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EZCORP Reports First Quarter 2022 Results

PLO Up 19%; Revenue up 24%; Net Income up 266%

EZCORP, Inc. (NASDAQ: EZPW), a leading provider of pawn transactions in the United States and Latin America, today announced results for its first quarter ended December 31, 2021.

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

FIRST QUARTER HIGHLIGHTS

  • Pawn loans outstanding (PLO) was up 19%.
  • Total revenue increased 24%, and net revenue increased 22%.
  • Merchandise sales gross profit margin remains high at 40%.
  • Diluted earnings per share of $0.21 were up significantly from $0.08. On an adjusted basis1, diluted earnings per share were $0.22, compared to diluted earnings per share of $0.13.
  • Return on earning assets (ROEA) remains strong at 177%.

CEO COMMENTARY AND OUTLOOK

Co-Interim Chief Executive Officer Lachie Given stated, “It was a very strong first quarter, as our passionate and productive team continued to execute on the plan we put in place at the end of fiscal 2020. These initiatives are driving better returns and improved financial metrics. PLO continues to recover, getting closer to pre-pandemic levels, and margins remain strong as our team has adopted the changes we implemented 18 months ago to improve inventory turns and reduce aged merchandise.

“In the first quarter we invested in a company with interests in 20 pawn stores primarily in the Caribbean with plans for further expansion. Our acquisition pipeline remains robust and we will continue to look for opportunities to diversify into new pawn markets.

“We are truly proud to provide a unique and essential service to our customers, that by its very nature contributes to the circular economy by extending the useful life of items and reducing waste. I am very excited to continue working with this team as we go forward to collectively grow the business and increase value for our shareholders,” concluded Given.

Co-Interim Chief Executive Officer Blair Powell said, “In my 30 plus years at EZCORP I have never before seen the level of enthusiasm and pride throughout the organization. Our team has thoroughly embraced our operating themes of People, Pawn and Passion. At every level the focus is on looking for ways to be more efficient and cost effective and to provide the optimal customer experience. Our refocused efforts continue to deliver tangible results, as we have seen our store level operating metrics continue to improve.

“Improving the customer experience is essential to our mission. The launch of our points-based loyalty program incentivizes customers to transact with us and has performed better than expected in the first quarter. We continue to enhance our online payment options and roll out our online showcase in selected markets for customers to view inventory. Our team members and customers drive our success, and we are laser focused on doing everything we can to optimize the customer and team member experience throughout the company,” concluded Powell.

CONSOLIDATED RESULTS

Three Months Ended December 31

As Reported

 

Adjusted1

in millions, except per share amounts

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

Total revenues

$

221.0

 

$

178.1

 

$

221.5

 

$

178.1

Net revenues

$

132.1

 

$

108.4

 

$

132.3

 

$

108.4

Income before tax

$

21.3

 

$

5.5

 

$

21.5

 

$

8.3

Net income

$

15.7

 

$

4.3

 

$

16.0

 

$

7.2

Diluted earnings per share

$

0.21

 

$

0.08

 

$

0.22

 

$

0.13

EBITDA (non-GAAP measure)

$

31.0

 

$

17.7

 

$

31.2

 

$

17.2

  • Diluted earnings per share were $0.21 for the first quarter, compared to $0.08. On an adjusted basis, diluted earnings per share were $0.22, compared to $0.13.
  • Income before taxes improved to $21.3 million from $5.5 million, while adjusted EBITDA increased 81% to $31.2 million.
  • PLO increased 19% to $176.6 million, up $28.7 million. On a same-store basis2, PLO increased 15% year-over-year and 1% sequentially.
  • Total revenues increased 24%, and net revenues increased 22%, reflecting improved pawn service charge (PSC) revenue and merchandise sales gross profit.
  • PSC increased 20% due to an increase in the average PLO balance during the quarter.
  • Merchandise sales gross profit margin remains high at 40%, reflecting the commitment to improving the core business by decreasing aged general merchandise (now less than 1% of total general merchandise inventory) and focusing on selling inventory in the first 90 days.
  • Net inventory increased 26% year-over-year and 7% sequentially, reflecting a return towards normalized inventory levels. Inventory turnover remained strong at 3.0x for the quarter, up from 2.9x.
  • Store expenses increased $7.5 million or 9%, primarily due to increased store count and rising labor costs resulting from growing transaction volume. On a same-store basis, store expenses increased 4%.
  • General and administrative expenses increased $3.0 million or 24%, primarily due to timing of fiscal year 2021 expenses.
  • Cash and cash equivalents at the end of the quarter was $233.3 million, down $57.2 million or 20% year-over-year and down $20.4 million or 8% on a sequential basis. The decrease is primarily due to the increase in PLO and inventory and the acquisition of new stores.

