Business Wire | Aug 4, 2020 04:45PM EDT

EZCORP Reports Third Quarter Fiscal Year 2020 Results

Aug. 04, 2020

AUSTIN, Texas--(BUSINESS WIRE)--Aug. 04, 2020--EZCORP, Inc. (NASDAQ: EZPW) today announced results for its fiscal third quarter ended June 30, 2020.

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 THIRD QUARTER OF FISCAL 2020

* Total revenues grew 4% in the quarter to $210.2 million. Retail sales grew 31% to $136.5 million, driven primarily by strong demand for merchandise for working and schooling from home. Net revenues declined 12% driven by a 34% reduction in pawn service (PSC) revenue, partially offset by a 33% increase in merchandise sales gross profit. * Operations expenses declined by 3% to $83.8 million while total store count grew by 2%. * Loss before taxes was $10.2 million, compared to profit before taxes of $3.5 million in the prior-year quarter. On an adjusted basis1, loss before taxes was $3.5 million, compared to profit before taxes of $13.6 million in the prior-year quarter. Diluted loss per share was $0.10, compared to diluted earnings per share of $0.06 in the prior-year quarter. On an adjusted basis, diluted loss per share was $0.01, compared to diluted earnings per share of $0.16. * Pawn loan volume was reduced during the quarter by emergency stimulus payment actions in the U.S. and restrictions on customer movements and localized store closure orders in Latin America. Pawn loans outstanding (PLO) decreased 40% to $113.3 million (down 39% to $116.8 million on a constant currency basis), which led to a 34% reduction in PSC revenue to $52.5 million (down 31% to $54.4 million on a constant currency basis). * Net inventory of $123.1 million ($127.1 million on a constant currency basis) decreased 30%, reflecting annualized inventory turnover of 2.9x. Sales margin of 33% increased 40bps despite a $2.2 million adjustment to merchandise cost of goods sold due to looting at 30 stores during riots in the U.S. * Cash and cash equivalents increased to $311 million as of June 30, 2020, an increase of over $100 million compared to the prior quarter. The decline in new pawn loan originations and increased merchandise and scrap sales all benefited the cash position. * Following a review of strategic alternatives for the non-core CashMax business in Canada, the Company has decided to close the remaining 22 stores. The shutdown of the business and related operations will be substantially completed during the fourth quarter of fiscal 2020 and will result in charges of approximately $8.0 - $10.0 million.

CEO COMMENTARY AND OUTLOOK

Chief Executive Officer Jason Kulas stated: "Our results for the fiscal third quarter were highlighted by ongoing revenue growth driven by strong retail sales. As a result of stimulus payments and extended unemployment and forbearance benefits, our customers' needs for cash were lower in the quarter, driving declines in PLO and PSC. While sales gross profit margins were strong, the tradeoff in higher-margin pawn service charges for lower-margin merchandise sales negatively impacted EBITDA and EPS in the quarter.

"In these uncertain times, we are focused on the safety of our team members and customers and on our continued financial strength. Our cash balance grew by over $100 million to $311 million from the second quarter, positioning us to meet our customers' short-term needs for cash as loan demand rebounds. In addition, our team is focused on increasing the efficiency of our operations, with significant expense reductions planned for fiscal year 2021. These efforts are expected to add an even greater level of resiliency to our business through the current environment and future economic cycles.

"In addition to optimizing our cost structure to maximize profitability and better align with near-term PLO trends, we are focused on creating long-term shareholder value by strengthening our core business operations and continuing to innovate and grow. Our optimization of pricing, lending and transactional efficiencies, and the modernization of our IT and data assets, will drive more consistent profitability. Our efforts to give customers more convenient choices, both in-store and through our Lana platform, will result in a superior customer experience, and our continued de novo store growth will give us the opportunity to expand our platform.

"Looking ahead, while it will take time for PLO and PSC to rebuild, we remain confident that demand for pawn loans will accelerate, thereby driving higher revenue growth and increased earnings power, particularly as we increasingly rationalize expenses and invest in value-added initiatives."

