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Share Name | Share Symbol | Market | Type |
---|---|---|---|
EZCORP Inc | NASDAQ:EZPW | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.03 | 0.29% | 10.34 | 9.72 | 10.49 | 10.42 | 10.26 | 10.37 | 475,980 | 22:33:58 |
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 74-2540145 | ||||||||||||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||
2500 Bee Cave Road | Bldg One | Suite 200 | Rollingwood | TX | 78746 | ||||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Class A Non-voting Common Stock, par value $.01 per share | EZPW | NASDAQ Stock Market | ||||||||||||
(NASDAQ Global Select Market) |
Large Accelerated Filer | ☐ | Accelerated Filer | ☒ | ||||||||
Non-accelerated Filer | ☐ | Smaller Reporting Company | ☐ | ||||||||
Emerging Growth Company | ☐ |
(in thousands, except share and per share amounts) | December 31, 2022 | December 31, 2021 | September 30, 2022 | ||||||||||||||
(Unaudited) | |||||||||||||||||
Assets: | |||||||||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | $ | 207,658 | $ | 233,274 | $ | 206,028 | |||||||||||
Restricted cash | 8,359 | 8,692 | 8,341 | ||||||||||||||
Pawn loans | 209,855 | 176,586 | 210,009 | ||||||||||||||
Pawn service charges receivable, net | 34,921 | 29,765 | 33,476 | ||||||||||||||
Inventory, net | 156,064 | 119,313 | 151,615 | ||||||||||||||
Prepaid expenses and other current assets | 45,559 | 31,209 | 34,694 | ||||||||||||||
Total current assets | 662,416 | 598,839 | 644,163 | ||||||||||||||
Investments in unconsolidated affiliates | 37,789 | 42,513 | 37,733 | ||||||||||||||
Other investments | 39,220 | 16,500 | 24,220 | ||||||||||||||
Property and equipment, net | 55,612 | 52,201 | 56,725 | ||||||||||||||
Right-of-use asset, net | 230,554 | 201,527 | 221,586 | ||||||||||||||
Goodwill | 297,361 | 284,619 | 286,828 | ||||||||||||||
Intangible assets, net | 58,029 | 61,458 | 56,819 | ||||||||||||||
Notes receivable, net | 1,224 | 1,190 | 1,215 | ||||||||||||||
Deferred tax asset, net | 12,428 | 15,623 | 12,145 | ||||||||||||||
Other assets | 7,682 | 5,851 | 6,444 | ||||||||||||||
Total assets | $ | 1,402,315 | $ | 1,280,321 | $ | 1,347,878 | |||||||||||
Liabilities and equity: | |||||||||||||||||
Current liabilities: | |||||||||||||||||
Accounts payable, accrued expenses and other current liabilities | $ | 69,930 | $ | 75,531 | $ | 84,509 | |||||||||||
Customer layaway deposits | 16,276 | 13,142 | 16,023 | ||||||||||||||
Operating lease liabilities, current | 52,799 | 51,843 | 52,334 | ||||||||||||||
Total current liabilities | 139,005 | 140,516 | 152,866 | ||||||||||||||
Long-term debt, net | 358,984 | 311,844 | 312,903 | ||||||||||||||
Deferred tax liability, net | — | 221 | 373 | ||||||||||||||
Operating lease liabilities | 188,730 | 161,841 | 180,756 | ||||||||||||||
Other long-term liabilities | 10,261 | 11,398 | 8,749 | ||||||||||||||
Total liabilities | 696,980 | 625,820 | 655,647 | ||||||||||||||
Commitments and contingencies (Note 9) | |||||||||||||||||
Stockholders’ equity: | |||||||||||||||||
Class A Non-voting Common Stock, par value $0.01 per share; shares authorized: 100 million; issued and outstanding: 52,877,930 as of December 31, 2022; 53,344,218 as of December 31, 2021; and 53,454,885 as of September 30, 2022 | 529 | 533 | 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 | 343,012 | 339,955 | 345,330 | ||||||||||||||
Retained earnings | 414,929 | 369,359 | 402,006 | ||||||||||||||
Accumulated other comprehensive loss | (53,165) | (55,376) | (55,669) | ||||||||||||||
Total equity | 705,335 | 654,501 | 692,231 | ||||||||||||||
Total liabilities and equity | $ | 1,402,315 | $ | 1,280,321 | $ | 1,347,878 |
Three Months Ended December 31, | |||||||||||
(in thousands, except per share amount) | 2022 | 2021 | |||||||||
Revenues: | |||||||||||
Merchandise sales | $ | 163,787 | $ | 137,720 | |||||||
Jewelry scrapping sales | 7,884 | 6,944 | |||||||||
Pawn service charges | 92,593 | 76,025 | |||||||||
Other revenues, net | 63 | 305 | |||||||||
Total revenues | 264,327 | 220,994 | |||||||||
Merchandise cost of goods sold | 104,877 | 83,111 | |||||||||
Jewelry scrapping cost of goods sold | 6,953 | 5,772 | |||||||||
Gross profit | 152,497 | 132,111 | |||||||||
Operating expenses: | |||||||||||
Store expenses | 100,803 | 86,771 | |||||||||
General and administrative | 15,476 | 15,545 | |||||||||
Depreciation and amortization | 7,988 | 7,574 | |||||||||
(Gain) loss on sale or disposal of assets and other | (16) | 5 | |||||||||
