EZCORP Reports Second Quarter Fiscal 2023 Results

Rhea-AI Summary

EZCORP, Inc. (NASDAQ: EZPW) announced its second-quarter results, showing a 19% increase in pawn loans outstanding to $206.1 million. Total revenue increased by 20%, and gross profit increased by 16%. Net loss was $6.8 million, down from net income of $14.9 million. CEO Lachie Given highlighted the record PLO and merchandise sales, as well as the expansion of store footprint and growth in the loyalty program. The company remains focused on investing in teams and technology to serve more customers and drive value to shareholders.

Positive

• Pawn loans outstanding increased by 19% to $206.1 million
• Total revenue increased by 20%
• Gross profit increased by 16%
• Diluted loss per share was $0.12, down from diluted earnings per share of $0.20
• Adjusted diluted earnings per share were $0.23, up from $0.22
• Return on earning assets (ROEA) remains strong at 165%
• Expanded store footprint with 13 new stores, including luxury brand Max Pawn
• 2.9 million members in the EZ+ Rewards loyalty program, an increase of 17%
• Repurchased $3.9 million worth of EZCORP shares
• Cash and cash equivalents at the end of the quarter was $243.1 million, down 5% year-over-year

Negative

• Net loss of $6.8 million, down from net income of $14.9 million
• Loss before taxes was $7.3 million, down from profit before taxes of $20.1 million
• Store expenses increased 18%
• General and administrative expenses increased 28%
• Cash and cash equivalents decreased by 5% year-over-year

Record Second Quarter Pawn Loans Outstanding and Sales Driving Strong Revenue Growth

AUSTIN, Texas--(BUSINESS WIRE)-- EZCORP, Inc. (NASDAQ: EZPW), a leading provider of pawn transactions in the United States and Latin America, today announced results for its second quarter ended March 31, 2023.

Unless otherwise noted, all amounts in this release are in conformity with U.S. generally accepted accounting principles ("GAAP") and comparisons shown are to the same period in the prior year.

SECOND QUARTER HIGHLIGHTS

• Pawn loans outstanding (PLO) up 19% to $206.1 million.

• Total revenue increased 20%, and gross profit increased 16%.

• Merchandise sales gross margin remains within our targeted range at 36%.

• Net loss of $6.8 million, was down from Net Income of $14.9 million, primarily driven by our $25.6 million share of the one-time, non-cash goodwill impairment and discrete adjustments recognized by Cash Converters International in its half-year period ended December 31, 2022.

• Diluted loss per share of $0.12 was down from diluted earnings per share of $0.20. On an adjusted basis¹, diluted earnings per share was $0.23, compared to $0.22 in the prior-year quarter.

• Return on earning assets (ROEA) remains strong at 165%.

CEO COMMENTARY AND OUTLOOK

Lachie Given, Chief Executive Officer, stated, "We achieved record second quarter PLO and merchandise sales as we continue to execute our three-year plan, put in place at the end of fiscal 2020. The macro-economic environment continues to support increased core demand for our products and services, including providing our environmentally conscious consumers with a more sustainable way to shop. Our team's relentless commitment to serving our customers with passion and respect and to operational excellence in all that we do, continues to drive our strong operating and financial results.

"During the second quarter, we expanded our store footprint, opening 13 de novo stores. Two of these stores were opened in Las Vegas, the first under our newly acquired luxury brand Max Pawn, and the other under the core EZPAWN brand. We are very excited to be growing our presence in this important pawn market. The other 11 new stores were opened across LatAm – 8 in Mexico and 3 in Guatemala, where we are extending our market leadership, with 103 stores there.

“EZ+ Rewards, our loyalty program, continues to be very well received by our customers and has grown to 2.9 million members globally, an increase of 17% over the first quarter of 2023. We are extremely happy with the increases here and are working hard on strategies to win and retain more customers in all of the local communities in which we operate.

"We continue to believe that investing in our teams and technology is essential. To ensure the continuous improvement of our Field Teams' bench strength, we completed talent and succession processes for all global operations. In Latin America we are enhancing recruiting strategies and implementing development programs for Lead Pawnbrokers and Store Managers. In the US we launched a new SharePoint in store communications program, to enhance our daily program execution and performance management strategies across all stores. We have deployed store system and network upgrades to support digital initiatives and are building out our e-commerce capabilities in a disciplined way.

