EZCORP, Inc. - SEC Filing

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023 or


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 0-19424

EZCORP, INC.

(Exact name of registrant as specified in its charter)

Delaware

74-2540145

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

2500 Bee Cave Road

Bldg One

Suite 200

Rollingwood

78746

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (512) 314-3400

Securities registered pursuant to Section 12(b) of the Act

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Non-voting Common Stock, par value $.01 per share

EZPW

NASDAQ Stock Market

(NASDAQ Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☐	Accelerated Filer	☒
Non-accelerated Filer	☐	Smaller Reporting Company	☐
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The only class of voting securities of the registrant issued and outstanding is the Class B Voting Common Stock, par value $.01 per share, all of which is owned by an affiliate of the registrant. There is no trading market for the Class B Voting Common Stock.

As of April 28, 2023, 52,447,860 shares of the registrant’s Class A Non-voting Common Stock ("Class A Common Stock"), par value $.01 per share, and 2,970,171 shares of the registrant’s Class B Voting Common Stock, par value $.01 per share, were outstanding.

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EZCORP, Inc.

INDEX TO FORM 10-Q


PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of March 31, 2023 and 2022 and September 30,2022			1
Condensed Consolidated Statements of Operations for the Three and Six Months Ended March 31, 2023 and 2022			2
Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended March 31, 2023 and 2022			3
Condensed Consolidated Statements of Stockholders’ Equity for the Periods Ended March 31, 2023 and 2022			4
Condensed Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2023 and 2022			5
Notes to Interim Condensed Consolidated Financial Statements			6
Note 1: Organization and Summary of Significant Accounting Policies			6


Note 2: Goodwill			7

Note 3: (Loss) Earnings Per Share			8
Note 4: Leases			9
Note 5: Strategic Investments			11
Note 6: Fair Value Measurements			12
Note 7: Debt			14
Note 8: Common Stock and Stock Compensation			17

Note 9: Commitments and Contingencies			18
Note 10: Segment Information			19
Note 11: Supplemental Consolidated Financial Information			22

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			23
Item 3. Quantitative and Qualitative Disclosures about Market Risk			36
Item 4. Controls and Procedures			37
PART II — OTHER INFORMATION
Item 1. Legal Proceedings			37
Item 1A. Risk Factors			37
Item 2. Unregistered Sale of Equity Security and Use of Proceeds			38
Item 6. Exhibits			39
SIGNATURES			40

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PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

EZCORP, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(in thousands, except share and per share amounts)	March 31, 2023		March 31, 2022		September 30, 2022

Assets:
Current assets:
Cash and cash equivalents	$	243,128	$	254,964	$	206,028
Restricted cash	8,451		8,713		8,341
Pawn loans	206,096		173,618		210,009
Pawn service charges receivable, net	33,116		28,319		33,476
Inventory, net	150,297		119,890		151,615

Prepaid expenses and other current assets	45,564		27,267		34,694
Total current assets	686,652		612,771		644,163
Investments in unconsolidated affiliates	10,681		42,002		37,733
Other investments	39,220		18,000		24,220
Property and equipment, net	59,775		50,874		56,725
Right-of-use asset, net	234,287		204,343		221,405
Goodwill	300,078		286,214		286,828
Intangible assets, net	59,620		62,145		56,819
Notes receivable, net	1,233		1,198		1,215
Deferred tax asset, net	19,127		15,908		12,145
Other assets	9,859		6,541		6,625
Total assets	$	1,420,532	$	1,299,996	$	1,347,878

Liabilities and equity:
Current liabilities:

Accounts payable, accrued expenses and other current liabilities	$	72,695	$	69,695	$	84,509
Customer layaway deposits	18,761		15,046		16,023
Operating lease liabilities, current	53,921		52,446		52,334
Total current liabilities	145,377		137,187		152,866
Long-term debt, net	359,287		312,168		312,903
Deferred tax liability, net	368		179		373
Operating lease liabilities	191,874		163,506		180,756
Other long-term liabilities	11,038		11,940		8,749
Total liabilities	707,944		624,980		655,647
Commitments and contingencies (Note 9)
Stockholders’ equity:
Class A Non-voting Common Stock, par value $0.01 per share; shares authorized: 100 million; issued and outstanding: 52,561,071 as of March 31, 2023; 53,685,333 as of March 31, 2022; and 53,454,885 as of September 30, 2022	526		537		534
Class B Voting Common Stock, convertible, par value $0.01 per share; shares authorized: 3 million; issued and outstanding: 2,970,171	30		30		30
Additional paid-in capital	343,088		341,913		345,330
Retained earnings	405,961		384,246		402,006
Accumulated other comprehensive loss	(37,017)		(51,710)		(55,669)
Total equity	712,588		675,016		692,231
Total liabilities and equity	$	1,420,532	$	1,299,996	$	1,347,878

See accompanying notes to unaudited interim condensed consolidated financial statements

