EX-99.1 2 a2014-q38xkex991_6302014.htm EXHIBIT 2014 - Q3 8-K EX 99.1_6/30/2014


Exhibit 99.1


EZCORP REPORTS THIRD QUARTER REVENUES OF $241 MILLION,
AND EARNINGS PER SHARE OF $0.21
Company confirms Q4 EPS outlook of $0.37-$0.39 including the impact of its recent financing

AUSTIN, Texas (July 29, 2014) EZCORP, Inc. (NASDAQ: EZPW), a leading provider of easy cash solutions for consumers, today announced its financial results for the third quarter of fiscal 2014.
For the quarter, total revenues were $241 million, with net income from continuing operations of $11.3 million and earnings per share of $0.21.

Mark Kuchenrither, EZCORP’s Interim President and Chief Executive Officer, stated, “We are pleased to have met our outlook for the third quarter. Our Pawn businesses and our Grupo Finmart business continued to drive our growth, representing 69% of our total revenues this quarter. During the quarter we strengthened our financial flexibility by raising $230 million through a private convertible debt offering which enabled us to pay off all amounts outstanding under our senior secured credit agreement and to buy back one million shares of stock. These capital structure enhancements in combination with our improving operational efficiencies enhance our ability to grow revenue and earnings, while improving the customer experience."

Consolidated Financial Highlights — Third Quarter Fiscal 2014 vs. Prior Year Quarter
Earning assets, including credit service organization (CSO) loans, were $443 million at quarter-end, an increase of 7% from continuing operations, as a result of growth in consumer loans at Grupo Finmart, as well as strong growth of installment loans in the U.S.
Total revenues were $241 million, an increase of 3% compared to $235 million in the same period last year. Excluding an expected decrease in gold scrapping, total revenues were up 6%, driven by 3% increases in consumer loan fees and merchandise sales in the United States and Mexico. In addition, we had two structured financing transactions at Grupo Finmart from which we recognized $10 million of revenues.
Cash and cash equivalents, including restricted cash, were $86 million at quarter-end, with aggregate consolidated debt of $382 million, comprised of the $230 million of our newly issued convertible debt and $152 million of Grupo Finmart third-party debt, which is non-recourse to EZCORP.
U.S. & Canada
Pawn —
Pawn loan balances were $141 million at quarter-end, up 2% in total and up 3% on a same-store basis due to transactional growth in new loans made in general merchandise and jewelry.

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Redemption rates were 85%, up 100 basis points compared to a year ago, driven by a 200 basis point increase in the jewelry redemption rate to 89%, and a 100 basis point increase in general merchandise redemption rate to 78%.
Total merchandise sales increased 4% in total and 5% on a same-store basis over the same quarter last year, driven by growth in storefront jewelry sales and strong online performance. Gross margin on merchandise sales was 38%.
Jewelry sales increased 18% in total and 16% on a same-store basis compared to the same quarter last year, with gross margin of 43%. For the first nine months of the fiscal year, jewelry sales growth was 27% in total and 23% on a same-store basis.
Online sales grew 51% over the same quarter last year and accounted for roughly10% of the segment’s total merchandise sales. Gross margin was 43% as compared to 42% for the same quarter last year.
Financial Services —
Total loan balances including CSO loans, net of reserves, were $48 million at quarter-end, a 5% increase over the same quarter last year. For the quarter, including CSO loans, installment loans were up 51% while auto title loans decreased 1% and traditional payday loans declined 9%.
Total loan fees were $42 million, up 4% over the same quarter last year. The gap in growth between loan balances and fees year-over-year is the result of a shift in product mix to lower yielding products driven by a more competitive marketplace and regulatory impact.
Bad debt as a percentage of fees was 31%, up 600 basis points over the same quarter last year, driven primarily by our online lending business.
Latin America
Consumer Lending —
On the last day of the third quarter of fiscal 2014, EZCORP acquired an additional 16% percent ownership of Grupo Finmart and now owns 76% of the company. Grupo Finmart is a vertically integrated lender focused on the following core business activities:
Development and servicing of primarily government agency contracts authorizing Grupo Finmart to lend to agency employees.
Origination of new loans through a number of expanding sales channels (direct/indirect sales teams, call center, mobile units and branches).
Grupo Finmart is a financial intermediary that has developed a hybrid business comprised of a distributor model and a loan portfolio model.
Grupo Finmart began using structured financing transactions in the first quarter of this year. As a result, Grupo Finmart operates as a distributor, while continuing to service customer loans.

