EZCORP, INC. 
By AUSTIN, Texas, Jan. 21 /PRNewswire-FirstCall/ -- EZCORP, Inc. (Nasdaq: EZPW) announced today results for its first fiscal quarter ended December 31, 2009.
(Logo: http://www.newscom.com/cgi-bin/prnh/20090713/EZCORPLOGO)
EZCORP's net income for the quarter ended December 31, 2009 increased 73% to $25.7 million ($0.52 per share) compared to $14.8 million ($0.33 per share) for the quarter ended December 31, 2008. Total revenues for the quarter increased 44% over the prior year period to $184.8 million.
Consolidated operating income improved 77% to $38.9 million (34% of net revenues) from $22.0 million (28% of net revenues) in the prior year quarter. The Company's U.S. pawn operations contributed $14.5 million of the improvement and the EZMONEY operations contributed $5.4 million of the increase. Operating income from the Empeno Facil Mexico pawn segment decreased $0.3 million as expenses at new stores outpaced the segment's 23% net revenue growth, with one third of its stores opened in the last six months. Partially offsetting the increase in store level operating income was higher administrative costs and depreciation and a small loss on disposal of assets.
U.S. pawn acquisitions completed in November and December 2008 contributed net income of approximately $5.8 million and $0.07 per share after taking into account the increase in shares issued in the acquisitions.
Commenting on these results, President and Chief Executive Officer, Joe Rotunda, stated, "This was an outstanding quarter, our 30th consecutive quarter of year over year earnings growth, and clearly demonstrates our ability to consistently enhance earnings and provide shareholder value. Coupled with this strong financial performance is an expanding world-wide presence with our store growth in Mexico, entry into Canada, and our strategic affiliations with Albemarle & Bond in the United Kingdom and Cash Converters in Australia."
Rotunda continued, "In all segments of our business, we saw strong loan demand. It appears that our broadened range of loan offerings provides solutions to consumers' cash needs and are found to be more attractive than other options. With these strong ending loan portfolio balances, we are well positioned for a solid fiscal year."
Rotunda concluded, "For the March quarter, we expect earnings per share of approximately $0.43, compared to $0.37 for the same period a year ago. For our 2010 fiscal year ending September 30th, we are raising our earnings guidance to approximately $1.81 per share, compared to $1.42 per share for fiscal 2009. We remain on track to open 40 to 50 Empeno Facil pawn locations in Mexico and 35 to 45 CASHMAX payday loan stores in Canada, as well as six domestic pawn stores by fiscal year-end."
ABOUT EZCORP:
EZCORP provides loans or credit services to customers who do not have cash resources or access to credit to meet their short-term cash needs. In its pawnshops, the Company offers non-recourse loans collateralized by tangible personal property, commonly known as pawn loans. At these locations, the Company also sells merchandise, primarily collateral forfeited from its pawn lending operations, to consumers looking for good value. The Company also offers a variety of short-term consumer loans, including payday loans, installment loans and auto title loans, or fee-based credit services to customers seeking loans from unaffiliated lenders.
At December 31, 2009, EZCORP operated a total of 920 locations, consisting of 370 U.S. pawnshops, 70 pawnshops in Mexico, 472 U.S. short-term consumer loan stores, and 8 short-term consumer loan stores in Canada. The Company also has significant investments in Albemarle & Bond Holdings PLC (ABM.L), one of the U.K.'s largest pawnbroking businesses with 115 stores, and Cash Converters International Limited (CCV.L and CCV.AUS), which franchises and operates approximately 500 locations worldwide.
This announcement contains certain forward-looking statements regarding the Company's expected operating and financial performance for future periods, including new store expansion and expected future earnings. These statements are based on the Company's current expectations. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of uncertainties and other factors, including changing market conditions in the overall economy and the industry, consumer demand for the Company's services and merchandise, actions of third parties who offer services and products in the Company's locations and changes in the regulatory environment. 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.
You are invited to listen to a conference call discussing these results on January 21, 2010 at 3:30 pm Central Time. The conference call can be accessed over the Internet or replayed at your convenience at the following address.
http://www.videonewswire.com/event.asp?id=65278
For additional information, contact Brad Wolfe at (512) 314-2289.
EZCORP, Inc.