SEGMENT RESULTS

U.S. Pawn

  • PLO continued to increase, ending the quarter up 16% (15% on a same store basis) year-over-year and up 4% on a sequential basis.
  • Total revenue was up 20% and net revenues increased 19%, reflecting increasing PSC, higher sales and improved merchandise sales gross profit.
  • PSC increased 13% in the first quarter as a result of higher average PLO.
  • Merchandise sales gross profit gross margins improved to 43% from 42%, reflecting a continued focus on improving retailing and maintaining lower levels of aged general merchandise inventory (which improved to 0.4% from 3.4% of total merchandise inventory).
  • Net inventory increased 16% year-over-year and 10% sequentially. Inventory turnover continued to improve, increasing to 2.8x from 2.6x for the prior-year quarter.
  • Store expenses increased 4%, or $2.6 million, to $64.7 million, primarily due to rising labor costs resulting from growing transaction volume and store count.
  • Segment contribution increased to $34.5 million, up $13.8 million.

Latin America Pawn

  • PLO improved 37% to $35.5 million (up 40% on constant currency basis). On a same store basis, PLO increased 18% (20% on a constant currency basis) year-over-year and decreased 10% (down 8% on a constant currency basis) sequentially consistent with seasonality.
  • Total revenue was up 38% (39% on a constant currency basis), while net revenues increased 33% (34% on a constant currency basis).
  • PSC increased 47% to $19.5 million (up 47% to $19.6 million on a constant currency basis) as a result of higher average PLO for the quarter.
  • Merchandise sales gross profit margins decreased from 35% to 29% reflecting a return to more normalized margins.
  • Net inventory increased 67% (71% on a constant currency basis), but was up only 1% sequentially (3% on a constant currency basis). Inventory turnover remains strong at 3.6x down from 3.8x for the prior-year quarter.
  • Store expenses increased $4.9 million or 28% ($5.0 million or 29% on a constant currency basis) primarily due to growth in store count and rising labor costs resulting from growing transaction volume. Same-store expenses increased $0.9 million or 5% ($1.0 million or 6% on a constant currency basis).
  • Segment contribution was $6.5 million ($6.6 million on a constant currency basis), compared to $5.0 million in the prior-year quarter. On an adjusted basis, the increase in segment contribution was $1.8 million to $6.6 million.
  • Segment store count increased by one de novo store opened during the quarter.

     

FORM 10-Q

EZCORP’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2021 has been filed with the Securities and Exchange Commission. The report is available in the Investor Relations section of the Company’s website at http://investors.ezcorp.com. EZCORP shareholders may obtain a paper copy of the report, free of charge, by sending a request to the investor relations contact below.

CONFERENCE CALL

EZCORP will host a conference call on Thursday, February 3, 2022, at 7:00 am Central Time to discuss First Quarter Fiscal 2022 results. Analysts and institutional investors may participate on the conference call by dialing (833) 579-0921, Conference ID: 3989568, or internationally by dialing (778) 560-2579. The conference call will be webcast simultaneously to the public through this link: http://investors.ezcorp.com/. A replay of the conference call will be available online at http://investors.ezcorp.com/ shortly after the end of the call.