"During the quarter, we repurchased $3.9 million worth of EZCORP shares as part of the up to $50 million share repurchase program announced in the second quarter of fiscal 2022.

"Our focus on People, Pawn, and Passion, along with the disciplined execution of our enhanced operating model has yielded another quarter of strong results for our shareholders. We will continue to invest in our people and technology with the goal of serving more customers, more frequently, across more locations, in an environmentally sustainable way, to ultimately drive value to our shareholders," Given concluded.

CONSOLIDATED RESULTS

Three Months Ended March 31	As Reported								Adjusted1
in millions, except per share amounts	2023				2022				2023				2022
Total revenues	$	258.4			$	216.0			$	253.8			$	216.0
Gross profit	$	149.2			$	128.9			$	146.7			$	128.9
(Loss) income before tax	$	(7.3	)		$	20.1			$	24.0			$	22.3
Net (loss) income	$	(6.8	)		$	14.9			$	17.0			$	16.7
Diluted (loss) earnings per share	$	(0.12	)		$	0.20			$	0.23			$	0.22
EBITDA (non-GAAP measure)	$	2.1			$	29.8			$	33.3			$	32.1

• Diluted loss per share was $0.12, down from diluted earnings per share of $0.20. On an adjusted basis, diluted earnings per share were $0.23, up from $0.22. The primary difference between GAAP and Adjusted financial results is attributable to our share of the previously announced one-time, non-cash goodwill impairment recognized by Cash Converters International in its half-year period ended December 31 2022.

• Loss before taxes was $7.3 million, down from profit before taxes of $20.1 million, while adjusted EBITDA increased 4% to $33.3 million.

• PLO increased 19% to $206.1 million, up $32.5 million. On a same-store basis², PLO increased 16% due to increased loan demand, reflecting continuing growth.

• Total revenues increased 20% and gross profit increased 16%, reflecting improved pawn service charge (PSC) revenue, merchandise sales and merchandise sales gross profit.

• PSC increased 21% as a result of higher average PLO and yields.

• Merchandise sales gross margin remains within our targeted range at 36%. Aged general merchandise has increased to 2.2% of total general merchandise inventory.

• Net inventory increased 25%, reflecting a return towards normalized inventory levels. Inventory turnover remained strong at 2.8x for the quarter, down from 2.9x.

• Store expenses increased 18%, primarily due to increased labor in-line with store activity, higher store count and, to a lesser extent, expenses related to our loyalty program. On a same-store basis, store expenses increased 12%. General and administrative expenses increased 28%, primarily due to the reversal of incentive compensation for the departed CEO in the prior period and, to a lesser extent, increase in accrued incentive compensation.

• Cash and cash equivalents at the end of the quarter was $243.1 million, down 5% year-over-year. The decrease was primarily due to the increase in PLO and inventory, the acquisition of new stores, and strategic investments, partially offset by the net cash proceeds associated with the convertible debt refinancing.

SEGMENT RESULTS

U.S. Pawn

• PLO ended the quarter at $157.0 million, up 18% or 14% on a same store basis.

• Total revenue was up 16% and gross profit increased 11%, reflecting increased PSC and higher merchandise sales.

• PSC increased 19% as a result of higher average PLO.

• Merchandise sales gross margin decreased to 38% from 41%, reflecting a more normalized operating environment. Aged general merchandise increased to 1.4% of total general merchandise inventory primarily driven by recent acquisitions.

• Net inventory increased 20% reflecting a return towards normalized inventory levels. Inventory turnover remained flat at 2.6x.

• Store expenses increased 12%, primarily due to increased labor in-line with store activity, higher store count and, to a lesser extent, expenses related to our loyalty program.

• Segment contribution increased 12% to $37.8 million.

• Segment store count increased by 2 de novo stores during the quarter.

Latin America Pawn

• PLO improved to $49.1 million, up 22% (14% on constant currency basis). On a same store basis, PLO increased 19% (12% on a constant currency basis).

• Total revenue was up 30% (22% on constant currency basis) and gross profit increased 32% (23% on a constant currency basis), reflecting increased PSC, higher merchandise sales and improved merchandise sales gross profit.

• PSC increased 29% (21% on a constant currency basis) as a result of higher average PLO and yield.