Highlights of Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share data and percents)
Three Months Ended
December 31, Increase Percent
2009 2008 (Decrease) Change
---- ---- ---------- ------
1 Revenues:
2 Merchandise
sales $62,476 $44,795 $17,681 39.5
3 Jewelry
scrapping
sales 37,442 19,785 17,657 89.2
4 Pawn
service
charges 40,797 26,381 14,416 54.6
5 Signature
loan fees 38,678 36,000 2,678 7.4
6 Auto
title loan fees 3,102 221 2,881 1303.6
7 Other 2,256 1,433 823 57.4
----- ----- --- ----
8 Total
revenues 184,751 128,615 56,136 43.6
9 Cost of
goods sold:
10 Cost of
merchandise
sales 39,265 27,166 12,099 44.5
11 Cost of
jewelry
scrapping
sales 23,305 13,259 10,046 75.8
------ ------ ------ ----
12 Total cost of
goods sold 62,570 40,425 22,145 54.8
13 Bad debt:
14 Signature
loan bad debt 8,790 9,484 (694) (7.3)
15 Auto
title loan
bad debt 460 7 453 6471.4
--- --- --- ------
16 Total bad
debt 9,250 9,491 (241) (2.5)
----- ----- ---- ----
17 Net revenue 112,931 78,699 34,232 43.5
18
19 Operations expense 58,181 43,494 14,687 33.8
20 Administrative
expense 12,297 10,411 1,886 18.1
21 Depreciation
and amortization 3,356 3,066 290 9.5
22 (Gain) /
Loss on sale/
disposal of
assets 211 (284) 495 (174.3)
--- ---- --- ------
23 Operating income 38,886 22,012 16,874 76.7
24
25 Interest income (8) (126) 118 (93.7)
26 Interest expense 365 165 200 121.2
27 Equity in
net income of
unconsolidated
affiliates (1,283) (941) (342) 36.3
28 Other (15) 25 (40) (160.0)
--- --- --- ------
29 Income before income
taxes 39,827 22,889 16,938 74.0
30 Income tax expense 14,120 8,061 6,059 75.2
------ ----- ----- ----
31 Net income $25,707 $14,828 $10,879 73.4
======= ======= ======= ====
32
33 Net income
per share, diluted $0.52 $0.33 $0.19 56.8
===== ===== ===== ====
34 Weighted average
shares, diluted 49,400 44,692
35
36 Amount or
Percentage Point
37 (ppt)
38 OTHER DATA: Increase (Decrease)
-------------------
39 Gross margin on
merchandise sales
(lines (2-10)/2) 37.2% 39.4% (2.2) ppts
40 Gross margin on
jewelry scrapping
sales (lines (3-11)/3) 37.8% 33.0% 4.8 ppts
---- ---- ---
41 Gross margin on
total sales (lines
((2+3)-12)/(2+3)) 37.4% 37.4% 0.0 ppts
42
43 Signature loan bad debt
as percent of
fees (lines 14/5) 22.7% 26.3% (3.6) ppts
44 Auto title
loan bad debt
as percent of
fees (lines 15/6) 14.8% 3.2% 11.6 ppts
45
46 Annualized inventory
turnover 3.7 3.3 0.4
47
48 Operating income margin
(lines 23/17) 34.4% 28.0% 6.4 ppts
EZCORP, Inc.
Highlights of Consolidated Balance Sheets (Unaudited)
(in thousands, except per share data and store counts)
------------------------------------------------------
December 31,
2009 2008
---- ----
1 Assets:
2 Current assets:
3 Cash and cash equivalents $17,032 $41,595
4 Pawn loans 103,446 93,789
5 Signature loans, net 8,934 8,246
6 Auto title loans, net 2,110 1,174
7 Pawn service charges receivable, net 19,662 16,888
8 Signature loan fees receivable, net 6,044 5,968
Auto title loan finance charges
9 receivable, net 827 92
10 Inventory, net 63,515 64,563
11 Deferred tax asset 15,671 15,773
12 Prepaid expenses and other assets 20,654 12,284
------ ------
13 Total current assets 257,895 260,372
14
15 Investment in unconsolidated
affiliates 90,455 37,873
16 Property and equipment, net 52,378 46,674
17 Deferred tax asset, non-current 5,011 7,754
18 Goodwill 101,134 98,300
19 Other assets, net 19,931 18,693
------ ------
20 Total assets $526,804 $469,666
======== ========
21 Liabilities and stockholders'
equity:
22 Current liabilities:
23 Current maturities of long-term
debt $10,000 $10,000
24 Accounts payable and other accrued
expenses 39,692 48,534
25 Customer layaway deposits 2,697 2,879
26 Federal income taxes payable 6,480 3,186
----- -----
27 Total current liabilities 58,869 64,599
28
29 Long-term debt, less current
maturities 22,500 30,337
30 Deferred gains and other long-term
liabilities 2,840 3,566
31 Total stockholders' equity 442,595 371,164
------- -------
32 Total liabilities and stockholders'
equity $526,804 $469,666
======== ========
33
34 Pawn loan balance per ending pawn store $235 $228
35 Inventory per ending pawn store $144 $157
36 Book value per share $9.08 $7.67
37 Tangible book value per share $6.68 $5.28
38 Pawn store count - end of period 440 412
39 Signature loan store count -end of period 480 477
40 Shares outstanding - end of period 48,732 48,417
EZCORP, Inc.