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Grupo Finmart will continue to grow the loan portfolio as well as sell a portion of the portfolio on a regular basis.
The hybrid approach is an important competitive advantage for the business that allows for maximum flexibility, healthy diversification in funding sources and consistent availability of capital for growth.
In the third quarter, Grupo Finmart's financial results were driven by focusing on organic growth initiatives, optimizing financing strategy, and capitalizing on increasing market demand.
New loan originations for the quarter grew 22% over last year to $22 million from $18 million.
Total consumer loan fees and interest was $15 million, up 15% as compared to the same period last year.
Three new government contracts were signed including one with the State of Tabasco. 
Bad debt as a percentage of fees was 9%, up from 5% in the same last quarter last year.
Our planned structured financing transactions this quarter resulted in $38 million in accelerated cash flow to fund new loan originations, and a $10 million gain reported in “Consumer loan sales and other.”
This quarter's structured asset sales represented less than 25% of the company's current loan portfolio.
Pawn — Latin America
Pawn loan balances were $17 million, up 7% over the same quarter last year. The yield on the loan balance improved 1100 basis points to 195% as compared to the same period last year.
Redemption rates were 76%, up 300 basis points compared to a year ago, driven by a 600 basis point increase in jewelry redemption rates to 75% and a 300 basis point increase in general merchandise to 76%.
Merchandise sales decreased 4% compared to last year.
Other International
Online Lending —
At Cash Genie, our U.K. online lending business, total loan fees were $5 million for the quarter.
Total loan balances at the end of the quarter were $3 million.
Bad debt as a percentage of fees was 66% for the quarter, as a result of business changes related to Financial Conduct Authority (FCA) regulations.

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Strategic Affiliates —
Our income from our Cash Converters International affiliate was $2 million.
CEO Commentary
Mr. Kuchenrither added, “As we have announced, there have been significant changes to the management and board of EZCORP over the past two weeks. These strategic changes were made in order to refocus the company on building a sustainable growth model which creates long-term shareholder value. We will employ a capital allocation strategy that is focused on achieving a return on invested capital of at least 15%."
Outlook
The company confirms its outlook for Q4 earnings per share of $0.37 to $0.39 from continuing operations, including the impact of our recent financing. This outlook does not take into account any potential expenses related to the recent management and board changes at the company.

The company provides supplemental information on its website. For additional content, please see "Investor Resources & Supplemental Information" at http://investors.ezcorp.com/.
About EZCORP

EZCORP, Inc. is a leader in delivering easy cash solutions to our customers across channels, products, services and markets. With approximately 7,500 team members and approximately 1,400 locations and branches, we give our customers multiple ways to access instant cash, including pawn loans and consumer loans in the United States, Mexico, Canada and the United Kingdom. We offer these products through four primary channels: in-store, online, at the worksite and through our mobile platform. At our pawn and buy/sell stores and online, we also sell merchandise, primarily collateral forfeited from pawn lending operations and used merchandise purchased from customers.

EZCORP owns controlling interests in Prestaciones Finmart, S.A.P.I. de C.V., SOFOM, E.N.R. (doing business under the names “Crediamigo” and “Adex”), a leading provider of consumer loans in Mexico; and in Renueva Commercial, S.A.P.I. de C.V., an operator of buy/sell stores in Mexico under the name “TUYO.” The company also has a significant investment in Cash Converters International Limited (CCV.ASX), which franchises and operates a worldwide network of over 700 stores that provide personal financial services and sell pre-owned merchandise.

For the latest information on EZCORP, please visit our website at: http://investors.ezcorp.com/.


