AUSTIN, Texas, Nov. 4, 2010 /PRNewswire-FirstCall/ -- EZCORP, Inc. (Nasdaq: EZPW), a leading provider of specialty financial services, today announced results for its fourth fiscal quarter and 2010 fiscal year ended September 30, 2010.
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EZCORP's net income for the quarter increased 33% to $27.9 million ($0.56 per share) compared to $20.9 million ($0.42 per share) for the prior year quarter. Total revenues for the quarter increased 20% over the prior year period to $198.2 million.
Consolidated operating income improved 32% to $40.1 million (33% of net revenue) from $30.3 million (31% of net revenue) in the prior year quarter. Store level operating income improved $9.3 million in the Company's U.S. Pawn operations, $0.4 million in its Empeno Facil Mexico Pawn segment and $3.9 million in its EZMONEY operations.
For the fiscal year ended September 30, 2010, net income increased 42% to a record $97.3 million ($1.96 per share) compared to $68.5 million ($1.42 per share) for the prior year. Total revenues grew 23% to $733.0 million while operating income increased 40% to $141.9 million. The pre-tax contribution from the Company's strategic affiliates, Albemarle & Bond and Cash Converters International, increased to $10.8 million from $5.0 million in the prior year.
Commenting on these results, President and Chief Executive Officer, Paul Rothamel, stated, "We are pleased to report another record year, with strong contributions from each of our operating segments. The keys to our successful year were driving strong top-line revenue growth, further leveraging our expense base to enhance margins, effectively managing bad debt to record lows, and the strong, quality growth in our earning assets. Overall, we delivered a 21% return on equity for the year."
Rothamel concluded, "In a year of significant transition at the top of the organization, the EZCORP team members delivered another outstanding performance. We had strong earnings growth, opened or acquired 127 new stores in the U.S., Mexico and Canada and acquired a 33% stake in Cash Converters, all while reducing our long term debt and maintaining a strong balance sheet."
The Company expects fiscal 2011 earnings per share to increase approximately 20% to $2.35, excluding the one-time charge described below.
As previously announced, in the first quarter of fiscal 2011, the Company will record a pre-tax charge of approximately $10.8 million related to the retirement of its former Chief Executive Officer, including $3.4 million attributable to cash payments and $7.4 million attributable to the vesting of restricted stock. After taxes, the charge will be approximately $7.0 million, or $0.14 per share, resulting in expected earnings per share for fiscal 2011 of approximately $2.21 on a GAAP basis.
ABOUT EZCORP
EZCORP is a leading provider of specialty consumer financial services. It provides collateralized non-recourse loans, commonly known as pawn loans, and a variety of short-term consumer loans including payday loans, installment loans and auto title loans, or fee-based credit services to customers seeking loans. At its pawn stores, the company also sells merchandise, primarily collateral forfeited from its pawn lending operations.
EZCORP operates more than 1,000 stores, including over 500 pawn stores in the U.S. and Mexico and over 500 short-term consumer loan stores in the U.S. and Canada. The company also has significant investments in Albemarle & Bond Holdings PLC (ABM.L), one of the U.K.'s largest pawnbroking businesses with over 120 stores, and Cash Converters International Limited (CCV.L and CCV.AUS), which franchises and operates a worldwide network of over 500 stores that provide financial services and sell pre-owned merchandise.
Special Note Regarding Forward-Looking Statements
This announcement contains certain forward-looking statements regarding the Company's expected operating and financial performance for future periods, including new store expansion and expected future earnings. These statements are based on the Company's current expectations. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of uncertainties and other factors, including changing market conditions in the overall economy and the industry, consumer demand for the Company's services and merchandise, actions of third parties who offer services and products in the Company's locations and changes in the regulatory environment. For a discussion of these and other factors affecting the Company's business and prospects, see the Company's annual, quarterly and other reports filed with the Securities and Exchange Commission.
For additional information, contact Investor Relations at (512) 314-2220.