• Merchandise sales gross margin increased from 29% to 32%. Aged general merchandise inventory increased to 3.2% from 1.0% of total merchandise inventory.

• Net inventory increased 44% (33% on a constant currency basis), reflecting a return towards normalized inventory levels. Inventory turnover remains strong at 3.5x, down from 3.8x.

• Store expenses increased 38% (29% on a constant currency basis), primarily due to increased labor in-line with store activity and higher store count. Same-store expenses increased 32% (24% on a constant currency basis).

• Segment contribution increased 68% (57% on a constant currency basis) to $8.0 million. On an adjusted basis, segment contribution was up 10% to $5.4 million, with the primary adjustment being the reversal of contingent consideration liability in connection with a previously completed acquisition.

• Segment store count increased by 11 de novo stores during the quarter.

FORM 10-Q

EZCORP’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 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.

CONFERENCE CALL

EZCORP will host a conference call on Thursday, May 4, 2023, at 8:00 am Central Time to discuss Second Quarter Fiscal 2023 results. Analysts and institutional investors may participate on the conference call by dialing (833) 470-1428, Conference ID: 721380, or internationally by dialing (404) 975-4839. 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 S&P 1000 Index and Nasdaq Composite Index.

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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.

Note: Percentages are calculated from the underlying numbers in thousands and, as a result, may not agree to the percentages calculated from numbers in millions.

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.

²“Same Store” basis, which is a financial measure, includes stores open the entirety of the comparable periods.

EZCORP, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
	Three Months Ended March 31,								Six Months Ended March 31,
(in thousands, except per share amounts)	2023				2022				2023				2022
Revenues:
Merchandise sales	$	152,507			$	133,556			$	316,294			$	271,276
Jewelry scrapping sales		12,825				5,690				20,709				12,634
Pawn service charges		93,030				76,683				185,623				152,708
Other revenues, net		61				53				124				358
Total revenues		258,423				215,982				522,750				436,976
Merchandise cost of goods sold		97,339				82,246				202,216				165,357
Jewelry scrapping cost of goods sold		11,902				4,808				18,855				10,580
Gross profit		149,182				128,928				301,679				261,039
Operating expenses:
Store expenses		101,269				85,743				202,072				172,514
General and administrative		15,609				12,227				31,085				27,772
Depreciation and amortization		7,963				7,450				15,951				15,024
Loss (gain) on sale or disposal of assets		73				(697	)			57				(692	)
Other		(2,465	)			—				(2,465	)			—
Total operating expenses		122,449				104,723				246,700				214,618
Operating income		26,733				24,205				54,979				46,421
Interest expense		3,390				2,527				9,580				4,958
Interest income		(1,898	)			(255	)			(2,562	)			(559	)
Equity in net loss of unconsolidated affiliates		32,501				1,439				30,917				301
Other expense (income)		80				371				(154	)			251
(Loss) income before income taxes		(7,340	)			20,123				17,198				41,470
Income (benefit) tax expense		(550	)			5,236				7,210				10,862
Net (loss) income	$	(6,790	)		$	14,887			$	9,988			$	30,608
Basic earnings per share	$	(0.12	)		$	0.26			$	0.18			$	0.54
Diluted earnings per share	$	(0.12	)		$	0.20			$	0.11			$	0.42
Weighted-average basic shares outstanding		55,648				56,561				55,981				56,370
Weighted-average diluted shares outstanding		55,648				82,407				65,269				82,270

