Business Wire | Feb 3, 2021 04:15PM EST

EZCORP Reports First Quarter Fiscal 2021 Results

Feb. 03, 2021

AUSTIN, Texas--(BUSINESS WIRE)--Feb. 03, 2021--EZCORP, Inc. (NASDAQ: EZPW) today announced results for its first quarter ended December 31, 2020.

All amounts in this release are in conformity with U.S. generally accepted accounting principles ("GAAP") unless otherwise noted. Comparisons shown in this release are to the same period in the prior year unless otherwise noted.

CEO COMMENTARY AND OUTLOOK

Chief Executive Officer Jason Kulas stated, "We remain focused on strengthening and growing our core pawn business as we continue to strive to be our customers' first and best choice for their short-term cash needs and for affordable pre-owned goods. The first quarter of fiscal 2021 was characterized by continuing growth in demand for pawn loans, building on the prior quarter's inflection point, even as store expenses remained flat on a sequential basis. Pawn loans outstanding (PLO) ended the quarter at $148 million, up 13% on a sequential basis from $131 million at the end of September 2020, primarily reflecting continued efforts to enhance our value proposition to customers and the reduction of certain government stimulus programs. In the near term, the recently implemented second stimulus package has reduced demand for pawn loans and the upcoming tax refund season will likely further temporarily curb loan demand.

"Turning to our financial performance for the quarter, pawn service charges (PSC) and merchandise sales remained depressed relative to prior-year levels as we continue to work through rebuilding PLO following 2020 stimulus payments and other ongoing headwinds from the COVID-19 pandemic. Merchandise sales gross profits held steady on more effective inventory management. We remain on track to realize meaningful cost savings as a result of strategic initiatives we implemented last quarter and continued this quarter. Looking ahead, while store-level operating costs will rebuild as transaction activity increases, ongoing cost reduction and simplification efforts across the business generate operating leverage as revenue trends higher. Furthermore, we maintain a strong balance sheet with ample liquidity to continue to fund PLO growth, de novo store openings, and strategic inorganic growth opportunities, with an ongoing emphasis on generating strong returns on capital.

"We are there for our customers, with virtually all of our stores remaining open and with continued expansion of payment options. Moreover, we remain focused on enhancing our digital pawn servicing platform to broaden customer engagement and enhance the customer experience as we drive operating efficiencies. We also continue to leverage technology and data analytics across geographies to optimize pricing, productivity, and returns, and strengthen business development initiatives. Finally, building the most passionate and tenured store-level team in the industry remains one of our top priorities, with an ongoing focus on the health, safety, development, and retention of our team members through and beyond the pandemic."

RESULTS FOR FIRST QUARTER OF FISCAL 2021

* Diluted earnings per share was $0.08, compared to $0.02 in the prior-year quarter. On an adjusted basis1, diluted earnings per share was $0.13, down from $0.17 in the prior-year quarter. Income before taxes increased by $2.5 million to $5.5 million. * Total revenues decreased $44.3 million or 20%, primarily due to a $21.2 million or 25% decrease in PSC and a $18.9 million or 15% decrease in merchandise sales. * The decrease in PSC was due to a $47.7 million or 24% decrease in PLO. Pawn loan demand was significantly reduced in the third and fourth quarters of fiscal 2020 as a result of the impact of COVID-19 and the economic stimulus actions in the U.S. and constrained traffic in Latin America. * Although merchandise sales decreased by $18.9 million, merchandise sales gross profit improved by 1%, driven by effective inventory management and less aged inventory leading to a 600 bps improvement in merchandise sales gross profit margin to 40%. The sales margin in the prior year quarter was negatively impacted by 260 bps due to greater sales volume of aged merchandise. * On a sequential basis, total revenues increased $11.3 million or 7% to $178.1 million, largely driven by a 15% increase in PSC. The sequential increase in PSC was primarily due to a $16.5 million or 13% increase in the PLO balance to $147.9 million from the prior quarter. * Continued focus on expense control drove total operating expenses down 15% to $99.4 million. The decrease in total operating expenses was primarily the result of a $10.0 million or 11% decrease in store expenses and a $6.3 million or 34% decrease in general and administrative expenses. The decrease in expenses is primarily due to cost cutting initiatives over the last 12 months (especially in the fourth quarter of fiscal 2020) and a continued focus on expense control. * Net inventory was $95.0 million, down 49% year-over-year and 1% sequentially. Inventory turnover improved to 2.9x from 2.0x and on a sequential basis improved 4% from 2.8x. * Cash and cash equivalents at the end of the quarter was $290.5 million, an increase of $147.3 million or 103% from the prior-year quarter due to the year-over-year reduction in earning assets. On a sequential basis, cash and cash equivalents decreased $14.1 million or 5%, due to the sequential increase in PLO.

