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EZCORP Reports First Quarter Fiscal Year 2020 Results

February 3, 2020 GMT

AUSTIN, Texas--(BUSINESS WIRE)--Feb 3, 2020--

EZCORP, Inc. (NASDAQ:EZPW) today announced results for its first quarter ended December 31, 2019.

All amounts in this release are from EZCORP continuing operations and 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.

HIGHLIGHTS FOR FIRST QUARTER OF FISCAL 2020

CEO COMMENTARY AND OUTLOOK

Chief Executive Officer Stuart Grimshaw commented, “Underlying results reflect the current management focus of reducing aged inventory levels at a time when our customers have excess cash in their hands. In Latin America we saw strong sales growth of 18% year-over-year, which was offset to a degree by the anticipated reduction in merchandise margin and loan balances. U.S. Pawn has also been focused on the efficient disposition of aged inventory with expected lower merchandise margins attached to this activity. Total consolidated revenues improved 3%, while we gained efficiencies in our operations expenses and effectively managed aged inventory. While our ongoing efforts to optimize inventory and upgrade systems, as well as the more recent government social welfare programs in Mexico, impact near-term results and loan balances, we remain focused on driving operating efficiencies, free cash flow and higher returns on earning assets, and reducing corporate expense.

In December, we introduced our differentiated digital platform, Lana, to customers in select stores in Florida, and completed the rollout of our new point-of-sale system in the U.S. and Mexico. We expect both these initiatives to enhance customer acquisition and retention, optimize lending decisions and expand earnings through improved loan redemption rates, resulting pawn service charge revenues and sales margins.

Importantly, we began repurchasing shares under the three-year, $60 million program that the Board approved in December 2019. We repurchased almost $1.0 million worth of stock by the end of the quarter, and to date we have repurchased approximately 415,000 shares for $2.7 million. Looking ahead, our free cash flow and strong balance sheet will enable us to enhance growth via new store openings, M&A opportunities that meet our strategic and financial criteria, and ongoing reinvestments, as well as return capital to shareholders through repurchasing publicly traded Class A shares under the share repurchase program.”

CONSOLIDATED RESULTS

Three Months Ended December 31

in millions, except per share amounts

 

As Reported

 

Adjusted 1

 

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

 

 

 

 

 

Total Revenues

$

 

222.4

 

 

$

 

215.7

 

 

$

 

221.1

 

 

$

 

215.7

 

Net Revenues

$

 

130.1

 

 

$

 

130.0

 

 

$

 

129.4

 

 

$

 

130.0

 

Income from Continuing Operations, Before Tax

$

 

3.0

 

 

$

 

(4.7

)

 

$

 

13.4

 

 

$

 

20.2

 

Net Income from Continuing Operations

$

 

1.3

 

 

$

 

(3.7

)

 

$

 

9.2

 

 

$

 

15.5

 

Diluted Earnings Per Share from Continuing Operations

$

 

0.02

 

 

$

 

(0.06

)

 

$

 

0.16

 

 

$

 

0.28

 

Adjusted EBITDA 1

$

 

15.2

 

 

$

 

7.6

 

 

$

 

22.7

 

 

$

 

28.3

 

SEGMENT RESULTS

U.S. Pawn

Latin America Pawn

CONFERENCE CALL

EZCORP will host a conference call on Monday, February 3, 2020, at 4:00 pm Central Time to discuss first quarter results. Analysts and institutional investors may participate on the conference call by dialing (877) 201-0168, Conference ID: 5299243, or internationally by dialing (647) 788-4901. 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 loans in the United States and Latin America. It also sells merchandise, primarily collateral forfeited from pawn lending operations and used 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 SmallCap 600 Index, S&P 1000 Index and Nasdaq Composite Index.

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 or current or future litigation. 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.