EZCORP, Inc. CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands, except share and per share amounts)	March 31, 2023				March 31, 2022				September 30, 2022
Assets:
Current assets:
Cash and cash equivalents	$	243,128			$	254,964			$	206,028
Restricted cash		8,451				8,713				8,341
Pawn loans		206,096				173,618				210,009
Pawn service charges receivable, net		33,116				28,319				33,476
Inventory, net		150,297				119,890				151,615
Prepaid expenses and other current assets		45,564				27,267				34,694
Total current assets		686,652				612,771				644,163
Investments in unconsolidated affiliates		10,681				42,002				37,733
Other investments		39,220				18,000				24,220
Property and equipment, net		59,775				50,874				56,725
Right-of-use asset, net		234,287				204,343				221,405
Goodwill		300,078				286,214				286,828
Intangible assets, net		59,620				62,145				56,819
Notes receivable, net		1,233				1,198				1,215
Deferred tax asset, net		19,127				15,908				12,145
Other assets		9,859				6,541				6,625
Total assets	$	1,420,532			$	1,299,996			$	1,347,878
Liabilities and equity:
Current liabilities:
Accounts payable, accrued expenses and other current liabilities	$	72,695			$	69,695			$	84,509
Customer layaway deposits		18,761				15,046				16,023
Operating lease liabilities, current		53,921				52,446				52,334
Total current liabilities		145,377				137,187				152,866
Long-term debt, net		359,287				312,168				312,903
Deferred tax liability, net		368				179				373
Operating lease liabilities		191,874				163,506				180,756
Other long-term liabilities		11,038				11,940				8,749
Total liabilities		707,944				624,980				655,647
Commitments and Contingencies
Stockholders’ equity:
Class A Non-voting Common Stock, par value $0.01 per share; shares authorized: 100 million; issued and outstanding: 52,561,071 as of March 31, 2023; 53,685,333 as of March 31, 2022; and 53,454,885 as of September 30, 2022		526				537				534
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		343,088				341,913				345,330
Retained earnings		405,961				384,246				402,006
Accumulated other comprehensive loss		(37,017	)			(51,710	)			(55,669	)
Total equity		712,588				675,016				692,231
Total liabilities and equity	$	1,420,532			$	1,299,996			$	1,347,878

EZCORP, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
	Six Months Ended March 31,
(in thousands)	2023				2022
Operating activities:
Net income	$	9,988			$	30,608
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization		15,951				15,024
Amortization of debt discount and deferred financing costs		736				698
Non-cash lease expense		27,546				25,746
Deferred income taxes		(6,987	)			212
Other adjustments		(2,386	)			(708	)
Provision for inventory reserve		280				(1,780	)
Stock compensation expense		3,741				2,158
Equity in net loss of unconsolidated affiliates		30,917				301
Net loss on extinguishment of debt		3,545				—
Changes in operating assets and liabilities, net of acquisitions:
Service charges and fees receivable		1,357				687
Inventory		(2,306	)			(2,779	)
Prepaid expenses, other current assets and other assets		(3,639	)			88
Accounts payable, accrued expenses and other liabilities		(43,969	)			(50,258	)
Customer layaway deposits		1,426				2,342
Income taxes		8,852				6,576
Dividends from unconsolidated affiliates		1,775				1,660
Net cash provided by operating activities		46,827				30,575
Investing activities:
Loans made		(378,717	)			(329,459	)
Loans repaid		230,604				199,836
Recovery of pawn loan principal through sale of forfeited collateral		171,504				129,311
Capital expenditures, net		(18,439	)			(10,498	)
Acquisitions, net of cash acquired		(12,968	)			—
Issuance of notes receivable		(15,500	)			(1,000	)
Investment in unconsolidated affiliates		(2,133	)			(3,577	)
Investment in other investments		(15,000	)			(16,500	)
Net cash used in investing activities		(40,649	)			(31,887	)
Financing activities:
Taxes paid related to net share settlement of equity awards		(1,149	)			(792	)
Proceeds from issuance of debt		230,000				—
Debt issuance cost		(7,458	)			—
Cash paid on extinguishment of debt		(1,951	)			—
Payments on debt		(178,488	)			—
Repurchase of common stock		(10,978	)			—
Net cash provided by (used in) financing activities		29,976				(792	)
Effect of exchange rate changes on cash and cash equivalents and restricted cash		1,056				2,157
Net increase in cash, cash equivalents and restricted cash		37,210				53
Cash, cash equivalents and restricted cash at beginning of period		214,369				263,624
Cash, cash equivalents and restricted cash at end of period	$	251,579			$	263,677

