Strategic Investments

12 Months Ended

Sep. 30, 2020

Equity Method Investments and Joint Ventures [Abstract]

Strategic Investments

NOTE 5: STRATEGIC INVESTMENTS

As of September 30, 2020, we owned 214,183,714 shares, or approximately 34.75%, of Cash Converters International. Our total investment in Cash Converters International was acquired between November 2009 and June 2018 for approximately $96.1 million, including the acquisition of 57,631,230 shares in June 2018 for $14.0 million (increasing our ownership by three percentage points) in connection with an underwritten placement of 123.3 million shares by Cash Converters International for AUD $39.5 million, excluding related costs.

Our equity in Cash Converters International’s net loss was $2.1 million and $0.1 million in fiscal 2020 and 2019, and our equity in net income was $5.5 million in 2018. Cash Converters International did not declare or pay a dividend in fiscal 2020, 2019 or 2018. Cash Converters International’s accumulated undistributed after-tax earnings included in our consolidated retained earnings were $13.7 million as of September 30, 2020.

The following tables present summary financial information for Cash Converters International’s most recently reported results as of September 30, 2020, 2019 and 2018 as applicable after translation to U.S. dollars:

	June 30,
	2020		2019
	(in thousands)
Current assets	$	157,183	$	173,826
Non-current assets	172,833		152,483
Total assets	$	330,016	$	326,309
Current liabilities	$	68,028	$	77,434
Non-current liabilities	51,275		26,163
Shareholders’ equity	210,713		222,712
Total liabilities and shareholders’ equity	$	330,016	$	326,309

	Fiscal Year Ended June 30,
	2020		2019		2018
	(in thousands)
Gross revenues	$	187,025	$	201,365	$	201,800
Gross profit	112,511		111,932		128,366
Net (loss) profit	(7,032)		(1,210)		17,443

At September 30, 2020, the fair value of our investment in Cash Converters International, as estimated by reference to its quoted market price per share, was greater than its carrying value.

For the first and second quarters of fiscal 2019, we determined that our investment was impaired and that such impairment was "other-than-temporary." In reaching this conclusion, we considered all available evidence, including evidence in existence as of September 30, 2018. Additionally, we noted the following developments subsequent to September 30, 2018: (i) continued decline in Cash Converters International's share price; and (ii) ongoing uncertainty around the Queensland, Australia class action lawsuit regarding historical lending practices by Cash Converters International, for which a settlement agreement was reached subsequent to September 30, 2019. As a result, we recognized "other-than-temporary" impairments in Cash Converters International of $13.3 million ($10.3 million, net of taxes) and $6.5 million ($5.0 million, net of taxes) during the first and second quarters of fiscal 2019, respectively. The fair value of our investment in Cash Converters International was $6.2 million below its carrying value as of September 30, 2019, which we determined was not other-than temporary primarily as a result of the subsequent settlement of the remaining Queensland, Australia class action lawsuit and recovery of share price.

We will continue to monitor the fair value of our investment in Cash Converters International for other-than-temporary impairments in future reporting periods and may record additional impairment charges should the fair value of our investment in Cash Converters International decline below its carrying value for an extended period of time. See Note 6 for the fair value and carrying value of our investment in Cash Converters International.

We hold a 13.14% ownership in "RDC" and recognized a $0.3 million net loss for fiscal year 2020.