1Adjusted 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. 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.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

Three Months Ended December 31,

 

2019

 

2018

 

 

 

 

 

 

(Unaudited)

 

(in thousands, except per share amounts)

Revenues:

 

 

 

 

Merchandise sales

$

126,728

 

 

$

121,024

 

Jewelry scrapping sales

 

9,528

 

 

 

9,281

 

Pawn service charges

 

84,725

 

 

 

83,519

 

Other revenues

 

1,454

 

 

 

1,871

 

Total revenues

 

222,435

 

 

 

215,695

 

Merchandise cost of goods sold

 

84,076

 

 

 

77,112

 

Jewelry scrapping cost of goods sold

 

7,754

 

 

 

8,050

 

Other cost of revenues

 

536

 

 

 

484

 

Net revenues

 

130,069

 

 

 

130,049

 

Operating expenses:

 

 

 

 

Operations

 

90,625

 

 

 

90,853

 

Administrative

 

17,489

 

 

 

13,165

 

Depreciation and amortization

 

7,733

 

 

 

6,848

 

Loss on sale or disposal of assets and other

 

744

 

 

 

4,442

 

Total operating expenses

 

116,591

 

 

 

115,308

 

Operating income

 

13,478

 

 

 

14,741

 

Interest expense

 

5,329

 

 

 

8,791

 

Interest income

 

(843

)

 

 

(3,339

)

Equity in net loss of unconsolidated affiliates

 

5,897

 

 

 

1,119

 

Impairment of investment in unconsolidated affiliates

 

 

 

13,274

 

Other expense (income)

 

71

 

 

 

(386

)

Income (loss) from continuing operations before income taxes

 

3,024

 

 

 

(4,718

)

Income tax expense (benefit)

 

1,759

 

 

 

(1,058

)

Income (loss) from continuing operations, net of tax

 

1,265

 

 

 

(3,660

)

Loss from discontinued operations, net of tax

 

(27

)

 

 

(183

)

Net income (loss)

 

1,238

 

 

 

(3,843

)

Net loss attributable to noncontrolling interest

 

 

 

(477

)

Net income (loss) attributable to EZCORP, Inc.

$

1,238

 

 

$

(3,366

)

 

 

 

 

 

Basic earnings (loss) per share attributable to EZCORP, Inc. — continuing operations

$

0.02

 

 

$

(0.06

)

Diluted earnings (loss) per share attributable to EZCORP, Inc. — continuing operations

$

0.02

 

 

$

(0.06

)

 

 

 

 

 

Weighted-average basic shares outstanding

 

55,666

 

 

 

55,032

Weighted-average diluted shares outstanding

55,687

55,032

EZCORP, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

 

December 31,
2019

 

December 31,
2018

 

September 30,
2019

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

Assets:

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

143,141

 

 

$

297,031

 

 

$

157,567

 

Pawn loans

 

195,586

 

 

 

193,984

 

 

 

199,058

 

Pawn service charges receivable, net

 

32,250

 

 

 

31,558

 

 

 

31,802

 

Inventory, net

 

187,369

 

 

 

175,422

 

 

 

179,355

 

Notes receivable, net

 

7,450

 

 

 

26,711

 

 

 

7,182

 

Prepaid expenses and other current assets

 

36,142

 

 

 

31,483

 

 

 

30,796

 

Total current assets

 

601,938

 

 

 

756,189

 

 

 

605,760

 

Investments in unconsolidated affiliates

 

29,272

 

 

 

35,511

 

 

 

34,516

 

Property and equipment, net

 

65,246

 

 

 

69,770

 

 

 

67,357

 

Lease right of use asset

 

225,950

 

 

 

 

 

Goodwill

 

301,282

 

 

 

296,638

 

 

 

300,527

 

Intangible assets, net

 

68,995

 

 

 

55,956

 

 

 

68,044

 

Notes receivable, net

 

1,124

 

 

 

4,599

 

 

 

1,117

 

Deferred tax asset, net

 

2,123

 

 

 

10,104

 

 

 

1,998

 

Other assets

 

5,012

 