CONSOLIDATED RESULTS

Three Months Ended December 31

in millions, except per share amounts

As Reported Adjusted^1

2020 2019 2020 2019



Total Revenues $ 178.1 $ 222.4 $ 180.1 $ 222.4

Net Revenues $ 108.4 $ 130.1 $ 109.5 $ 130.1

Income, Before Tax $ 5.5 $ 3.0 $ 8.5 $ 13.7

Net Income $ 4.3 $ 1.2 $ 7.4 $ 9.3

Diluted Earnings Per Share $ 0.08 $ 0.02 $ 0.13 $ 0.17

EBITDA $ 17.7 $ 15.2 $ 17.4 $ 22.9

* Total revenues decreased 20% to $178.1 million. PSC was down 25% to $63.5 million due to lower average PLO. On a sequential basis, PLO increased 13% from the prior quarter, compared to a 2% sequential decrease in the same period of the prior year. * Net revenues were down 17% to $108.4 million. * Consolidated merchandise sales gross profit increased 1% to $43.2 million. * Consolidated store expenses decreased 11% primarily due to a reduction of expenses in line with reduced activity at the store level. Total pawn store count decreased by 11 stores or 1% since the end of the prior-year quarter. General and administrative expense decreased 34% to $12.5 million, due to a continued focus on expense control.

SEGMENT RESULTS

U.S. Pawn

* Total revenue was down 18% to $136.5 million, reflecting the impact of lower PLO driving a decrease in PSC revenue. * PLO decreased 21% year-over-year to $121.9 million. On a sequential basis, PLO increased 15% compared to a 1% sequential decrease in the prior-year quarter, reflecting improved loan demand. * PSC decreased 22% to $50.2 million as a result of lower average PLO for the quarter, offset by an increase in yield to 173% from 164%. * Merchandise sales declined 14% to $82.3 million. Inventory turnover improved to 2.6x from 1.8x. Merchandise sales gross margin grew from 36% to 42%, above our targeted range. Aged general merchandise inventory improved to 3.4% from 6.7%. * Net revenues decreased 14% to $85.6 million primarily due to lower PSC, partially offset by increased merchandise sales gross profit. * Store expenses were down 9% to $62.1 million driven by a reduction in labor expense. * Segment contribution decreased $7.8 million to $20.7 million as a result of the decrease in net revenue, partially offset by the reduction in store expenses.

Latin America Pawn

* Total revenue was down 25% to $41.6 million, reflecting the impact of lower PLO driving a decrease in PSC revenue. * PLO decreased 36% year-over-year to $25.9 million. On a sequential basis, PLO increased 4% compared to a 3% sequential decrease in the prior-year quarter, reflecting improved loan demand. * PSC decreased 36% to $13.3 million (down 32% to $13.9 million on a constant currency basis) as a result of lower average PLO for the quarter, offset by an increase in yield to 200% from 192% in the prior year. * Merchandise sales declined 19% to $25.5 million (down 15% to $26.8 million on a constant currency basis), but merchandise sales gross margin was 35%, up from 28%. Inventory turnover improved to 3.8x from 2.7x. Aged general merchandise inventory increased to 9.4% from 8.5%. * Net revenues decreased 24% to $22.7 million (down 20% to $23.8 million on a constant currency basis) primarily due to lower PSC. * Store expenses were down 14% to $17.2 million driven by a reduction in labor expense. * Segment contribution for the quarter was $5.0 million ($5.0 million on a constant currency basis), compared to a contribution of $8.1 million in the prior year quarter, primarily reflecting lower net revenues offset by improvement in store expenses. * Latin America Pawn added two de novo stores in the quarter. New store openings typically pressure earnings in the short term as they ramp up, but drive higher profitability over time.