Total operating expenses | 124,251 | 109,895 | |||||||||
Operating income | 28,246 | 22,216 | |||||||||
Interest expense | 6,190 | 2,431 | |||||||||
Interest income | (664) | (304) | |||||||||
Equity in net income of unconsolidated affiliates | (1,584) | (1,138) | |||||||||
Other income | (234) | (120) | |||||||||
Income before income taxes | 24,538 | 21,347 | |||||||||
Income tax expense | 7,760 | 5,626 | |||||||||
Net income | $ | 16,778 | $ | 15,721 | |||||||
Basic earnings per share | $ | 0.30 | $ | 0.28 | |||||||
Diluted earnings per share | $ | 0.25 | $ | 0.21 | |||||||
Weighted-average basic shares outstanding | 56,308 | 56,183 | |||||||||
Weighted-average diluted shares outstanding | 83,779 | 81,948 |
Three Months Ended December 31, | |||||||||||
(in thousands) | 2022 | 2021 | |||||||||
Net income | $ | 16,778 | $ | 15,721 | |||||||
Other comprehensive income: | |||||||||||
Foreign currency translation adjustment, net of tax | 2,504 | 3,039 | |||||||||
Comprehensive income | $ | 19,282 | $ | 18,760 |
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | |||||||||||||||||||||||||||||||
(in thousands) | Shares | Par Value | |||||||||||||||||||||||||||||||||
Balances as of September 30, 2022 | 56,425 | $ | 564 | $ | 345,330 | $ | 402,006 | $ | (55,669) | $ | 692,231 | ||||||||||||||||||||||||
Stock compensation | — | — | 1,886 | — | — | 1,886 | |||||||||||||||||||||||||||||
Transfer of consideration for acquisition | 10 | — | 99 | — | — | 99 | |||||||||||||||||||||||||||||
Release of restricted stock, net of shares withheld for taxes | 235 | 2 | — | — | — | 2 | |||||||||||||||||||||||||||||
Taxes paid related to net share settlement of equity awards | — | — | (1,138) | — | — | (1,138) | |||||||||||||||||||||||||||||
Foreign currency translation gain | — | — | — | — | 2,504 | 2,504 | |||||||||||||||||||||||||||||
Purchase and retirement of treasury stock | (822) | (7) | (3,165) | (3,855) | — | (7,027) | |||||||||||||||||||||||||||||
Net income | — | — | — | 16,778 | — | 16,778 | |||||||||||||||||||||||||||||
Balances as of December 31, 2022 | 55,848 | $ | 559 | $ | 343,012 | $ | 414,929 | $ | (53,165) | $ | 705,335 | ||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | |||||||||||||||||||||||||||||||
(in thousands) | Shares | Par Value | |||||||||||||||||||||||||||||||||
Balances as of September 30, 2021 | 56,057 | $ | 560 | $ | 403,312 | $ | 326,781 | $ | (58,415) | $ | 672,238 | ||||||||||||||||||||||||
Stock compensation | — | — | 1,698 | — | — | 1,698 | |||||||||||||||||||||||||||||
Release of restricted stock, net of shares withheld for taxes | 257 | 3 | — | — | — | 3 | |||||||||||||||||||||||||||||
Taxes paid related to net share settlement of equity awards | — | — | (792) | — | — | (792) | |||||||||||||||||||||||||||||
— | — | (64,263) | 26,857 | — | (37,406) | ||||||||||||||||||||||||||||||
Foreign currency translation gain | — | — | — | — | 3,039 | 3,039 | |||||||||||||||||||||||||||||
Net income | — | — | — | 15,721 | — | 15,721 | |||||||||||||||||||||||||||||
Balances as of December 31, 2021 | 56,314 | $ | 563 | $ | 339,955 | $ | 369,359 | $ | (55,376) | $ | 654,501 | ||||||||||||||||||||||||
Three Months Ended December 31, | |||||||||||
(in thousands) | 2022 | 2021 | |||||||||
Operating activities: | |||||||||||
Net income | $ | 16,778 | $ | 15,721 | |||||||
Adjustments to reconcile net income to net cash flows from operating activities: | |||||||||||
Depreciation and amortization | 7,988 | 7,574 | |||||||||
Amortization of debt discount and deferred financing costs | 378 | 374 | |||||||||
Non-cash lease expense | 13,596 | 12,694 | |||||||||
Deferred income taxes | 656 | 587 | |||||||||
Other adjustments | (91) | (30) | |||||||||
Provision for inventory reserve | 532 | (820) | |||||||||
Stock compensation expense | 1,886 | 1,698 | |||||||||
Equity in net income of unconsolidated affiliates | (1,584) | (1,138) | |||||||||
Loss on extinguishment of debt | 3,545 | — | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Service charges and fees receivable | (691) | (419) | |||||||||
Inventory | (1,881) | (2,314) | |||||||||
Prepaid expenses, other current assets and other assets | (2,280) | (2,330) | |||||||||
Accounts payable, accrued expenses and other liabilities | (34,761) | (29,531) | |||||||||
Customer layaway deposits | (752) | 551 | |||||||||
Income taxes | 6,574 | 4,741 | |||||||||
Dividends from unconsolidated affiliates | 1,775 | 1,660 | |||||||||
Net cash provided by operating activities | 11,668 | 9,018 | |||||||||