CONSOLIDATED RESULTS

Three Months Ended June 30 in millions, except per share amounts

As Reported Adjusted^1

2020 2019 2020 2019



Total Revenues $ 210.2 $ 202.5 $ 216.5 $ 207.0

Net Revenues $ 102.2 $ 115.9 $ 107.4 $ 120.4

(Loss) Income from Continuing $ (10.2 ) $ 3.5 $ (3.5 ) $ 13.6 Operations, Before Tax

Net (Loss) Income from Continuing $ (5.5 ) $ 3.4 $ (0.7 ) $ 8.8 Operations

Diluted Earnings Per Share from $ (0.10 ) $ 0.06 $ (0.01 ) $ 0.16 Continuing Operations

Adjusted EBITDA^1 $ 2.2 $ 17.4 $ 5.7 $ 21.9

* Total revenues grew 4% to $210.2 million. PSC was down 34% to $52.5 million largely reflecting lower average PLO for the quarter, a result of a lower pawn loan demand during the quarter. * Merchandise sales grew 31% and scrap sales were up 11%. Merchandise sales were particularly strong in consumer electronics, while scrap sales benefited from higher gold prices. * Net revenues were down 12% at $102.2 million. Consolidated merchandise sales gross profit increased 33% to $44.7 million, with a 31% increase in merchandise sales. * Consolidated operations expenses decreased 3%. Total store count increased 2%, consisting of a net 23 stores acquired or opened since the end of the prior-year quarter. Administrative expense increased 7% to $14.7 million. * Gross interest expense decreased $4.5 million reflecting the June 2019 repayment of $195.0 million of cash convertible debt. Gross interest income decreased $2.5 million due to collections on notes receivable since the prior-year period. * Third quarter fiscal 2020 results include a loss of $1.8 million in inventory, $0.4 million in loan restitution losses and $0.2 million in property, plant and equipment due to lootings that occurred in 30 of our U.S. stores during riots in late May and early June.

SEGMENT RESULTS

U.S. Pawn

* Total revenue was up 12% reflecting 39% growth in merchandise sales. * PSC was down 30%, largely reflecting lower average PLO for the quarter as a result of lower loan demand and increased loan redemptions believed to be related to federal economic stimulus. * Merchandise margins of 35% remain within our targeted range. When excluding losses from looting of $2.2 million from merchandise cost of goods sold, margins were unchanged at 37%. Aged general merchandise inventory improved to 4.9% from 6.3% in the prior year. Jewelry scrapping gross profit increased 86%, with related margins up 900bps to 25% on higher gold prices. * Segment contribution decreased $7.1 million to $16.6 million, the result of a $17.6 million reduction in PSC partially offset by increased merchandise sales and scrap sales gross profit.

Latin America Pawn

* Merchandise sales grew 1%, to $20.3 million (20% to $24.0 million on a constant currency basis). Merchandise gross sales margins were 21% while aged general merchandise inventory increased to 18.5% of total general merchandise inventory, both the result of a more challenging environment in our Latin America countries, as well as store closures, limited operating hours and restrictions on mobility in GPMX. * Net revenues decreased 33% to $15.5 million (down 21% to $18.4 million on a constant currency basis) largely reflecting lower PSC due in part to COVID-19 related store closures, reduced public transportation and curfews imposed in some Latin America countries. * PSC decreased 44% to $11.4 million (down 35% to $13.3 million on a constant currency basis) as a result of lower average PLO for the quarter and a lower yield on pawn loans, reflecting our commitment to work with customers by negotiating reduced interest payments on a case-by-case basis. * Operations expense was tightly managed, down 18% to $15.0 million. * Latin America Pawn added three 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. * Segment loss for the quarter was $0.7 million ($0.4 million on a constant currency basis), compared to a contribution of $2.1 million in the prior year quarter, primarily reflecting lower PSC revenues. * Over 99% of stores in Latin America are currently open. More specifically: Mexico (367 stores) - Excluding short-term closings due to regulatory decree or safety protocols, stores in Mexico were generally open most of the quarter. However, retail sales in all stores were prohibited by regulators during the last three weeks of May. During the quarter, one de novo store was opened. Guatemala (85 stores) - Regulators imposed country-wide lock-downs on many weekends, 39 mall-based locations were closed for extended periods (5 of which have been closed since March 17), and certain restrictions prohibited stores to be open after 5:00 pm. Two de novo stores opened during quarter. El Salvador (17 stores) - Stores were closed as part of a broad government-imposed lock-down from late March through mid-June when all stores opened. Honduras (16 stores) - Honduras was on lock- down during the last half of March. We were able to reopen five stores on March 26 and another eleven stores on April 11. Peru (11 stores) - Starting the second week of March through mid-May, all stores were closed. We were able to reopen six stores on May 15 and five more stores on June 20.

