Business Wire | Aug 4, 2021 04:34PM EDT

EZCORP Reports Third Quarter Fiscal 2021 Results

Aug. 04, 2021

AUSTIN, Texas--(BUSINESS WIRE)--Aug. 04, 2021--EZCORP, Inc. (NASDAQ: EZPW), a leading provider of pawn transactions in the United States and Latin America, today announced results for its third quarter ended June 30, 2021.

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, "During the quarter, we completed the acquisition of 128 Cash Apoyo Efectivo stores in Mexico, our largest acquisition to date in terms of store-count, solidifying our position as the second largest for-profit pawn operator in Mexico. We also acquired 11 stores in the Houston, Texas area and opened four de novo stores in Latin America, bringing our total store count to 1,143 at the end of the quarter, 627 (55%) of which are in Latin America.

"The third quarter was a solid quarter in which we continued to make significant strides in strengthening and growing our core pawn business. Despite lingering transitory COVID-related impacts, including government stimulus programs in the U.S., we continued to drive meaningful improvements across core operating metrics. We achieved our highest quarter-ending balance of PLO since the beginning of the pandemic, up 25% on a sequential basis and 39% compared to a year ago. While merchandise sales volumes were down 21% from their peak pandemic levels a year ago, we delivered a 6% increase in sales gross profit through effective inventory management and higher margins. These positive results reflect the relentless focus of our store teams on meeting our customers' needs and executing the fundamentals.

"Net Income improved from a loss of $5.5 million to a loss of $2.6 million, while adjusted EBITDA more than doubled, reflecting not only the improvement in core operating metrics, but also our ongoing commitment to expense management and efficiency. We remain on track to realize annualized cost savings of more than $14.0 million for fiscal 2021 even assuming store-level expenses trend higher as transaction volumes accelerate.

"Looking ahead, we remain well positioned to continue our trend of improving financial performance, and are excited about the increasing earnings power of the platform. Pawn transaction activity continues to rebuild, driving PLO balances closer to pre-pandemic levels, which will drive accelerating pawn service charge revenue in the coming quarters given the natural lag between pawn originations and related fees. In addition, we remain on track to realize meaningful cost savings this year and beyond, even assuming store-level expenses trend higher to meet accelerating transaction volumes. And, we maintain a strong and liquid balance sheet to fund accelerating pawn demand and capitalize on acquisition opportunities that further enhance our scale-enabled and geographically diverse footprint and generate strong returns on investment."

CONSOLIDATED RESULTSThree Months Ended June 30in millions, except per share amounts

As Reported Adjusted^1

2021 2020 2021 2020



Total Revenues $ 174.0 $ 210.2 $ 169.6 $ 210.2

Net Revenues $ 108.0 $ 102.2 $ 105.5 $ 104.4

(Loss) Income, Before Tax $ (0.8) $ (10.2) $ 3.2 $ (3.9)

Net Loss $ (2.6) $ (5.5) $ (1.7) $ (1.1)

Diluted Loss Per Share $ (0.05) $ (0.10) $ (0.03) $ (0.02)

EBITDA $ 11.7 $ 2.2 $ 12.0 $ 5.3

* Diluted loss per share was $0.05, compared to a diluted loss per share of $0.10 in the prior-year quarter. On an adjusted basis1, diluted loss per share was $0.03, compared to diluted loss per share of $0.02 in the prior-year quarter. * Income before taxes improved $9.5 million or 93% from a loss of $10.2 million to a loss of $0.8 million. Adjusted EBITDA increased $6.7 million or 126% from $5.3 million to $12.0 million. * Pawn loans outstanding (PLO) increased to $157.2 million up 39% from the prior-year quarter and 25% on a sequential basis. On a same store basis, PLO increased 34% year-over-year and 21% sequentially. * Net revenues increased $5.8 million or 6% while total revenues decreased $36.2 million or 17%. * Merchandise sales gross profit increased by 6%, even though merchandise sales decreased by $28.7 million or 21% as a result of effective inventory management. Merchandise sales gross profit margin was 44%, a 1,100 bps improvement over the prior-year quarter (which was adversely impacted by a cost of goods sold adjustment for merchandise lost during looting at 30 U.S. stores during that quarter) and 100 bps over the immediately preceding quarter. * PSC increased $8.0 million or 15% due to an increase in the average PLO balance during the quarter. * Jewelry scrapping sales decreased $14.6 million or 72% and jewelry scrapping sales gross profit decreased $3.9 million or 95%. Jewelry scrapping sales gross profit margin decreased to 4% from 20%. This reflects our strategy of focusing on selling jewelry at higher retail margins than the scrapping process provides. * Net inventory was $92.2 million, down 25% year-over-year and 7% sequentially. Inventory turnover improved to 3.1x from 2.9x. * Total operating expenses were down $2.1 million or 2% to $104.3 million. Store expenses decreased 1% even though store count grew by 11%. In addition, general and administrative expenses decreased $1.6 million or 10% due to continued focus on expense control initiatives implemented since the fourth quarter of 2020. * Cash and cash equivalents at the end of the quarter was $283.7 million, down $27.5 million or 9% year-over-year and $52.0 million or 15% on a sequential basis. The decrease is primarily due to the increase in PLO and the acquisition of new stores.

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.