Investing activities: | |||||||||||
Loans made | (189,074) | (166,480) | |||||||||
Loans repaid | 109,125 | 95,542 | |||||||||
Recovery of pawn loan principal through sale of forfeited collateral | 88,030 | 65,297 | |||||||||
Capital expenditures, net | (7,182) | (4,985) | |||||||||
Acquisitions, net of cash acquired | (12,884) | — | |||||||||
Issuance of notes receivable | (15,500) | (1,000) | |||||||||
Investment in unconsolidated affiliates | (2,133) | (2,477) | |||||||||
Investment in other investments | (15,000) | (16,500) | |||||||||
Net cash used in investing activities | (44,618) | (30,603) | |||||||||
Financing activities: | |||||||||||
Taxes paid related to net share settlement of equity awards | (1,138) | (792) | |||||||||
Proceeds from issuance of debt | 230,000 | — | |||||||||
Debt issuance cost | (7,403) | — | |||||||||
Cash paid on extinguishment of debt | (1,951) | — | |||||||||
Payments on debt | (178,488) | — | |||||||||
Repurchase of common stock | (7,027) | — | |||||||||
Net cash provided by (used in) financing activities | 33,993 | (792) | |||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash | 605 | 719 | |||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 1,648 | (21,658) | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | 214,369 | 263,624 | |||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 216,017 | $ | 241,966 | |||||||
Three Months Ended December 31, 2022 | |||||||||||||||||
(in thousands) | U.S. Pawn | Latin America Pawn | Consolidated | ||||||||||||||
Balances as of September 30, 2022 | $ | 245,503 | $ | 41,325 | $ | 286,828 | |||||||||||
Acquisitions | 9,413 | — | 9,413 | ||||||||||||||
Effect of foreign currency translation changes | — | 1,120 | 1,120 | ||||||||||||||
Balances as of December 31, 2022 | $ | 254,916 | $ | 42,445 | $ | 297,361 |
Three Months Ended December 31, 2021 | |||||||||||||||||
(in thousands) | U.S. Pawn | Latin America Pawn | Consolidated | ||||||||||||||
Balances as of September 30, 2021 | $ | 244,471 | $ | 41,287 | $ | 285,758 | |||||||||||
Measurement period adjustments | — | (1,322) | $ | (1,322) | |||||||||||||
Effect of foreign currency translation changes | — | 183 | 183 | ||||||||||||||
Balances as of December 31, 2021 | $ | 244,471 | $ | 40,148 | $ | 284,619 | |||||||||||
Three Months Ended December 31, | |||||||||||
(in thousands, except per share amounts) | 2022 | 2021 | |||||||||
Basic earnings per common share: | |||||||||||
Net income - basic | $ | 16,778 | $ | 15,721 | |||||||
Weighted shares outstanding - basic | 56,308 | 56,183 | |||||||||
Basic earnings per common share | $ | 0.30 | $ | 0.28 | |||||||
Diluted earnings per common share: | |||||||||||
Net income - basic | $ | 16,778 | $ | 15,721 | |||||||
Add: Convertible Notes interest expense, net of tax* | 4,540 | 1,884 | |||||||||
Net income - diluted | $ | 21,318 | $ | 17,605 | |||||||
Weighted shares outstanding - basic | 56,308 | 56,183 | |||||||||
Effect of dilution from equity-based compensation awards** | 1,118 | 541 | |||||||||
Effect of dilution from if-converted Convertible Notes*** | 26,353 | 25,224 | |||||||||
Weighted shares outstanding - diluted | 83,779 | 81,948 | |||||||||
Diluted earnings per common share | $ | 0.25 | $ | 0.21 | |||||||
Potential common shares excluded from the calculation of diluted earnings per share above: | |||||||||||
Restricted stock**** | 1,552 | 1,936 |
(in thousands) | Balance Sheet Location | December 31, 2022 | December 31, 2021 | September 30, 2022 | ||||||||||||||||
Lease assets: | ||||||||||||||||||||
Operating lease right-of-use assets | $ | 229,991 | $ | 201,527 | $ | 221,405 | ||||||||||||||
Financing lease assets | 563 | — | 181 | |||||||||||||||||
Total lease assets | $ | 230,554 | $ | 201,527 | $ | 221,586 | ||||||||||||||
Lease liabilities: | ||||||||||||||||||||
Current: | ||||||||||||||||||||
Operating lease liabilities | Operating lease liabilities, current | $ | 52,799 | $ | 51,843 | $ | 52,334 | |||||||||||||
Financing lease liabilities | 121 | — | 37 | |||||||||||||||||
Total current lease liabilities | $ | 52,920 | $ | 51,843 | $ | 52,371 | ||||||||||||||
Non-current: | ||||||||||||||||||||
Operating lease liabilities | Operating lease liabilities | $ | 188,730 | $ | 161,841 | $ | 180,756 | |||||||||||||
Financing lease liabilities | 447 | — | 148 | |||||||||||||||||
Total non-current lease liabilities | $ | 189,177 | $ | 161,841 | $ | 180,904 | ||||||||||||||
Total lease liabilities | $ | 242,097 | $ | 213,684 | $ | 233,275 |
Three Months Ended December 31, | |||||||||||