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Forward-Looking Statements
This announcement contains certain forward-looking statements regarding the company’s expected operating and financial performance for future periods. 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 fluctuations in gold prices or the desire of our customers to pawn or sell their gold items, changes in the regulatory environment, changing market conditions in the overall economy and the industry, and consumer demand for the company’s services and merchandise. 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.

Contact:
Mark Trinske
Vice President, Investor Relations and Communications
EZCORP, Inc.
(512) 314-2220
Investor_Relations@ezcorp.com
http://investors.ezcorp.com/



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EZCORP, Inc.
Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)

 
 
Three Months Ended June 30,
 
Nine Months Ended June 30,
 
2014
 
2013
 
2014
 
2013
Revenues:
 
 
 
 
 
 
 
Merchandise sales
$
89,170

 
$
86,576

 
$
298,211

 
$
281,262

Jewelry scrapping sales
20,273

 
26,288

 
74,169

 
113,579

Pawn service charges
59,917

 
60,397

 
183,212

 
187,812

Consumer loan fees and interest
61,144

 
59,234

 
192,258

 
183,119

Consumer loan sales and other
10,876

 
2,671

 
22,587

 
10,169

Total revenues
241,380

 
235,166

 
770,437

 
775,941

Merchandise cost of goods sold
55,751

 
51,050

 
183,196

 
164,711

Jewelry scrapping cost of goods sold
15,131

 
20,377

 
55,262

 
80,993

Consumer loan bad debt
17,246

 
12,518

 
46,100

 
34,496

Net revenues
153,252

 
151,221

 
485,879

 
495,741

Operating expenses:
 
 
 
 
 
 
 
Operations
109,575

 
104,230

 
330,408

 
309,346

Administrative
14,467

 
12,644

 
50,244

 
34,918

Depreciation
7,551

 
7,377

 
22,556

 
21,008

Amortization
1,640

 
1,591

 
5,555

 
3,621

(Gain) loss on sale or disposal of assets
(26
)
 
178

 
(5,974
)
 
220

Total operating expenses
133,207

 
126,020

 
402,789

 
369,113

Operating income
20,045

 
25,201

 
83,090

 
126,628

Interest expense, net
6,073

 
3,637

 
15,680

 
11,027

Equity in net income of unconsolidated affiliates
(2,117
)
 
(4,328
)
 
(3,880
)
 
(13,491
)
Impairment of investments

 

 
7,940

 

Other (income) expense
(370
)
 
96

 
786

 

Income from continuing operations before income taxes
16,459


25,796


62,564

 
129,092

Income tax expense
4,302

 
9,139

 
18,387

 
42,084

Income from continuing operations, net of tax
12,157


16,657


44,177

 
87,008

Income (loss) from discontinued operations, net of tax
186

 
(21,497
)
 
1,628

 
(24,813
)
Net income (loss)
12,343


(4,840
)

45,805

 
62,195

Net income from continuing operations attributable to redeemable noncontrolling interest
837

 
1,041

 
3,738

 
3,378

Net income (loss) attributable to EZCORP, Inc.
$
11,506


$
(5,881
)

$
42,067

 
$
58,817

 
 
 
 
 
 
 
 
Diluted earnings (loss) per share attributable to EZCORP, Inc.:
 
 
 
 
 
 
 
Continuing operations
$
0.21

 
$
0.29

 
$
0.74

 
$
1.56

Discontinued operations

 
(0.40
)
 
0.03

 
(0.46
)
Diluted earnings per share
$
0.21

 
$
(0.11
)
 
$
0.77

 
$
1.10

 
 
 
 
 
 
 
 
Weighted average shares outstanding diluted
54,395

 
54,255

 
54,529

 
53,540

 
 
 
 
 
 
 
 
Net income from continuing operations attributable to EZCORP, Inc.
$
11,320

 
$
15,616

 
$
40,439

 
$
83,630

Income (loss) from discontinued operations attributable to EZCORP, Inc.
186

 
(21,497
)
 