SEGMENT RESULTS

U.S. Pawn

* PLO increased 35% year-over-year to $117.2 million. On a sequential basis, PLO increased 23% compared to a 29% sequential decrease in the prior-year quarter. On a same store basis, PLO increased 34% year-over-year and 22% sequentially. * Total revenue was down 25% to $130.4 million, while net revenues decreased 3% to $83.3 million. * Merchandise sales and same store sales declined 27% to $84.5 million, but merchandise sales gross profit was down only 3%, reflecting increased gross margins of 46% compared to 35% in the prior-year-quarter (37% when excluding a loss from looting of $2.2 million from merchandise cost of goods sold in the prior-year-quarter). Aged general merchandise inventory as a percentage of total inventory improved to 1.2% from 4.9%. * PSC increased 7% to $44.0 million as a result of higher average PLO for the quarter. * Jewelry scrapping sales decreased $15.2 million or 89% and jewelry scrapping sales gross profit decreased $4.2 million or 99% Jewelry scrapping sales gross profit margin decreased to 2% from 25%. * Net inventory was down $20.9 million or 23% year-over-year and 1% sequentially. Inventory turnover decreased to 2.8x from 3.2x. * Store expenses were down 6% to $62.5 million driven by a reduction in labor expense. * Segment contribution increased $1.6 million to $18.1 million. When excluding the looting charge taken in the prior year quarter, segment contribution decreased $0.6 million. * Segment store count increased by 11 during the quarter, due to the acquisition of 11 pawn stores in the Houston, Texas area.

Latin America Pawn

* PLO increased 51% year-over-year to $40.0 million (36% on constant currency basis). On a sequential basis, PLO increased 34% compared to a 31% sequential decrease in the prior-year quarter. On a same store basis, PLO increased 32% year-over-year and 17% sequentially. * Total revenue was up 25% to $43.5 million (12% on a constant currency basis), while net revenues increased 59% to $24.7 million (43% on a constant currency basis). * Merchandise sales grew 15% to $23.3 million (up 3% to $20.8 million on a constant currency basis) and same store sales grew 8% (down 4% on a constant currency basis). Merchandise sales gross profit was up 91%, reflecting significantly improved margins of 35% compared to 21% in the prior-year quarter. Aged general merchandise as a percentage of total inventory improved to 0.9% from 18.1%. * PSC increased $5.0 million to $16.4 million (up 30% to $14.8 million on a constant currency basis) as a result of higher average PLO for the quarter. * Net inventory was down $9.9 million or 30% year-over-year (38% on a constant currency basis), but up 41% sequentially. Inventory turnover improved to 4.0x from 2.2x. * Store expenses were up $4.3 million or 28% ($2.2 million or 15% on a constant currency basis) primarily due to an increase in transaction volume and costs resulting from the re-opening of stores impacted by the COVID-19 pandemic last year. * Segment contribution was $3.6 million ($3.2 million on a constant currency basis), compared to a segment loss of $0.7 million in the prior year quarter. * Segment store count increased by 121 during the quarter, reflecting the acquisition of 128 Cash Apoyo Efectivo stores, the addition of four de novo stores and the closure of 11 stores in Peru.

FORM 10-Q

EZCORP's Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 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, August 5, 2021, at 7:00 am Central Time to discuss fiscal third quarter results. Analysts and institutional investors may participate on the conference call by dialing (866) 269-4262, Conference ID: 8885759, or internationally by dialing (323) 347-3281. The conference call will be webcast simultaneously to the public through this link: http://investors.ezcorp.com/. A replay of the conference call will be available online at http://investors.ezcorp.com/ shortly after the end of the call.

ABOUT EZCORP

Formed in 1989, EZCORP has grown into a leading provider of pawn transactions in the United States and Latin America. We also sell merchandise, primarily collateral forfeited from pawn lending operations and pre-owned and recycled merchandise purchased from customers. We are dedicated to satisfying the short-term cash needs of consumers who are both cash and credit constrained, focusing on an industry-leading customer experience. EZCORP is traded on NASDAQ under the symbol EZPW and is a member of the 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.

EZCORP, Inc.CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)

Three Months Ended Nine Months Ended June 30, June 30,

(in thousands, except 2021 2020 2021 2020per share amount)



Revenues:

Merchandise sales $ 107,808 $ 136,537 $ 330,816 $ 393,095

Jewelry scrapping sales 5,673 20,303 18,507 41,709

Pawn service charges 60,431 52,460 187,356 217,407

Other revenues 121 924 428 3,727

Total revenues 174,033 210,224 537,107 655,938

Merchandise cost of 60,539 91,859 190,872 261,711 goods sold

Jewelry scrapping cost 5,473 16,158 16,076 33,529 of goods sold

Other cost of revenues - 32 - 1,093

Net revenues 108,021 102,175 330,159 359,605

Operating expenses:

Store expenses 81,803 82,341 242,261 259,264

General and 14,589 16,176 40,870 50,355 administrative

Impairment of goodwill,intangible and other - - - 47,060 assets

Depreciation and 7,419 7,679 23,080 23,174 amortization

Loss on sale or disposal - 255 90 1,260 of assets and other

Other charges 497 - 497 -

Total operating expenses 104,308 106,451 306,798 381,113

Operating income (loss) 3,713 (4,276) 23,361 (21,508)

Interest expense 5,569 5,379 16,542 16,589

Interest income (512) (628) (1,918) (2,412)

Equity in net (income)loss of unconsolidated (643) 1,183 (2,409) 5,896 affiliates

Other expense (income) 65 28 (389) (215)

(Loss) income before (766) (10,238) 11,535 (41,366) income taxes

Income tax expense 1,804 (4,751) 4,476 3,757 (benefit)

Net (loss) income $ (2,570) $ (5,487) $ 7,059 $ (45,123)