FORM 10-Q

EZCORP's Quarterly Report on Form 10-Q for the quarter ended December 31, 2020 has been filed with the Securities and Exchange Commission and 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, February 4, 2021, at 7:00 am Central Time to discuss fiscal first quarter results. Analysts and institutional investors may participate on the conference call by dialing (877) 407-0789, Conference ID: 13715451, or internationally by dialing (201) 689-8562. 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. We also sell merchandise, primarily collateral forfeited from pawn lending operations and pre-owned merchandise purchased from customers. We are dedicated to satisfying the short-term cash needs of consumers who are both cash and credit constrained, focusing on an industry-leading customer experience. EZCORP is traded on NASDAQ under the symbol EZPW and is a member of the Russell 2000 Index, S&P 1000 Index and Nasdaq Composite Index.

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.

1"Adjusted" basis, which is a non-GAAP measure, excludes certain items. "Constant currency" basis, which is a non-GAAP measure, excludes the impact of foreign currency exchange rate fluctuations. "Free cash flow," which is a non-GAAP measure, includes certain adjustments to cash flow from operating activities.

For additional information about these calculations, as well as a reconciliation to the most comparable GAAP financial measures, see "Non-GAAP Financial Information" at the end of this release.

EZCORP, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended December 31,

(in thousands, except per share amount) 2020 2019



Revenues:

Merchandise sales $ 107,783 $ 126,728

Jewelry scrapping sales 6,759 9,528

Pawn service charges 63,489 84,725

Other revenues 104 1,454

Total revenues 178,135 222,435

Merchandise cost of goods sold 64,543 84,076

Jewelry scrapping cost of goods sold 5,202 7,754

Other cost of revenues - 536

Net revenues 108,390 130,069

Operating expenses:

Store expenses 79,309 89,275

General and administrative 12,510 18,839

Depreciation and amortization 7,572 7,733

(Gain) loss on sale or disposal of assets and other (22 ) 744

Total operating expenses 99,369 116,591

Operating income 9,021 13,478

Interest expense 5,455 5,329

Interest income (821 ) (843 )

Equity in net (income) loss of unconsolidated (516 ) 5,897 affiliates

Other (income) expense (599 ) 98

Income before income taxes 5,502 2,997

Income tax expense 1,203 1,759

Net income $ 4,299 $ 1,238



Basic earnings per share $ 0.08 $ 0.02

Diluted earnings per share $ 0.08 $ 0.02



Weighted-average basic shares outstanding 55,361 55,666

Weighted-average diluted shares outstanding 55,428 55,687

EZCORP, Inc.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

December 31,

September 30,

(in thousands, except share and per share amounts)

2020

2019

2020

Assets:

Current assets:

Cash and cash equivalents

$

290,450

$

143,141

$

304,542

Restricted cash

8,011

-

8,011

Pawn loans

147,852

195,586

131,323

Pawn service charges receivable, net

24,825

32,250

20,580

Inventory, net

94,980

187,369

95,891

Notes receivable, net

-

7,450

-

Prepaid expenses and other current assets

32,824

36,142

32,903

Total current assets

598,942

601,938

593,250

Investments in unconsolidated affiliates

31,773

29,272

32,458

Property and equipment, net

55,204

65,246

56,986

Lease right-of-use asset

177,308

225,950

183,809

Goodwill

258,453

301,282

257,582

Intangible assets, net

58,794

68,995

58,638

Notes receivable, net

1,156

1,124

1,148

Deferred tax asset, net

10,000

2,123

8,931

Other assets

5,534

5,012

4,221

Total assets

$

1,197,164

$

1,300,942

$

1,197,023

Liabilities and equity:

Current liabilities:

Current maturities of long-term debt, net

$

213

$

215

$

213

Accounts payable, accrued expenses and other current liabilities

67,777

51,621

71,504

Customer layaway deposits

9,904

12,548

11,008

Lease liability

45,351

48,052

49,742

Total current liabilities

123,245

112,436

132,467

Long-term debt, net

254,322

241,209

251,016

Deferred tax liability, net

172

2,119

524

Lease liability

143,620

186,352

153,040

Other long-term liabilities

11,303

7,226

10,849

Total liabilities

532,662

549,342

547,896

Commitments and Contingencies

Stockholders' equity:

Class A Non-voting Common Stock, par value $0.01 per share; shares authorized: 100 million; issued and outstanding: 52,628,588 as of December 31, 2020; 52,886,122 as of December 31, 2019; and 52,332,848 as of September 30, 2020

526

529

521

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

398,269

407,440

398,475

Retained earnings

322,468

389,928

318,169

Accumulated other comprehensive loss

(56,791

)

(46,327

)

(68,068

)