(in thousands) | 2022 | 2021 | |||||||||
Operating lease cost: | |||||||||||
Operating lease cost * | $ | 17,495 | $ | 16,362 | |||||||
Variable lease cost | 3,852 | 3,542 | |||||||||
Total operating lease cost | $ | 21,347 | $ | 19,904 | |||||||
Financing lease cost: | |||||||||||
Amortization of financing lease assets | $ | 19 | $ | — | |||||||
Interest on financing lease liabilities | 11 | — | |||||||||
Total financing lease cost | $ | 30 | $ | — | |||||||
Total lease cost | $ | 21,377 | $ | 19,904 |
Three Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Weighted-average remaining lease term (years): | |||||||||||
Operating leases | 5.21 | 5.05 | |||||||||
Financing leases | 4.03 | N/A | |||||||||
Weighted-average discount rate: | |||||||||||
Operating leases | 8.36 | % | 8.10 | % | |||||||
Financing leases | 11.14 | % | N/A | ||||||||
(in thousands) | Operating Leases | Financing Leases | |||||||||
Remaining 2023 | $ | 53,547 | $ | 176 | |||||||
Fiscal 2024 | 64,242 | 177 | |||||||||
Fiscal 2025 | 54,470 | 177 | |||||||||
Fiscal 2026 | 44,077 | 166 | |||||||||
Fiscal 2027 | 31,338 | 12 | |||||||||
Thereafter | 50,420 | — | |||||||||
Total lease liabilities | $ | 298,094 | $ | 708 | |||||||
Less: portion representing imputed interest | 56,565 | 140 | |||||||||
Total net lease liabilities | $ | 241,529 | $ | 568 | |||||||
Less: current portion | 52,799 | 121 | |||||||||
Total long term net lease liabilities | $ | 188,730 | $ | 447 |
June 30, | |||||||||||
(in thousands) | 2022 | 2021 | |||||||||
Current assets | $ | 158,987 | $ | 167,553 | |||||||
Non-current assets | 170,798 | 191,788 | |||||||||
Total assets | $ | 329,785 | $ | 359,341 | |||||||
Current liabilities | $ | 59,256 | $ | 61,395 | |||||||
Non-current liabilities | 53,045 | 57,511 | |||||||||
Shareholders’ equity | 217,484 | 240,435 | |||||||||
Total liabilities and shareholders’ equity | $ | 329,785 | $ | 359,341 |
Full-Year Ended June 30, | |||||||||||
(in thousands) | 2022 | 2021 | |||||||||
Gross revenues | $ | 178,215 | $ | 150,165 | |||||||
Gross profit | 116,106 | 105,851 | |||||||||
Net profit | 8,099 | 12,081 |
Carrying Value | Estimated Fair Value | |||||||||||||||||||||||||||||||
December 31, 2022 | December 31, 2022 | Fair Value Measurement Using | ||||||||||||||||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||||||||
2.89% promissory note receivable due April 2024 | $ | 1,224 | $ | 1,224 | $ | — | $ | — | $ | 1,224 | ||||||||||||||||||||||
12.00% promissory note receivable from Founders | 15,100 | 15,100 | — | — | 15,100 | |||||||||||||||||||||||||||
Investments in unconsolidated affiliates | 37,789 | 43,497 | 43,497 | — | — | |||||||||||||||||||||||||||
Other investments | 39,220 | 39,220 | — | — | 39,220 | |||||||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||
2024 Convertible Notes | $ | 34,143 | $ | 35,851 | $ | — | $ | 35,851 | $ | — | ||||||||||||||||||||||
2025 Convertible Notes | 102,192 | 89,883 | — | 89,883 | — | |||||||||||||||||||||||||||
2029 Convertible Notes | 222,649 | 225,975 | — | 225,975 | — | |||||||||||||||||||||||||||
Carrying Value | Estimated Fair Value | |||||||||||||||||||||||||||||||
December 31, 2021 | December 31, 2021 | Fair Value Measurement Using | ||||||||||||||||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||||||||
2.89% promissory note receivable due April 2024 | $ | 1,190 | $ | 1,190 | $ | — | $ | — | $ | 1,190 | ||||||||||||||||||||||
Investments in unconsolidated affiliates | 42,513 | 52,671 | 45,650 | — | 7,021 | |||||||||||||||||||||||||||
Other investments | 16,500 | 16,500 | — | — | 16,500 | |||||||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||
2024 Convertible Notes | $ | 142,106 | $ | 147,063 | $ | — | $ | 147,063 | $ | — | ||||||||||||||||||||||
2025 Convertible Notes | 169,738 | 155,060 | — | 155,060 | — | |||||||||||||||||||||||||||
Carrying Value | Estimated Fair Value | |||||||||||||||||||||||||||||||
September 30, 2022 | September 30, 2022 | Fair Value Measurement Using | ||||||||||||||||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||||||||
2.89% promissory note receivable due April 2024 | $ | 1,215 | $ | 1,215 | $ | — | $ | — | $ | 1,215 | ||||||||||||||||||||||
Investments in unconsolidated affiliates | 37,733 | 40,279 | 40,279 | — | — | |||||||||||||||||||||||||||
Other investments | 24,220 | 24,220 | — | — | 24,220 | |||||||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||
2024 Convertible Notes | $ | 142,575 | $ | 157,727 | $ | — | $ | 157,727 | $ | — | ||||||||||||||||||||||