Basic (loss) earnings $ (0.05) $ (0.10) $ 0.13 $ (0.81) per share

Diluted (loss) earnings $ (0.05) $ (0.10) $ 0.13 $ (0.81) per share



Weighted-average basic 55,898 55,068 55,639 55,395 shares outstanding

Weighted-average diluted 55,898 55,068 55,653 55,395 shares outstanding

EZCORP, Inc. CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

June 30, 2021

June 30, 2020

September 30, 2020

(Unaudited)

Assets:

Current assets:

Cash and cash equivalents

$

283,668

$

311,130

$

304,542

Restricted cash

13,795

4,000

8,011

Pawn loans

157,155

113,290

131,323

Pawn service charges receivable, net

24,965

17,432

20,580

Inventory, net

92,242

123,112

95,891

Notes receivable, net

-

3,866

-

Prepaid expenses and other current assets

28,343

25,754

32,903

Total current assets

600,168

598,584

593,250

Investments in unconsolidated affiliates

35,387

29,483

32,458

Property and equipment, net

55,630

58,098

56,986

Lease right-of-use asset

185,467

204,591

183,809

Goodwill

283,619

257,326

257,582

Intangible assets, net

61,922

65,003

58,638

Notes receivable, net

1,173

1,140

1,148

Deferred tax asset, net

10,292

5,505

8,931

Other assets

4,992

4,572

4,221

Total assets

$

1,238,650

$

1,224,302

$

1,197,023

Liabilities and equity:

Current liabilities:

Current maturities of long-term debt, net

$

-

$

268

$

213

Accounts payable, accrued expenses and other current liabilities

84,966

58,358

71,504

Customer layaway deposits

11,884

11,902

11,008

Lease liability

47,241

48,840

49,742

Total current liabilities

144,091

119,368

132,467

Long-term debt, net

260,632

247,618

251,016

Deferred tax liability, net

1,309

2,165

524

Lease liability

149,342

167,716

153,040

Other long-term liabilities

10,058

7,523

10,849

Total liabilities

565,432

544,390

547,896

Commitments and Contingencies (Note 13)

Stockholders' equity:

Class A Non-voting Common Stock, par value $0.01 per share; shares authorized: 100 million; issued and outstanding: 53,086,438 as of June 30, 2021; 52,097,590 as of June 30, 2020; and 52,332,848 as of September 30, 2020

530

521

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

402,522

408,601

398,475

Retained earnings

325,228

341,517

318,169

Accumulated other comprehensive loss

(55,092)

(70,757)

(68,068)

Total equity

673,218

679,912

649,127

Total liabilities and equity

$

1,238,650

$

1,224,302

$

1,197,023

EZCORP, Inc.CONSOLIDATED BALANCE SHEETS

(in thousands, except share and June 30, June 30, September 30,per share amounts) 2021 2020 2020

(Unaudited)

Assets:

Current assets:

Cash and cash equivalents $ 283,668 $ 311,130 $ 304,542

Restricted cash 13,795 4,000 8,011

Pawn loans 157,155 113,290 131,323

Pawn service charges receivable, 24,965 17,432 20,580 net

Inventory, net 92,242 123,112 95,891

Notes receivable, net - 3,866 -

Prepaid expenses and other 28,343 25,754 32,903 current assets

Total current assets 600,168 598,584 593,250

Investments in unconsolidated 35,387 29,483 32,458 affiliates

Property and equipment, net 55,630 58,098 56,986

Lease right-of-use asset 185,467 204,591 183,809

Goodwill 283,619 257,326 257,582

Intangible assets, net 61,922 65,003 58,638

Notes receivable, net 1,173 1,140 1,148

Deferred tax asset, net 10,292 5,505 8,931

Other assets 4,992 4,572 4,221

Total assets $ 1,238,650 $ 1,224,302 $ 1,197,023



Liabilities and equity:

Current liabilities:

Current maturities of long-term $ - $ 268 $ 213 debt, net

Accounts payable, accruedexpenses and other current 84,966 58,358 71,504 liabilities

Customer layaway deposits 11,884 11,902 11,008

Lease liability 47,241 48,840 49,742

Total current liabilities 144,091 119,368 132,467

Long-term debt, net 260,632 247,618 251,016

Deferred tax liability, net 1,309 2,165 524

Lease liability 149,342 167,716 153,040

Other long-term liabilities 10,058 7,523 10,849

Total liabilities 565,432 544,390 547,896

Commitments and Contingencies (Note 13)

Stockholders' equity:

Class A Non-voting Common Stock,par value $0.01 per share; sharesauthorized: 100 million; issuedand outstanding: 53,086,438 as of 530 521 521 June 30, 2021; 52,097,590 as ofJune 30, 2020; and 52,332,848 asof 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 402,522 408,601 398,475

Retained earnings 325,228 341,517 318,169

Accumulated other comprehensive (55,092) (70,757) (68,068) loss

Total equity 673,218 679,912 649,127

Total liabilities and equity $ 1,238,650 $ 1,224,302 $ 1,197,023

EZCORP, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Nine Months Ended June 30,

(in thousands)

2021

2020

Operating activities:

Net income (loss)

$

7,059

$

(45,123)

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

Depreciation and amortization

23,080

23,174

Amortization of debt discount and deferred financing costs

10,243

9,814

Amortization of lease right-of-use asset

35,885

34,265

Accretion of notes receivable discount and deferred compensation fee

-

(688)

Deferred income taxes

(576)

(3,327)

Impairment of goodwill and intangible assets

-

47,060

Other adjustments

(331)

2,128

Provision for inventory reserve

(6,812)

(4,477)