 

 

4,442

 

 

 

4,383

 

Total assets

$

1,300,942

 

 

$

1,233,209

 

 

$

1,083,702

 

 

 

 

 

 

 

 

 

 

Liabilities and equity:

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current maturities of long-term debt, net

$

215

 

 

$

190,238

 

 

$

214

 

Accounts payable, accrued expenses and other current liabilities

 

51,621

 

 

 

57,380

 

 

 

77,957

 

Customer layaway deposits

 

12,548

 

 

 

11,747

 

 

 

12,915

 

Lease liability

 

48,052

 

 

 

 

 

Total current liabilities

 

112,436

 

 

 

259,365

 

 

 

91,086

 

Long-term debt, net

 

241,209

 

 

 

229,928

 

 

 

238,380

 

Deferred tax liability, net

 

2,119

 

 

 

9,617

 

 

 

1,985

 

Lease liability

 

186,352

 

 

 

 

 

Other long-term liabilities

 

7,226

 

 

 

6,150

 

 

 

7,302

 

Total liabilities

 

549,342

 

 

 

505,060

 

 

 

338,753

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Class A Non-voting Common Stock, par value $.01 per share; shares authorized: 100 million; issued and outstanding: 52,886,122 as of December 31, 2019; 52,475,070 as of December 31, 2018; and 52,565,064 as of September 30, 2019

 

529

 

 

 

524

 

 

 

526

 

Class B Voting Common Stock, convertible, par value $.01 per share; shares authorized: 3 million; issued and outstanding: 2,970,171

 

30

 

 

 

30

 

 

 

30

 

Additional paid-in capital

 

407,440

 

 

 

400,081

 

 

 

407,628

 

Retained earnings

 

389,928

 

 

 

383,256

 

 

 

389,163

 

Accumulated other comprehensive loss

 

(46,327

)

 

 

(48,739

)

 

 

(52,398

)

EZCORP, Inc. stockholders’ equity

 

751,600

 

 

 

735,152

 

 

 

744,949

 

Noncontrolling interest

 

 

 

(7,003

)

 

 

Total equity

 

751,600

 

 

 

728,149

 

 

 

744,949

 

Total liabilities and equity

$

1,300,942

 

 

$

1,233,209

 

 

$

1,083,702

 

EZCORP, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

Three Months Ended December 31,

 

2019

 

2018

 

 

 

 

 

 

 

(Unaudited)

 

(in thousands)

Operating activities:

 

 

 

 

 

Net income (loss)

$

1,238

 

 

$

(3,843

)

Adjustments to reconcile net income (loss) to net cash flows from operating activities:

 

 

 

 

 

Depreciation and amortization

 

7,733

 

 

 

6,848

 

Amortization of debt discount and deferred financing costs

 

3,229

 

 

 

5,585

 

Amortization of lease right-of-use asset

 

11,474

 

 

 

Accretion of notes receivable discount and deferred compensation fee

 

(275

)

 

 

(1,376

)

Deferred income taxes

 

10

 

 

 

352

 

Impairment of investment in unconsolidated affiliate

 

 

 

13,274

 

Other adjustments

 

1,298

 

 

 

5,052

 

Stock compensation expense

 

1,695

 

 

 

2,238

 

Loss from investments in unconsolidated affiliates

 

5,897

 

 

 

1,119

 

Changes in operating assets and liabilities, net of business acquisitions:

 

 

 

 

 

Service charges and fees receivable

 

(355

)

 

 

(726

)

Inventory

 

(1,592

)

 

 

685

 

Prepaid expenses, other current assets and other assets

 

(9,649

)

 

 

(1,564

)

Accounts payable, accrued expenses and other liabilities

 

(29,966

)

 

 

(836

)

Customer layaway deposits

 

(467

)

 

 

18

 

Income taxes

 

(1,188

)

 

 

(3,445

)

Net cash (used in) provided by operating activities

 

(10,918

)