EZCORP, Inc. |
||||||||
Highlights of Consolidated Statements of Operations (Unaudited) |
||||||||
(in thousands, except per share data and percents) |
||||||||
Three Months Ended September 30, |
Increase |
Percent |
||||||
2010 |
2009 |
(Decrease) |
Change |
|||||
Revenues: |
||||||||
Merchandise sales |
$ 52,670 |
$ 48,381 |
$ 4,289 |
8.9 |
||||
Jewelry scrapping sales |
53,968 |
40,313 |
13,655 |
33.9 |
||||
Pawn service charges |
45,168 |
37,392 |
7,776 |
20.8 |
||||
Signature loan fees |
36,699 |
34,935 |
1,764 |
5.0 |
||||
Auto title loan fees |
5,991 |
1,923 |
4,068 |
211.5 |
||||
Other |
3,672 |
1,857 |
1,815 |
97.7 |
||||
Total revenues |
198,168 |
164,801 |
33,367 |
20.2 |
||||
Cost of goods sold: |
||||||||
Cost of merchandise sales |
32,229 |
30,214 |
2,015 |
6.7 |
||||
Cost of jewelry scrapping sales |
35,176 |
25,559 |
9,617 |
37.6 |
||||
Total cost of goods sold |
67,405 |
55,773 |
11,632 |
20.9 |
||||
Bad debt: |
||||||||
Signature loan bad debt |
9,605 |
10,379 |
(774) |
(7.5) |
||||
Auto title loan bad debt |
1,119 |
227 |
892 |
393.0 |
||||
Total bad debt |
10,724 |
10,606 |
118 |
1.1 |
||||
Net revenue |
120,039 |
98,422 |
21,617 |
22.0 |
||||
Operations expense |
62,326 |
54,282 |
8,044 |
14.8 |
||||
Administrative expense |
13,384 |
10,605 |
2,779 |
26.2 |
||||
Depreciation and amortization |
3,973 |
3,275 |
698 |
21.3 |
||||
(Gain) / Loss on sale/disposal of assets |
227 |
(57) |
284 |
(498.2) |
||||
Operating income |
40,129 |
30,317 |
9,812 |
32.4 |
||||
Interest income |
(35) |
(24) |
(11) |
45.8 |
||||
Interest expense |
314 |
361 |
(47) |
(13.0) |
||||
Equity in net income of unconsolidated affiliates |
(3,231) |
(1,853) |
(1,378) |
74.4 |
||||
Other |
10 |
- |
10 |
- |
||||
Income before income taxes |
43,071 |
31,833 |
11,238 |
35.3 |
||||
Income tax expense |
15,219 |
10,894 |
4,325 |
39.7 |
||||
Net income |
$ 27,852 |
$ 20,939 |
$ 6,913 |
33.0 |
||||
Net income per share, diluted |
$ 0.56 |
$ 0.42 |
$ 0.14 |
33.3 |
||||
Weighted average shares, diluted |
49,672 |
49,287 |
||||||
Amount or |
||||||||
Percentage Point (ppt) |
||||||||
OTHER DATA: |
Increase (Decrease) |
|||||||
Gross margin on merchandise sales |
38.8% |
37.5% |
1.3 |
ppts |
||||
Gross margin on jewelry scrapping sales |
34.8% |
36.6% |
(1.8) |
ppts |
||||
Gross margin on total sales |
36.8% |
37.1% |
(0.3) |
ppts |
||||
Signature loan bad debt as percent of fees |
26.2% |
29.7% |
(3.5) |
ppts |
||||
Auto title loan bad debt as percent of fees |
18.7% |
11.8% |
6.9 |
ppts |
||||
Annualized inventory turnover |
4.0 |
3.6 |
0.4 |
|||||
Operating income margin |
33.4% |
30.8% |
2.6 |
ppts |
||||
EZCORP, Inc. |
||||||||
Highlights of Consolidated Statements of Operations (Unaudited) |
||||||||
(in thousands, except per share data and percents) |
||||||||
Year Ended September 30, |