Total equity

664,502

751,600

649,127

Total liabilities and equity

$

1,197,164

$

1,300,942

$

1,197,023

EZCORP, Inc.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

December 31, September 30,

(in thousands, except share and 2020 2019 2020per share amounts)



Assets:

Current assets:

Cash and cash equivalents $ 290,450 $ 143,141 $ 304,542

Restricted cash 8,011 - 8,011

Pawn loans 147,852 195,586 131,323

Pawn service charges receivable, 24,825 32,250 20,580 net

Inventory, net 94,980 187,369 95,891

Notes receivable, net - 7,450 -

Prepaid expenses and other 32,824 36,142 32,903 current assets

Total current assets 598,942 601,938 593,250

Investments in unconsolidated 31,773 29,272 32,458 affiliates

Property and equipment, net 55,204 65,246 56,986

Lease right-of-use asset 177,308 225,950 183,809

Goodwill 258,453 301,282 257,582

Intangible assets, net 58,794 68,995 58,638

Notes receivable, net 1,156 1,124 1,148

Deferred tax asset, net 10,000 2,123 8,931

Other assets 5,534 5,012 4,221

Total assets $ 1,197,164 $ 1,300,942 $ 1,197,023



Liabilities and equity:

Current liabilities:

Current maturities of long-term $ 213 $ 215 $ 213 debt, net

Accounts payable, accruedexpenses and other current 67,777 51,621 71,504 liabilities

Customer layaway deposits 9,904 12,548 11,008

Lease liability 45,351 48,052 49,742

Total current liabilities 123,245 112,436 132,467

Long-term debt, net 254,322 241,209 251,016

Deferred tax liability, net 172 2,119 524

Lease liability 143,620 186,352 153,040

Other long-term liabilities 11,303 7,226 10,849

Total liabilities 532,662 549,342 547,896

Commitments and Contingencies

Stockholders' equity:

Class A Non-voting Common Stock,par value $0.01 per share; sharesauthorized: 100 million; issuedand outstanding: 52,628,588 as of 526 529 521 December 31, 2020; 52,886,122 asof December 31, 2019; and52,332,848 as of September 30,2020

Class B Voting Common Stock,convertible, par value $0.01 pershare; shares authorized: 3 30 30 30 million; issued and outstanding:2,970,171

Additional paid-in capital 398,269 407,440 398,475

Retained earnings 322,468 389,928 318,169

Accumulated other comprehensive (56,791 ) (46,327 ) (68,068 )loss

Total equity 664,502 751,600 649,127

Total liabilities and equity $ 1,197,164 $ 1,300,942 $ 1,197,023

EZCORP, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Three Months Ended

December 31,

(in thousands)

2020

2019

Operating activities:

Net income

$

4,299

$

1,238

Adjustments to reconcile net income to net cash flows from operating activities:

Depreciation and amortization

7,572

7,733

Amortization of debt discount and deferred financing costs

3,329

3,229

Amortization of lease right-of-use asset

11,504

11,474

Accretion of notes receivable discount and deferred compensation fee

-

(275

)

Deferred income taxes

(1,421

)

10

Impairment of goodwill and intangible assets

-

-

Other adjustments

(167

)

1,298

Provision for inventory reserve

(1,510

)

329

Stock compensation expense

524

1,695

Equity in net (income) loss of unconsolidated affiliates

(516

)

5,897

Changes in operating assets and liabilities:

Service charges and fees receivable

(4,034

)

(355

)

Inventory

1,323

(1,921

)

Prepaid expenses, other current assets and other assets

(713

)

(9,649

)

Accounts payable, accrued expenses and other liabilities

(23,460

)

(29,966

)

Customer layaway deposits

(1,311

)

(467

)

Income taxes

68

(1,188

)

Net cash used in operating activities

(4,513

)

(10,918

)

Investing activities:

Loans made

(142,936

)

(187,362

)

Loans repaid

77,116

109,623

Recovery of pawn loan principal through sale of forfeited collateral

53,981

76,515

Capital expenditures, net

(3,223

)

(5,574

)

Net cash used in investing activities

(15,062

)

(6,798

)

Financing activities:

Taxes paid related to net share settlement of equity awards

(730

)

(1,395

)

Payout of deferred consideration

-

(175

)

Proceeds from borrowings, net of issuance costs

-

(109

)

Payments on borrowings

(53

)

(292

)

Repurchase of common stock

-

(963

)

Net cash used in financing activities

(783

)

(2,934

)