2025 Convertible Notes | 170,328 | 147,488 | — | 147,488 | — | |||||||||||||||||||||||||||
December 31, 2022 | December 31, 2021 | September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Gross Amount | Debt Issuance Costs | Carrying Amount | Gross Amount | Debt Issuance Costs | Carrying Amount | Gross Amount | Debt Issuance Costs | Carrying Amount | ||||||||||||||||||||||||||||||||||||||||||||
2029 Convertible Notes | $ | 230,000 | $ | (7,351) | $ | 222,649 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||||||
2025 Convertible Notes | 103,373 | (1,181) | 102,192 | 172,500 | (2,762) | 169,738 | 172,500 | (2,172) | 170,328 | ||||||||||||||||||||||||||||||||||||||||||||
2024 Convertible Notes | 34,389 | (246) | 34,143 | 143,750 | (1,644) | 142,106 | 143,750 | (1,175) | 142,575 | ||||||||||||||||||||||||||||||||||||||||||||
Total long-term debt | $ | 367,762 | $ | (8,778) | $ | 358,984 | $ | 316,250 | $ | (4,406) | $ | 311,844 | $ | 316,250 | $ | (3,347) | $ | 312,903 |
Schedule of Contractual Maturities | |||||||||||||||||||||||
(in thousands) | 2029 Convertible Notes | 2025 Convertible Notes | 2024 Convertible Notes | Total | |||||||||||||||||||
Remaining 2023 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
Fiscal 2024 | — | — | 34,389 | 34,389 | |||||||||||||||||||
Fiscal 2025 | — | 103,373 | — | 103,373 | |||||||||||||||||||
Fiscal 2026 | — | — | — | — | |||||||||||||||||||
Fiscal 2027 | — | — | — | — | |||||||||||||||||||
Thereafter | 230,000 | — | — | 230,000 | |||||||||||||||||||
Total long-term debt | $ | 230,000 | $ | 103,373 | $ | 34,389 | $ | 367,762 |
Three Months Ended December 31, | |||||||||||
(in thousands) | 2022 | 2021 | |||||||||
2029 Convertible Notes: | |||||||||||
Contractual interest expense | $ | 431 | $ | — | |||||||
Amortization of deferred financing costs | 52 | — | |||||||||
Total interest expense | $ | 483 | $ | — | |||||||
2025 Convertible Notes: | |||||||||||
Contractual interest expense | $ | 942 | $ | 1,024 | |||||||
Amortization of deferred financing costs | 188 | 207 | |||||||||
Total interest expense | $ | 1,130 | $ | 1,231 | |||||||
2024 Convertible Notes: | |||||||||||
Contractual interest expense | $ | 876 | $ | 1,033 | |||||||
Amortization of deferred financing costs | 138 | 167 | |||||||||
Total interest expense | $ | 1,014 | $ | 1,200 |
Shares | Weighted Average Grant Date Fair Value | ||||||||||
Outstanding as of September 30, 2022 | 2,113,323 | $ | 5.88 | ||||||||
Granted | 917,990 | 7.72 | |||||||||
Released (a) | (347,788) | 4.71 | |||||||||
Cancelled | (54,497) | 6.55 | |||||||||
Outstanding as of December 31, 2022 | 2,629,028 | $ | 6.66 |
Three Months Ended December 31, 2022 | |||||||||||||||||||||||||||||||||||
(in thousands) | U.S. Pawn | Latin America Pawn | Other Investments | Total Segments | Corporate Items | Consolidated | |||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||
Merchandise sales | $ | 118,314 | $ | 45,473 | $ | — | $ | 163,787 | $ | — | $ | 163,787 | |||||||||||||||||||||||
Jewelry scrapping sales | 7,176 | 708 | — | 7,884 | — | 7,884 | |||||||||||||||||||||||||||||
Pawn service charges | 69,310 | 23,283 | — | 92,593 | — | 92,593 | |||||||||||||||||||||||||||||
Other revenues | 25 | 16 | 22 | 63 | — | 63 | |||||||||||||||||||||||||||||
Total revenues | 194,825 | 69,480 | 22 | 264,327 | — | 264,327 | |||||||||||||||||||||||||||||
Merchandise cost of goods sold | 73,256 | 31,621 | — | 104,877 | — | 104,877 | |||||||||||||||||||||||||||||
Jewelry scrapping cost of goods sold | 6,216 | 737 | — | 6,953 | — | 6,953 | |||||||||||||||||||||||||||||
Gross profit | 115,353 | 37,122 | 22 | 152,497 | — | 152,497 | |||||||||||||||||||||||||||||
Segment and corporate expenses (income): | |||||||||||||||||||||||||||||||||||
Store expenses | 73,304 | 27,499 | — | 100,803 | — | 100,803 | |||||||||||||||||||||||||||||
General and administrative | — | (3) | — | (3) | 15,479 | 15,476 | |||||||||||||||||||||||||||||
Depreciation and amortization | 2,755 | 2,215 | — | 4,970 | 3,018 | 7,988 | |||||||||||||||||||||||||||||
(Gain) loss on sale or disposal of assets and other | 3 | (19) | — | (16) | — | (16) | |||||||||||||||||||||||||||||
Interest expense | — | — | — | — | 6,190 | 6,190 | |||||||||||||||||||||||||||||
Interest income | — | (169) | — | (169) | (495) | (664) | |||||||||||||||||||||||||||||
Equity in net income of unconsolidated affiliates | — | — | (1,584) | (1,584) | — | (1,584) | |||||||||||||||||||||||||||||
Other (income) expense | — | 70 | 4 | 74 | (308) | (234) | |||||||||||||||||||||||||||||