 

 

23,381

 

Investing activities:

 

 

 

 

 

Loans made

 

(187,362

)

 

 

(186,588

)

Loans repaid

 

109,623

 

 

 

106,643

 

Recovery of pawn loan principal through sale of forfeited collateral

 

76,515

 

 

 

70,594

 

Additions to property and equipment, net

 

(5,574

)

 

 

(5,880

)

Acquisitions, net of cash acquired

 

 

 

(332

)

Principal collections on notes receivable

 

 

 

7,284

 

Net cash used in investing activities

 

(6,798

)

 

 

(8,279

)

Financing activities:

 

 

 

 

 

Taxes paid related to net share settlement of equity awards

 

(1,395

)

 

 

(3,288

)

Payout of deferred consideration

 

(175

)

 

 

Proceeds from borrowings, net of issuance costs

 

(109

)

 

 

743

 

Payments on borrowings

 

(292

)

 

 

(67

)

Repurchase of common stock

 

(963

)

 

 

Net cash used in financing activities

 

(2,934

)

 

 

(2,612

)

Effect of exchange rate changes on cash and cash equivalents and restricted cash

 

1,349

 

 

 

(782

)

Net (decrease) increase in cash, cash equivalents and restricted cash

 

(19,301

)

 

 

11,708

 

Cash, cash equivalents and restricted cash at beginning of period

 

162,442

 

 

 

285,578

 

Cash, cash equivalents and restricted cash at end of period

$

143,141

 

 

$

297,286

 

 

 

 

 

 

 

Non-cash investing and financing activities:

 

 

 

 

 

Pawn loans forfeited and transferred to inventory

$

82,878

 

 

$

80,301

 

EZCORP, Inc.

OPERATING SEGMENT RESULTS

(Unaudited and in thousands)

 

Three Months Ended December 31, 2019

 

U.S. Pawn

 

Latin
America
Pawn

 

Lana

 

Other
International

 

Total
Segments

 

Corporate
Items

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merchandise sales

$

95,354

 

 

$

31,374

 

 

$

 

 

$

 

 

$

126,728

 

 

$

 

 

$

126,728

 

Jewelry scrapping sales

 

6,117

 

 

 

3,411

 

 

 

 

 

 

 

 

 

9,528

 

 

 

 

 

 

9,528

 

Pawn service charges

 

64,090

 

 

 

20,635

 

 

 

 

 

 

 

 

 

84,725

 

 

 

 

 

 

84,725

 

Other revenues

 

36

 

 

 

25

 

 

 

 

1

 

 

 

1,392

 

 

 

1,454

 

 

 

 

 

 

1,454

 

Total revenues

 

165,597

 

 

 

55,445

 

 

 

 

1

 

 

 

1,392

 

 

 

222,435

 

 

 

 

 

 

222,435

 

Merchandise cost of goods sold

 

61,364

 

 

 

22,712

 

 

 

 

 

 

 

 

 

84,076

 

 

 

 

 

 

84,076

 

Jewelry scrapping cost of goods sold

 

4,755

 

 

 

2,999

 

 

 

 

 

 

 

 

 

7,754

 

 

 

 

 

 

7,754

 

Other cost of revenues

 

 

 

 

 

 

 

 

536

 

 

 

536

 

 

 

 

 

 

536

 

Net revenues

 

99,478

 

 

 

29,734

 

 

 

 

1

 

 

 

856

 

 

 

130,069

 

 

 

 

 

 

130,069

 

Segment and corporate expenses (income):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operations

 

68,059

 

 

 

19,983

 

 

 

 

1,350

 

 

 

1,233

 

 

 

90,625

 

 

 

 

 

 

90,625

 

Administrative

 

 

 

 

 

 

 

 

 

 

 

 

 

17,489

 

 

 

17,489

 

Depreciation and amortization

 

2,865

 

 

 

1,889

 

 

 

 

12

 

 

 

34

 

 

 