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

6,266

1,349

Net decrease in cash, cash equivalents and restricted cash

(14,092

)

(19,301

)

Cash, cash equivalents and restricted cash at beginning of period

312,553

162,442

Cash, cash equivalents and restricted cash at end of period

$

298,461

$

143,141

Supplemental disclosure of cash flow information

Cash and cash equivalents

$

290,450

$

143,141

Restricted cash

8,011

-

Total cash and cash equivalents and restricted cash

$

298,461

$

143,141

Non-cash investing and financing activities:

Pawn loans forfeited and transferred to inventory

$

50,921

$

82,878

EZCORP, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Three Months Ended December 31,

(in thousands) 2020 2019



Operating activities:

Net income $ 4,299 $ 1,238

Adjustments to reconcile net income to net cash flows from operating activities:

Depreciation and amortization 7,572 7,733

Amortization of debt discount and deferred financing 3,329 3,229 costs

Amortization of lease right-of-use asset 11,504 11,474

Accretion of notes receivable discount and deferred - (275 )compensation fee

Deferred income taxes (1,421 ) 10

Impairment of goodwill and intangible assets - -

Other adjustments (167 ) 1,298

Provision for inventory reserve (1,510 ) 329

Stock compensation expense 524 1,695

Equity in net (income) loss of unconsolidated (516 ) 5,897 affiliates

Changes in operating assets and liabilities:

Service charges and fees receivable (4,034 ) (355 )

Inventory 1,323 (1,921 )

Prepaid expenses, other current assets and other assets (713 ) (9,649 )

Accounts payable, accrued expenses and other (23,460 ) (29,966 )liabilities

Customer layaway deposits (1,311 ) (467 )

Income taxes 68 (1,188 )

Net cash used in operating activities (4,513 ) (10,918 )

Investing activities:

Loans made (142,936 ) (187,362 )

Loans repaid 77,116 109,623

Recovery of pawn loan principal through sale of 53,981 76,515 forfeited collateral

Capital expenditures, net (3,223 ) (5,574 )

Net cash used in investing activities (15,062 ) (6,798 )

Financing activities:

Taxes paid related to net share settlement of equity (730 ) (1,395 )awards

Payout of deferred consideration - (175 )

Proceeds from borrowings, net of issuance costs - (109 )

Payments on borrowings (53 ) (292 )

Repurchase of common stock - (963 )

Net cash used in financing activities (783 ) (2,934 )

Effect of exchange rate changes on cash and cash 6,266 1,349 equivalents and restricted cash

Net decrease in cash, cash equivalents and restricted (14,092 ) (19,301 )cash

Cash, cash equivalents and restricted cash at beginning 312,553 162,442 of period

Cash, cash equivalents and restricted cash at end of $ 298,461 $ 143,141 period



Supplemental disclosure of cash flow information

Cash and cash equivalents $ 290,450 $ 143,141

Restricted cash 8,011 -

Total cash and cash equivalents and restricted cash $ 298,461 $ 143,141



Non-cash investing and financing activities:

Pawn loans forfeited and transferred to inventory $ 50,921 $ 82,878

EZCORP, Inc.

OPERATING SEGMENT RESULTS

(Unaudited and in thousands)

Three Months Ended December 31, 2020

(in thousands)

U.S. Pawn

Latin America Pawn

Other International

Total Segments

Corporate Items

Consolidated

Revenues:

Merchandise sales

$

82,253

$

25,530

$

-

$

107,783

$

-

$

107,783

Jewelry scrapping sales

4,004

2,755

$

-

6,759

-

6,759

Pawn service charges

50,220

13,269

$

-

63,489

-

63,489

Other revenues

22

7

$

75

104

-

104

Total revenues

136,499

41,561

$

75

178,135

-

178,135

Merchandise cost of goods sold

48,059

16,484

$

-

64,543

-

64,543

Jewelry scrapping cost of goods sold

2,844

2,358

$

-

5,202

-

5,202

Other cost of revenues

-

-

$

-

-

-

-

Net revenues

85,596

22,719

$

75

108,390

-

108,390

Segment and corporate expenses (income):

Store expenses

62,092

17,217

$

-

79,309

-

79,309

General and administrative

-

-

$

-

-

12,510

12,510

Depreciation and amortization

2,736

1,860

$

-

4,596

2,976

7,572

Loss (gain) on sale or disposal of assets and other

27

(101

)

$

-

(74

)

52

(22

)

Interest expense

-

-

$

-

-

5,455

5,455

Interest income

-

(764

)

$

-

(764

)

(57

)

(821

)

Equity in net income of unconsolidated affiliates

-

-

$

(516

)

(516

)

-

(516

)

Other (income) expense

-

(455

)

$

(210

)

(665

)

66

(599

)

Segment contribution

$

20,741

$

4,962

$

801

$

26,504

Income (loss) before income taxes

$

26,504

$

(21,002

)

$

5,502

EZCORP, Inc.