Stock compensation expense

3,156

5,093

Equity in net (income) loss of unconsolidated affiliates

(2,409)

5,896

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

Service charges and fees receivable

(2,832)

14,076

Inventory

5,382

12,467

Prepaid expenses, other current assets and other assets

7,908

(3,348)

Accounts payable, accrued expenses and other liabilities

(51,565)

(40,450)

Customer layaway deposits

511

(709)

Income taxes

4,423

514

Net cash provided by operating activities

33,122

56,365

Investing activities:

Loans made

(423,450)

(442,752)

Loans repaid

260,536

321,718

Recovery of pawn loan principal through sale of forfeited collateral

155,595

248,290

Capital expenditures, net

(14,635)

(20,867)

Acquisitions, net of cash acquired

(15,132)

-

Principal collections on notes receivable

-

4,000

Net cash (used in) provided by investing activities

(37,086)

110,389

Financing activities:

Taxes paid related to net share settlement of equity awards

(839)

(1,458)

Payout of deferred consideration

-

(350)

Proceeds from borrowings, net of issuance costs

-

(106)

Payments on assumed debt and other borrowings

(15,363)

(316)

Repurchase of common stock

-

(5,158)

Net cash used in financing activities

(16,202)

(7,388)

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

5,076

(6,678)

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

(15,090)

152,688

Cash, cash equivalents and restricted cash at beginning of period

312,553

162,442

Cash, cash equivalents and restricted cash at end of period

$

297,463

$

315,130

Supplemental disclosure of cash flow information

Cash and cash equivalents

$

283,668

$

311,130

Restricted cash

13,795

4,000

Total cash and cash equivalents and restricted cash

$

297,463

$

315,130

Non-cash investing and financing activities:

Pawn loans forfeited and transferred to inventory

$

145,839

$

200,160

Transfer of consideration for current period acquisition

1,547

-

Acquisition earn-out contingency

4,608

-

Accrued acquisition consideration held as restricted cash

5,824

-

EZCORP, Inc.CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)

Nine Months Ended June 30,

(in thousands) 2021 2020



Operating activities:

Net income (loss) $ 7,059 $ (45,123)

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

Depreciation and amortization 23,080 23,174

Amortization of debt discount and deferred financing 10,243 9,814 costs

Amortization of lease right-of-use asset 35,885 34,265

Accretion of notes receivable discount and deferred - (688) compensation fee

Deferred income taxes (576) (3,327)

Impairment of goodwill and intangible assets - 47,060

Other adjustments (331) 2,128

Provision for inventory reserve (6,812) (4,477)

Stock compensation expense 3,156 5,093

Equity in net (income) loss of unconsolidated (2,409) 5,896 affiliates

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

Service charges and fees receivable (2,832) 14,076

Inventory 5,382 12,467

Prepaid expenses, other current assets and other 7,908 (3,348) assets

Accounts payable, accrued expenses and other (51,565) (40,450) liabilities

Customer layaway deposits 511 (709)

Income taxes 4,423 514

Net cash provided by operating activities 33,122 56,365

Investing activities:

Loans made (423,450) (442,752)

Loans repaid 260,536 321,718

Recovery of pawn loan principal through sale of 155,595 248,290 forfeited collateral

Capital expenditures, net (14,635) (20,867)

Acquisitions, net of cash acquired (15,132) -

Principal collections on notes receivable - 4,000

Net cash (used in) provided by investing activities (37,086) 110,389

Financing activities:

Taxes paid related to net share settlement of equity (839) (1,458) awards

Payout of deferred consideration - (350)

Proceeds from borrowings, net of issuance costs - (106)

Payments on assumed debt and other borrowings (15,363) (316)

Repurchase of common stock - (5,158)

Net cash used in financing activities (16,202) (7,388)

Effect of exchange rate changes on cash and cash 5,076 (6,678) equivalents and restricted cash

Net (decrease) increase in cash, cash equivalents (15,090) 152,688 and restricted cash

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

Cash, cash equivalents and restricted cash at end of $ 297,463 $ 315,130 period



Supplemental disclosure of cash flow information

Cash and cash equivalents $ 283,668 $ 311,130

Restricted cash 13,795 4,000

Total cash and cash equivalents and restricted cash $ 297,463 $ 315,130



Non-cash investing and financing activities:

Pawn loans forfeited and transferred to inventory $ 145,839 $ 200,160

Transfer of consideration for current period 1,547 - acquisition

Acquisition earn-out contingency 4,608 -

Accrued acquisition consideration held as restricted 5,824 - cash

EZCORP, Inc. OPERATING SEGMENT RESULTS(Unaudited)

Three Months Ended June 30, 2021

(in thousands)

U.S. Pawn

Latin America Pawn

Other International

Total Segments

Corporate Items

Consolidated

Revenues:

Merchandise sales

$

84,465

$

23,343

$

-

$

107,808

$

-

$

107,808

Jewelry scrapping sales

1,908

3,765

-

5,673

-

5,673

Pawn service charges

44,039

16,392

-

60,431

-

60,431

Other revenues

32

-

89

121

-

121

Total revenues

130,444

43,500

89

174,033

-

174,033

Merchandise cost of goods sold

45,310

15,229

-

60,539

-

60,539

Jewelry scrapping cost of goods sold

1,878

3,595

-

5,473

-

5,473

Other cost of revenues

-

-

-

-

-

-

Net revenues

83,256

24,676

89

108,021

-

108,021

Segment and corporate expenses (income):