Operating Segment Results (Unaudited)
(in thousands, except store counts and percents)
Three months ended U.S. Pawn Empeno EZMONEY
December 31, 2009: Operations Facil Operations Consolidated
---------- ----- ---------- ------------
1 Revenues:
2 Sales $96,034 $3,872 $12 $99,918
3 Pawn service
charges 38,941 1,856 - 40,797
4 Signature
loan fees 553 - 38,125 38,678
5 Auto title loan
fees 475 - 2,627 3,102
6 Other 2,167 89 - 2,256
----- --- --- -----
7 Total
revenues 138,170 5,817 40,764 184,751
8
9 Cost of
goods sold 59,730 2,833 7 62,570
10 Signature
loan bad debt 186 - 8,604 8,790
11 Auto title loan
bad debt 70 - 390 460
--- --- --- ---
12 Net
revenues 78,184 2,984 31,763 112,931
13
14 Operations
expense 40,199 2,164 15,818 58,181
------ ----- ------ ------
15 Store level
operating
income $37,985 $820 $15,945 $54,750
======= ==== ======= =======
16
17 Gross margin on
total sales (lines
(2-9)/2) 37.8% 26.8% 41.7% 37.4%
18 Annualized
inventory turnover 3.7 3.9 N/A 3.7
19 Signature
loan bad debt as
percent of fees
(lines 10/4) 33.6% N/A 22.6% 22.7%
20 Auto title loan
bad debt as percent
of fees (lines
11/5) 14.7% N/A 14.8% 14.8%
21 Operating
income margin
(lines 15/12) 48.6% 27.5% 50.2% 48.5%
22 Pawn store
count - end of
period 370 70 - 440
23 Signature
loan store count -
end of period 6 - 474 480
24
25
26 Three months ended
December 31, 2008:
27 Revenues:
28 Sales $62,167 $2,413 $- $64,580
29 Pawn service
charges 24,884 1,497 - 26,381
30 Signature
loan fees 686 - 35,314 36,000
31 Auto
title loan
fees 210 - 11 221
32 Other 1,433 - - 1,433
----- --- --- -----
33 Total
revenues 89,380 3,910 35,325 128,615
34
35 Cost of
goods sold 38,938 1,487 - 40,425
36 Signature
loan bad debt 236 - 9,248 9,484
37 Auto title loan
bad debt 6 - 1 7
--- --- --- ---
38 Net
revenues 50,200 2,423 26,076 78,699
39
40 Operations
expense 26,678 1,284 15,532 43,494
------ ----- ------ ------
41 Store Level
operating income $23,522 $1,139 $10,544 $35,205
======= ====== ======= =======
42
43 Gross margin on
total sales
(lines
(28-35)/28) 37.4% 38.4% N/A 37.4%
44 Annualized
inventory
turnover 3.4 2.2 N/A 3.3
45 Signature
loan bad debt as
percent of fees
(lines 36/30) 34.4% N/A 26.2% 26.3%
46 Auto title loan
bad debt as percent
of fees (lines
37/31) 2.9% N/A 9.1% 3.2%
47 Operating income
margin (lines
41/38) 46.9% 47.0% 40.4% 44.7%
48 Pawn store
count - end of
period 371 41 - 412
49 Signature
loan store count -
end of period 6 - 471 477
SOURCE EZCORP, Inc.