Segment contribution | $ | 39,291 | $ | 7,529 | $ | 1,602 | $ | 48,422 | |||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 48,422 | $ | (23,884) | $ | 24,538 |
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 | |||||||||||||||||||||||||||||
Gross profit | 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 |
(in thousands) | December 31, 2022 | December 31, 2021 | September 30, 2022 | ||||||||||||||
Gross pawn service charges receivable | $ | 44,397 | $ | 38,040 | $ | 44,192 | |||||||||||
Allowance for uncollectible pawn service charges receivable | (9,476) | (8,275) | (10,716) | ||||||||||||||
Pawn service charges receivable, net | $ | 34,921 | $ | 29,765 | $ | 33,476 | |||||||||||
Gross inventory | $ | 159,286 | $ | 124,286 | $ | 153,673 | |||||||||||
Inventory reserves | (3,222) | (4,973) | (2,058) | ||||||||||||||
Inventory, net | $ | 156,064 | $ | 119,313 | $ | 151,615 | |||||||||||
Prepaid expenses and other | $ | 11,581 | $ | 10,614 | $ | 8,336 | |||||||||||
Accounts receivable, notes receivable and other | 22,730 | 6,258 | 8,435 | ||||||||||||||
Income taxes prepaid and receivable | 11,248 | 14,337 | 17,923 | ||||||||||||||
Prepaid expenses and other current assets | $ | 45,559 | $ | 31,209 | $ | 34,694 | |||||||||||
Property and equipment, gross | $ | 312,502 | $ | 288,285 | $ | 306,667 | |||||||||||
Accumulated depreciation | (256,890) | (236,084) | (249,942) | ||||||||||||||
Property and equipment, net | $ | 55,612 | $ | 52,201 | $ | 56,725 | |||||||||||
Accounts payable | $ | 20,220 | $ | 18,925 | $ | 24,056 | |||||||||||
Accrued payroll | 4,952 | 11,486 | 8,365 | ||||||||||||||
Incentive accrual | 6,010 | 5,158 | 17,403 | ||||||||||||||
Other payroll related expenses | 10,911 | 7,964 | 9,592 | ||||||||||||||
Accrued sales and VAT taxes | 8,086 | 9,704 | 7,279 | ||||||||||||||
Accrued income taxes payable | 2,562 | 6,024 | 2,663 | ||||||||||||||
Other current liabilities | 17,189 | 16,270 | 15,151 | ||||||||||||||
Accounts payable, accrued expenses and other current liabilities | $ | 69,930 | $ | 75,531 | $ | 84,509 |
Three Months Ended December 31, | |||||||||||
(in thousands) | 2022 | 2021 | |||||||||
Supplemental disclosure of cash flow information | |||||||||||
Cash and cash equivalents | $ | 207,658 | $ | 233,274 | |||||||
Restricted cash | 8,359 | 8,692 | |||||||||
Total cash and cash equivalents and restricted cash | $ | 216,017 | $ | 241,966 | |||||||
Non-cash investing and financing activities: | |||||||||||
Pawn loans forfeited and transferred to inventory | $ | 84,851 | $ | 70,966 | |||||||
Transfer of consideration for acquisition | 99 | — | |||||||||
Acquisition earn-out contingency | 2,000 | — | |||||||||
Accrued acquisition consideration | 1,250 | — |
Strengthen the Core | Relentless focus on superior execution and operational excellence in our core pawn business | ||||
Cost Efficiency and Simplification | Shape a culture of cost efficiency through ongoing focus on simplification and optimization | ||||
Innovate and Grow | Broaden customer engagement to service more customers more frequently in more locations |
December 31, | Three Months Ended December 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Mexican peso | 19.5 | 20.5 | 19.7 | 20.7 | |||||||||||||||||||
Guatemalan quetzal | 7.7 | 7.5 | 7.7 | 7.6 | |||||||||||||||||||
Honduran lempira | 24.4 | 24.1 | 24.3 | 23.9 | |||||||||||||||||||
Australian dollar | 1.5 | 1.4 | 1.5 | 1.4 |
Three Months Ended December 31, 2022 | |||||||||||||||||
U.S. Pawn | Latin America Pawn | Consolidated | |||||||||||||||
As of September 30, 2022 | 515 | 660 | 1,175 | ||||||||||||||
New locations opened | — | 2 | 2 | ||||||||||||||
Locations acquired | 10 | — | 10 | ||||||||||||||
Locations sold, combined or closed | — | (1) | (1) | ||||||||||||||
As of December 31, 2022 | 525 | 661 | 1,186 |
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, | Change | ||||||||||||||||
(in thousands) | 2022 | 2021 | |||||||||||||||
Gross profit: | |||||||||||||||||
Pawn service charges | $ | 69,310 | $ | 56,557 | 23% | ||||||||||||
Merchandise sales | 118,314 | 102,078 | 16% | ||||||||||||||
Merchandise sales gross profit | 45,058 | 44,246 | 2% | ||||||||||||||
Gross margin on merchandise sales | 38 | % | 43 | % | (500)bps | ||||||||||||
Jewelry scrapping sales | 7,176 | 4,980 | 44% | ||||||||||||||
Jewelry scrapping sales gross profit | 960 | 1,005 | (4)% | ||||||||||||||
Gross margin on jewelry scrapping sales | 13 | % | 20 | % | (700)bps | ||||||||||||
