EX-99.1 2 a2022-q1pressreleaseex991.htm EX-99.1 Document

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EZCORP Reports First Quarter 2022 Results
PLO Up 19%; Revenue up 24%; Net Income up 266%
Austin, Texas (February 2, 2022) — 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 amounts2021202020212020
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. 
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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.
2”Same Store” basis, which is a non-GAAP measure, includes stores open the entirety of the comparable periods.
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.


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.
Contact:
Email: Investor_Relations@ezcorp.com
Phone: (512) 314-2220

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)20212020
(Unaudited)
Revenues:
Merchandise sales$137,720 $107,783 
Jewelry scrapping sales6,944 6,759 
Pawn service charges76,025 63,489 
Other revenues305 104 
Total revenues220,994 178,135 
Merchandise cost of goods sold83,111 64,543 
Jewelry scrapping cost of goods sold5,772 5,202 
Net revenues132,111 108,390 
Operating expenses:
Store expenses86,771 79,309 
General and administrative15,545 12,510 
Depreciation and amortization7,574 7,572 
Loss (gain) on sale or disposal of assets and other5 (22)
Total operating expenses109,895 99,369 
Operating income22,216 9,021 
Interest expense2,431 5,455 
Interest income(304)(821)
Equity in net income of unconsolidated affiliates(1,138)(516)
Other income(120)(599)
Income before income taxes21,347 5,502 
Income tax expense5,626 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 outstanding56,183 55,361 
Weighted-average diluted shares outstanding81,948 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 cash8,692 8,011 9,957 
Pawn loans176,586 147,852 175,901 
Pawn service charges receivable, net29,765 24,825 29,337 
Inventory, net119,313 94,980 110,989 
Prepaid expenses and other current assets31,209 32,824 31,010 
Total current assets598,839 598,942 610,861 
Investments in unconsolidated affiliates42,513 31,773 37,724 
Other investments16,500 — — 
Property and equipment, net52,201 55,204 53,811 
Right-of-use asset, net201,527 177,308 200,990 
Goodwill284,619 258,453 285,758 
Intangible assets, net61,458 58,794 62,104 
Notes receivable, net1,190 1,156 1,181 
Deferred tax asset, net15,623 10,000 9,746 
Other assets5,851 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 liabilities75,531 67,777 90,268 
Customer layaway deposits13,142 9,904 12,557 
Lease liability51,843 45,351 52,263 
Total current liabilities140,516 123,245 155,088 
Long-term debt, net311,844 254,322 264,186 
Deferred tax liability, net221 172 3,684 
Lease liability161,841 143,620 161,330 
Other long-term liabilities11,398 11,303 10,385 
Total liabilities625,820 532,662 594,673 
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 capital339,955 398,269 403,312 
Retained earnings369,359 322,468 326,781 
Accumulated other comprehensive loss(55,376)(56,791)(58,415)
Total equity654,501 664,502 672,238 
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)20212020
Operating activities:
Net income $15,721 $4,299 
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization7,574 7,572 
Amortization of debt discount and deferred financing costs374 3,329 
Amortization of lease right-of-use asset12,694 11,504 
Deferred income taxes587 (1,421)
Other adjustments(30)(167)
Provision for inventory reserve(820)(1,510)
Stock compensation expense1,698 524 
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 deposits551 (1,311)
Income taxes4,741 68 
Dividends from unconsolidated affiliates1,660 — 
Net cash provided by (used in) operating activities9,018 (4,513)
Investing activities:
Loans made(166,480)(142,936)
Loans repaid95,542 77,116 
Recovery of pawn loan principal through sale of forfeited collateral65,297 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 cash719 6,266 
Net decrease in cash, cash equivalents and restricted cash(21,658)(14,092)
Cash, cash equivalents and restricted cash at beginning of period263,624 312,553 
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 cash8,692 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. PawnLatin America PawnOther InvestmentsTotal SegmentsCorporate ItemsConsolidated
Revenues:
Merchandise sales$102,078 $35,642 $— $137,720 $— $137,720 
Jewelry scrapping sales4,980 1,964 — 6,944 — 6,944 
Pawn service charges56,557 19,468 — 76,025 — 76,025 
Other revenues22 240 43 305 — 305 
Total revenues163,637 57,314 43 220,994 — 220,994 
Merchandise cost of goods sold57,832 25,279 — 83,111 — 83,111 
Jewelry scrapping cost of goods sold3,975 1,797 — 5,772 — 5,772 
Net revenues101,830 30,238 43 132,111 — 132,111 
Segment and corporate expenses (income):
Store expenses64,689 22,082 — 86,771 — 86,771 
General and administrative— — — — 15,545 15,545 
Depreciation and amortization2,670 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. PawnLatin America PawnOther InvestmentsTotal SegmentsCorporate ItemsConsolidated
Revenues:
Merchandise sales$82,253 $25,530 $— $107,783 $— $107,783 
Jewelry scrapping sales4,004 2,755 — 6,759 — 6,759 
Pawn service charges50,220 13,269 — 63,489 — 63,489 
Other revenues22 7 75 104 — 104 
Total revenues136,499 41,561 75 178,135 — 178,135 
Merchandise cost of goods sold48,059 16,484 — 64,543 — 64,543 
Jewelry scrapping cost of goods sold2,844 2,358 — 5,202 — 5,202 
Net revenues85,596 22,719 75 108,390 — 108,390 
Segment and corporate expenses (income):
Store expenses62,092 17,217 — 79,309 — 79,309 
General and administrative— — — — 12,510 12,510 
Depreciation and amortization2,736 1,860 — 4,596 2,976 7,572 
Loss (gain) on sale or disposal of assets and other27 (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. PawnLatin America PawnConsolidated
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. PawnLatin America PawnConsolidated
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,
2021202020212020
Mexican peso20.5 19.9 20.7 20.5 
Guatemalan quetzal7.5 7.6 7.6 7.6 
Honduran lempira24.1 23.8 23.9 24.1 
Peruvian sol4.0 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)20212020
Net income$15.7 $4.3 
Interest expense2.4 5.4 
Interest income(0.3)(0.8)
Income tax expense5.6 1.2 
Depreciation and amortization7.6 7.6 
EBITDA$31.0 $17.7 

