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