Increase |
Percent |
||||||
2010 |
2009 |
(Decrease) |
Change |
|||||
Revenues: |
||||||||
Merchandise sales |
$ 228,120 |
$ 204,674 |
$ 23,446 |
11.5 |
||||
Jewelry scrapping sales |
171,411 |
118,922 |
52,489 |
44.1 |
||||
Pawn service charges |
163,695 |
130,169 |
33,526 |
25.8 |
||||
Signature loan fees |
139,315 |
133,344 |
5,971 |
4.5 |
||||
Auto title loan fees |
17,707 |
3,589 |
14,118 |
393.4 |
||||
Other |
12,797 |
6,758 |
6,039 |
89.4 |
||||
Total revenues |
733,045 |
597,456 |
135,589 |
22.7 |
||||
Cost of goods sold: |
||||||||
Cost of merchandise sales |
140,284 |
126,562 |
13,722 |
10.8 |
||||
Cost of jewelry scrapping sales |
110,838 |
77,027 |
33,811 |
43.9 |
||||
Total cost of goods sold |
251,122 |
203,589 |
47,533 |
23.3 |
||||
Bad debt: |
||||||||
Signature loan bad debt |
31,709 |
33,553 |
(1,844) |
(5.5) |
||||
Auto title loan bad debt |
2,735 |
380 |
2,355 |
619.7 |
||||
Total bad debt |
34,444 |
33,933 |
511 |
1.5 |
||||
Net revenue |
447,479 |
359,934 |
87,545 |
24.3 |
||||
Operations expense |
236,664 |
206,237 |
30,427 |
14.8 |
||||
Administrative expense |
52,740 |
40,497 |
12,243 |
30.2 |
||||
Depreciation and amortization |
14,661 |
12,746 |
1,915 |
15.0 |
||||
(Gain) / Loss on sale/disposal of assets |
1,528 |
(1,024) |
2,552 |
(249.2) |
||||
Operating income |
141,886 |
101,478 |
40,408 |
39.8 |
||||
Interest income |
(186) |
(281) |
95 |
(33.8) |
||||
Interest expense |
1,385 |
1,425 |
(40) |
(2.8) |
||||
Equity in net income of unconsolidated affiliates |
(10,750) |
(5,016) |
(5,734) |
114.3 |
||||
Other |
(93) |
38 |
(131) |
(344.7) |
||||
Income before income taxes |
151,530 |
105,312 |
46,218 |
43.9 |
||||
Income tax expense |
54,236 |
36,840 |
17,396 |
47.2 |
||||
Net income |
$ 97,294 |
$ 68,472 |
$ 28,822 |
42.1 |
||||
Net income per share, diluted |
$ 1.96 |
$ 1.42 |
$ 0.54 |
38.0 |
||||
Weighted average shares, diluted |
49,576 |
48,076 |
||||||
Amount or |
||||||||
Percentage Point (ppt) |
||||||||
OTHER DATA: |
Increase (Decrease) |
|||||||
Gross margin on merchandise sales |
38.5% |
38.2% |
0.3 |
ppts |
||||
Gross margin on jewelry scrapping sales |
35.3% |
35.2% |
0.1 |
ppts |
||||
Gross margin on total sales |
37.1% |
37.1% |
0.0 |
ppts |
||||
Signature loan bad debt as percent of fees |
22.8% |
25.2% |
(2.4) |
ppts |
||||
Auto title loan bad debt as percent of fees |
15.4% |
10.6% |
4.8 |
ppts |
||||
Annualized inventory turnover |
4.0 |
3.6 |
0.4 |
|||||
Operating income margin |
31.7% |
28.2% |
3.5 |
ppts |
||||
EZCORP, Inc. |
||||
Highlights of Consolidated Balance Sheets (Unaudited) |
||||
(in thousands, except per share data and store counts) |
||||
September 30, |
||||
2010 |
2009 |
|||
Assets: |
||||
Current assets: |
||||
Cash and cash equivalents |
$ 25,854 |
$ 44,764 |
||
Pawn loans |
121,201 |
101,684 |
||
Signature loans, net |