ABOUT EZCORP

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

Follow us on social media:

Facebook EZPAWN Official https://www.facebook.com/EZPAWN/

EZCORP Instagram Official https://www.instagram.com/ezcorp_official/

EZPAWN Instagram Official https://www.instagram.com/ezpawnofficial/

EZCORP Linked In https://www.linkedin.com/company/ezcorp/

FORWARD LOOKING STATEMENTS

This announcement contains certain forward-looking statements regarding the company’s strategy, initiatives and expected performance. These statements are based on the Company’s current expectations as to the outcome and timing of future events. All statements, other than statements of historical facts, including all statements regarding the company's strategy, initiatives and future performance, that address activities or results that the company plans, expects, believes, projects, estimates or anticipates, will, should or may occur in the future, including future financial or operating results, are forward-looking statements. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of uncertainties and other factors, including operating risks, liquidity risks, legislative or regulatory developments, market factors, current or future litigation and risks associated with the COVID-19 pandemic. For a discussion of these and other factors affecting the Company’s business and prospects, see the Company’s annual, quarterly and other reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

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

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

 

EZCORP, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

Three Months Ended

December 31,

(in thousands, except per share amounts)

2021

 

2020

 

(Unaudited)

Revenues:

 

 

 

Merchandise sales

$

137,720

 

 

$

107,783

 

Jewelry scrapping sales

 

6,944

 

 

 

6,759

 

Pawn service charges

 

76,025

 

 

 

63,489

 

Other revenues

 

305

 

 

 

104

 

Total revenues

 

220,994

 

 

 

178,135

 

Merchandise cost of goods sold

 

83,111

 

 

 

64,543

 

Jewelry scrapping cost of goods sold

 

5,772

 

 

 

5,202

 

Net revenues

 

132,111

 

 

 

108,390

 

Operating expenses:

 

 

 

Store expenses

 

86,771

 

 

 

79,309

 

General and administrative

 

15,545

 

 

 

12,510

 

Depreciation and amortization

 

7,574

 

 

 

7,572

 

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

 

5

 

 

 

(22

)

Total operating expenses

 

109,895

 

 

 

99,369

 

Operating income

 

22,216

 

 

 

9,021

 

Interest expense

 

2,431

 

 

 

5,455

 

Interest income

 

(304

)

 

 

(821

)

Equity in net income of unconsolidated affiliates

 

(1,138

)

 

 

(516

)

Other income

 

(120

)

 

 

(599

)

Income before income taxes

 

21,347

 

 

 

5,502

 

Income tax expense

 

5,626

 

 

 

1,203

 

Net income

$

15,721

 

 

$

4,299

 

 

 

 

 

Basic earnings per share

$

0.28

 

 

$

0.08

 

Diluted earnings per share

$

0.21

 

 

$

0.08

 

 

 

 

 

Weighted-average basic shares outstanding

 

56,183

 

 

 

55,361

 

Weighted-average diluted shares outstanding

 

81,948

 

 

 

55,428

 

 

 

 

 

EZCORP, Inc.

CONSOLIDATED BALANCE SHEETS

 

(in thousands, except share and per share amounts)

December 31,

2021

 

December 31,

2020

 

September 30,

2021

 

 

 

 

 

 

 

(Unaudited)

 

 

Assets:

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

233,274

 

 

$

290,450

 

 

$

253,667

 

Restricted cash

 

8,692

 

 

 

8,011

 

 

 

9,957

 

Pawn loans

 

176,586

 

 

 

147,852

 

 

 

175,901

 

Pawn service charges receivable, net

 

29,765

 

 

 

24,825

 

 

 

29,337

 

Inventory, net

 

119,313

 

 

 

94,980

 

 

 

110,989

 

Prepaid expenses and other current assets

 

31,209

 

 

 

32,824

 

 

 

31,010

 

Total current assets

 

598,839

 

 

 

598,942

 

 

 

610,861

 

Investments in unconsolidated affiliates

 

42,513

 

 

 

31,773

 

 

 

37,724

 

Other investments

 

16,500

 

 

 

 

 

 

 

Property and equipment, net

 

52,201

 

 

 

55,204

 

 

 

53,811

 

Right-of-use asset, net

 

201,527

 

 

 

177,308

 

 

 

200,990

 

Goodwill

 

284,619

 

 

 

258,453

 

 

 

285,758

 

Intangible assets, net

 

61,458

 

 

 

58,794

 

 

 

62,104

 

Notes receivable, net

 

1,190

 

 

 

1,156

 

 

 

1,181

 

Deferred tax asset, net

 

15,623

 

 

 

10,000

 

 

 

9,746

 

Other assets

 

5,851

 

 

 

5,534

 

 

 

4,736

 

Total assets

$

1,280,321

 

 

$

1,197,164

 

 

$

1,266,911

 

 

 

 

 

 

 