Store expenses

62,507

19,296

-

81,803

-

81,803

General and administrative

-

-

-

-

14,589

14,589

Depreciation and amortization

2,600

1,806

-

4,406

3,013

7,419

Other charges

-

497

-

497

-

497

Interest expense

-

-

-

-

5,569

5,569

Interest income

-

(484)

-

(484)

(28)

(512)

Equity in net income of unconsolidated affiliates

-

-

(643)

(643)

-

(643)

Other (income) expense

-

(5)

18

13

52

65

Segment contribution

$

18,149

$

3,566

$

714

$

22,429

Income (loss) before income taxes

$

22,429

$

(23,195)

$

(766)

EZCORP, Inc.OPERATING SEGMENT RESULTS(Unaudited)

Three Months Ended June 30, 2021

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



Revenues:

Merchandise $ 84,465 $ 23,343 $ - $ 107,808 $ - $ 107,808 sales

Jewelryscrapping 1,908 3,765 - 5,673 - 5,673 sales

Pawn service 44,039 16,392 - 60,431 - 60,431 charges

Other revenues 32 - 89 121 - 121

Total revenues 130,444 43,500 89 174,033 - 174,033

Merchandisecost of goods 45,310 15,229 - 60,539 - 60,539 sold

Jewelryscrapping cost 1,878 3,595 - 5,473 - 5,473 of goods sold

Other cost of - - - - - - revenues

Net revenues 83,256 24,676 89 108,021 - 108,021

Segment andcorporate expenses(income):

Store expenses 62,507 19,296 - 81,803 - 81,803

General and - - - - 14,589 14,589 administrative

Depreciationand 2,600 1,806 - 4,406 3,013 7,419 amortization

Other charges - 497 - 497 - 497

Interest - - - - 5,569 5,569 expense

Interest - (484) - (484) (28) (512) income

Equity in netincome of - - (643) (643) - (643) unconsolidatedaffiliates

Other (income) - (5) 18 13 52 65 expense

Segment $ 18,149 $ 3,566 $ 714 $ 22,429 contribution

Income (loss)before income $ 22,429 $ (23,195) $ (766) taxes

Three Months Ended June 30, 2020

(in thousands)

U.S. Pawn

Latin America Pawn

Other International

Total Segments

Corporate Items

Consolidated

Revenues:

Merchandise sales

$

116,258

$

20,279

$

-

$

136,537

$

136,537

Jewelry scrapping sales

17,129

3,174

-

20,303

-

20,303

Pawn service charges

41,069

11,391

-

52,460

-

52,460

Other revenues

40

-

884

924

-

924

Total revenues

174,496

34,844

884

210,224

-

210,224

Merchandise cost of goods sold

75,838

16,021

-

91,859

-

91,859

Jewelry scrapping cost of goods sold

12,875

3,283

-

16,158

-

16,158

Other cost of revenues

-

32

-

32

-

32

Net revenues

85,783

15,508

884

102,175

-

102,175

Segment and corporate expenses (income):

Store expenses

66,243

15,041

1,057

82,341

-

82,341

General and administrative

-

-

-

-

16,176

16,176

Depreciation and amortization

2,749

1,647

3

4,399

3,280

7,679

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

234

23

(20)

237

18

255

Interest expense

-

-

140

140

5,239

5,379

Interest income

-

(404)

-

(404)

(224)

(628)

Equity in net income of unconsolidated affiliates

-

-

1,183

1,183

-

1,183

Other (income) expense

-

(61)

(5)

(66)

94

28

Segment contribution (loss)

$

16,557

$

(738)

$

(1,474)

$

14,345

Loss before income taxes

$

14,345

$

(24,583)

$

(10,238)

Three Months Ended June 30, 2020

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



Revenues:

Merchandise $ 116,258 $ 20,279 $ - $ 136,537 $ 136,537 sales

Jewelryscrapping 17,129 3,174 - 20,303 - 20,303 sales

Pawn service 41,069 11,391 - 52,460 - 52,460 charges

Other revenues 40 - 884 924 - 924

Total revenues 174,496 34,844 884 210,224 - 210,224

Merchandisecost of goods 75,838 16,021 - 91,859 - 91,859 sold

Jewelryscrapping cost 12,875 3,283 - 16,158 - 16,158 of goods sold

Other cost of - 32 - 32 - 32 revenues

Net revenues 85,783 15,508 884 102,175 - 102,175

Segment andcorporate expenses(income):

Store expenses 66,243 15,041 1,057 82,341 - 82,341

General and - - - - 16,176 16,176 administrative

Depreciationand 2,749 1,647 3 4,399 3,280 7,679 amortization

(Gain) loss onsale ordisposal of 234 23 (20) 237 18 255 assets andother

Interest - - 140 140 5,239 5,379 expense

Interest - (404) - (404) (224) (628) income

Equity in netincome of - - 1,183 1,183 - 1,183 unconsolidatedaffiliates

Other (income) - (61) (5) (66) 94 28 expense

Segmentcontribution $ 16,557 $ (738) $ (1,474) $ 14,345 (loss)

Loss before $ 14,345 $ (24,583) $ (10,238) income taxes



Nine Months Ended June 30, 2021

(in thousands)

U.S. Pawn

Latin America Pawn

Other International

Total Segments

Corporate Items

Consolidated

Revenues:

Merchandise sales

$

260,545

$

70,271

$

-

$

330,816

$

-

$

330,816

Jewelry scrapping sales

9,493

9,014

-

18,507

-

18,507

Pawn service charges

143,836

43,520

-

187,356

-

187,356

Other revenues

83

7

338

428

-

428

Total revenues

413,957

122,812

338

537,107

-

537,107

Merchandise cost of goods sold

145,181

45,691

-

190,872

-

190,872

Jewelry scrapping cost of goods sold

7,871

8,205

-

16,076

-

16,076

Net revenues

260,905

68,916

338

330,159

-

330,159

Segment and corporate expenses (income):