OPERATING SEGMENT RESULTS

(Unaudited and in thousands)

Three Months Ended December 31, 2020

Latin Other Total Corporate(in thousands) U.S. Pawn America International Segments Items Consolidated Pawn



Revenues:

Merchandise $ 82,253 $ 25,530 $ - $ 107,783 $ - $ 107,783 sales

Jewelryscrapping 4,004 2,755 $ - 6,759 - 6,759 sales

Pawn service 50,220 13,269 $ - 63,489 - 63,489 charges

Other revenues 22 7 $ 75 104 - 104

Total revenues 136,499 41,561 $ 75 178,135 - 178,135

Merchandisecost of goods 48,059 16,484 $ - 64,543 - 64,543 sold

Jewelryscrapping cost 2,844 2,358 $ - 5,202 - 5,202 of goods sold

Other cost of - - $ - - - - revenues

Net revenues 85,596 22,719 $ 75 108,390 - 108,390

Segment andcorporate expenses(income):

Store expenses 62,092 17,217 $ - 79,309 - 79,309

General and - - $ - - 12,510 12,510 administrative

Depreciationand 2,736 1,860 $ - 4,596 2,976 7,572 amortization

Loss (gain) onsale ordisposal of 27 (101 ) $ - (74 ) 52 (22 )assets andother

Interest - - $ - - 5,455 5,455 expense

Interest - (764 ) $ - (764 ) (57 ) (821 )income

Equity in netincome of - - $ (516 ) (516 ) - (516 )unconsolidatedaffiliates

Other (income) - (455 ) $ (210 ) (665 ) 66 (599 )expense

Segment $ 20,741 $ 4,962 $ 801 $ 26,504 contribution

Income (loss)before income $ 26,504 $ (21,002 ) $ 5,502 taxes

Three Months Ended December 31, 2019

(in thousands)

U.S. Pawn

Latin America Pawn

Other International

Total Segments

Corporate Items

Consolidated

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

1,393

1,454

-

1,454

Total revenues

165,597

55,445

1,393

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

857

130,069

-

130,069

Segment and corporate expenses (income):

Store expenses

68,059

19,983

1,233

89,275

-

89,275

General and administrative

-

-

-

-

18,839

18,839

Impairment of goodwill, intangible and other assets

-

-

-

-

-

-

Depreciation and amortization

2,865

1,889

34

4,788

2,945

7,733

Loss on sale or disposal of assets and other

-

28

-

28

716

744

Interest expense

-

28

170

198

5,131

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

32

98

Segment contribution (loss)

$

28,554

$

8,127

$

(6,476

)

$

30,205

Income (loss) before income taxes

$

30,205

$

(27,208

)

$

2,997

Three Months Ended December 31, 2019

Latin Other Total Corporate(in thousands) U.S. Pawn America International Segments Items Consolidated Pawn



Revenues:

Merchandise $ 95,354 $ 31,374 $ - $ 126,728 $ - $ 126,728 sales

Jewelryscrapping 6,117 3,411 - 9,528 - 9,528 sales

Pawn service 64,090 20,635 - 84,725 - 84,725 charges

Other revenues 36 25 1,393 1,454 - 1,454

Total revenues 165,597 55,445 1,393 222,435 - 222,435

Merchandisecost of goods 61,364 22,712 - 84,076 - 84,076 sold

Jewelryscrapping cost 4,755 2,999 - 7,754 - 7,754 of goods sold

Other cost of - - 536 536 - 536 revenues

Net revenues 99,478 29,734 857 130,069 - 130,069

Segment andcorporate expenses(income):

Store expenses 68,059 19,983 1,233 89,275 - 89,275

General and - - - - 18,839 18,839 administrative

Impairment ofgoodwill, - - - - - - intangible andother assets

Depreciationand 2,865 1,889 34 4,788 2,945 7,733 amortization

Loss on saleor disposal of - 28 - 28 716 744 assets andother

Interest - 28 170 198 5,131 5,329 expense

Interest - (388 ) - (388 ) (455 ) (843 )income

Equity in netloss of - - 5,897 5,897 - 5,897 unconsolidatedaffiliates

Other expense - 67 (1 ) 66 32 98 (income)

Segmentcontribution $ 28,554 $ 8,127 $ (6,476 ) $ 30,205 (loss)

Income (loss)before income $ 30,205 $ (27,208 ) $ 2,997 taxes



EZCORP, Inc.