Liabilities and equity:

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current maturities of long-term debt, net

$

 

 

$

213

 

 

$

 

Accounts payable, accrued expenses and other current liabilities

 

75,531

 

 

 

67,777

 

 

 

90,268

 

Customer layaway deposits

 

13,142

 

 

 

9,904

 

 

 

12,557

 

Lease liability

 

51,843

 

 

 

45,351

 

 

 

52,263

 

Total current liabilities

 

140,516

 

 

 

123,245

 

 

 

155,088

 

Long-term debt, net

 

311,844

 

 

 

254,322

 

 

 

264,186

 

Deferred tax liability, net

 

221

 

 

 

172

 

 

 

3,684

 

Lease liability

 

161,841

 

 

 

143,620

 

 

 

161,330

 

Other long-term liabilities

 

11,398

 

 

 

11,303

 

 

 

10,385

 

Total liabilities

 

625,820

 

 

 

532,662

 

 

 

594,673

 

Commitments and Contingencies

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Class A Non-voting Common Stock, par value $0.01 per share; shares authorized: 100 million; issued and outstanding: 53,344,218 as of December 31, 2021; 52,628,588 as of December 31, 2020; and 53,086,438 as of September 30, 2021

 

533

 

 

 

526

 

 

 

530

 

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

 

30

 

 

 

30

 

 

 

30

 

Additional paid-in capital

 

339,955

 

 

 

398,269

 

 

 

403,312

 

Retained earnings

 

369,359

 

 

 

322,468

 

 

 

326,781

 

Accumulated other comprehensive loss

 

(55,376

)

 

 

(56,791

)

 

 

(58,415

)

Total equity

 

654,501

 

 

 

664,502

 

 

 

672,238

 

Total liabilities and equity

$

1,280,321

 

 

$

1,197,164

 

 

$

1,266,911

 

 

EZCORP, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

Three Months Ended

December 31,

(in thousands)

2021

 

2020

 

 

Operating activities:

 

 

 

Net income

$

15,721

 

 

$

4,299

 

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

 

 

 

Depreciation and amortization

 

7,574

 

 

 

7,572

 

Amortization of debt discount and deferred financing costs

 

374

 

 

 

3,329

 

Amortization of lease right-of-use asset

 

12,694

 

 

 

11,504

 

Deferred income taxes

 

587

 

 

 

(1,421

)

Other adjustments

 

(30

)

 

 

(167

)

Provision for inventory reserve

 

(820

)

 

 

(1,510

)

Stock compensation expense

 

1,698

 

 

 

524

 

Equity in net income of unconsolidated affiliates

 

(1,138

)

 

 

(516

)

Changes in operating assets and liabilities:

 

 

 

Service charges and fees receivable

 

(419

)

 

 

(4,034

)

Inventory

 

(2,314

)

 

 

1,323

 

Prepaid expenses, other current assets and other assets

 

(2,330

)

 

 

(713

)

Accounts payable, accrued expenses and other liabilities

 

(29,531

)

 

 

(23,460

)

Customer layaway deposits

 

551

 

 

 

(1,311

)

Income taxes

 

4,741

 

 

 

68

 

Dividends from unconsolidated affiliates

 

1,660

 

 

 

 

Net cash provided by (used in) operating activities

 

9,018

 

 

 

(4,513

)

Investing activities:

 

 

 

Loans made

 

(166,480

)

 

 

(142,936

)

Loans repaid

 

95,542

 

 

 

77,116

 

Recovery of pawn loan principal through sale of forfeited collateral

 

65,297

 

 

 

53,981

 

Capital expenditures, net

 

(4,985

)

 

 

(3,223

)

Issuance of note receivable

 

(1,000

)

 

 

 

Investment in unconsolidated affiliates

 

(2,477

)

 

 

 

Investment in other investments

 

(16,500

)

 

 

 

Net cash used in investing activities

 

(30,603

)

 

 

(15,062

)

Financing activities:

 

 

 

Taxes paid related to net share settlement of equity awards

 

(792

)

 

 

(730

)

Payments on assumed debt and other borrowings

 

 

 

 

(53

)

Net cash used in financing activities

 

(792

)

 

 

(783

)

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

 

719

 

 

 

6,266

 

Net decrease in cash, cash equivalents and restricted cash

 