Total RevenuesNet RevenuesIncome Before TaxTax EffectNet IncomeDiluted 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 impact0.5 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 RevenuesNet RevenuesIncome Before TaxTax EffectNet
Income		Diluted EPSEBITDA
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 AmountPercentage Change YOY
Consolidated revenue $221.0 24 %
Currency exchange rate fluctuations0.5 
Constant currency consolidated revenue$221.5 24 %
Consolidated net revenue $132.1 22 %
Currency exchange rate fluctuations0.2 
Constant currency consolidated net revenue$132.3 22 %
Consolidated net inventory$119.3 26 %
Currency exchange rate fluctuations0.6 
Constant currency consolidated net inventory$119.9 26 %
Latin America Pawn net revenue $30.2 33 %
Currency exchange rate fluctuations0.2 
Constant currency Latin America Pawn net revenue $30.4 34 %
Latin America Pawn PLO$35.5 37 %
Currency exchange rate fluctuations0.7 
Constant currency Latin America Pawn PLO$36.2 40 %
Latin America Pawn PSC revenues $19.5 47 %
Currency exchange rate fluctuations0.1 
Constant currency Latin America Pawn PSC revenues $19.6 47 %
Latin America Pawn merchandise sales $35.6 40 %
Currency exchange rate fluctuations0.4 
Constant currency Latin America Pawn merchandise sales $36.0 41 %
Latin America Pawn segment profit before tax$6.5 30 %
Currency exchange rate fluctuations0.1 
Constant currency Latin America Pawn segment profit before tax$6.6 32 %