EZCORP, Inc. OPERATING SEGMENT RESULTS
	Three Months Ended March 31, 2023 (Unaudited)
(in thousands)	U.S. Pawn				Latin America Pawn				Other Investments				Total Segments				Corporate Items				Consolidated
Revenues:
Merchandise sales	$	108,740			$	43,767			$	—			$	152,507			$	—			$	152,507
Jewelry scrapping sales		9,814				3,011				—				12,825				—				12,825
Pawn service charges		69,945				23,085				—				93,030				—				93,030
Other revenues		32				19				10				61				—				61
Total revenues		188,531				69,882				10				258,423				—				258,423
Merchandise cost of goods sold		67,643				29,696				—				97,339				—				97,339
Jewelry scrapping cost of goods sold		8,550				3,352				—				11,902				—				11,902
Other cost of revenues		—				—				—				—				—				—
Gross profit		112,338				36,834				10				149,182				—				149,182
Store expenses		71,946				29,323				—				101,269				—				101,269
General and administrative		—				—				—				—				15,609				15,609
Depreciation and amortization		2,560				2,332				—				4,892				3,071				7,963
Loss (gain) loss on sale or disposal of assets		81				(8	)			—				73				—				73
Other		—				(2,465	)			—				(2,465	)			—				(2,465	)
Interest expense		—				—				—				—				3,390				3,390
Interest income		(1	)			(298	)			—				(299	)			(1,599	)			(1,898	)
Equity in net loss of unconsolidated affiliates		—				—				32,501				32,501				—				32,501
Other (income) expense		—				(46	)			6				(40	)			120				80
Segment contribution (loss)	$	37,752			$	7,996			$	(32,497	)		$	13,251
Income (loss) before income taxes													$	13,251			$	(20,591	)		$	(7,340	)

	Three Months Ended March 31, 2022 (Unaudited)
(in thousands)	U.S. Pawn				Latin America Pawn				Other Investments				Total Segments				Corporate Items				Consolidated
Revenues:
Merchandise sales	$	100,064			$	33,492			$	—			$	133,556			$	—			$	133,556
Jewelry scrapping sales		3,480				2,210				—				5,690				—				5,690
Pawn service charges		58,772				17,911				—				76,683				—				76,683
Other revenues		24				—				29				53				—				53
Total revenues		162,340				53,613				29				215,982				—				215,982
Merchandise cost of goods sold		58,613				23,633				—				82,246				—				82,246
Jewelry scrapping cost of goods sold		2,798				2,010				—				4,808				—				4,808
Gross profit		100,929				27,970				29				128,928				—				128,928
Segment and corporate expenses (income):
Store expenses		64,492				21,251				—				85,743				—				85,743
General and administrative		—				—				—				—				12,227				12,227
Depreciation and amortization		2,625				1,891				—				4,516				2,934				7,450
Gain on sale of disposal of assets and other		—				(9	)			—				(9	)			(688	)			(697	)
Interest expense		—				—				—				—				2,527				2,527
Interest income		—				(255	)			—				(255	)			—				(255	)
Equity in net income of unconsolidated affiliates		—				—				1,439				1,439				—				1,439
Other (income) expense		—				334				8				342				29				371
Segment contribution	$	33,812			$	4,758			$	(1,418	)		$	37,152
Income (loss) before income taxes													$	37,152			$	(17,029	)		$	20,123

	Six Months Ended March 31, 2023 (Unaudited)
(in thousands)	U.S. Pawn				Latin America Pawn				Other Investments				Total Segments				Corporate Items				Consolidated
Revenues:
Merchandise sales	$	227,054			$	89,240			$	—			$	316,294			$	—			$	316,294
Jewelry scrapping sales		16,990				3,719				—				20,709				—				20,709
Pawn service charges		139,255				46,368				—				185,623				—				185,623
Other revenues		57				35				32				124				—				124
Total revenues		383,356				139,362				32				522,750				—				522,750
Merchandise cost of goods sold		140,899				61,317				—				202,216				—				202,216
Jewelry scrapping cost of goods sold		14,766				4,089				—				18,855				—				18,855
Gross profit		227,691				73,956				32				301,679				—				301,679
Segment and corporate expenses (income):
Store expenses		145,250				56,822				—				202,072				—				202,072
General and administrative		—				(3	)			—				(3	)			31,088				31,085
Depreciation and amortization		5,315				4,547				—				9,862				6,089				15,951
Loss (gain) on sale or disposal of assets		84				(27	)			—				57				—				57
Other charges		—				(2,465	)			—				(2,465	)			—				(2,465	)
Interest expense		—				—				—				—				9,580				9,580
Interest income		(1	)			(467	)			—				(468	)			(2,094	)			(2,562	)
Equity in net loss of unconsolidated affiliates		—				—				30,917				30,917				—				30,917
Other expense (income)		—				24				10				34				(188	)			(154	)
Loss on extinguishment of debt		—				—				—				—				—				—
Segment contribution (loss)	$	77,043			$	15,525			$	(30,895	)		$	61,673
Income (loss) before income taxes													$	61,673			$	(44,475	)		$	17,198