1,628

 
(24,813
)
Net income (loss) attributable to EZCORP, Inc.
$
11,506

 
$
(5,881
)
 
$
42,067

 
$
58,817


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EZCORP, Inc.
Consolidated Balance Sheets (Unaudited)
(in thousands)
 
 
June 30,
 
2014
 
2013
Assets:
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
49,999

 
$
45,955

Restricted cash
13,248

 
3,132

Pawn loans
157,491

 
154,095

Consumer loans, net
76,748

 
42,883

Pawn service charges receivable, net
29,307

 
28,590

Consumer loan fees and interest receivable, net
38,351

 
35,315

Inventory, net
132,021

 
122,503

Deferred tax asset
13,825

 
15,716

Income tax prepaid
21,779

 
12,937

Prepaid expenses and other assets
113,458

 
37,377

Total current assets
646,227

 
498,503

Investments in unconsolidated affiliates
90,730

 
146,707

Property and equipment, net
109,458

 
110,312

Restricted cash, non-current
22,473

 
2,182

Goodwill
436,765

 
430,940

Intangible assets, net
62,915

 
60,687

Non-current consumer loans, net
51,798

 
82,935

Deferred tax asset
9,308

 

Other assets, net
92,693

 
28,835

Total assets
$
1,522,367

 
$
1,361,101

Liabilities and stockholders’ equity:
 
 
 
Current liabilities:
 
 
 
Current maturities of long-term debt
$
21,029

 
$
33,525

Current capital lease obligations
520

 
533

Accounts payable and other accrued expenses
90,234

 
68,960

Other current liabilities
8,716

 
22,640

Customer layaway deposits
8,206

 
7,912

Total current liabilities
128,705

 
133,570

Long-term debt, less current maturities
360,628

 
198,374

Long-term capital lease obligations

 
521

Deferred tax liability

 
8,948

Deferred gains and other long-term liabilities
18,463

 
23,351

Total liabilities
507,796

 
364,764

Temporary equity:
 
 
 
Redeemable noncontrolling interest
36,645

 
56,837

EZCORP, Inc. stockholders’ equity
977,926

 
939,500

Total liabilities and stockholders’ equity
$
1,522,367

 
$
1,361,101



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EZCORP, Inc.
Operating Segment Results (Unaudited)
(in thousands)
 
 
Three Months Ended June 30, 2014
 
U.S. & Canada
 
Latin America
 
Other International
 
Total Segments
 
Corporate Items
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Merchandise sales
$
74,674

 
$
14,496

 
$

 
$
89,170

 
$

 
$
89,170

Jewelry scrapping sales
18,909

 
1,364

 

 
20,273

 

 
20,273

Pawn service charges
51,894

 
8,023

 

 
59,917

 

 
59,917

Consumer loan fees and interest
41,749

 
14,839

 
4,556

 
61,144

 

 
61,144

Consumer loan sales and other
531

 
10,333

 
12

 
10,876

 

 
10,876

Total revenues
187,757

 
49,055

 
4,568

 
241,380

 

 
241,380

Merchandise cost of goods sold
45,927

 
9,824

 

 
55,751

 

 
55,751

Jewelry scrapping cost of goods sold
13,894

 
1,237

 

 
15,131

 

 
15,131

Consumer loan bad debt
12,894

 
1,361

 
2,991

 
17,246

 

 
17,246

Net revenues
115,042

 
36,633

 
1,577

 
153,252

 

 
153,252

Operating expenses (income):
 
 
 
 
 
 

 
 
 

Operations
84,553

 
22,112

 
2,910

 
109,575

 

 
109,575

Administrative

 

 

 

 
14,467

 
14,467

Depreciation
4,305

 
1,502

 
80

 
5,887

 
1,664

 
7,551

Amortization
414

 
329

 
4

 
747

 
893

 
1,640

Loss (gain) on sale or disposal of assets
129

 
11

 
(160
)
 
(20
)
 
(6
)
 
(26
)
Interest expense (income), net

 
4,234

 
(2
)
 