10,775 |
8,357 |
||
Auto title loans, net |
3,145 |
1,663 |
||
Pawn service charges receivable, net |
21,626 |
18,187 |
||
Signature loan fees receivable, net |
5,818 |
5,599 |
||
Auto title loan fees receivable, net |
1,616 |
529 |
||
Inventory, net |
71,502 |
64,001 |
||
Deferred tax asset |
23,208 |
15,670 |
||
Prepaid expenses and other assets |
17,427 |
16,927 |
||
Total current assets |
302,172 |
277,381 |
||
Investments in unconsolidated affiliates |
101,386 |
38,851 |
||
Property and equipment, net |
62,293 |
51,154 |
||
Deferred tax asset, non-current |
60 |
6,311 |
||
Goodwill |
117,305 |
100,719 |
||
Other assets, net |
23,196 |
18,101 |
||
Total assets |
$ 606,412 |
$ 492,517 |
||
Liabilities and stockholders' equity: |
||||
Current liabilities: |
||||
Current maturities of long-term debt |
$ 10,000 |
$ 10,000 |
||
Accounts payable and other accrued expenses |
49,663 |
33,838 |
||
Customer layaway deposits |
6,109 |
4,175 |
||
Federal income taxes payable |
3,687 |
572 |
||
Total current liabilities |
69,459 |
48,585 |
||
Long-term debt, less current maturities |
15,000 |
25,000 |
||
Deferred gains and other long-term liabilities |
2,525 |
3,247 |
||
Total stockholders' equity |
519,428 |
415,685 |
||
Total liabilities and stockholders' equity |
$ 606,412 |
$ 492,517 |
||
Pawn loan balance per ending pawn store |
$ 240 |
$ 236 |
||
Inventory per ending pawn store |
$ 142 |
$ 148 |
||
Book value per share |
$ 10.55 |
$ 8.54 |
||
Tangible book value per share |
$ 7.83 |
$ 6.14 |
||
Pawn store count - end of period |
505 |
431 |
||
Signature loan store count - end of period |
501 |
479 |
||
Shares outstanding - end of period |
49,226 |
48,703 |
||
EZCORP, Inc. |
||||||||||
Operating Segment Results (Unaudited) |
||||||||||
(in thousands, except store counts and percents) |
||||||||||
U.S. Pawn |
Empeno |
EZMONEY |
||||||||
Three months ended September 30, 2010: |
Operations |
Facil |
Operations |
Consolidated |
||||||
Revenues: |
||||||||||
Merchandise Sales |
$ 48,944 |
$ 3,726 |
$ - |
$ 52,670 |
||||||
Scrap Sales |
51,007 |
2,839 |
122 |
53,968 |
||||||
Pawn service charges |
42,294 |
2,874 |
- |
45,168 |
||||||
Signature loan fees |
488 |
- |
36,211 |
36,699 |
||||||
Auto title loan fees |
398 |
- |
5,593 |
5,991 |
||||||
Other |
3,497 |
162 |
13 |
3,672 |
||||||
Total revenues |
146,628 |
9,601 |
41,939 |
198,168 |
||||||
Merchandise cost of goods sold |
30,112 |
2,117 |
- |
32,229 |
||||||
Scrap cost of goods sold |
32,896 |
2,226 |
54 |
35,176 |
||||||
Signature loan bad debt |
195 |
- |
9,410 |
9,605 |
||||||
Auto title loan bad debt |
70 |
- |
1,049 |
1,119 |
||||||
Net revenues |
83,355 |
5,258 |
31,426 |
120,039 |
||||||
Operations expense |
41,886 |
3,922 |
16,518 |
62,326 |
||||||
Store operating income |
$ 41,469 |
$ 1,336 |
$ 14,908 |
$ 57,713 |