	Six Months Ended March 31, 2022 (Unaudited)
(in thousands)	U.S. Pawn				Latin America Pawn				Other Investments				Total Segments				Corporate Items				Consolidated
Revenues:
Merchandise sales	$	202,142			$	69,134			$	—			$	271,276			$	—			$	271,276
Jewelry scrapping sales		8,460				4,174				—				12,634				—				12,634
Pawn service charges		115,329				37,379				—				152,708				—				152,708
Other revenues		46				240				72				358				—				358
Total revenues		325,977				110,927				72				436,976				—				436,976
Merchandise cost of goods sold		116,445				48,912				—				165,357				—				165,357
Jewelry scrapping cost of goods sold		6,773				3,807				—				10,580				—				10,580
Gross profit		202,759				58,208				72				261,039				—				261,039
Segment and corporate expenses (income):
Store expenses		129,181				43,333				—				172,514				—				172,514
General and administrative		—				—				—				—				27,772				27,772
Depreciation and amortization		5,295				3,871				—				9,166				5,858				15,024
Gain on sale or disposal of assets and other		—				(4	)			—				(4	)			(688	)			(692	)
Other Charges		—				—				—				—				—				—
Interest expense		—				—				—				—				4,958				4,958
Interest income		—				(437	)			—				(437	)			(122	)			(559	)
Equity in net income of unconsolidated affiliates		—				—				301				301				—				301
Other (income) expense		—				200				(4	)			196				55				251
Segment contribution	$	68,283			$	11,245			$	(225	)		$	79,303
Income (loss) before income taxes													$	79,303			$	(37,833	)		$	41,470

EZCORP, Inc. STORE COUNT ACTIVITY (Unaudited)
	Three Months Ended March 31, 2023
	U.S. Pawn			Latin America Pawn			Consolidated
As of December 31, 2022	525			661			1,186
New locations opened	2			11			13
As of March 31, 2023	527			672			1,199

	Three Months Ended March 31, 2022
	U.S. Pawn			Latin America Pawn			Consolidated
As of December 31, 2021	516			633			1,149
New locations opened	—			3			3
As of March 31, 2022	516			636			1,152

	Six Months Ended March 31, 2023
	U.S. Pawn			Latin America Pawn			Consolidated
As of September 30, 2022	515			660			1,175
New locations opened	2			13			15
Locations acquired	10			—			10
Locations sold, combined or closed	—			(1	)		(1	)
As of March 31, 2023	527			672			1,199

	Six Months Ended March 31, 2022
	U.S. Pawn			Latin America Pawn			Consolidated
As of September 30, 2021	516			632			1,148
New locations opened	—			4			4
As of March 31, 2022	516			636			1,152

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. In addition, we have an equity method investment that is denominated in Australian dollars and is translated into U.S. dollars. 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 and six months ended March 31, 2023 and 2022 were as follows:

		March 31,						Three Months Ended March 31,						Six Months Ended March 31,
		2023			2022			2023			2022			2023			2022
Mexican peso		18.1			19.9			18.7			20.5			19.2			20.6
Guatemalan quetzal		7.6			7.5			7.6			7.5			7.6			7.5
Honduran lempira		24.4			24.1			24.3			24.2			24.3			24.0
Australian dollar		1.5			1.3			1.5			1.4			1.5			1.4

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 March 31,
(in millions)	2023				2022
Net income	$	(6.8	)		$	14.9
Interest expense		3.4				2.5
Interest income		(1.9	)			(0.3	)
Income tax expense		(0.6	)			5.2
Depreciation and amortization		8.0				7.5
EBITDA	$	2.1			$	29.8