4,232

 
1,841

 
6,073

Equity in net income of unconsolidated affiliates

 

 
(2,117
)
 
(2,117
)
 

 
(2,117
)
Other (income) expense
(7
)
 
(167
)
 

 
(174
)
 
(196
)
 
(370
)
Segment contribution
$
25,648

 
$
8,612

 
$
862

 
$
35,122

 

 
 
Income (loss) from continuing operations before income taxes
 
 
 
 
 
 
$
35,122

 
$
(18,663
)
 
$
16,459


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EZCORP, Inc.
Operating Segment Results (Unaudited)
(in thousands)

 
Three Months Ended June 30, 2013
 
U.S. & Canada
 
Latin America
 
Other International
 
Segments Total
 
Corporate Items
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Merchandise sales
$
71,464

 
$
15,112

 
$

 
$
86,576

 
$

 
$
86,576

Jewelry scrapping sales
26,288

 

 

 
26,288

 

 
26,288

Pawn service charges
52,505

 
7,892

 

 
60,397

 

 
60,397

Consumer loan fees and interest
40,279

 
12,864

 
6,091

 
59,234

 

 
59,234

Consumer loan sales and other
1,058

 
1,034

 
579

 
2,671

 

 
2,671

Total revenues
191,594

 
36,902

 
6,670

 
235,166

 

 
235,166

Merchandise cost of goods sold
41,795

 
9,255

 

 
51,050

 

 
51,050

Jewelry scrapping cost of goods sold
20,285

 
92

 

 
20,377

 

 
20,377

Consumer loan bad debt expense
9,994

 
685

 
1,839

 
12,518

 

 
12,518

Net revenues
119,520

 
26,870

 
4,831

 
151,221

 

 
151,221

Operating expenses (income):
 
 
 
 
 
 
 
 
 
 
 
Operations
84,194

 
16,513

 
3,523

 
104,230

 

 
104,230

Administrative

 

 

 

 
12,644

 
12,644

Depreciation
4,184

 
1,420

 
93

 
5,697

 
1,680

 
7,377

Amortization
721

 
434

 
25

 
1,180

 
411

 
1,591

Loss on sale or disposal of assets
174

 
4

 

 
178

 

 
178

Interest (income) expense, net
(25
)
 
2,790

 

 
2,765

 
872

 
3,637

Equity in net income of unconsolidated affiliates

 

 
(4,328
)
 
(4,328
)
 

 
(4,328
)
Other expense

 
57

 

 
57

 
39

 
96

Segment contribution
$
30,272

 
$
5,652

 
$
5,518

 
$
41,442

 
 
 
 
Income (loss) from continuing operations before income taxes
 
 
 
 
 
 
$
41,442

 
$
(15,646
)
 
$
25,796


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EZCORP, Inc.
Operating Segment Results (Unaudited)
(in thousands)
 
 
Nine Months Ended June 30, 2014
 
U.S. & Canada
 
Latin America
 
Other International
 
Total Segments
 
Corporate Items
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Merchandise sales
$
253,501

 
$
44,710

 
$

 
$
298,211

 
$

 
$
298,211

Jewelry scrapping sales
69,531

 
4,638

 

 
74,169

 

 
74,169

Pawn service charges
161,117

 
22,095

 

 
183,212

 

 
183,212

Consumer loan fees and interest
136,108

 
43,460

 
12,690

 
192,258

 

 
192,258

Consumer loan sales and other
2,025

 
20,520

 
42

 
22,587

 

 
22,587

Total revenues
622,282

 
135,423

 
12,732

 
770,437

 

 
770,437

Merchandise cost of goods sold
153,864

 
29,332

 

 
183,196

 

 
183,196

Jewelry scrapping cost of goods sold
51,257

 
4,005

 

 
55,262

 

 
55,262

Consumer loan bad debt
37,571

 
3,206

 
5,323

 
46,100

 

 
46,100

Net revenues
379,590

 
98,880

 
7,409

 
485,879

 

 
485,879

Operating expenses (income):
 
 
 