(21,658

)

 

 

(14,092

)

Cash, cash equivalents and restricted cash at beginning of period

 

263,624

 

 

 

312,553

 

Cash, cash equivalents and restricted cash at end of period

$

241,966

 

 

$

298,461

 

 

 

 

 

Supplemental disclosure of cash flow information

 

 

 

Cash and cash equivalents

$

233,274

 

 

$

290,450

 

Restricted cash

 

8,692

 

 

 

8,011

 

Total cash and cash equivalents and restricted cash

$

241,966

 

 

$

298,461

 

 

 

 

 

 

 

 

 

Non-cash investing and financing activities:

 

 

 

Pawn loans forfeited and transferred to inventory

$

70,966

 

 

$

50,921

 

 

EZCORP, Inc.

OPERATING SEGMENT RESULTS

(Unaudited)

 

 

Three Months Ended December 31, 2021

(in thousands)

U.S. Pawn

 

Latin America

Pawn

 

Other

Investments

 

Total Segments

 

Corporate

Items

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Merchandise sales

$

102,078

 

$

35,642

 

 

$

 

 

$

137,720

 

 

$

 

 

$

137,720

 

Jewelry scrapping sales

 

4,980

 

 

1,964

 

 

 

 

 

 

6,944

 

 

 

 

 

 

6,944

 

Pawn service charges

 

56,557

 

 

19,468

 

 

 

 

 

 

76,025

 

 

 

 

 

 

76,025

 

Other revenues

 

22

 

 

240

 

 

 

43

 

 

 

305

 

 

 

 

 

 

305

 

Total revenues

 

163,637

 

 

57,314

 

 

 

43

 

 

 

220,994

 

 

 

 

 

 

220,994

 

Merchandise cost of goods sold

 

57,832

 

 

25,279

 

 

 

 

 

 

83,111

 

 

 

 

 

 

83,111

 

Jewelry scrapping cost of goods sold

 

3,975

 

 

1,797

 

 

 

 

 

 

5,772

 

 

 

 

 

 

5,772

 

Net revenues

 

101,830

 

 

30,238

 

 

 

43

 

 

 

132,111

 

 

 

 

 

 

132,111

 

Segment and corporate expenses (income):

 

 

 

 

 

 

 

 

 

 

 

Store expenses

 

64,689

 

 

22,082

 

 

 

 

 

 

86,771

 

 

 

 

 

 

86,771

 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

15,545

 

 

 

15,545

 

Depreciation and amortization

 

2,670

 

 

1,980

 

 

 

 

 

 

4,650

 

 

 

2,924

 

 

 

7,574

 

Loss on sale or disposal of assets and other

 

 

 

5

 

 

 

 

 

 

5

 

 

 

 

 

 

5

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

2,431

 

 

 

2,431

 

Interest income

 

 

 

(182

)

 

 

 

 

 

(182

)

 

 

(122

)

 

 

(304

)

Equity in net income of unconsolidated affiliates

 

 

 

 

 

 

(1,138

)

 

 

(1,138

)

 

 

 

 

 

(1,138

)

Other (income) expense

 

 

 

(134

)

 

 

(12

)

 

 

(146

)

 

 

26

 

 

 

(120

)

Segment contribution

$

34,471

 

$

6,487

 

 

$

1,193

 

 

$

42,151

 

 

 

 

 

Income (loss) before income taxes

 

 

 

 

 

 

$

42,151

 

 

$

(20,804

)

 

$

21,347

 

 

 

Three Months Ended December 31, 2020

(in thousands)

U.S. Pawn

 

Latin America

Pawn

 

Other

Investments

 

Total Segments

 

Corporate

Items

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Merchandise sales

$

82,253

 

$

25,530

 

 

$

 

 

$

107,783

 

 

$

 

 

$

107,783

 

Jewelry scrapping sales

 

4,004

 

 

2,755

 

 

 

 

 

 

6,759

 

 

 

 

 

 

6,759

 

Pawn service charges

 

50,220

 

 

13,269

 

 

 

 

 

 

63,489

 

 

 

 

 

 

63,489

 

Other revenues

 

22

 

 

7

 

 

 

75

 

 

 

104

 

 

 

 

 

 

104

 

Total revenues

 

136,499

 