CONFERENCE CALL

EZCORP will host a conference call on Wednesday, August 5, 2020, at 7:00 am Central Time to discuss fiscal third quarter results. Analysts and institutional investors may participate on the conference call by dialing (833) 579-0921, Conference ID: 4162018, or internationally by dialing (778) 560-2579. 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 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 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.

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 June Nine Months Ended June 30, 30,

2020 2019 2020 2019



(Unaudited)

(in thousands, except per share amounts)

Revenues:

Merchandise sales $ 136,537 $ 103,902 $ 393,095 $ 346,186

Jewelry scrapping sales 20,303 18,212 41,709 37,873

Pawn service charges 52,460 78,980 217,407 244,298

Other revenues 933 1,371 3,740 4,533

Total revenues 210,233 202,465 655,951 632,890

Merchandise cost of goods 91,859 70,271 261,711 225,183 sold

Jewelry scrapping cost of 16,158 15,765 33,529 32,648 goods sold

Other cost of revenues 32 576 1,093 1,467

Net revenues 102,184 115,853 359,618 373,592

Operating expenses:

Operations 83,838 86,095 262,835 266,737

Administrative 14,688 13,685 46,797 41,814

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

Depreciation and 7,679 7,254 23,174 21,114 amortization

Loss on sale or disposal 255 24 1,260 3,643 of assets and other

Total operating expenses 106,460 107,058 381,126 333,308

Operating (loss) income (4,276 ) 8,795 (21,508 ) 40,284

Interest expense 5,379 9,832 16,589 27,212

Interest income (628 ) (3,172 ) (2,412 ) (9,637 )

Equity in net (income)loss of unconsolidated 1,183 (1,320 ) 5,896 (632 )affiliates

Impairment of investmentin unconsolidated - - - 19,725 affiliates

Other (income) expense 8 (4 ) (282 ) (121 )

(Loss) income fromcontinuing operations (10,218 ) 3,459 (41,299 ) 3,737 before income taxes

Income tax (benefit) (4,751 ) 98 3,757 1,377 expense

(Loss) income fromcontinuing operations, (5,467 ) 3,361 (45,056 ) 2,360 net of tax

Loss from discontinued (20 ) (203 ) (67 ) (404 )operations, net of tax

Net (loss) income (5,487 ) 3,158 (45,123 ) 1,956

Net loss attributable to - - - (1,230 )noncontrolling interest

Net (loss) incomeattributable to EZCORP, $ (5,487 ) $ 3,158 $ (45,123 ) $ 3,186 Inc.



Basic (loss) earnings pershare attributable to $ (0.10 ) $ 0.06 $ (0.81 ) $ 0.06 EZCORP, Inc. - continuingoperations

Diluted (loss) earningsper share attributable to $ (0.10 ) $ 0.06 $ (0.81 ) $ 0.06 EZCORP, Inc. - continuingoperations



Weighted-average basic 55,068 55,445 55,395 55,306 shares outstanding

Weighted-average diluted 55,231 55,487 55,483 55,327 shares outstanding

EZCORP, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

June 30, June 30, September 30, 2020 2019 2019



(Unaudited)

Assets:

Current assets:

Cash and cash equivalents $ 311,130 $ 138,922 $ 157,567

Restricted cash 4,000 - 4,875

Pawn loans 113,290 190,299 199,058

Pawn service charges receivable, 17,432 29,847 31,802 net

Inventory, net 123,112 175,802 179,355

Notes receivable, net 3,866 16,166 7,182

Prepaid expenses and other 25,754 37,365 25,921 current assets

Total current assets 598,584 588,401 605,760

Investments in unconsolidated 29,483 30,922 34,516 affiliates

Property and equipment, net 58,098 66,214 67,357

Lease right-of-use asset 204,591 - -

Goodwill 257,326 300,700 300,527

Intangible assets, net 65,003 63,646 68,044

Notes receivable, net 1,140 10,912 1,117

Deferred tax asset, net 5,505 3,956 1,998

Other assets 4,572 4,472 4,383

Total assets $ 1,224,302 $ 1,069,223 $ 1,083,702



Liabilities and equity:

Current liabilities:

Current maturities of long-term $ 268 $ 215 $ 214 debt, net

Accounts payable, accruedexpenses and other current 58,358 59,981 77,957 liabilities

Customer layaway deposits 11,902 12,750 12,915

Lease liability 48,840 - -

Total current liabilities 119,368 72,946 91,086

Long-term debt, net 247,618 235,449 238,380

Deferred tax liability, net 2,165 7,522 1,985

Lease liability 167,716 - -

Other long-term liabilities 7,523 5,990 7,302

Total liabilities 544,390 321,907 338,753

Commitments and contingencies (Note 11)

Stockholders' equity:

Class A Non-voting Common Stock,par value $.01 per share; sharesauthorized: 100 million; issuedand outstanding: 52,097,590 as of 521 524 526 June 30, 2020; 52,475,070 as ofJune 30, 2019; and 52,565,064 asof September 30, 2019

Class B Voting Common Stock,convertible, par value $.01 pershare; shares authorized: 3 30 30 30 million; issued and outstanding:2,970,171

Additional paid-in capital 408,601 404,880 407,628

Retained earnings 341,517 389,808 389,163

Accumulated other comprehensive (70,757 ) (47,926 ) (52,398 )loss

Total equity 679,912 747,316 744,949

Total liabilities and equity $ 1,224,302 $ 1,069,223 $ 1,083,702

EZCORP, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended June 30,

2020 2019



(Unaudited)

(in thousands)

Operating activities:

Net (loss) income $ (45,123 ) $ 1,956

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

Depreciation and amortization 23,174 21,114

Amortization of debt discount and deferred financing 9,814 16,613 costs

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

Accretion of notes receivable discount and deferred (688 ) (3,788 )compensation fee

Deferred income taxes (3,327 ) 5,003

Impairment of goodwill and intangible assets 47,060 -

Impairment of investment in unconsolidated affiliate - 19,725

Other adjustments 2,128 1,875

Reserve on jewelry scrap receivable - 3,646

Stock compensation expense 5,093 7,036

Equity in net loss (gain) from investment in 5,896 (632 )unconsolidated affiliates

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

Service charges and fees receivable 14,076 1,301

Inventory 7,990 1,377

Prepaid expenses, other current assets and other (3,348 ) (4,194 )assets

Accounts payable, accrued expenses and other (40,450 ) (1,477 )liabilities

Customer layaway deposits (709 ) 949

Income taxes 514 (5,527 )

Net cash provided by operating activities 56,365 64,977

Investing activities:

Loans made (442,752 ) (542,512 )

Loans repaid 321,718 328,079

Recovery of pawn loan principal through sale of 248,290 211,979 forfeited collateral

Additions to property and equipment, net (20,867 ) (24,568 )

Acquisitions, net of cash acquired - (8,116 )

Principal collections on notes receivable 4,000 21,900

Net cash provided by (used in) investing activities 110,389 (13,238 )

Financing activities:

Taxes paid related to net share settlement of equity (1,458 ) (3,288 )awards

Payout of deferred consideration (350 ) -

Proceeds from borrowings, net of issuance costs (106 ) 1,064

Payments on borrowings (316 ) (195,877 )