Other revenues | 25 | 22 | 14% | ||||||||||||||
Gross profit | 115,353 | 101,830 | 13% | ||||||||||||||
Segment operating expenses: | |||||||||||||||||
Store expenses | 73,304 | 64,689 | 13% | ||||||||||||||
Depreciation and amortization | 2,755 | 2,670 | 3% | ||||||||||||||
Loss on sale or disposal of assets and other | 3 | — | * | ||||||||||||||
Segment contribution | $ | 39,291 | $ | 34,471 | 14% | ||||||||||||
Other data: | |||||||||||||||||
Net earning assets (a) | $ | 284,880 | $ | 231,408 | 23% | ||||||||||||
Inventory turnover | 2.6 | 2.8 | (7)% | ||||||||||||||
Average monthly ending pawn loan balance per store (b) | $ | 315 | $ | 270 | 17% | ||||||||||||
Monthly average yield on pawn loans outstanding | 14 | % | 13 | % | 100bps | ||||||||||||
* | Represents a percentage computation that is not mathematically meaningful. | ||||
(a) | Balance includes pawn loans and inventory. | ||||
(b) | Balance is calculated based upon the average of the monthly ending balances during the applicable period. |
Three Months Ended December 31, | |||||||||||||||||||||||||||||
(in thousands) | 2022 (GAAP) | 2021 (GAAP) | Change (GAAP) | 2022 (Constant Currency) | Change (Constant Currency) | ||||||||||||||||||||||||
Gross profit: | |||||||||||||||||||||||||||||
Pawn service charges | $ | 23,283 | $ | 19,468 | 20% | $ | 22,479 | 15% | |||||||||||||||||||||
Merchandise sales | 45,473 | 35,642 | 28% | 43,596 | 22% | ||||||||||||||||||||||||
Merchandise sales gross profit | 13,852 | 10,363 | 34% | 13,289 | 28% | ||||||||||||||||||||||||
Gross margin on merchandise sales | 30 | % | 29 | % | 100bps | 30 | % | 100bps | |||||||||||||||||||||
Jewelry scrapping sales | 708 | 1,964 | (64)% | 672 | (66)% | ||||||||||||||||||||||||
Jewelry scrapping sales gross profit | (29) | 167 | (117)% | (29) | (117)% | ||||||||||||||||||||||||
Gross margin on jewelry scrapping sales | (4) | % | 9 | % | * | (4) | % | * | |||||||||||||||||||||
Other revenues, net | 16 | 240 | * | 15 | * | ||||||||||||||||||||||||
Gross profit | 37,122 | 30,238 | 23% | 35,754 | 18% | ||||||||||||||||||||||||
Segment operating expenses: | |||||||||||||||||||||||||||||
Store expenses | 27,499 | 22,082 | 25% | 26,438 | 20% | ||||||||||||||||||||||||
Depreciation and amortization | 2,215 | 1,980 | 12% | 2,125 | 7% | ||||||||||||||||||||||||
Other Charges | — | — | * | — | * | ||||||||||||||||||||||||
Segment operating contribution | 7,408 | 6,176 | 20% | 7,191 | 16% | ||||||||||||||||||||||||
Other segment income | (121) | (311) | (61)% | (294) | (5)% | ||||||||||||||||||||||||
Segment contribution | $ | 7,529 | $ | 6,487 | 16% | $ | 7,485 | 15% | |||||||||||||||||||||
Other data: | |||||||||||||||||||||||||||||
Net earning assets (a) | $ | 81,107 | $ | 64,490 | 26% | $ | 78,345 | 21% | |||||||||||||||||||||
Inventory turnover | 3.3 | 3.6 | (8)% | 3.3 | (8)% | ||||||||||||||||||||||||
Average monthly ending pawn loan balance per store (b) | $ | 70 | $ | 60 | 17% | $ | 70 | 17% | |||||||||||||||||||||
Monthly average yield on pawn loans outstanding | 17 | % | 17 | % | —bps | 17 | % | —bps | |||||||||||||||||||||
* | Represents a percentage computation that is not mathematically meaningful. | ||||
(a) | Balance includes pawn loans and inventory. | ||||
(b) | Balance is calculated based upon the average of the monthly ending balances during the applicable period. | ||||
2022 Change (GAAP) | 2022 Change (Constant Currency) | ||||||||||
Same Store data: | |||||||||||
PLO | 19% | 15% | |||||||||
PSC | 18% | 14% | |||||||||
Merchandise Sales | 23% | 18% | |||||||||
Merchandise Sales Gross Profit | 52% | 45% | |||||||||
Store Expenses | 22% | 18% |
Three Months Ended December 31, | Change | ||||||||||||||||
(in thousands) | 2022 | 2021 | |||||||||||||||
Gross profit: | |||||||||||||||||
Consumer loan fees, interest and other | $ | 22 | $ | 43 | (49)% | ||||||||||||
Gross profit | 22 | 43 | (49)% | ||||||||||||||
Segment operating expenses: | |||||||||||||||||
Equity in net income of unconsolidated affiliates | (1,584) | (1,138) | 39% | ||||||||||||||
Segment operating contribution | 1,606 | 1,181 | 36% | ||||||||||||||
Other segment expense | 4 | (12) | (133)% | ||||||||||||||
Segment contribution | $ | 1,602 | $ | 1,193 | 34% |
Three Months Ended December 31, | Percentage Change | ||||||||||||||||
(in thousands) | 2022 | 2021 | |||||||||||||||
Segment contribution | $ | 48,422 | $ | 42,151 | 15% | ||||||||||||
Corporate expenses (income): | |||||||||||||||||
General and administrative | 15,479 | 15,545 | * | ||||||||||||||