 

41,561

 

 

 

75

 

 

 

178,135

 

 

 

 

 

 

178,135

 

Merchandise cost of goods sold

 

48,059

 

 

16,484

 

 

 

 

 

 

64,543

 

 

 

 

 

 

64,543

 

Jewelry scrapping cost of goods sold

 

2,844

 

 

2,358

 

 

 

 

 

 

5,202

 

 

 

 

 

 

5,202

 

Net revenues

 

85,596

 

 

22,719

 

 

 

75

 

 

 

108,390

 

 

 

 

 

 

108,390

 

Segment and corporate expenses (income):

 

 

 

 

 

 

 

 

 

 

 

Store expenses

 

62,092

 

 

17,217

 

 

 

 

 

 

79,309

 

 

 

 

 

 

79,309

 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

12,510

 

 

 

12,510

 

Depreciation and amortization

 

2,736

 

 

1,860

 

 

 

 

 

 

4,596

 

 

 

2,976

 

 

 

7,572

 

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

 

27

 

 

(101

)

 

 

 

 

 

(74

)

 

 

52

 

 

 

(22

)

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

5,455

 

 

 

5,455

 

Interest income

 

 

 

(764

)

 

 

 

 

 

(764

)

 

 

(57

)

 

 

(821

)

Equity in net income of unconsolidated affiliates

 

 

 

 

 

 

(516

)

 

 

(516

)

 

 

 

 

 

(516

)

Other (income) expense

 

 

 

(455

)

 

 

(210

)

 

 

(665

)

 

 

66

 

 

 

(599

)

Segment contribution

$

20,741

 

$

4,962

 

 

$

801

 

 

$

26,504

 

 

 

 

 

Income (loss) before income taxes

 

 

 

 

 

 

$

26,504

 

 

$

(21,002

)

 

$

5,502

 

 

 

 

 

 

 

 

 

 

 

 

 

EZCORP, Inc.

STORE COUNT ACTIVITY

(Unaudited)

 

 

Three Months Ended December 31, 2021

 

U.S. Pawn

 

Latin America

Pawn

 

Consolidated

 

 

 

 

 

 

As of September 30, 2021

516

 

632

 

1,148

New locations opened

 

1

 

1

As of December 31, 2021

516

 

633

 

1,149

 

 

Three Months Ended December 31, 2020

 

U.S. Pawn

 

Latin America

Pawn

 

Consolidated

 

 

 

 

 

 

As of September 30, 2020

505

 

500

 

1,005

New locations opened

 

2

 

2

As of December 31, 2020

505

 

502

 

1,007

 

Non-GAAP Financial Information (Unaudited)

In addition to the financial information prepared in conformity with accounting principles generally accepted in the United States ("GAAP"), we provide certain other non-GAAP financial information on a constant currency ("constant currency") and adjusted basis. We use constant currency results to evaluate our Latin America Pawn operations, which are denominated primarily in Mexican pesos, Guatemalan quetzales and other Latin American currencies. We believe that presentation of constant currency and adjusted results is meaningful and useful in understanding the activities and business metrics of our operations and reflect an additional way of viewing aspects of our business that, when viewed with GAAP results, provide a more complete understanding of factors and trends affecting our business. We provide non-GAAP financial information for informational purposes and to enhance understanding of our GAAP consolidated financial statements. We use this non-GAAP financial information primarily to evaluate and compare operating results across accounting periods.

Readers should consider the information in addition to, but not instead of or superior to, our financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.

Constant currency results reported herein are calculated by translating consolidated balance sheet and consolidated statement of operations items denominated in local currency to U.S. dollars using the exchange rate from the prior-year comparable period, as opposed to the current period, in order to exclude the effects of foreign currency rate fluctuations. We used the end-of-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. The end-of-period and approximate average exchange rates for each applicable currency as compared to U.S. dollars as of and for the three months ended December 31, 2021 and 2020 were as follows:

 

 

December 31,

 

Three Months Ended

December 31,

 

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

Mexican peso

 

20.5

 

19.9

 

20.7

 

20.5

Guatemalan quetzal

 

7.5

 

7.6

 

7.6

 

7.6

Honduran lempira

 

24.1

 

23.8

 

23.9

 

24.1

Peruvian sol

 