Repurchase of common stock (5,158 ) -

Net cash used in financing activities (7,388 ) (198,101 )

Effect of exchange rate changes on cash and cash (6,678 ) (294 )equivalents and restricted cash

Net increase in cash, cash equivalents and restricted 152,688 (146,656 )cash

Cash, cash equivalents and restricted cash at 162,442 285,578 beginning of period

Cash, cash equivalents and restricted cash at end of $ 315,130 $ 138,922 period



Non-cash investing and financing activities:

Pawn loans forfeited and transferred to inventory $ 200,160 $ 221,940

EZCORP, Inc.

OPERATING SEGMENT RESULTS

(Unaudited and in thousands)

Three Months Ended June 30, 2020

Latin Other Total Corporate U.S. Pawn America Lana International Segments Items Consolidated Pawn



(in thousands)

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 - 9 884 933 - 933

Total revenues 174,496 34,844 9 884 210,233 - 210,233

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 9 884 102,184 - 102,184

Segment andcorporate expenses(income):

Operations 66,243 15,041 1,497 1,057 83,838 - 83,838

Administrative - - - - - 14,688 14,688

Depreciationand 2,749 1,647 337 3 4,736 2,943 7,679 amortization

Loss (gain) onsale ordisposal of 234 23 - (20 ) 237 18 255 assets andother

Interest - - 36 140 176 5,203 5,379 expense

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

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

Impairment ofgoodwill and - - - - - - - intangibleassets

Other (income) - (61 ) - (5 ) (66 ) 74 8 expense

Segmentcontribution $ 16,557 $ (738 ) $ (1,861 ) $ (1,474 ) $ 12,484 (loss)

Income (loss)fromcontinuing $ 12,484 $ (22,702 ) $ (10,218 )operationsbefore incometaxes

Three Months Ended June 30, 2019

Latin Other Total Corporate U.S. Pawn America Lana International Segments Items Consolidated Pawn



(in thousands)

Revenues:

Merchandise $ 83,904 $ 19,998 $ - $ - $ 103,902 $ - $ 103,902 sales

Jewelryscrapping 13,889 4,323 - - 18,212 - 18,212 sales

Pawn service 58,635 20,345 - - 78,980 - 78,980 charges

Other revenues 34 67 - 1,270 1,371 - 1,371

Total revenues 156,462 44,733 - 1,270 202,465 - 202,465

Merchandisecost of goods 52,855 17,416 - - 70,271 - 70,271 sold

Jewelryscrapping cost 11,599 4,166 - - 15,765 - 15,765 of goods sold

Other cost of - - - 576 576 - 576 revenues

Net revenues 92,008 23,151 - 694 115,853 - 115,853

Segment andcorporate expenses(income):

Operations 65,449 18,284 1,368 994 86,095 - 86,095

Administrative - - - - - 13,685 13,685

Depreciationand 2,934 1,626 - 72 4,632 2,622 7,254 amortization

(Gain) loss onsale ordisposal of 4 (8 ) - 6 2 22 24 assets andother

Interest - 1,491 - 76 1,567 8,265 9,832 expense

Interest - (376 ) - - (376 ) (2,796 ) (3,172 )income

Equity in netincome of - - - (1,320 ) (1,320 ) - (1,320 )unconsolidatedaffiliates

Impairment ofinvestment in - - - - - - - unconsolidatedaffiliates

Other expense - 34 - 6 40 (44 ) (4 )(income)

Segmentcontribution $ 23,621 $ 2,100 $ (1,368 ) $ 860 $ 25,213 (loss)

Income fromcontinuingoperations $ 25,213 $ (21,754 ) $ 3,459 before incometaxes

Nine Months Ended June 30, 2020

Latin Other Total Corporate U.S. Pawn America Lana International Segments Items Consolidated Pawn



(in thousands)

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 13 3,570 3,740 - 3,740

Total revenues 513,930 138,438 13 3,570 655,951 - 655,951

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 13 2,546 359,618 - 359,618

Segment andcorporate expenses(income):