Depreciation and amortization | 3,018 | 2,924 | 3% | ||||||||||||||
Interest expense | 6,190 | 2,431 | 155% | ||||||||||||||
Interest income | (495) | (122) | * | ||||||||||||||
Other (income) expense | (308) | 26 | * | ||||||||||||||
Income before income taxes | 24,538 | 21,347 | 15% | ||||||||||||||
Income tax expense | 7,760 | 5,626 | 38% | ||||||||||||||
Net income | $ | 16,778 | $ | 15,721 | 7% |
* | Represents a percentage computation that is not mathematically meaningful. | ||||
Three Months Ended December 31, | Percentage Change | ||||||||||||||||
(in thousands) | 2022 | 2021 | |||||||||||||||
Net cash provided by operating activities | $ | 11,668 | $ | 9,018 | 29% | ||||||||||||
Net cash used in investing activities | (44,618) | (30,603) | 46% | ||||||||||||||
Net cash provided by (used in) financing activities | 33,993 | (792) | * | ||||||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 605 | 719 | (16)% | ||||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 1,648 | $ | (21,658) | (108)% |
* | Represents a percentage computation that is not mathematically meaningful. |
Share Repurchases | ||||||||||||||||||||||||||
Total Number of Shares Purchased (1)(2) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Programs | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Programs (1) | |||||||||||||||||||||||
(in thousands, except number of shares and average price information) | ||||||||||||||||||||||||||
October 1, 2022 through October 31, 2022 | 115,902 | $ | 8.32 | 115,902 | $ | 47,001 | ||||||||||||||||||||
November 1, 2022 through November 30, 2022 | — | N/A | — | $ | 47,001 | |||||||||||||||||||||
December 1, 2022 through December 31, 2022 | 705,863 | $ | 8.58 | 127,160 | $ | 45,941 | ||||||||||||||||||||
Quarter ended December 31, 2022 | 821,765 | $ | 8.55 | 243,062 | $ | 45,941 |
(1) | On May 3, 2022, the Board of Directors approved a share repurchase program, under which we are authorized to repurchase up to $50 million of our Class A Non-Voting common shares over a three-year period. All repurchases under this program were in open market transactions at prevailing market prices and were executed pursuant to a trading plan under Rule 10b5-1 under the Securities Exchange Act of 1934. Execution of the program will be responsive to fluctuating market conditions and valuations, liquidity needs and the expected return on investment compared to other opportunities. | ||||
(2) | On December 12, 2022, we used approximately $5.0 million of the net proceeds from the 2029 Convertible Notes offering to repurchase 578,703 shares of our Class A common stock from purchasers of our 2029 Convertible Notes in privately negotiated transactions. Such transactions were authorized separately from, and not considered a part of, the publicly announced share repurchase program referred to in footnote (1) above. |
Incorporated by Reference | Filed Herewith | |||||||||||||||||||||||||
Exhibit | Description of Exhibit | Form | File No. | Exhibit | Filing Date | |||||||||||||||||||||
4.1 | 8-K | 0-19424 | 4.1 | December 13, 2022 | ||||||||||||||||||||||
10.1 | 8-K | 0-19424 | 10.1 | December 13, 2022 | ||||||||||||||||||||||
10.2 | 10-K | 0-19424 | 10.5 | November 16, 2022 | ||||||||||||||||||||||
10.3 | 10-K | 0-19424 | 10.6 | November 16, 2022 | ||||||||||||||||||||||
10.4 | 10-K | 0-19424 | 10.7 | November 16, 2022 | ||||||||||||||||||||||
31.1 | x | |||||||||||||||||||||||||
31.2 | x | |||||||||||||||||||||||||
32.1† | x | |||||||||||||||||||||||||
101.INS | Inline XBRL Instance Document (the instance document does not appear in the interactive data files because the XBRL tags are embedded within the Inline XBRL document) | |||||||||||||||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | x | ||||||||||||||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | x | ||||||||||||||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | x | ||||||||||||||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document | x | ||||||||||||||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | x | ||||||||||||||||||||||||
104 | Cover Page Interactive Data File in Inline XBRL format (contained in Exhibit 101) |
† | The certifications furnished in Exhibit 32.1 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference. |
EZCORP, INC. | |||||||||||
Date: | February 1, 2023 | /s/Timothy K. Jugmans | |||||||||
Timothy K. Jugmans, Chief Financial Officer | |||||||||||
1 Year EZCORP Chart |
1 Month EZCORP Chart |
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