4,800

 

 

 

2,933

 

 

 

7,733

 

Loss on sale or disposal of assets and other

 

 

 

28

 

 

 

 

 

 

 

 

 

28

 

 

 

716

 

 

 

744

 

Interest expense

 

 

 

28

 

 

 

 

(36

)

 

 

170

 

 

 

162

 

 

 

5,167

 

 

 

5,329

 

Interest income

 

 

 

(388

)

 

 

 

 

 

 

 

 

(388

)

 

 

(455

)

 

 

(843

)

Equity in net loss of unconsolidated affiliates

 

 

 

 

 

 

 

 

5,897

 

 

 

5,897

 

 

 

 

 

 

5,897

 

Other expense (income)

 

 

 

67

 

 

 

 

 

 

(1

)

 

 

66

 

 

 

5

 

 

 

71

 

Segment contribution (loss)

$

28,554

 

 

$

8,127

 

 

$

(1,325

)

 

$

(6,477

)

 

$

28,879

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

28,879

 

 

$

(25,855

)

 

$

3,024

 

 

Three Months Ended December 31, 2018

 

U.S. Pawn

 

Latin
America
Pawn

 

Lana

 

Other
International

 

Total
Segments

 

Corporate
Items

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merchandise sales

$

95,103

 

 

$

25,921

 

 

$

 

 

$

 

 

$

121,024

 

 

$

 

 

$

121,024

 

Jewelry scrapping sales

 

6,552

 

 

 

2,729

 

 

 

 

 

 

 

 

 

9,281

 

 

 

 

 

 

9,281

 

Pawn service charges

 

64,225

 

 

 

19,294

 

 

 

 

 

 

 

 

 

83,519

 

 

 

 

 

 

83,519

 

Other revenues

 

48

 

 

 

42

 

 

 

 

 

 

1,781

 

 

 

1,871

 

 

 

 

 

 

1,871

 

Total revenues

 

165,928

 

 

 

47,986

 

 

 

 

 

 

1,781

 

 

 

215,695

 

 

 

 

 

 

215,695

 

Merchandise cost of goods sold

 

59,148

 

 

 

17,964

 

 

 

 

 

 

 

 

 

77,112

 

 

 

 

 

 

77,112

 

Jewelry scrapping cost of goods sold

 

5,510

 

 

 

2,540

 

 

 

 

 

 

 

 

 

8,050

 

 

 

 

 

 

8,050

 

Other cost of revenues

 

 

 

 

 

 

 

 

484

 

 

 

484

 

 

 

 

 

 

484

 

Net revenues

 

101,270

 

 

 

27,482

 

 

 

 

 

 

1,297

 

 

 

130,049

 

 

 

 

 

 

130,049

 

Segment and corporate expenses (income):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operations

 

67,937

 

 

 

18,196

 

 

 

 

2,090

 

 

 

2,630

 

 

 

90,853

 

 

 

 

 

 

90,853

 

Administrative

 

 

 

 

 

 

 

 

 

 

 

 

 

13,165

 

 

 

13,165

 

Depreciation and amortization

 

3,035

 

 

 

1,422

 

 

 

 

 

 

41

 

 

 

4,498

 

 

 

2,350

 

 

 

6,848

 

Loss on sale or disposal of assets and other

 

2,853

 

 

 

1,589

 

 

 

 

 

 

 

 

 

4,442

 

 

 

 

 

 

4,442

 

Interest expense

 

 

 

29

 

 

 

 

 

 

72

 

 

 

101

 

 

 

8,690

 

 

 

8,791

 

Interest income

 

 

 

(419

)

 

 

 

 

 

 

 

 

(419

)

 

 

(2,920

)

 

 

(3,339

)

Equity in net loss of unconsolidated affiliates

 

 

 

 

 

 

 

 

1,119

 

 

 

1,119

 

 

 

 

 

 

1,119

 

Impairment of investments in unconsolidated affiliates

 