Operations 201,921 53,493 3,571 3,850 262,835 - 262,835

Administrative - - - - - 46,797 46,797

Depreciationand 8,325 5,476 726 60 14,587 8,587 23,174 amortization

Loss (gain) 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

Impairment ofgoodwill and 10,000 35,936 - 1,124 47,060 - 47,060 intangibleassets

Other (income) - (303 ) - 14 (289 ) 7 (282 )expense

Segmentcontribution $ 65,532 $ (22,752 ) $ (4,284 ) $ (8,842 ) $ 29,654 (loss)

Income (loss)fromcontinuing $ 29,654 $ (70,953 ) $ (41,299 )operationsbefore incometaxes

Nine Months Ended June 30, 2019

Latin Other Total Corporate U.S. Pawn America Lana International Segments Items Consolidated Pawn



(in thousands)

Revenues:

Merchandise $ 275,639 $ 70,547 $ - $ - $ 346,186 $ - $ 346,186 sales

Jewelryscrapping 28,357 9,516 - - 37,873 - 37,873 sales

Pawn service 184,658 59,640 - - 244,298 - 244,298 charges

Other revenues 125 134 - 4,274 4,533 - 4,533

Total revenues 488,779 139,837 - 4,274 632,890 - 632,890

Merchandisecost of goods 172,931 52,252 - - 225,183 - 225,183 sold

Jewelryscrapping cost 23,680 8,968 - - 32,648 - 32,648 of goods sold

Other cost of - - - 1,467 1,467 - 1,467 revenues

Net revenues 292,168 78,617 - 2,807 373,592 - 373,592

Segment andcorporate expenses(income):

Operations 200,884 54,703 4,981 6,169 266,737 - 266,737

Administrative - - - - - 41,814 41,814

Depreciationand 8,951 4,543 - 190 13,684 7,430 21,114 amortization

Loss on saleor disposal of 2,856 743 - 22 3,621 22 3,643 assets andother

Interest - 1,570 - 280 1,850 25,362 27,212 expense

Interest - (1,226 ) - - (1,226 ) (8,411 ) (9,637 )income

Equity in netloss of - - - (632 ) (632 ) - (632 )unconsolidatedaffiliates

Impairment ofinvestment in - - - 19,725 19,725 - 19,725 unconsolidatedaffiliates

Other (income) - (63 ) - 290 227 (348 ) (121 )expense

Segmentcontribution $ 79,477 $ 18,347 $ (4,981 ) $ (23,237 ) $ 69,606 (loss)

Income fromcontinuingoperations $ 69,606 $ (65,869 ) $ 3,737 before incometaxes

EZCORP, Inc.

STORE COUNT ACTIVITY

(Unaudited)

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

Three Months Ended June 30, 2019

U.S. Latin Other Pawn America International Consolidated Pawn



As of March 31, 2019 508 466 24 998

New locations opened - 4 - 4

Locations acquired 7 - - 7

Locations sold, combined or (1 ) - (2 ) (3 )closed

As of June 30, 2019 514 470 22 1,006

Nine Months Ended June 30, 2020

U.S. Latin Other Pawn America International Consolidated Pawn



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

Nine Months Ended June 30, 2019

U.S. Latin Other Pawn America International Consolidated Pawn



As of September 30, 2018 508 453 27 988

New locations opened - 12 - 12

Locations acquired 7 5 - 12

Locations sold, combined or (1 ) - (5 ) (6 )closed

As of June 30, 2019 514 470 22 1,006

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 basis ("constant currency"). 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 results is meaningful and useful in understanding the activities and business metrics of our Latin America Pawn 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 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 and nine months ended June 30 were as follows:

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

2020 2019 2020 2019 2020 2019



Mexican peso 23.1 19.2 23.3 19.1 20.8 19.4

Guatemalan 7.5 7.5 7.5 7.5 7.5 7.6 quetzal

Honduran 24.4 24.3 24.4 24.2 24.3 24.1 lempira

Peruvian sol 3.5 3.3 3.4 3.3 3.4 3.3

Miscellaneous Non-GAAP Financial Measures

2020 Q3 2019 Q3



(in millions)

