systems in great to footprint price past, on we we profitability team opportunities have get have to driving strongly with and a are acquisitions. working And back levels at the very needs all focus close and footprint, a We of the the the we and to and

So closing for comments, to those I'd questions. like it with open up

Operator

Instructions]. [Operator

question John from first Your the line of comes Jefferies. Hecht from

John Hecht

How to guys over that to think quarters? loan-to-value good so that expand the intermediate-term with do range the you forth What playing about next year? seeing are year. you margins and gross we the for think with this about in about? that? First, improved Is coming blended X% Are the a different

Stuart Grimshaw

Thanks, held our The John, able their with good actually The that to and are good improve actually understanding around managing of as customers. as customers the both we've has result the well XX% the we well risk. that, the morning. margin XX%. been customer, and range been way pretty the we've product there's up product customers to lending these seen been riskier to What been reflects the the risks has

we're a be a towards can we bought healthy activity some but does to margin, end, the as we keep seasonal good try analytics So happy. Obviously, we it result top in. we'd and seeing times, get if keep the at it margin of pretty

John Hecht

in a the Okay. of have And sheet. of balance we a lot balance good cash

acquisitive. some Can pipeline maybe the now? right been of You've you looks like what color us give

Stuart Grimshaw

let shareholders. arise, thing over we to been the important sure strength acquisition we're stated and Yes. invest make last we they we company we've that of can for that cash. we're cash, of flexibility to it's But the sheet I'm have to I convert, where is that making are We have healthy John, that we think it's opportunities the I mean, occur. balance We've opportunities just deploy the that's before hold And few and just deploying in as should happy beneficial sure again, invested matures to June, us. when years. cash, where very so of a opportunities continue not meet to keeping for returns one have disciplined, have us, the the the past. we But which the going while still been XXXX them sake actually

John Hecht

Mexico. in some another Okay. the out question, of administration mentioned And then you noise new

retailers. what you kind Mexico might us impact color also, were? you structure can give specifically specifically fee us of of in on And comments have the You remind is. what said Maybe it toward maybe

Stuart Grimshaw

transfer The retailers pretty from one is banks American to the of their on who really at not affected in basic on about and incoming And party It XX% hasn't the a the revenue build, XX% ATM Mexico own ATM which high that's the - members had it fees, trying We've present of all. banks. XX%, out. that of an basis. typically suggest and fees trade pay to positive it the in hours, Within revoked basically the it and that XX% be bank prices by for X banking was in which should back peso to will schedules changed that drop years. been the share a the statement and free, wouldn't calls Mexico seeing about blow we're be the Latin next to transfer - industry effect the X banking have

So there a volatility. was short-term

in at principally looked retailer industry aren't U.S. relatively don't that we the particularly markets, think a a there comfortable the nervousness caps just the but I feel actually there all, any as a when there any see already was here contagion on with flaw we And U.S. in that Mexico, not shows it have interest some and is in company. position. still so here we into Mexico risk people assumed the bank, are but at some just we the pawn that in

Operator

[Operator Instructions].

comes line of Your from Stephens. next Vincent question the Caintic from

Vincent Caintic

in good in America. question So Latin my geographies. - question going is Actually, be separate to first performance

of about just had you in I the regulatory a success more lot to also to lot a seems from Converters change - Latin there's talk so in like America a converting wanted and payday there's instalment investment Canada So Cash you have It loans. - to the there. your opportunity loans and

So kind of part two question. a

your for about the Cash talk Converters tentative could vision business. If and you

why capital core. you related these reinvest businesses, that maybe part, If second then and you wouldn't the growth? to exit businesses that be America consider into more harvest Latin store And the to these

Stuart Grimshaw

have not easy holding the isn't increase Yes. to operation working Thanks, and that on XX% level we're get XX% a and Converters, market where what deep, under share think of performance curves. exit to price Cash Vincent to It's to a company. In good hear. as just so because we the I the is

XxP still they're company As compared about that very hit that Converters ensure which is working price think increase. to trading is I between analyst that before, the profit so to but very, after industry hard. million, XX and profitability net share The quite is low was consensus [ph] around to mentioned for that of $X.XX $X.XX. there's the try and a market, the the We AUD Cash obviously probably value continues tax

is So firstly, exit very the difficult.

upside think closely in in company because a Secondly, where working value very similar there's the to still market we understanding to there's in them with they help of Cash the do our thirdly, any we actually and us. Converters operate see market we're could