||||||
Gross margin on merchandise sales |
38.5% |
43.2% |
N/A |
38.8% |
||||||
Gross margin on scrap sales |
35.5% |
21.6% |
55.7% |
34.8% |
||||||
Gross margin on total sales |
37.0% |
33.8% |
55.7% |
36.8% |
||||||
Annualized inventory turnover |
4.0 |
4.0 |
N/A |
4.0 |
||||||
Signature loan bad debt as percent of fees |
40.0% |
N/A |
26.0% |
26.2% |
||||||
Auto title loan bad debt as percent of fees |
17.6% |
N/A |
18.8% |
18.7% |
||||||
Store operating income margin |
49.7% |
25.4% |
47.4% |
48.1% |
||||||
Pawn store count - end of period |
390 |
115 |
- |
505 |
||||||
Signature loan store count - end of period |
6 |
- |
495 |
501 |
||||||
Three months ended September 30, 2009: |
||||||||||
Revenues: |
||||||||||
Merchandise Sales |
$ 45,909 |
$ 2,472 |
$ - |
$ 48,381 |
||||||
Scrap Sales |
39,645 |
659 |
9 |
40,313 |
||||||
Pawn service charges |
35,838 |
1,554 |
- |
37,392 |
||||||
Signature loan fees |
527 |
- |
34,408 |
34,935 |
||||||
Auto title loan fees |
322 |
- |
1,601 |
1,923 |
||||||
Other |
1,780 |
77 |
- |
1,857 |
||||||
Total revenues |
124,021 |
4,762 |
36,018 |
164,801 |
||||||
Merchandise cost of goods sold |
28,649 |
1,565 |
- |
30,214 |
||||||
Scrap cost of goods sold |
25,098 |
455 |
6 |
25,559 |
||||||
Signature loan bad debt |
247 |
- |
10,132 |
10,379 |
||||||
Auto title loan bad debt |
52 |
- |
175 |
227 |
||||||
Net revenues |
69,975 |
2,742 |
25,705 |
98,422 |
||||||
Operations expense |
37,761 |
1,809 |
14,712 |
54,282 |
||||||
Store operating income |
$ 32,214 |
$ 933 |
$ 10,993 |
$ 44,140 |
||||||
Gross margin on merchandise sales |
37.6% |
36.7% |
N/A |
37.5% |
||||||
Gross margin on scrap sales |
36.7% |
31.0% |
33.3% |
36.6% |
||||||
Gross margin on total sales |
37.2% |
35.5% |
33.3% |
37.1% |
||||||
Annualized inventory turnover |
3.6 |
2.7 |
N/A |
3.6 |
||||||
Signature loan bad debt as percent of fees |
46.9% |
N/A |
29.4% |
29.7% |
||||||
Auto title loan bad debt as percent of fees |
16.1% |
N/A |
10.9% |
11.8% |
||||||
Store operating income margin |
46.0% |
34.0% |
42.8% |
44.8% |
||||||
Pawn store count - end of period |
369 |
62 |
- |
431 |
||||||
Signature loan store count - end of period |
6 |
- |
473 |
479 |
||||||
EZCORP, Inc. |
||||||||||
Operating Segment Results (Unaudited) |
||||||||||
(in thousands, except store counts and percents) |
||||||||||
U.S. Pawn |
Empeno |
EZMONEY |
||||||||
Year ended September 30, 2010: |
Operations |
Facil |
Operations |
Consolidated |
||||||
Revenues: |
||||||||||
Merchandise Sales |
$ 214,598 |
$ 13,522 |
$ - |
$ 228,120 |
||||||
Scrap Sales |
163,667 |
7,389 |
355 |
171,411 |
||||||
Pawn service charges |
154,505 |
9,190 |
- |
163,695 |
||||||
Signature loan fees |
1,930 |
- |
137,385 |
139,315 |
||||||
Auto title loan fees |
1,659 |
- |
16,048 |
17,707 |
||||||
Other |
12,268 |
508 |
21 |
12,797 |