 
 
 
 
 
 
 

Operations
261,161

 
58,580

 
10,667

 
330,408

 

 
330,408

Administrative

 

 

 

 
50,244

 
50,244

Depreciation
12,867

 
4,411

 
288

 
17,566

 
4,990

 
22,556

Amortization
1,723

 
1,553

 
55

 
3,331

 
2,224

 
5,555

(Gain) loss on sale or disposal of assets
(6,630
)
 
15

 
(1
)
 
(6,616
)
 
642

 
(5,974
)
Interest (income) expense, net
(11
)
 
11,628

 
(4
)
 
11,613

 
4,067

 
15,680

Equity in net income of unconsolidated affiliates

 

 
(3,880
)
 
(3,880
)
 

 
(3,880
)
Impairment of investments

 

 
7,940

 
7,940

 

 
7,940

Other (income) expense
(7
)
 
(208
)
 
346

 
131

 
655

 
786

Segment contribution (loss)
$
110,487

 
$
22,901

 
$
(8,002
)
 
$
125,386

 
 
 
 
Income (loss) from continuing operations before income taxes
 
 
 
 
 
 
$
125,386

 
$
(62,822
)
 
$
62,564


10 of 14






EZCORP, Inc.
Operating Segment Results (Unaudited)
(in thousands)

 
Nine Months Ended June 30, 2013
 
U.S. & Canada
 
Latin America
 
Other International
 
Segments Total
 
Corporate Items
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Merchandise sales
$
237,577

 
$
43,685

 
$

 
$
281,262

 
$

 
$
281,262

Jewelry scrapping sales
108,777

 
4,802

 

 
113,579

 

 
113,579

Pawn service charges
165,202

 
22,610

 

 
187,812

 

 
187,812

Consumer loan fees and interest
126,873

 
36,583

 
19,663

 
183,119

 

 
183,119

Consumer loan sales and other
5,469

 
2,880

 
1,820

 
10,169

 

 
10,169

Total revenues
643,898

 
110,560

 
21,483

 
775,941

 

 
775,941

Merchandise cost of goods sold
138,936

 
25,775

 

 
164,711

 

 
164,711

Jewelry scrapping cost of goods sold
76,922

 
4,071

 

 
80,993

 

 
80,993

Consumer loan bad debt expense (benefit)
27,363

 
(1,024
)
 
8,157

 
34,496

 

 
34,496

Net revenues
400,677

 
81,738

 
13,326

 
495,741

 

 
495,741

Operating expenses (income):
 
 
 
 
 
 
 
 
 
 
 
Operations
251,593

 
46,483

 
11,270

 
309,346

 

 
309,346

Administrative

 

 

 

 
34,918

 
34,918

Depreciation
11,905

 
3,782

 
263

 
15,950

 
5,058

 
21,008

Amortization
1,490

 
1,285

 
74

 
2,849

 
772

 
3,621

Loss on sale or disposal of assets
202

 
18

 

 
220

 

 
220

Interest expense (income), net
7

 
8,205

 
(1
)
 
8,211

 
2,816

 
11,027

Equity in net income of unconsolidated affiliates

 

 
(13,491
)
 
(13,491
)
 

 
(13,491
)
Other (income) expense
(5
)
 
(238
)
 
(69
)
 
(312
)
 
312

 

Segment contribution
$
135,485

 
$
22,203

 
$
15,280

 
$
172,968

 
 
 
 
Income (loss) from continuing operations before income taxes
 
 
 
 
 
 
$
172,968

 
$
(43,876
)
 
$
129,092



11 of 14






EZCORP, Inc.
Store Count Activity
 
 
Three Months Ended June 30, 2014
 
Company-owned Stores
 
Franchises
 
U.S. & Canada
 
Latin America
 
Other
International
 
Consolidated
 
 
Beginning of period
1,037

 
318

 

 
1,355

 
5

De novo
5

 

 

 
5

 

Acquired

 

 

 

 

Sold, combined, or closed
(1
)
 
(3
)
 

 
(4
)
 