STORE COUNT ACTIVITY

(Unaudited)

Three Months Ended December 31, 2020

U.S. Pawn

Latin America Pawn

Consolidated

As of September 30, 2020

505

500

1,005

New locations opened

-

2

2

As of December 31, 2020

505

502

1,007

EZCORP, Inc.

STORE COUNT ACTIVITY

(Unaudited)

Three Months Ended December 31, 2020

U.S. Pawn Latin America Consolidated Pawn



As of September 30, 2020 505 500 1,005

New locations opened - 2 2

As of December 31, 2020 505 502 1,007

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

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 and other Latin American currencies. We believe that presentation of constant currency and adjusted results is meaningful and useful in understanding the activities and business metrics of our operations and reflect an additional way of viewing aspects of our business that, when viewed with GAAP results, provide a more complete understanding of factors and trends affecting our business. We provide non-GAAP financial information for informational purposes and to enhance understanding of our GAAP consolidated financial statements. We use this non-GAAP financial information primarily to evaluate and compare operating results across accounting periods.

Readers should consider the information in addition to, but not instead of or superior to, our financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.

Constant currency results reported herein are calculated by translating consolidated balance sheet and consolidated statement of operations items denominated in local currency to U.S. dollars using the exchange rate from the prior-year comparable period, as opposed to the current period, in order to exclude the effects of foreign currency rate fluctuations. We used the end-of-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. The end-of-period and approximate average exchange rates for each applicable currency as compared to U.S. dollars as of and for the three months ended December 31, 2020 and 2019 and September 30, 2020 and 2019 were as follows:

Three Months Ended December 31, 2019

U.S. Latin Other Pawn America International Consolidated Pawn



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

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 and other Latin American currencies. We believe that presentation of constant currency and adjusted results is meaningful and useful in understanding the activities and business metrics of our operations and reflect an additional way of viewing aspects of our business that, when viewed with GAAP results, provide a more complete understanding of factors and trends affecting our business. We provide non-GAAP financial information for informational purposes and to enhance understanding of our GAAP consolidated financial statements. We use this non-GAAP financial information primarily to evaluate and compare operating results across accounting periods.

Readers should consider the information in addition to, but not instead of or superior to, our financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.

Constant currency results reported herein are calculated by translating consolidated balance sheet and consolidated statement of operations items denominated in local currency to U.S. dollars using the exchange rate from the prior-year comparable period, as opposed to the current period, in order to exclude the effects of foreign currency rate fluctuations. We used the end-of-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. The end-of-period and approximate average exchange rates for each applicable currency as compared to U.S. dollars as of and for the three months ended December 31, 2020 and 2019 and September 30, 2020 and 2019 were as follows:

Three Months Three Months December 31, Ended September Ended 30, September 30, December 31,

2020 2019 2020 2019 2020 2019 2020 2019



Mexican peso 19.9 18.9 20.5 19.2 21.6 19.7 22.1 19.4

Guatemalan 7.6 7.5 7.6 7.5 7.6 7.6 7.5 7.5 quetzal

Honduran 23.8 24.4 24.1 24.3 24.3 24.2 24.3 24.1 lempira

Peruvian sol 3.6 3.3 3.6 3.3 3.5 3.4 3.5 3.3

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

2021 Q1 2020 Q1



(in millions)

Net income $ 4.3 $ 1.2

Interest expense 5.4 5.3

Interest income (0.8 ) (0.8 )

Income tax expense 1.2 1.8

Depreciation and amortization 7.6 7.7

EBITDA $ 17.7 $ 15.2

Total Revenues

Net Revenues

Income Before Tax

Tax Effect

Net Income

Diluted EPS

EBITDA

2021 Q1 Reported

$

178.1

$

108.4

$

5.5

$

1.2

$

4.3

$

0.08

$

17.7

Contract termination costs

-

-

(0.4

)

(0.1

)

(0.3

)

(0.01

)

(0.4

)