On the from memory, have Canada, we're basically term And than moving instrument the loans. are that's still more loans. instalment moving the think loans, into We regulators writing moving everyone. term actually our actually short short where we're offer but into because we actually, I more loans

to cap that So down seeing around change XX% from came at rate we're in in the down interest came January January.

think that this, us. we seen watching loss It's U.S. all, less much is in So we Canada, the credit have culture still sits in given in than we're that payday for not industry industry lending the big at business. We there's but think - what it's the good in the a

Vincent Caintic

I unfortunately. fee Okay. know the concern Got it. that That's helpful. Switching here, has stock been driving the gears Mexican

differences of any if couple the know different about example, what Mexico I versus there. think this you between really the if don't or for if compare there? or charge. difference And I comparisons U.S. the have what the know like like example, what questions players can to So fees the make discuss you you are maybe you for is it's a I geographies, the, nonprofits from you in what differences like rate that maybe structures charge don't different just pawn if

Stuart Grimshaw

comes that concerns Mexico of we us risks. have used jewellery. jewellery Well, in for is Part to exhibit a in is of much merchandise general security Mexico, in a business lot larger we with

merchandise, interest So does we rate general a pushed which typically than pretty jewellery. hard attract into higher

store, on that such customer goes and very low for are flow They're different needs the satisfy We ratio. the And that's not really of anomaly understand cash as are, we some result a ratio. much that sure value we that So of we in loan make for as cash what heavy, are to it's why that and customer's loan-to-value so their there's needs, that, when really, actually a their a are the a there. we do. pretty operate they that in the profits for very merchandising low isn't them where drive or profits don't getting raised their needs cost not low

So pawn customers. are There as of segments in if the X It's of market. there's there pawn various not type are anomalies customer.

typically market. has keep merchandise growth the general profile Mexico, For stronger the into it as of we sector a pushing

Daniel Chism

to our Yes, relationship of queuing up a really is add their the don't key that well long mind lot our service and customer on in the for focus customers differentiator on as the between line. not customer profits

Operator

Your line Sidoti. of from from Pendy comes next question Greg the

Gregory Pendy

of in you margins Can is IT a at pawn just any, well? now role, playing and yield could where potentially the the us roll side that out? it something merchandise tell of that that sort kind if And the And is you help on right as how you're we're seeing?

Stuart Grimshaw

number are busiest. be pretty What we're Mexico the is won't the Yes, tax close on year, anticipate the which And the virtually But we've through we we've we we on U.S. season, the stores second small got seeing we're such quarter to don't roll that. don't fully pawn year. stores by that much Mexico. that and be and the stream where in system pretty out - the out a and of of next obviously, behind got about XX refund operational U.S. accelerate calendar we operational in rolling Christmas

the is actual enable to us become and dramatic we put insert of and pawn front I that grading customer click over will it analytics seeing and We in we're area. in make exhibit at mobility substantially both some basic much yield the the hopefully opportunities through's when pawn hopefully, into of better What can to be it. yield itself time, windows all customer that inventory system, will it's will we in improvements. improvements quicker, think serve the don't is some the quicker. applications So which decisioning but

Gregory Pendy

we're the are sequentially I you current the Great. think is down seems a two now Okay. into acquisitions solid you know of there's And It holidays. that at quarters just, level? but it's inventory, then inventory come been at for straight. like the How merchandise can that I heading lot demand for the - comfortable

So is Or down? a come is continue, this level? do that think think you steady do you something will that to

Stuart Grimshaw

we'll season I and sales into it inventory down, we're balance can coming but the Look, think moment higher tax hold into refund the Christmas coming typically the still so a at come the region.

I can So and systems to see getting through actually come and back. I moving returns down get it we - is think But product it to come the the moving we the capital We're better cost would will my down. preference do we we have. down. come to Yes, is keep see the continue so it inventory to like inventory we need see

we're quicker there's think PLO the can we we're think with move I so positioning more there still inventory, getting than do to but growing I right, the getting it.