End of period
1,041

 
315

 

 
1,356

 
5

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30, 2013
 
Company-owned Stores
 
Franchises
 
U.S. & Canada
 
Latin America
 
Other
International
 
Consolidated
 
 
Beginning of period
1,058

 
345

 

 
1,403

 
9

De novo
5

 
15

 

 
20

 

Acquired

 
6

 

 
6

 

Sold, combined, or closed
(2
)
 
(3
)
 

 
(5
)
 
(1
)
End of period
1,061

 
363

 

 
1,424

 
8

 
 
 
 
 
 
 
 
 
 
Discontinued operations
(50
)
 
(57
)
 

 
(107
)
 

Stores in continuing operations:
1,011

 
306

 

 
1,317

 
8


 
Nine Months Ended June 30, 2014
 
Company-owned Stores
 
Franchises
 
U.S. & Canada
 
Latin America
 
Other
International
 
Consolidated
 
 
Beginning of period
1,030

 
312

 

 
1,342

 
8

De novo
19

 
6

 

 
25

 

Acquired

 

 

 

 

Sold, combined, or closed
(8
)
 
(3
)
 

 
(11
)
 
(3
)
End of period
1,041

 
315

 

 
1,356

 
5

 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended June 30, 2013
 
Company-owned Stores
 
Franchises
 
U.S. & Canada
 
Latin America
 
Other
International
 
Consolidated
 
 
Beginning of period
987

 
275

 

 
1,262

 
10

De novo
68

 
66

 

 
134

 

Acquired
12

 
26

 

 
38

 

Sold, combined, or closed
(6
)
 
(4
)
 

 
(10
)
 
(2
)
End of period
1,061

 
363

 

 
1,424

 
8

 
 
 
 
 
 
 
 
 
 
Discontinued operations
(50
)
 
(57
)
 

 
(107
)
 

Stores in continuing operations:
1,011

 
306

 

 
1,317

 
8




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EZCORP, Inc.
Reconciliation of GAAP to Non-GAAP Results (Unaudited)
(in thousands, except per share data)

The following tables provide a reconciliation of the differences between the reported or projected non-GAAP financial measures for the periods indicated and the most comparable GAAP financial measures. The non-GAAP financial measures presented may not be directly comparable to similarly titled measures reported by other companies and their usefulness for such purposes are therefore limited. EZCORP management believes presentation of the non-GAAP financial measures enhances investors’ ability to analyze the Company’s operating results. However, non-GAAP financial measures are not an alternative to GAAP financial measures and should be read only in conjunction with financial measures presented on a GAAP basis.
 
Three Months Ended June 30, 2014
 
Three Months Ended June 30, 2013
 
GAAP
 
Non-GAAP Adjustment
 
Non-GAAP
 
GAAP
 
Non-GAAP Adjustment
 
Non-GAAP
Segment Contribution:
 
 
 
 
 
 
 
 
 
 
 
U.S. & Canada
$
25,648

 
$

 
$
25,648

 
$
30,272

 
$

 
$
30,272

Latin America
8,612

 

 
8,612

 
5,652

 

 
5,652

Other International*
862

 

 
862

 
5,518

 
(1,493
)
 
4,025

Total Segment Contribution (Loss)
35,122

 

 
35,122

 
41,442

 
(1,493
)
 
39,949

 
 
 
 
 
 
 
 
 
 
 
 
Administrative expense
14,467

 

 
14,467

 
12,644

 

 
12,644

Depreciation
1,664

 

 
1,664

 
1,680

 

 
1,680

Amortization
893

 

 
893

 
411

 

 
411

Gain on sale or disposal of assets
(6
)
 

 
(6
)
 

 

 

Interest expense, net
1,841

 

 
1,841

 
872

 

 
872

Other (income) expense
(196
)
 

 
(196
)
 
39

 

 
39

Income (loss) from continuing operations before income taxes
16,459

 

 
16,459

 
25,796

 
(1,493
)
 
24,303

Income tax expense (benefit)
4,302

 