Non cash interest

-

-

3.3

-

3.3

0.06

-

Other adjustments

-

-

0.1

-

0.1

-

0.1

Constant currency impact

2.0

1.1

-

-

-

-

-

2021 Q1 Adjusted

$

180.1

$

109.5

$

8.5

$

1.1

$

7.4

$

0.13

$

17.4

Total Net Income Tax Net Diluted Revenues Revenues Before Effect Income EPS EBITDA Tax



2021 Q1 $ 178.1 $ 108.4 $ 5.5 $ 1.2 $ 4.3 $ 0.08 $ 17.7 Reported



Contracttermination - - (0.4 ) (0.1 ) (0.3 ) (0.01 ) (0.4 )costs

Non cash - - 3.3 - 3.3 0.06 - interest

Other - - 0.1 - 0.1 - 0.1 adjustments

Constantcurrency 2.0 1.1 - - - - - impact



2021 Q1 $ 180.1 $ 109.5 $ 8.5 $ 1.1 $ 7.4 $ 0.13 $ 17.4 Adjusted



Total Revenues

Net Revenues

Income Before Tax

Tax Effect

Net Income

Diluted EPS

EBITDA

2020 Q1 Reported

$

222.4

$

130.1

$

3.0

$

1.8

$

1.2

$

0.02

$

15.2

Impact on CCV earnings from litigation settlement

-

-

7.1

2.1

5.0

0.09

7.1

Termination of non-core software project

-

-

0.6

0.1

0.5

0.01

0.6

Non cash interest

-

-

3.0

0.4

2.6

0.05

-

Constant currency impact

-

-

-

-

-

-

-

2020 Q1 Adjusted

$

222.4

$

130.1

$

13.7

$

4.4

$

9.3

$

0.17

$

22.9

Total Net Income Tax Net Diluted Revenues Revenues Before Effect Income EPS EBITDA Tax



2020 Q1 $ 222.4 $ 130.1 $ 3.0 $ 1.8 $ 1.2 $ 0.02 $ 15.2 Reported



Impact onCCVearnings - - 7.1 2.1 5.0 0.09 7.1 fromlitigationsettlement

Terminationof non-core - - 0.6 0.1 0.5 0.01 0.6 softwareproject

Non cash - - 3.0 0.4 2.6 0.05 - interest

Constantcurrency - - - - - - - impact



2020 Q1 $ 222.4 $ 130.1 $ 13.7 $ 4.4 $ 9.3 $ 0.17 $ 22.9 Adjusted



2021 Q1:

U.S. Dollar Amount

Percentage Change YOY

(in millions)

Consolidated revenue (three months ended December 31, 2020)

$

178.1

(20)

%

Currency exchange rate fluctuations

2.0

Constant currency consolidated revenue (three months ended December 31, 2020)

$

180.1

(19)

%

Consolidated net revenue (three months ended December 31, 2020)

$

108.4

(17)

%

Currency exchange rate fluctuations

$

1.1

Constant currency consolidated net revenue (three months ended December 31, 2020)

$

109.5

(16)

%

Consolidated net inventory

$

95.0

(49)

%

Currency exchange rate fluctuations

$

0.7

Constant currency consolidated net inventory

$

95.7

(49)

%

Latin America Pawn net revenue (three months ended December 31, 2020)

$

22.7

(24)

%

Currency exchange rate fluctuations

$

1.1

Constant currency Latin America Pawn net revenue (three months ended December 31, 2020)

$

23.8

(20)

%

Latin America Pawn PLO

$

25.9

(36)

%

Currency exchange rate fluctuations

$

1.1

Constant currency Latin America Pawn PLO

$

27.0

(33)

%

Latin America Pawn PSC revenues (three months ended December 31, 2020)

$

13.3

(36)

%

Currency exchange rate fluctuations

$

0.6

Constant currency Latin America Pawn PSC revenues (three months ended December 31, 2020)

$

13.9

(32)

%

Latin America Pawn merchandise sales (three months ended December 31, 2020)

$

25.5

(19)

%

Currency exchange rate fluctuations

$

1.3

Constant currency Latin America Pawn merchandise sales (three months ended December 31, 2020)

$

26.8

(15)

%

Latin America Pawn segment profit before tax (three months ended December 31, 2020)

$

5.0

(39)

%

Currency exchange rate fluctuations

$

-

Constant currency Latin America Pawn segment profit before tax (three months ended December 31, 2020)

$

5.0

(38)

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20210203005912/en/

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