	Total Revenues				Gross Profit				Income Before Tax				Tax Effect				Net Income				Diluted EPS				EBITDA
2023 Q2 Reported	$	258.4			$	149.2			$	(7.3	)		$	7.8			$	(6.8	)		$	(0.12	)		$	2.1
CCV Impairment and discrete adjustments		—				—				34.0				8.4				25.6				0.29				34.0
Contingent consideration liability		—				—				(2.2	)			(0.6	)			(1.6	)			(0.02	)			(2.2	)
Impact of dilutive instruments*		—				—				—				—				—				0.08				—
FX impact		—				—				0.1				—				0.1				—				0.1
Constant currency impact		(4.7	)			(2.4	)			(0.6	)			(0.3	)			(0.3	)			—				(0.7	)
2023 Q2 Adjusted	$	253.8			$	146.7			$	24.0			$	7.0			$	17.0			$	0.23			$	33.3

*Q2 Reported Diluted EPS calculated based on 55.6 million weighted average diluted shares outstanding and Q2 Adjusted Diluted EPS calculated based on weighted average diluted shares outstanding of 87.1 million

	Total Revenues				Gross Profit				Income Before Tax				Tax Effect				Net Income				Diluted EPS				EBITDA
2022 Q2 Reported	$	216.0			$	128.9			$	20.1			$	5.2			$	14.9			$	0.20			$	29.8
CCV Adjustment		—				—				2.1				0.4				1.7				0.02				2.1
Non cash Interest		—				—				0.1				0.1				0.1				—				0.1
2022 Q2 Adjusted	$	216.0			$	128.9			$	22.3			$	5.7			$	16.7			$	0.22			$	32.1

	Three Months Ended March 31, 2023							Six Months Ended March 31, 2023
(in millions)	U.S. Dollar Amount				Percentage Change YOY			U.S. Dollar Amount				Percentage Change YOY
Consolidated revenue	$	258.4			20	%		$	522.8			20	%
Currency exchange rate fluctuations		(4.6	)						(7.4	)
Constant currency consolidated revenue	$	253.8			17	%		$	515.4			18	%
Consolidated gross profit	$	149.2			16	%		$	301.7			16	%
Currency exchange rate fluctuations		(2.5	)						(3.8	)
Constant currency consolidated gross profit	$	146.7			14	%		$	297.9			14	%
Consolidated net inventory	$	150.3			25	%		$	150.3			25	%
Currency exchange rate fluctuations		(2.8	)						(2.8	)
Constant currency consolidated net inventory	$	147.5			23	%		$	147.5			23	%
Latin America Pawn gross profit	$	36.8			32	%		$	74.0			27	%
Currency exchange rate fluctuations		(2.4	)						(3.8	)
Constant currency Latin America Pawn gross profit	$	34.4			23	%		$	70.2			21	%
Latin America Pawn PLO	$	49.1			22	%		$	49.1			22	%
Currency exchange rate fluctuations		(3.2	)						(3.2	)
Constant currency Latin America Pawn PLO	$	45.9			14	%		$	45.9			14	%
Latin America Pawn PSC revenues	$	23.1			29	%		$	46.4			24	%
Currency exchange rate fluctuations		(1.4	)						(2.2	)
Constant currency Latin America Pawn PSC revenues	$	21.7			21	%		$	44.2			18	%
Latin America Pawn merchandise sales	$	43.8			31	%		$	89.2			29	%
Currency exchange rate fluctuations		(3.1	)						(5.0	)
Constant currency Latin America Pawn merchandise sales	$	40.7			22	%		$	84.2			22	%
Latin America Pawn segment profit before tax	$	8.0			68	%		$	15.5			38	%
Currency exchange rate fluctuations		(0.5	)						(0.7	)
Constant currency Latin America Pawn segment profit before tax	$	7.5			57	%		$	14.8			31	%

 

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Email: Investor_Relations@ezcorp.com

Phone: (512) 314-2220

Source: EZCORP, Inc.

FAQ

What were the second quarter highlights for EZCORP?

Pawn loans outstanding increased by 19% to $206.1 million. Total revenue increased by 20%, and gross profit increased by 16%.

What were the earnings per share for the second quarter?

Diluted loss per share was $0.12, down from diluted earnings per share of $0.20. Adjusted diluted earnings per share were $0.23, up from $0.22.

How many new stores did EZCORP open during the second quarter?

EZCORP opened 13 new stores, including two under the luxury brand Max Pawn.

What was the growth in the EZ+ Rewards loyalty program?

The loyalty program grew to 2.9 million members, an increase of 17% over the first quarter of 2023.

How much worth of EZCORP shares were repurchased?

EZCORP repurchased $3.9 million worth of shares as part of the share repurchase program.