4.0

 

3.6

 

4.0

 

3.6

 

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

Miscellaneous Non-GAAP Financial Measures

 

Three Months Ended

December 31,

(in millions)

2021

 

2020

 

 

 

 

Net income

$

15.7

 

 

$

4.3

 

Interest expense

 

2.4

 

 

 

5.4

 

Interest income

 

(0.3

)

 

 

(0.8

)

Income tax expense

 

5.6

 

 

 

1.2

 

Depreciation and amortization

 

7.6

 

 

 

7.6

 

EBITDA

$

31.0

 

 

$

17.7

 

 

 

Total

Revenues

 

Net

Revenues

 

Income

Before Tax

 

Tax Effect

 

Net

Income

 

Diluted EPS

 

EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022 Q1 Reported

$

221.0

 

$

132.1

 

$

21.3

 

 

$

5.6

 

 

$

15.7

 

 

$

0.21

 

 

$

31.0

 

FX impact

 

 

 

 

 

0.1

 

 

 

(0.1

)

 

 

0.2

 

 

 

 

 

 

0.1

 

Constant currency impact

 

0.5

 

 

0.2

 

 

0.1

 

 

 

 

 

 

0.1

 

 

 

0.01

 

 

 

0.1

 

2022 Q1 Adjusted

$

221.5

 

$

132.3

 

$

21.5

 

 

$

5.5

 

 

$

16.0

 

 

$

0.22

 

 

$

31.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

Revenues

 

Net

Revenues

 

Income

Before Tax

 

Tax Effect

 

Net

Income

 

Diluted EPS

 

EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2021 Q1 Reported

$

178.1

 

$

108.4

 

$

5.5

 

 

$

1.2

 

 

$

4.3

 

 

$

0.08

 

 

$

17.7

 

Contract termination costs

 

 

 

 

 

(0.4

)

 

 

(0.1

)

 

 

(0.3

)

 

 

(0.01

)

 

 

(0.4

)

Non cash interest

 

 

 

 

 

3.3

 

 

 

 

 

 

3.3

 

 

 

0.06

 

 

 

3.3

 

Other adjustments

 

 

 

 

 

(0.1

)

 

 

 

 

 

(0.1

)

 

 

 

 

 

(3.4

)

2021 Q1 Adjusted

$

178.1

 

$

108.4

 

$

8.3

 

 

$

1.1

 

 

$

7.2

 

 

$

0.13

 

 

$

17.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

December 31, 2021

(in millions)

U.S. Dollar

Amount

 

Percentage

Change YOY

 

 

 

 

Consolidated revenue

$

221.0

 

24

%

Currency exchange rate fluctuations

 

0.5

 

 

Constant currency consolidated revenue

$

221.5

 

24

%

 

 

 

 

Consolidated net revenue

$

132.1

 

22

%

Currency exchange rate fluctuations

 

0.2

 

 

Constant currency consolidated net revenue

$

132.3

 

22

%

 

 

 

 

Consolidated net inventory

$

119.3

 

26

%

Currency exchange rate fluctuations

 

0.6

 

 

Constant currency consolidated net inventory

$

119.9

 

26

%

 

 

 

 

Latin America Pawn net revenue

$

30.2

 

33

%

Currency exchange rate fluctuations

 

0.2

 

 

Constant currency Latin America Pawn net revenue

$

30.4

 

34

%

 

 

 

 

Latin America Pawn PLO

$

35.5

 

37

%

Currency exchange rate fluctuations

 

0.7

 

 

Constant currency Latin America Pawn PLO

$

36.2

 

40

%

 

 

 

 

Latin America Pawn PSC revenues

$

19.5

 

47

%

Currency exchange rate fluctuations

 

0.1

 

 

Constant currency Latin America Pawn PSC revenues

$

19.6

 

47

%

 

 

 

 

Latin America Pawn merchandise sales

$

35.6

 

40

%

Currency exchange rate fluctuations

 

0.4

 

 

Constant currency Latin America Pawn merchandise sales

$

36.0

 

41

%

 

 

 

 

Latin America Pawn segment profit before tax

$

6.5

 

30

%

Currency exchange rate fluctuations

 

0.1

 

 

Constant currency Latin America Pawn segment profit before tax

$

6.6

 

32

%

 

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