Operator

[Operator Instructions].

comes Your the [indiscernible]. of next question from line

Unidentified Analyst

been on continue metrics. traded You to you faster them discount grow and than far Historically, outperform than XX% Cash lower. discount. First has Yet this multiple more a

please discount you because tremendous the clearly can valuation it value. your articulate shareholder this, strategy for creates So given closing

in advance thanks for your response. So

Stuart Grimshaw

Thanks, Chris.

we're So as I well. think frustrated

believe the the and we more operating still by the performance do focusing to thing and right geographically growing keeping is efficiently. relevance Our much customer, and operating on

notwithstanding us the disadvantages buyback there's it on at is think I structural some that X% the the share probably closest share to close discount. of a believe to just just I issue and think price, overlay dividends, didn't inherent working to happens in the event. mix come which again an that about drop clarification is I trade which back a

this that So we the have have have of we'll time and teams, the systems, on we ensuring we that the like growth. that believe the the that hitting. right on thing drive that geographies that in that of we get we the headwinds see that to seen that's where structural the to grow, structural outlined have we've spend service anyone accretive to continue price key systems I getting relevance that driver. but continue We to believe as and this the coaching, systems, support best interesting to get to be best us we continue discussed, some drive of investing get deploy happens the should industry the support investing the get could executing the of margin Slide drivers management speak have use we still our to work this is it's share in his XX, nothing are we and to We it expanding the getting it our back but price to we a out we're We best Chris, But members work think we've but proven board back. against assisting that as business all about the more that and think one. of objective is. to share and go performance, level to is it issues by through lot higher, levels there's acquisitions, better we towards team to on store the shareholders else, to with us, The to performance strategy than scale into the the market operating we'll capital rounds execute

Operator

Hymowitz from comes of Jordan the line Financial. question next from Your Philadelphia

Jordan Hymowitz

What's the on charge taxes Because the basis? know average I rate Mexico import down there U.S. you versus blended a you rates in generally.

Stuart Grimshaw

the yes, U.S., XX% - about around averaging In we're XX%. On Mexico, we're XX%. averaging it's

around. Mexico, yield And U.S. the to it but high all varies you and in jewellery Mexico, on so depends will typically loan in the we where by So on state a as it it in GM sit, portfolio. messes get

Jordan Hymowitz

you said? was [indiscernible] points basis it XXX said by you higher And Okay.

Stuart Grimshaw

we America, have Latin U.S. quarter. this In In the for XX%

XXX - That's yield. we're Latin XX% America between the XX% so think different I an rate, average - and about U.S.

Daniel Chism

average-- as I'd into on taking the Jordan, statutory is point not forfeitures that's right? So well, account calculated rate. out, that's the That

Stuart Grimshaw

Yes. XXX. On we're average, looking at

Jordan Hymowitz

concerned discussed in fee be rate in consumer affect lenders. if Perfect. saying several retail or there only out the other have they're right but of And retailers industry the analyst regarding the banking second, affect [indiscernible] come proposals and down Mexico, now, could it banks, the they're across or it it it's you're retailers would them board? not if Why not concerned that could or cap cap would a and the because be

Stuart Grimshaw

is Yes. retailer lender. a I they an have also so unsecured Elektra unsecured mean, different lender,

degree state that's out wouldn't and change banking came a company move that also So they the they of rapidly. that going for structure said the comfort, unless to as that's There three that change would but and move. move party friend one my years a can we basically say a that quite it that be seeing taken, saying industry was in of things that way I we've direction is particular typically will the why have Mexico and

things change. comfortable are that we So we can more while today, believe

Jordan Hymowitz

Moreno, it that's said Senator think with proceed on that said I analyst The what he statement, Senior correct. that ignore Montréal And said and will legislation.

they of So it not is his pushing it. in may like be up signing he end but May the and it's kind pass party U.S. something, if pushing it,

Stuart Grimshaw

Ministry anywhere look would to Finance have proposal have that and as of they The approve have any would it it to actually well. said at before gets

on plays will still to lot there we're the in my is the see - about there. disagree it's of as moving from in average comments see and America the is be it don't some that out XX% high about should Latin to previous these at how a parts, which it. we fees think with fees, regulated. have these you comes issue But you But it banks seems So there and I the stage, makes banking obviously being party I around XX extraordinarily checks be revenues this comments a of why of and that the there, recipient like news uncertainty. Jordan, with but but

Operator

Instructions]. [Operator

Hathaway Your comes Brad next from the view. of far from question line

Unidentified Analyst

a for as the you. secured Mexico guess, you're versus you these share-based XXK that to little you kinds could I pleased want had if just Two curious was viewed compensation clarify on One, to I lender phone how of issue, to give about the question a was lenders unsecured to the this came questions of was then the difference I kind background about. second And I see and a as year between country. per more how in the move