Net income $ (5.5 ) $ 3.2

Loss from discontinued operations, net of tax - 0.2

Interest expense 5.4 9.8

Interest income (0.6 ) (3.2 )

Income tax expense (4.8 ) 0.1

Depreciation and amortization 7.7 7.3

Adjusted EBITDA $ 2.2 $ 17.4

Income from Net Income Continuing Continuing Tax from Adjusted Operations Operations, Effect Continuing EBITDA Diluted Before Tax Operations EPS



(in millions)

2020 Q3 reported $ (10.2 ) $ 4.7 $ (5.5 ) $ 2.2 $ (0.10 )

COVID-19 expenses 0.5 (0.1 ) 0.4 0.5 0.01

Civil Unrest- asset 0.2 - 0.2 0.2 - disposal

Currency exchange rate 0.6 (0.1 ) 0.5 0.6 0.01 fluctuations

Non-cash net interest 3.2 (1.0 ) 2.2 - 0.04 expense

Civil Unrest- looting 2.2 (0.7 ) 1.5 2.2 0.03

2020 Q3 adjusted $ (3.5 ) $ 2.8 $ (0.7 ) $ 5.7 $ (0.01 )

Income from Net Income Continuing Continuing Tax from Adjusted Operations Operations, Effect Continuing EBITDA Diluted Before Tax Operations EPS



(in millions)

2019 Q3 reported $ 3.5 $ (0.1 ) $ 3.4 $ 17.4 $ 0.06

Discretetransaction tax 4.6 (1.9 ) 2.7 4.6 0.05 adjustment

Currency exchange (0.1 ) - (0.1 ) (0.1 ) - rate fluctuation

Non-cash net 5.6 (2.8 ) 2.8 - 0.05 interest expense

2019 Q3 adjusted* $ 13.6 $ (4.8 ) $ 8.8 $ 21.9 $ 0.16

* During the first quarter of fiscal 2020, we revised the financial information our chief operating decision maker (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.

U.S. Percentage 2020 Q3: Dollar Change YOY Amount



(in millions)

Consolidated revenue (three months ended June 30, 2020) $ 210.2 4 %

Currency exchange rate fluctuations 6.3

Constant currency consolidated revenue (three months $ 216.5 7 %ended June 30, 2020)



Consolidated net revenue (three months ended June 30, $ 102.2 (12 )%2020)

Currency exchange rate fluctuations 3.0

Constant currency consolidated net revenue (three months $ 105.2 (9 )%ended June 30, 2020)



Consolidated net inventory (three months ended June 30, $ 123.1 (30 )%2020)

Currency exchange rate fluctuations $ 4.0

Constant currency consolidated net inventory (three $ 127.1 (28 )%months ended June 30, 2020)



Latin America Pawn net revenue (three months ended June $ 15.5 (33 )%30, 2020)

Currency exchange rate fluctuations 2.9

Constant currency Latin America Pawn net revenue (three $ 18.4 (21 )%months ended June 30, 2020)



Latin America Pawn PLO $ 26.4 (37 )%

Currency exchange rate fluctuations 3.6

Constant currency Latin America Pawn PLO $ 30.0 (28 )%



Latin America Pawn PSC revenues (three months ended June $ 11.4 (44 )%30, 2020)

Currency exchange rate fluctuations 1.9

Constant currency Latin America Pawn PSC revenues (three $ 13.3 (35 )%months ended June 30, 2020)



Latin America Pawn merchandise sales (three months ended $ 20.3 1 %June 30, 2020)

Currency exchange rate fluctuations 3.7

Constant currency Latin America Pawn merchandise sales $ 24.0 20 %(three months ended June 30, 2020)



Latin America Pawn segment profit before tax (three $ (0.7 ) (135 )%months ended June 30, 2020)

Currency exchange rate fluctuations 0.3

Constant currency Latin America Pawn segment profit $ (0.4 ) (119 )%before tax (three months ended June 30, 2020)

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