Leases

9 Months Ended

Jun. 30, 2024

Leases [Abstract]

Leases

NOTE 4: LEASES

We determine if a contract contains a lease at inception. Our lease portfolio consists primarily of operating leases for pawn store locations and corporate offices with lease terms ranging from three to ten years and finance leases for vehicles with lease terms ranging from two to five years.

The table below presents balances of our lease assets and liabilities and their balance sheet locations for both operating and financing leases:

(in thousands)	Balance Sheet Location	June 30, 2024		June 30, 2023		September 30, 2023
Lease assets:
Operating lease right-of-use assets	Right-of-use assets, net	$	235,030	$	243,100	$	234,388
Financing lease assets	Other assets	1,832		2,076		2,178
Total lease assets		$	236,862	$	245,176	$	236,566
Lease liabilities:
Current:
Operating lease liabilities	Operating lease liabilities, current	$	58,905	$	56,919	$	57,182
Financing lease liabilities	Accounts payable, accrued expenses and other current liabilities	596		472		530
Total current lease liabilities		$	59,501	$	57,391	$	57,712
Non-current:
Operating lease liabilities	Operating lease liabilities	$	188,996	$	197,499	$	193,187
Financing lease liabilities	Other long-term liabilities	1,352		1,645		1,715
Total non-current lease liabilities		$	190,348	$	199,144	$	194,902
Total lease liabilities		$	249,849	$	256,535	$	252,614

The table below provides major components of our lease costs:

	Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Operating lease cost:
Operating lease cost *	$	20,406	$	18,701	$	59,312	$	54,219
Variable lease cost	4,318		4,188		13,176		12,068
Total operating lease cost	$	24,724	$	22,889	$	72,488	$	66,287
Financing lease cost:
Amortization of financing lease assets	$	140	$	106	$	455	$	180
Interest on financing lease liabilities	49		47		177		82
Total financing lease cost	$	189	$	153	$	632	$	262
Total lease cost	$	24,913	$	23,042	$	73,120	$	66,549

* Includes a reduction for sublease rental income of $0.7 million and $1.0 million for the three months ended June 30, 2024 and 2023, respectively, and $2.4 million and $2.8 million for the nine months ended June 30, 2024 and 2023, respectively.

Lease expense is recognized on a straight-line basis over the lease term with variable lease expense recognized in the period in which the costs are incurred. The components of lease expense are included in “Store expenses” and “General and administrative” under operating expenses, based on the underlying lease use. Cash paid for operating leases was $15.9 million and $19.5 million for the three months ended June 30, 2024 and 2023, respectively, and $60.5 million and $56.9 million for the nine months ended June 30, 2024 and 2023, respectively. Cash paid for principal and interest on finance leases was $0.1 million and $0.1 million, respectively, for the three months ended June 30, 2024 and $0.4 million and $0.2 million for the nine months ended June 30, 2024 respectively. There was no cash paid for principal or interest on finance leases during the three and nine months ended June 30, 2023.

The weighted-average term and discount rates for leases are as follows:

	Nine Months Ended June 30,
	2024		2023
Weighted-average remaining lease term (years):
Operating leases	4.88		5.11
Financing leases	3.01		3.88
Weighted-average discount rate:
Operating leases	8.33	%	8.52	%
Financing leases	11.14	%	11.14	%

As of June 30, 2024, maturities of lease liabilities under ASC 842 by fiscal year were as follows:

(in thousands)	Operating Leases		Financing Leases
Remaining 2024	$	19,113	$	196
Fiscal 2025	75,596		783
Fiscal 2026	64,879		783
Fiscal 2027	50,391		500
Fiscal 2028	35,301		36
Thereafter	56,958		—
Total lease liabilities	$	302,238	$	2,298
Less: portion representing imputed interest	54,337		350
Total net lease liabilities	$	247,901	$	1,948
Less: current portion	58,905		596
Total long term net lease liabilities	$	188,996	$	1,352

We recorded $46.1 million and $55.2 million in non-cash additions to our operating right-of-use assets and lease liabilities for the nine months ended June 30, 2024 and 2023, respectively. We recorded $0.3 million and $2.1 million in non-cash finance lease additions for the nine months ended June 30, 2024 and 2023, respectively.