Stuart Grimshaw

and in the they means being operation obviously structure look the term, from while hostess were with a consultants took than actually with side, at the which lender actually a to of Mexico. to under is Underneath, it versus EPS where as the having is discussing shareholders retail the much so and we view incentive it the is seeing one. term we're I pretty took the of a have it lending. lot sit I'll make for that guidance number and supportive which very deal incentive. long we perfect lending it's They first more side blended lending we're retailer unsecured way But doesn't term the just that top onboard the actually compensation committee that's view looks over EPS program. in seem than we the which the with long about and of the their it lend, was Typically that way of look compensation has details committee, EBITDA the that pure outright short management more the term a sense, consultants lenders long the the the think more unsecured Okay. do in is first of and

Daniel Chism

we landing, kind their loans the payday pawn was the of with of in cycle industry the be I'll side, versus similarly landing unsecured, on been the because secured concern politically, Mexico likely tackle other there regulatory favorably saw much very with U.S. like has I overhang forfeiting viewed largely the just where around payday customer a to And more can And as historical by lot well. of debt the debt collateral. much that's of versus satisfy in pawn fully think

Operator

of laughing Your line Matt from the capital. next water question from Sweeney comes

Matthew Sweeney

in And make all stock estimation that maybe that you're piece assuming looking value value now an the now, collecting the trading and to our the about Converters X likelihood what Xx receivables, of step the revisit the Cash of would you what make might range assets. acquisition. in Xx kind just where really tell I'm in and liquidation for good you back the of for acquisitions and be? stocks share past, the the a the potential can in you at off is stores basically and And question issues below believe ago, trading thinking it's those Can range you buybacks you asking couple of structural questions EBITDA said and just

operational you not would risk? which stock, acquisition your my a essentially So question execute the a making offer did large here why all is, tender in remove own

Stuart Grimshaw

that think third quarter a money. bit we've I done before asked in of that question the and Well, lost as we've

number funding that EBITDA, cash period. a have the our we opportunities. of basis actually year surplus that we the you X.Xx that are or buybacks look X number there this believe of coming cash there which cost And to share opportunities up, months, that time. the basis, look to year, for value but the we raised the commitment return that Two, X acquisition in on acquisition the to opportunities do X a we When long have a have have months is if occur we bond, did so a when that at around of cash term. a as Typically, do are is we not committed convertible company of is plenty convertible the as a there's a our X given we ROIC have. commitments marginal reasons. raised we we I We as One which of well the marginal think at earlier

accretion We continue lot when that the hear of when we're seeing. a see the I there time, shareholders occur have discussions the basis, with the operations. into opportunities investment we a all but to on marginal can are

Matthew Sweeney

is paper that's we code involved and stock your trading And other an of words, Xx and at it. about with have XXx reading is, is trading we agrees around be to at where there the and make some initial of owned going context, that a was at the documents But an to well. that it potential from growth just acquisitions a then at the directly out you cost over Okay. decade is the shares creating we Xx realization The obviously pushing any investment story, X ultimately situation value is acquisition - through much if has and for at asset the very of of know and years capital? another really for the stock Cohen the way just very trading EBITDA, some question question, that In if Mr. time, make be believe created kind stock you're below was legal value. tied is into out value the Xx belief EBITDA, that that EZCORP worked amount great. EBITDA, which evolve about there investment EBITDA, But not you really and to special

be So on pulled? what's cost what And your of could are the view capital? of the levers the that importance

Stuart Grimshaw

so a it. very that We in to that opportunities short grow, a look of growth lucrative look we quickly the have is undervalued, that at very paid the the very we the on time. value return multiple retrieve and reduced grow We period we where at we've out. what also we acquisitions long-term understand, are over X-year the out the believe not we're but value been that's we and trying we that EBITDA the work hasn't that to saw X- to But We're skills think capital period, to will out it immune our have It backed quickly. as we acquisition, that of investments acquisitions we're acquisition use to looking where not with wasting think you capital. the has

Matthew Sweeney

at I essentially. has compounded is zero and guess, mean has XX% and been since And time. the looking public about a IPO First it months question created XXXX. guess, X.X last Cash stock the I within the over over I in has the X% of back that So came years, there XX year a compounded value the

under seems has a board Is improvements CEO, the stuff your U.S. your which of has board, around how changed value this is forward? we under actually created. been expect record like kind going that understanding strong and of and have or making it that, historically the it position decisions the has So sound can track leadership