||||||
Total revenues |
548,627 |
30,609 |
153,809 |
733,045 |
||||||
Merchandise cost of goods sold |
131,825 |
8,459 |
- |
140,284 |
||||||
Scrap cost of goods sold |
104,531 |
6,137 |
170 |
110,838 |
||||||
Signature loan bad debt |
641 |
- |
31,068 |
31,709 |
||||||
Auto title loan bad debt |
236 |
- |
2,499 |
2,735 |
||||||
Net revenues |
311,394 |
16,013 |
120,072 |
447,479 |
||||||
Operations expense |
161,145 |
11,658 |
63,861 |
236,664 |
||||||
Store operating income |
$ 150,249 |
$ 4,355 |
$ 56,211 |
$ 210,815 |
||||||
Gross margin on merchandise sales |
38.6% |
37.4% |
N/A |
38.5% |
||||||
Gross margin on scrap sales |
36.1% |
16.9% |
52.1% |
35.3% |
||||||
Gross margin on total sales |
37.5% |
30.2% |
52.1% |
37.1% |
||||||
Annualized inventory turnover |
3.9 |
4.3 |
N/A |
4.0 |
||||||
Signature loan bad debt as percent of fees |
33.2% |
N/A |
22.6% |
22.8% |
||||||
Auto title loan bad debt as percent of fees |
14.2% |
N/A |
15.6% |
15.4% |
||||||
Store operating income margin |
48.3% |
27.2% |
46.8% |
47.1% |
||||||
Pawn store count - end of period |
390 |
115 |
- |
505 |
||||||
Signature loan store count - end of period |
6 |
- |
495 |
501 |
||||||
Year ended September 30, 2009: |
||||||||||
Revenues: |
||||||||||
Merchandise Sales |
$ 196,035 |
$ 8,639 |
$ - |
$ 204,674 |
||||||
Scrap Sales |
117,013 |
1,900 |
9 |
118,922 |
||||||
Pawn service charges |
124,396 |
5,773 |
- |
130,169 |
||||||
Signature loan fees |
2,293 |
- |
131,051 |
133,344 |
||||||
Auto title loan fees |
1,313 |
- |
2,276 |
3,589 |
||||||
Other |
6,646 |
112 |
- |
6,758 |
||||||
Total revenues |
447,696 |
16,424 |
133,336 |
597,456 |
||||||
Merchandise cost of goods sold |
121,170 |
5,392 |
- |
126,562 |
||||||
Scrap cost of goods sold |
75,744 |
1,277 |
6 |
77,027 |
||||||
Signature loan bad debt |
828 |
- |
32,725 |
33,553 |
||||||
Auto title loan bad debt |
124 |
- |
256 |
380 |
||||||
Net revenues |
249,830 |
9,755 |
100,349 |
359,934 |
||||||
Operations expense |
140,525 |
5,833 |
59,879 |
206,237 |
||||||
Store operating income |
$ 109,305 |
$ 3,922 |
$ 40,470 |
$ 153,697 |
||||||
Gross margin on merchandise sales |
38.2% |
37.6% |
N/A |
38.2% |
||||||
Gross margin on scrap sales |
35.3% |
32.8% |
33.3% |
35.2% |
||||||
Gross margin on total sales |
37.1% |
36.7% |
33.3% |
37.1% |
||||||
Annualized inventory turnover |
3.7 |
2.4 |
N/A |
3.6 |
||||||
Signature loan bad debt as percent of fees |
36.1% |
N/A |
25.0% |
25.2% |
||||||
Auto title loan bad debt as percent of fees |
9.4% |
N/A |
11.2% |
10.6% |
||||||
Store operating income margin |
43.8% |
40.2% |
40.3% |
42.7% |
||||||
Pawn store count - end of period |
369 |
62 |
- |
431 |
||||||
Signature loan store count - end of period |
6 |
- |
473 |
479 |
||||||
SOURCE EZCORP, Inc.
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