Store expenses

188,256

54,005

-

242,261

-

242,261

General and administrative

-

-

-

-

40,870

40,870

Depreciation and amortization

7,972

5,459

-

13,431

9,649

23,080

Loss on sale or disposal of assets and other

27

-

-

27

63

90

Other charges

-

497

-

497

-

497

Interest expense

-

-

-

-

16,542

16,542

Interest income

-

(1,819)

-

(1,819)

(99)

(1,918)

Equity in net income of unconsolidated affiliates

-

-

(2,409)

(2,409)

-

(2,409)

Other (income) expense

-

(375)

(183)

(558)

169

(389)

Segment contribution

$

64,650

$

11,149

$

2,930

$

78,729

Income (loss) before income taxes

$

78,729

$

(67,194)

$

11,535

Nine Months Ended June 30, 2021

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



Revenues:

Merchandise $ 260,545 $ 70,271 $ - $ 330,816 $ - $ 330,816 sales

Jewelryscrapping 9,493 9,014 - 18,507 - 18,507 sales

Pawn service 143,836 43,520 - 187,356 - 187,356 charges

Other revenues 83 7 338 428 - 428

Total revenues 413,957 122,812 338 537,107 - 537,107

Merchandisecost of goods 145,181 45,691 - 190,872 - 190,872 sold

Jewelryscrapping cost 7,871 8,205 - 16,076 - 16,076 of goods sold

Net revenues 260,905 68,916 338 330,159 - 330,159

Segment andcorporate expenses(income):

Store expenses 188,256 54,005 - 242,261 - 242,261

General and - - - - 40,870 40,870 administrative

Depreciationand 7,972 5,459 - 13,431 9,649 23,080 amortization

Loss on saleor disposal of 27 - - 27 63 90 assets andother

Other charges - 497 - 497 - 497

Interest - - - - 16,542 16,542 expense

Interest - (1,819) - (1,819) (99) (1,918) income

Equity in netincome of - - (2,409) (2,409) - (2,409) unconsolidatedaffiliates

Other (income) - (375) (183) (558) 169 (389) expense

Segment $ 64,650 $ 11,149 $ 2,930 $ 78,729 contribution

Income (loss)before income $ 78,729 $ (67,194) $ 11,535 taxes

Nine Months Ended June 30, 2020

(in thousands)

U.S. Pawn

Latin America Pawn

Other International

Total Segments

Corporate Items

Consolidated

Revenues:

Merchandise sales

$

314,059

$

79,036

$

-

$

393,095

$

-

$

393,095

Jewelry scrapping sales

32,905

8,804

-

41,709

-

41,709

Pawn service charges

166,859

50,548

-

217,407

-

217,407

Other revenues

107

50

3,570

3,727

-

3,727

Total revenues

513,930

138,438

3,570

655,938

-

655,938

Merchandise cost of goods sold

202,488

59,223

-

261,711

-

261,711

Jewelry scrapping cost of goods sold

25,430

8,099

-

33,529

-

33,529

Other cost of revenues

-

69

1,024

1,093

-

1,093

Net revenues

286,012

71,047

2,546

359,605

-

359,605

Segment and corporate expenses (income):

Store expenses

201,921

53,493

3,850

259,264

-

259,264

General and administrative

-

-

-

-

50,355

50,355

Impairment of goodwill, intangible and other assets

10,000

35,936

1,124

47,060

-

47,060

Depreciation and amortization

8,325

5,476

60

13,861

9,313

23,174

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

234

(72)

(20)

142

1,118

1,260

Interest expense

-

430

464

894

15,695

16,589

Interest income

-

(1,161)

-

(1,161)

(1,251)

(2,412)

Equity in net loss of unconsolidated affiliates

-

5,896

5,896

-

5,896

Other (income) expense

-

(303)

14

(289)

74

(215)

Segment contribution (loss)

$

65,532

$

(22,752)

$

(8,842)

$

33,938

Income (loss) before income taxes

$

33,938

$

(75,304)

$

(41,366)

Nine Months Ended June 30, 2020

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



Revenues:

Merchandise $ 314,059 $ 79,036 $ - $ 393,095 $ - $ 393,095 sales

Jewelryscrapping 32,905 8,804 - 41,709 - 41,709 sales

Pawn service 166,859 50,548 - 217,407 - 217,407 charges

Other revenues 107 50 3,570 3,727 - 3,727

Total revenues 513,930 138,438 3,570 655,938 - 655,938

Merchandisecost of goods 202,488 59,223 - 261,711 - 261,711 sold

Jewelryscrapping cost 25,430 8,099 - 33,529 - 33,529 of goods sold

Other cost of - 69 1,024 1,093 - 1,093 revenues

Net revenues 286,012 71,047 2,546 359,605 - 359,605

Segment andcorporate expenses(income):

Store expenses 201,921 53,493 3,850 259,264 - 259,264

General and - - - - 50,355 50,355 administrative

Impairment ofgoodwill, 10,000 35,936 1,124 47,060 - 47,060 intangible andother assets

Depreciationand 8,325 5,476 60 13,861 9,313 23,174 amortization

(Gain) loss onsale ordisposal of 234 (72) (20) 142 1,118 1,260 assets andother

Interest - 430 464 894 15,695 16,589 expense

Interest - (1,161) - (1,161) (1,251) (2,412) income

Equity in netloss of - 5,896 5,896 - 5,896 unconsolidatedaffiliates

Other (income) - (303) 14 (289) 74 (215) expense

Segmentcontribution $ 65,532 $ (22,752) $ (8,842) $ 33,938 (loss)