 
4,302

 
9,139

 
(529
)
 
8,610

Income (loss) from continuing operations, net of tax
12,157

 

 
12,157

 
16,657

 
(964
)
 
15,693

Income (loss) from discontinued operations, net of tax
186

 

 
186

 
(21,497
)
 

 
(21,497
)
Net income (loss)
12,343

 

 
12,343

 
(4,840
)
 
(964
)
 
(5,804
)
Net income from continuing operations attributable to redeemable noncontrolling interest
837

 

 
837

 
1,041

 

 
1,041

Net income (loss) attributable to EZCORP, Inc.
$
11,506

 
$

 
$
11,506

 
$
(5,881
)
 
$
(964
)
 
$
(6,845
)
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Shares Outstanding - Diluted
54,395

 

 
54,395

 
54,255

 

 
54,255

EPS - Diluted
$
0.21

 
$

 
$
0.21

 
$
(0.11
)
 
$
(0.02
)
 
$
(0.13
)
* The Other International non-GAAP adjustment includes our equity in the net income of Albemarle & Bond for the three months ended June 30, 2013.

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Nine Months Ended June 30, 2014
 
Nine Months Ended June 30, 2013
 
GAAP
 
Non-GAAP Adjustment
 
Non-GAAP
 
GAAP
 
Non-GAAP Adjustment
 
Non-GAAP
Segment Contribution:
 
 
 
 
 
 
 
 
 
 
 
U.S. & Canada
$
110,487

 
$

 
$
110,487

 
$
135,485

 
$

 
$
135,485

Latin America
22,901

 

 
22,901

 
22,203

 

 
22,203

Other International*
(8,002
)
 
9,489

 
1,487

 
15,280

 
(4,430
)
 
10,850

Total Segment Contribution (Loss)
125,386

 
9,489

 
134,875

 
172,968

 
(4,430
)
 
168,538

 
 
 
 
 
 
 
 
 
 
 
 
Administrative expense (income)**
50,244

 
(7,951
)
 
42,293

 
34,918

 

 
34,918

Depreciation
4,990

 

 
4,990

 
5,058

 

 
5,058

Amortization
2,224

 

 
2,224

 
772

 

 
772

Loss on sale or disposal of assets
642

 

 
642

 

 

 

Interest expense, net
4,067

 

 
4,067

 
2,816

 

 
2,816

Other expense
655

 

 
655

 
312

 

 
312

Income (loss) from continuing operations before income taxes
62,564

 
17,440

 
80,004

 
129,092

 
(4,430
)
 
124,662

Income tax expense (benefit)
18,387

 
5,125

 
23,512

 
42,084

 
(1,444
)
 
40,640

Income (loss) from continuing operations, net of tax
44,177

 
12,315

 
56,492

 
87,008

 
(2,986
)
 
84,022

Income (loss) from discontinued operations, net of tax
1,628

 

 
1,628

 
(24,813
)
 

 
(24,813
)
Net income (loss)
45,805

 
12,315

 
58,120

 
62,195

 
(2,986
)
 
59,209

Net income from continuing operations attributable to redeemable noncontrolling interest
3,738

 

 
3,738

 
3,378

 

 
3,378

Net income (loss) attributable to EZCORP, Inc.
$
42,067

 
$
12,315

 
$
54,382

 
$
58,817

 
$
(2,986
)
 
$
55,831

 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Shares Outstanding - Diluted
54,529

 

 
54,529

 
53,540

 

 
53,540

EPS - Diluted
$
0.77

 
$
0.23

 
$
1.00

 
$
1.10

 
$
(0.06
)
 
$
1.04

* The Other International non-GAAP adjustment includes the Albemarle & Bond impairment charge and its related foreign currency exchange loss during the nine months ended June 30, 2014 and our equity in the net income of Albemarle & Bond for the nine months ended June 30, 2013.
** The administrative expense (income) non-GAAP adjustment is due to the compensatory benefits charge recorded in the second quarter of fiscal 2014 related to Sterling B. Brinkley's retirement.

14 of 14