 

 

 

 

 

 

 

13,274

 

 

 

13,274

 

 

 

 

 

 

13,274

 

Other (income) expense

 

 

 

(126

)

 

 

 

 

 

22

 

 

 

(104

)

 

 

(282

)

 

 

(386

)

Segment contribution (loss)

$

27,445

 

 

$

6,791

 

 

$

(2,090

)

 

$

(15,861

)

 

$

16,285

 

 

 

 

 

 

 

 

Loss from continuing operations before income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

16,285

 

 

$

(21,003

)

 

$

(4,718

)

EZCORP, Inc.

STORE COUNT ACTIVITY

(Unaudited)

           

 

Three Months Ended December 31, 2019

 

U.S. Pawn

 

Latin America
Pawn

 

Other
International

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

As of September 30, 2019

512

 

 

480

 

 

22

 

 

1,014

 

New locations opened

 

 

4

 

 

 

 

4

 

As of December 31, 2019

512

 

 

484

 

 

22

 

 

1,018

 

 

Three Months Ended December 31, 2018

 

U.S. Pawn

 

Latin America
Pawn

 

Other
International

 

Consolidated

 

 

 

 

 

 

 

 

As of September 30, 2018

508

 

 

453

 

 

27

 

 

988

 

New locations opened

 

 

4

 

 

 

 

4

 

Locations acquired

 

 

5

 

 

 

 

5

 

As of December 31, 2018

508

462

27

997

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 quetzals 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. 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. 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 were as follows:

 

 

December 31,

 

Three Months Ended December 31,

 

 

    2019    

 

    2018    

 

2019

 

2018

 

 

 

 

 

 

 

 

 

Mexican peso

 

18.9

 

 

19.6

 

 

19.2

 

 

19.8

 

Guatemalan quetzal

 

7.5

 

 

7.7

 

 

7.5

 

 

7.6

 

Honduran lempira

 

24.4

 

 

24.2

 

 

24.3

 

 

24.0

 

Peruvian sol

 

3.3

 

 

3.4

 

 

3.3

 

 

3.3

 

Miscellaneous Non-GAAP Financial Measures

 

2020 Q1

 

2019 Q1

 

 

 

 

 

 

 

(in millions)

Net income (loss)

$

1.2

 

 

$

(3.8

)

Loss from discontinued operations, net of tax

 

 

 

0.2

 

Interest expense

 

5.3

 

 

 

8.8

 

Interest income

 

(0.8

)

 

 

(3.3

)

Income tax expense (benefit)

 

1.8

 

 

 

(1.1

)

Depreciation and amortization

 

7.7

 

 

 

6.8

 

Adjusted EBITDA

$

15.2

 

 

$

7.6

 

 

Income from
Continuing
Operations,
Before Tax

 

Tax
Effect

 

Net Income
from
Continuing
Operations

 

Adjusted
EBITDA

 

Continuing
Operations
Diluted EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in millions)

2020 Q1 reported

$

3.0

 

 

$

(1.7

)

 

$

1.3

 

 

$

15.2

 

 

$

0.02

 

Impact on CCV earnings from litigation settlement

 

7.1

 

 

 

(2.1

)

 

 

5.0

 

 

 

7.1

 

 

 

0.09

 

Termination of non-core software project

 

0.6

 

 

 

(0.1

)

 

 

0.5

 

 

 

0.6

 

 

 

0.01

 

Currency exchange rate fluctuations

 

(0.2

)

 

 

 

 

(0.2

)

 

 

(0.2

)

 

 

Non-cash net interest expense

 

2.9

 

 

 

(0.3

)

 

 

2.6

 

 

 

 

 

0.04

 

2020 Q1 adjusted

$

13.4

 

 

$

(4.2

)

 

$

9.2

 

 

$

22.7

 

 

$

0.16

 

 

Income
(Loss) from
Continuing
Operations,
Before Tax

 

Tax
Effect

 