Income (loss)before income $ 33,938 $ (75,304) $ (41,366) taxes

EZCORP, Inc. STORE COUNT ACTIVITY(Unaudited)

Three Months Ended June 30, 2021

U.S. Pawn

Latin America Pawn

Consolidated

As of March 31, 2021

505

506

1,011

New locations opened

-

4

4

Locations acquired

11

128

139

Locations sold, combined or closed

-

(11)

(11)

As of June 30, 2021

516

627

1,143

EZCORP, Inc.STORE COUNT ACTIVITY(Unaudited)

Three Months Ended June 30, 2021

U.S. Latin Pawn America Consolidated Pawn



As of March 31, 2021 505 506 1,011

New locations opened - 4 4

Locations acquired 11 128 139

Locations sold, combined or closed - (11) (11)

As of June 30, 2021 516 627 1,143

Three Months Ended June 30, 2020

U.S. Pawn

Latin America Pawn

Other International

Consolidated

As of March 31, 2020

512

493

22

1,027

New locations opened

-

3

-

3

Locations sold, combined or closed

(1)

-

-

(1)

As of June 30, 2020

511

496

22

1,029

Three Months Ended June 30, 2020

U.S. Latin Other Pawn America International Consolidated Pawn



As of March 31, 2020 512 493 22 1,027

New locations opened - 3 - 3

Locations sold, combined or (1) - - (1) closed

As of June 30, 2020 511 496 22 1,029



Nine Months Ended June 30, 2021

U.S. Pawn

Latin America Pawn

Consolidated

As of September 30, 2020

505

500

1,005

New locations opened

-

10

10

Locations acquired

11

128

139

Locations sold, combined or closed

-

(11)

(11)

As of June 30, 2021

516

627

1,143

Nine Months Ended June 30, 2021

U.S. Latin Pawn America Consolidated Pawn



As of September 30, 2020 505 500 1,005

New locations opened - 10 10

Locations acquired 11 128 139

Locations sold, combined or closed - (11) (11)

As of June 30, 2021 516 627 1,143

Nine Months Ended June 30, 2020

U.S. Pawn

Latin America Pawn

Other

International

Consolidated

As of September 30, 2019

512

480

22

1,014

New locations opened

-

16

-

16

Locations sold, combined or closed

(1)

-

-

(1)

As of June 30, 2020

511

496

22

1,029

Non-GAAP Financial Information (Unaudited)

In addition to the financial information prepared in conformity with accounting principles generally accepted in the United States ("GAAP"), we provide certain other non-GAAP financial information on a constant currency ("constant currency") and adjusted basis. We use constant currency results to evaluate our Latin America Pawn operations, which are denominated primarily in Mexican pesos, Guatemalan quetzales and other Latin American currencies. We believe that presentation of constant currency and adjusted results is meaningful and useful in understanding the activities and business metrics of our operations and reflect an additional way of viewing aspects of our business that, when viewed with GAAP results, provide a more complete understanding of factors and trends affecting our business. We provide non-GAAP financial information for informational purposes and to enhance understanding of our GAAP consolidated financial statements. We use this non-GAAP financial information primarily to evaluate and compare operating results across accounting periods.

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

Constant currency results reported herein are calculated by translating consolidated balance sheet and consolidated statement of operations items denominated in local currency to U.S. dollars using the exchange rate from the prior-year comparable period, as opposed to the current period, in order to exclude the effects of foreign currency rate fluctuations. We used the end-of-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. The end-of-period and approximate average exchange rates for each applicable currency as compared to U.S. dollars as of and for the three and nine months ended June 30, 2021 and 2020 were as follows:

Nine Months Ended June 30, 2020

U.S. Latin Other Pawn America Consolidated Pawn International



As of September 30, 2019 512 480 22 1,014

New locations opened - 16 - 16

Locations sold, combined or (1) - - (1) closed

As of June 30, 2020 511 496 22 1,029

Non-GAAP Financial Information (Unaudited)

In addition to the financial information prepared in conformity with accounting principles generally accepted in the United States ("GAAP"), we provide certain other non-GAAP financial information on a constant currency ("constant currency") and adjusted basis. We use constant currency results to evaluate our Latin America Pawn operations, which are denominated primarily in Mexican pesos, Guatemalan quetzales and other Latin American currencies. We believe that presentation of constant currency and adjusted results is meaningful and useful in understanding the activities and business metrics of our operations and reflect an additional way of viewing aspects of our business that, when viewed with GAAP results, provide a more complete understanding of factors and trends affecting our business. We provide non-GAAP financial information for informational purposes and to enhance understanding of our GAAP consolidated financial statements. We use this non-GAAP financial information primarily to evaluate and compare operating results across accounting periods.

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

Constant currency results reported herein are calculated by translating consolidated balance sheet and consolidated statement of operations items denominated in local currency to U.S. dollars using the exchange rate from the prior-year comparable period, as opposed to the current period, in order to exclude the effects of foreign currency rate fluctuations. We used the end-of-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. The end-of-period and approximate average exchange rates for each applicable currency as compared to U.S. dollars as of and for the three and nine months ended June 30, 2021 and 2020 were as follows:

Three Months Nine Months Ended June 30, Ended June 30, June 30,

2021 2020 2021 2020 2021 2020



Mexican peso 19.9 23.1 20.0 23.3 20.3 20.8

Guatemalan quetzal 7.6 7.5 7.6 7.5 7.6 7.5

Honduran lempira 23.6 24.4 23.7 24.4 23.8 24.3

Peruvian sol 3.9 3.5 3.8 3.4 3.7 3.4

Our statement of operations constant currency results reflect the monthly exchange rate fluctuations and so are not directly calculable from the above rates. Constant currency results, where presented, also exclude the foreign currency gain or loss.

