UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 2, 2022
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(Exact name of registrant as specified in its charter)
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| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
(Address of principal executive offices) (zip code)
Registrant’s telephone number, including area code: (512 ) 314-3400
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |||||||||||||||
| (NASDAQ Global Select Market) | |||||||||||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 8.01 — Other Events
As noted in our Annual Report on Form 10-K for the year ended September 30, 2022 (the “Fiscal 2022 Annual Report”), we own a non-redeemable voting participating preferred equity interest in Founders One, LLC (“Founders”), a private company that has majority ownership in Simple Management Group, Inc. (“SMG”). SMG, through its wholly-owned subsidiaries, owns and operates pawn stores principally in the Caribbean. See Note 5 of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplementary Data” of the Fiscal 2022 Annual Report.
On December 2, 2022, SMG acquired 100% of the issued and outstanding capital stock of FFI Holdings, Inc., which owns 52 pawn stores in Florida and Puerto Rico operating under the name “La Familia Pawn & Jewelry” and other related names, including “La Familia” and “Family Financial.” To assist with the financing of SMG’s acquisition of La Familia, we made the following additional investments in Founders:
•We contributed $15.0 million to Founders as an additional capital contribution associated with our preferred interest. Those proceeds were used by Founders to acquire additional common stock in SMG, increasing Founders’ ownership in SMG to approximately 71%.
•We loaned $15.0 million to Founders in exchange for a Demand Promissory Note secured by the common interest in Founders held by the other member. Those proceeds, along with the proceeds of additional debt financing from a third-party investor, were loaned by Founders to SMG in exchange for a Subordinated Note.
SMG used the proceeds from the capital contribution and the subordinated loan from Founders, along with additional debt financing obtained from a third-party senior lender, to complete the La Familia acquisition. SMG now owns and operates a total of 73 pawn stores (42 in the Caribbean and 31 in Florida).
On December 5, 2022, the Company issued a press release regarding, among other things, the closing of this transaction. That press release is filed as Exhibit 99.1 to this report.
Item 9.01 — Financial Statements and Exhibits
| (d) | Exhibits. | ||||
| 99.1 | |||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| EZCORP, INC. | |||||||||||||||||||||||
| Date: | December 5, 2022 | By: | /s/ Thomas H. Welch, Jr. | ||||||||||||||||||||
| Thomas H. Welch, Jr. | |||||||||||||||||||||||
| Chief Legal Officer and Secretary | |||||||||||||||||||||||
Exhibit 99.1
EZCORP INCREASES INVESTMENT IN FLORIDA AND CARIBBEAN;
EXPANDS PAWNBROKING FOOTPRINT TO INCLUDE LUXURY OFFERINGS
AUSTIN, Texas--(BUSINESS WIRE) -- EZCORP, Inc. (NASDAQ: EZPW), a leading provider of pawnbroking services in the United States and Latin America and retailer of pre-owned, name-brand merchandise, today announced two investments that highlight its continuing initiatives to expand its geographic footprint and broaden its pawnbroking offerings.
The Company recently increased its investment in Founders One, LLC, a private company that owns a majority interest in Simple Management Group, Inc. (SMG). This increased investment (comprised of a $15 million preferred equity contribution and a $15 million loan), along with other third-party financing secured by SMG, was used by SMG to acquire 100% of the outstanding capital stock of FFI Holdings, Inc., which owns 52 pawnbroking stores in Florida and Puerto Rico operating under the “La Familia” or “Family Financial” brand. That acquisition was completed on December 2, 2022, and with it, SMG now owns and operates a total of 73 pawnbroking stores (42 in the Caribbean and 31 in Florida). Additional information about the Company’s increased investment in Founders One can be found in its Current Report on Form 8-K, dated December 2, 2022, filed with the Securities and Exchange Commission.
EZCORP also recently acquired a luxury pawnbroking business in Las Vegas operating under the name “Max Pawn” and established a joint venture with Michael Mack, the former owner of Max Pawn. The joint venture will focus on the luxury goods space in Las Vegas and other selected markets across the U.S. In connection with the acquisition, Mr. Mack has joined EZCORP to lead the Company’s new Luxury Pawn Division.
“We continue to execute on exciting inorganic strategic opportunities to expand our core pawnbroking business in both existing and new geographic regions. Our increased investment in Founders One gives us enhanced exposure to the strategically important Caribbean region along with increased exposure to the Florida market,” said Lachie Given, Chief Executive Officer of EZCORP. “Additionally, our new Luxury Pawn Division will significantly enhance our existing pawnbroking offerings by providing dedicated and targeted focus on higher-end products in order to serve more customers, in more places, and in more categories. Together, these new investments strengthen and expand our pawnbroking offerings and broaden the geographic reach of our core pawnbroking business.”
ABOUT EZCORP
Formed in 1989, EZCORP has grown into a leading provider of pawn transactions in the United States and Latin America. We also sell merchandise, primarily collateral forfeited from pawn operations and pre-owned 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.
Formed in 1989, EZCORP has grown into a leading provider of pawn transactions in the United States and Latin America. We also sell merchandise, primarily collateral forfeited from pawn operations and pre-owned 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.
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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.
Media Contact
EZCORP
Emily Metcalfe – Senior Manager, Corporate Communications
Phone: 512.673.9444
Email: media@ezcorp.com
EZCORP
Emily Metcalfe – Senior Manager, Corporate Communications
Phone: 512.673.9444
Email: media@ezcorp.com
Investor Contact
Email: Investor_Relations@ezcorp.com
Phone: 512.314.2220
Phone: 512.314.2220
Jean Marie Young
Managing Director, Three Part Advisors
Three Part Advisors
Email: jyoung@threepa.com
Phone: 631.418.4339
Managing Director, Three Part Advisors
Three Part Advisors
Email: jyoung@threepa.com
Phone: 631.418.4339