Net Income
(Loss) from
Continuing
Operations

 

Adjusted
EBITDA

 

Continuing
Operations
Diluted EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in millions)

2019 Q1 reported

$

(4.7

)

 

$

1.0

 

 

$

(3.7

)

 

$

7.6

 

 

$

(0.06

)

Acquisition costs

 

0.1

 

 

 

 

 

0.1

 

 

 

0.1

 

 

 

Charge-off of aged assets and other

 

0.2

 

 

 

 

 

0.2

 

 

 

0.2

 

 

 

Impairment on CCV investment

 

13.3

 

 

 

(2.8

)

 

 

10.5

 

 

 

13.3

 

 

 

0.18

 

Impact on CCV earnings from litigation settlement

 

2.9

 

 

 

(0.7

)

 

 

2.2

 

 

 

2.9

 

 

 

0.04

 

Adjustment for Republic Metals Corporation reserve

 

4.4

 

 

 

(1.1

)

 

 

3.3

 

 

 

4.4

 

 

 

0.06

 

Currency exchange rate fluctuations

 

(0.2

)

 

 

 

 

(0.2

)

 

 

(0.2

)

 

 

Non-cash net interest expense

 

4.2

 

 

 

(1.1

)

 

 

3.1

 

 

 

 

 

0.06

 

2019 Q1 adjusted*

$

20.2

 

 

$

(4.7

)

 

$

15.5

 

 

$

28.3

 

 

$

0.28

 

* During the first quarter of fiscal 2020, we revised the financial information our chief operating decision maker (currently our chief executive officer) reviews for operational decision-making purposes to include the separate financial results of our Lana business. Our historical segment results have been recast to conform to current presentation including the removal of discretionary strategic investment in digital platform costs in historically adjusted results. We additionally recast certain other adjustments to conform to restated historical results.

2020 Q1:

U.S. Dollar
Amount

 

Percentage
Change YOY

 

 

 

 

 

 

 

(in millions)

Latin America Pawn net revenue (three months ended December 31, 2019)

$

29.7

 

 

8

%

Currency exchange rate fluctuations

 

(0.6

)

 

 

 

Constant currency Latin America Pawn net revenue (three months ended December 31, 2019)

$

29.1

 

 

6

%

 

 

 

 

 

 

Latin America Pawn PLO

$

40.3

 

 

4

%

Currency exchange rate fluctuations

 

(1.7

)

 

 

 

Constant currency Latin America Pawn PLO

$

39.2

 

 

1

%

 

 

 

 

 

 

Latin America Pawn PSC revenues (three months ended December 31, 2019)

$

20.6

 

 

7

%

Currency exchange rate fluctuations

 

(0.4

)

 

 

 

Constant currency Latin America Pawn PSC revenues (three months ended December 30, 2019)

$

20.2

 

 

5

%

 

 

 

 

 

 

Latin America Pawn merchandise sales (three months ended December 31, 2019)

$

31.4

 

 

21

%

Currency exchange rate fluctuations

 

(0.9

)

 

 

 

Constant currency Latin America Pawn merchandise sales (three months ended December 31, 2019)

$

30.5

 

 

18

%

 

 

 

 

 

 

Latin America Pawn segment profit before tax (three months ended December 31, 2019)

$

8.1

 

 

20

%

Currency exchange rate fluctuations

 

(0.3

)

 

 

 

Constant currency Latin America Pawn segment profit before tax (three months ended December 31, 2019)

$

7.8

 

 

16

%

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20200203005728/en/

CONTACT: Email:Investor_Relations@ezcorp.com

Phone: (512) 314-2220

KEYWORD: TEXAS UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: PROFESSIONAL SERVICES FINANCE

SOURCE: EZCORP, Inc.

Copyright Business Wire 2020.

PUB: 02/03/2020 04:01 PM/DISC: 02/03/2020 04:02 PM

http://www.businesswire.com/news/home/20200203005728/en