Stuart Grimshaw

Yes.

over to I has board think capital the of time. use actually that. Over the

very value you mentioned time. period high over of time, period Matt, that Sorry the prices of to share the

in made number in price the actually in I trust point-to-point to think was haven't a and the very the XXXX the accretion. share we taken XXXX, reflected the We affected trust that hard. consistently company, of which acquisitions, board

on a we're So rebuild strategy.

of our undertaken are that to result of some that, actions and at continue have a as restatement we've the to we grow. that after account We profitability on path a and on We're company a time.

So some I board level level. think and at been there potentially issues both have management

I think efficiency would that given hasn't some come of the acquisitions a capital basis. assessed out been seen on we've

some utilize done. strong aren't. are of how them want how it. you've your EPS I it's The as a to that of focusing get at said price basis correct, back to as on And And are strong seen the So see I is incentive look some with, the before on think I a board being with to programs some aligned the have as we comments getting up and it's of with think handle share the cash shareholder.

believe growth We that great international this is also opportunity. growth is a an opportunity and

Daniel Chism

And we of that looking cost capital so exceed away thresholds. because then the the making on, investment Matt, we're that's reasons And the great the are some from pretty very of actually remain long-term only deals that not that don't way value, at disciplined average our add around will walk to periodically you're meet that on that. ROIC expected your there's going sure opportunities disciplined opportunities point, our that to

Matthew Sweeney

board consultant have confidence XXXX some we investors period. of I time the to getting those referred XXXX things how guess, the that oversaw acquisitions So Chairman should my in more the has amounts consultant to because Chairman is where the experience, Chairman. have Non-Executive but XXx never have Board changed value you seen my Australia in acquisitions that of the construed than maybe massive a at First Executive in in situation investment experience, paid exceptions Cash of the And of

how given set the we has So investors confidence that up? has changed that something have

Stuart Grimshaw

at the Well, time. wasn't I here

think and agreement have those a taken the we at so here place. right is can of and not acquisitions, management without but on in in there. an has that the I'm board well All team believe provide ability place a in are decision has make actually the individual with involved - quite I make to one to the to a board, board we consensus in decision say strong there's disciplines processes is actually any No everything, the have the a insulated the on There guidance. there. he look was I the that strong the individual ability we're path go

Matthew Sweeney

I improve Chairman. optics discrepancy capital of very that just address and improve like of which way that terrible, optics would now easy it in of a the to would add to cost the be strain the likely the the being Executive of would your being just between value to are participating some record

Stuart Grimshaw

call, I would say involved and experience Matt. thanks we've what don't and of thanks have positive, we your all that your in Thanks, And for But at that which accretive become very own. a acquisitions I support. Matt. valued been very done so is the certainly member we've for

Operator

from of comes question the next line Investment. Your from Chase Samuel Stephens

Samuel Chase

guys to I Latin have investments price and value positive to it put you Stuart, a and I in that block would company think to our these would capital investing holding don't capital are and questions a a when your isn't be the control shareholders, fair want why you EZCORP with the again of of or pawn is into stores, company, mean, into of into have to you have this on daily company asset, follows double allocation. XX% shareholders? investments management XXX% up that a I you on regarding control you guests of you put question the and some up don't you set and to control be we where not to matter the what an deem morning no quick assets assets want ROI America capital why deeming Australia basis. No a company guys

long was said you the and back, that? go will into. a asset and mean countries indicated investments can talking about well First first which multiple, you want you XX the I way just Cash, been Cash since that talking September call way our it away walk like In So assets putting you're again is collapse about that I the do we're to through haven't I a we're share as be to price First it positions if from know well think minority I looks again. very foreign decline capital you maybe revaluing if in conference

we talk So that little could bit? a about

Stuart Grimshaw

the similar do similar actually call. Sure, a is And actually very type have Sam. investment for in your The we in thanks that business Cash Converters structure. run

an and their and develop Australia we in way franchise what globally. operations There like business foreign have We they is do and do. they do the their overlap in opportunities,

unsecured put point point Latin At we do put capital I off the and should that profit of way some XXX% the inquiry, and a there reflected disappointing and irrelevant money not growth, mentioned Converters with will investment. in Converters growth time, be this more out, of everything a Converters one. time previously, I and you've point center the Your a Cash is no it Only I your industry believe correctly they Cash necessarily is you isn't debt and and Unfortunately, about America support as one. will Cash are you at overhang to we go, them, the instance,, share to is we say, of and we into overhang. what valid specific saw an think as very which needed hear that get right is part capital to on It's and the pointed good the line, so good see plans and the which deploying can into continue for to hasn't price the to, capital we any more is returns. pay