Leases

NOTE 4: LEASES

We determine if a contract contains a lease at inception. Our lease portfolio consists primarily of operating leases for pawn store locations and corporate offices with lease terms ranging from three to ten years and finance leases for vehicles with lease terms ranging from two to five years.

The table below presents balances of our lease assets and liabilities and their balance sheet locations for both operating and financing leases:

(in thousands)	Balance Sheet Location	June 30, 2024		June 30, 2023		September 30, 2023
Lease assets:
Operating lease right-of-use assets	Right-of-use assets, net	$	235,030	$	243,100	$	234,388
Financing lease assets	Other assets	1,832		2,076		2,178
Total lease assets		$	236,862	$	245,176	$	236,566
Lease liabilities:
Current:
Operating lease liabilities	Operating lease liabilities, current	$	58,905	$	56,919	$	57,182
Financing lease liabilities	Accounts payable, accrued expenses and other current liabilities	596		472		530
Total current lease liabilities		$	59,501	$	57,391	$	57,712
Non-current:
Operating lease liabilities	Operating lease liabilities	$	188,996	$	197,499	$	193,187
Financing lease liabilities	Other long-term liabilities	1,352		1,645		1,715
Total non-current lease liabilities		$	190,348	$	199,144	$	194,902
Total lease liabilities		$	249,849	$	256,535	$	252,614

The table below provides major components of our lease costs:

	Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Operating lease cost:
Operating lease cost *	$	20,406	$	18,701	$	59,312	$	54,219
Variable lease cost	4,318		4,188		13,176		12,068
Total operating lease cost	$	24,724	$	22,889	$	72,488	$	66,287
Financing lease cost:
Amortization of financing lease assets	$	140	$	106	$	455	$	180
Interest on financing lease liabilities	49		47		177		82
Total financing lease cost	$	189	$	153	$	632	$	262
Total lease cost	$	24,913	$	23,042	$	73,120	$	66,549

* Includes a reduction for sublease rental income of $0.7 million and $1.0 million for the three months ended June 30, 2024 and 2023, respectively, and $2.4 million and $2.8 million for the nine months ended June 30, 2024 and 2023, respectively.

Lease expense is recognized on a straight-line basis over the lease term with variable lease expense recognized in the period in which the costs are incurred. The components of lease expense are included in “Store expenses” and “General and administrative” under operating expenses, based on the underlying lease use. Cash paid for operating leases was $15.9 million and $19.5 million for the three months ended June 30, 2024 and 2023, respectively, and $60.5 million and $56.9 million for the nine months ended June 30, 2024 and 2023, respectively. Cash paid for principal and interest on finance leases was $0.1 million and $0.1 million, respectively, for the three months ended June 30, 2024 and $0.4 million and $0.2 million for the nine months ended June 30, 2024 respectively. There was no cash paid for principal or interest on finance leases during the three and nine months ended June 30, 2023.

The weighted-average term and discount rates for leases are as follows:

	Nine Months Ended June 30,
	2024		2023
Weighted-average remaining lease term (years):
Operating leases	4.88		5.11
Financing leases	3.01		3.88
Weighted-average discount rate:
Operating leases	8.33	%	8.52	%
Financing leases	11.14	%	11.14	%

As of June 30, 2024, maturities of lease liabilities under ASC 842 by fiscal year were as follows:

(in thousands)	Operating Leases		Financing Leases
Remaining 2024	$	19,113	$	196
Fiscal 2025	75,596		783
Fiscal 2026	64,879		783
Fiscal 2027	50,391		500
Fiscal 2028	35,301		36
Thereafter	56,958		—
Total lease liabilities	$	302,238	$	2,298
Less: portion representing imputed interest	54,337		350
Total net lease liabilities	$	247,901	$	1,948
Less: current portion	58,905		596
Total long term net lease liabilities	$	188,996	$	1,352

We recorded $46.1 million and $55.2 million in non-cash additions to our operating right-of-use assets and lease liabilities for the nine months ended June 30, 2024 and 2023, respectively. We recorded $0.3 million and $2.1 million in non-cash finance lease additions for the nine months ended June 30, 2024 and 2023, respectively.