Miscellaneous Non-GAAP Financial Measures

2021 Q3 2020 Q3



(in millions)

Net loss $ (2.6) $ (5.5)

Interest expense 5.6 5.4

Interest income (0.5) (0.6)

Income tax expense 1.8 (4.8)

Depreciation and amortization 7.4 7.7

EBITDA $ 11.7 $ 2.2

Total Revenues

Net Revenues

Income Before Tax

Tax Effect

Net Income

Diluted EPS

EBITDA

2021 Q3 Reported

$

174.0

$

108.0

$

(0.8)

$

1.8

$

(2.6)

$

(0.05)

$

11.7

Acquisition expenses

-

-

0.3

0.2

0.1

-

0.3

Peru reserve

-

-

0.5

0.4

0.1

-

-

Non cash net interest expense

-

-

3.5

2.5

1.0

0.02

-

Constant currency impact

(4.4)

(2.5)

(0.3)

-

(0.3)

-

-

2021 Q3 Adjusted

$

169.6

$

105.5

$

3.2

$

4.9

$

(1.7)

$

(0.03)

$

12.0

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



2021 Q3 $ 174.0 $ 108.0 $ (0.8) $ 1.8 $ (2.6) $ (0.05) $ 11.7 Reported



Acquisition - - 0.3 0.2 0.1 - 0.3 expenses

Peru - - 0.5 0.4 0.1 - - reserve

Non cashnet - - 3.5 2.5 1.0 0.02 - interestexpense

Constantcurrency (4.4) (2.5) (0.3) - (0.3) - - impact



2021 Q3 $ 169.6 $ 105.5 $ 3.2 $ 4.9 $ (1.7) $ (0.03) $ 12.0 Adjusted



Total Revenues

Net Revenues

(Loss) Income Before Tax

Tax Effect

Net (Loss) Income

Diluted EPS

EBITDA

2020 Q3 Reported

$

210.2

$

102.2

$

(10.2)

$

(4.7)

$

(5.5)

$

(0.10)

$

2.2

COVID-19 expenses

-

-

0.5

0.1

0.4

0.01

0.5

Civil unrest - asset disposal

-

-

0.2

-

0.2

-

0.2

Civil unrest - looting

-

-

2.2

0.7

1.5

0.03

2.2

Currency exchange rate fluctuations

-

-

0.6

0.1

0.5

0.01

0.5

Non cash interest

-

-

3.2

1.0

2.2

0.04

-

Constant currency impact

-

2.2

(0.4)

-

(0.4)

(0.01)

(0.3)

2020 Q3 Adjusted

$

210.2

$

104.4

$

(3.9)

$

(2.8)

$

(1.1)

$

(0.02)

$

5.3

Total Net (Loss) Tax Net Diluted Revenues Revenues Income Effect (Loss) EPS EBITDA Before Tax Income



2020 Q3 $ 210.2 $ 102.2 $ (10.2) $ (4.7) $ (5.5) $ (0.10) $ 2.2 Reported



COVID-19 - - 0.5 0.1 0.4 0.01 0.5 expenses

Civil unrest- asset - - 0.2 - 0.2 - 0.2 disposal

Civil unrest - - 2.2 0.7 1.5 0.03 2.2 - looting

Currencyexchange - - 0.6 0.1 0.5 0.01 0.5 ratefluctuations

Non cash - - 3.2 1.0 2.2 0.04 - interest

Constantcurrency - 2.2 (0.4) - (0.4) (0.01) (0.3) impact



2020 Q3 $ 210.2 $ 104.4 $ (3.9) $ (2.8) $ (1.1) $ (0.02) $ 5.3 Adjusted



2021 Q3:

U.S. Dollar Amount

Percentage Change YOY

(in millions)

Consolidated revenue

$

174.0

(17)

%

Currency exchange rate fluctuations

(4.4)

Constant currency consolidated revenue

$

169.6

(19)

%

Consolidated net revenue

$

108.0

6

%

Currency exchange rate fluctuations

(2.5)

Constant currency consolidated net revenue

$

105.5

1

%

Consolidated net inventory

$

92.2

(25)

%

Currency exchange rate fluctuations

(2.6)

Constant currency consolidated net inventory

$

89.6

(27)

%

Latin America Pawn net revenue

$

24.7

59

%

Currency exchange rate fluctuations

(2.5)

Constant currency Latin America Pawn net revenue

$

22.2

44

%

Latin America Pawn PLO

$

40.0

51

%

Currency exchange rate fluctuations

(4.0)

Constant currency Latin America Pawn PLO

$

36.0

36

%

Latin America Pawn PSC revenues

$

16.4

44

%

Currency exchange rate fluctuations

(1.6)

Constant currency Latin America Pawn PSC revenues

$

14.8

30

%

Latin America Pawn merchandise sales

$

23.3

15

%

Currency exchange rate fluctuations

(2.5)

Constant currency Latin America Pawn merchandise sales

$

20.8

2

%

Latin America Pawn segment profit before tax

$

3.6

583

%

Currency exchange rate fluctuations

(0.4)

Constant currency Latin America Pawn segment profit before tax

$

3.2

535

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20210804006122/en/

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