Samuel Chase

control. swim their point, that It's it's that's the standpoint, fair And and at this in raise and my trying because that our sink to shareholders [ph] more market own? just got to on I their to see forward, lot guys me you to going capital up to Cash sense that's the a been capital NAV just at you that debt mostly they from Converters hate capital to no don't the guys. Okay. of more we point put that to control just a asset seems to firm convertible say this go would what's make to available

Stuart Grimshaw

don't time, plans I we plans, At into any Converters. in Cash have more any this to have don't capital put point

Operator

comes line question next [indiscernible]. from of Your the

Unidentified Analyst

ensuring Two follow-ups. former I some frustration. the question Against callers the of

things structural fix we to able be those of some not is reality near the term. think I may

a I guys fact, in as discount question, think Joe was mentioned we calculated first there. the traded However, I prior historically much prior in my decade decade, for you smaller XX% the for

start echo term those appreciate I Can incentive another close already you've mentioned, caller's get also structural just the we buyback would to comment can a as love know want the I think I even XX%-plus to that during And to that? here then reasons starting was that we would today, echo positioned feel two second I of U.S. long see great to would XXXX. slowdown. everyone like issues, I guess caller now were you mean, pleased questions, so my can but gap your see that and in about with you're I think to or addressed back to drive to XXX,XXX, to to would plan. to PLO it, worry still do So I tighter EPS get see you're another well talk obviously, growth added well environments? you the I store you my do about be, economic about question able hit it's is since first to kind how the time concern credit

that do business touch it you pretty imagine I well. type So how your of to expect can you because perform environment in if on would

Stuart Grimshaw

Thanks, Yes. Chris.

managers it's X store remote really more store go taken are management. when to in daily increase PLO And not compensation their I because the on do store the by X you've and the that compensation that getting the to past by so we're having the that customers, or focusing a see getting tenure PLO enhanced know to myself, experiences we of outcomes for what spent they years those focused mentioned by more I to business a be that doesn't are it happens friends and What we know on having between people, positive activity they're means previously organization tenure. getting through regarding the right to at return starting great happen the remote activities It basis business platforms that which we've we've have X aligned X day the and team members, store. needs, the each that management. our it it's the on As outcomes top value being and that well and know and doing lot today. per the to we're that all to increase their we have micromanagement everything down a time we over over talk investing works on getting store, it it We've businesses had We're seen and exactly returns. get it each the the focus we're as the by satisfying in about customers years, Joe, basis we we team way And the to of day.

it's achieve was the say on if a the of work there this and water, you're hard a make to can wish it, it I actually you get lot to to money, over word top adding level. time a of the but going by over can of that I So is period long magic

hard this you people. I put we've the got and store be will help that well. just more it's questions, is place the unfortunately, to the in level, systems But to us going with asked think work supported as at the great

Daniel Chism

Chris. Yes,

also product. probably a provides ask bit low a that gold we've And - demand an U.S., expected the about cash. increase with I customer things extremely of pawn going and how is company in there in that to as prices a the environment We're lending. seen economic would that to slowdown, a for we bit You unemployment headwind say the of then I'd Obviously, bit our more that think does a couple would slowdown, respond. well. for with

bit, obviously pull which go you see for an So would with the that's company. been a prices probably economic lately I a net depressed down up a think gold little positive is

Operator

I'll turn questions over There you. further Mr. are at time. the to no call back Grimshaw, this

Stuart Grimshaw

appreciate day. interest. be asked. support and questions this and dialing great robust and Thanks the session. Thanks available a Danny much, for webcast. and call. both later will a like been much, to and the are the thank We'd morning. in those That That's everyone, concludes good thanks, very questions your you their And We that for very for have Jeff in

Operator

concludes conference This call. today's

may You disconnect. now

EZCORP (EZPW) 15 Nov 182018 Q4 Earnings call transcript