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EZCORP, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended March 31,				Six Months Ended March 31,
(in thousands, except per share amount)	2023		2022		2023		2022

Revenues:
Merchandise sales	$	152,507	$	133,556	$	316,294	$	271,276
Jewelry scrapping sales	12,825		5,690		20,709		12,634
Pawn service charges	93,030		76,683		185,623		152,708
Other revenues, net	61		53		124		358
Total revenues	258,423		215,982		522,750		436,976
Merchandise cost of goods sold	97,339		82,246		202,216		165,357
Jewelry scrapping cost of goods sold	11,902		4,808		18,855		10,580

Gross profit	149,182		128,928		301,679		261,039
Operating expenses:
Store expenses	101,269		85,743		202,072		172,514
General and administrative	15,609		12,227		31,085		27,772

Depreciation and amortization	7,963		7,450		15,951		15,024
Loss (gain) on sale or disposal of assets	73		(697)		57		(692)
Other	(2,465)		—		(2,465)		—
Total operating expenses	122,449		104,723		246,700		214,618
Operating income	26,733		24,205		54,979		46,421
Interest expense	3,390		2,527		9,580		4,958
Interest income	(1,898)		(255)		(2,562)		(559)
Equity in net loss of unconsolidated affiliates	32,501		1,439		30,917		301
Other expense (income)	80		371		(154)		251

(Loss) income before income taxes	(7,340)		20,123		17,198		41,470
Income (benefit) tax expense	(550)		5,236		7,210		10,862
Net (loss) income	$	(6,790)	$	14,887	$	9,988	$	30,608

Basic earnings per share	$	(0.12)	$	0.26	$	0.18	$	0.54
Diluted earnings per share	$	(0.12)	$	0.20	$	0.11	$	0.42

Weighted-average basic shares outstanding	55,648		56,561		55,981		56,370
Weighted-average diluted shares outstanding	55,648		82,407		65,269		82,270

See accompanying notes to unaudited interim condensed consolidated financial statements

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EZCORP, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,				Six Months Ended March 31,
(in thousands)	2023		2022		2023		2022

Net (loss) income	$	(6,790)	$	14,887	$	9,988	$	30,608
Other comprehensive income:
Foreign currency translation adjustment, net of tax	16,148		3,666		18,652		6,705




Comprehensive income	$	9,358	$	18,553	$	28,640	$	37,313

See accompanying notes to unaudited interim condensed consolidated financial statements

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EZCORP, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
(in thousands)	Shares	Par Value

Balances as of September 30, 2022	56,425	$	564	$	345,330	$	402,006	$	(55,669)	$	692,231
Stock compensation	—	—		1,886		—		—		1,886
Transfer of equity consideration for acquisition	10	—		99		—		—		99

Release of restricted stock, net of shares withheld for taxes	235	2		—		—		—		2
Taxes paid related to net share settlement of equity awards	—	—		(1,138)		—		—		(1,138)





Foreign currency translation gain	—	—		—		—		2,504		2,504

Purchase and retirement of treasury stock	(822)	(7)		(3,165)		(3,855)		—		(7,027)

Net income	—	—		—		16,778		—		16,778
Balances as of December 31, 2022	55,848	$	559	$	343,012	$	414,929	$	(53,165)	$	705,335
Stock compensation	—	—		1,855		—		—		1,855


Release of restricted stock, net of shares withheld for taxes	132	2		—		—		—		2
Taxes paid related to net share settlement of equity awards	(1)	—		(11)		—		—		(11)





Foreign currency translation gain	—	—		—		—		16,148		16,148

Purchase and retirement of treasury stock	(448)	(5)		(1,768)		(2,178)		—		(3,951)

Net loss	—	—		—		(6,790)		—		(6,790)
Balances as of March 31, 2023	55,531	$	556	$	343,088	$	405,961	$	(37,017)	$	712,588


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
(in thousands)	Shares	Par Value

Balances as of September 30, 2021	56,057	$	560	$	403,312	$	326,781	$	(58,415)	$	672,238
Stock compensation	—	—		1,698		—		—		1,698


Release of restricted stock, net of shares withheld for taxes	257	3		—		—		—		3
Taxes paid related to net share settlement of equity awards	—	—		(792)		—		—		(792)
Cumulative effect of adoption of ASU 2020-06	—	—		(64,263)		26,857		—		(37,406)




Foreign currency translation gain	—	—		—		—		3,039		3,039



Net income	—	—		—		15,721		—		15,721
Balances as of December 31, 2021	56,314	$	563	$	339,955	$	369,359	$	(55,376)	$	654,501
Stock compensation	—	—		460		—		—		460

Transfer of consideration for other investment	213	2		1,498		—		—		1,500
Release of restricted stock, net of shares withheld for taxes	129	2		—		—		—		2






Foreign currency translation gain	—	—		—		—		3,666		3,666



Net income	—	—		—		14,887		—		14,887
Balances as of March 31, 2022	56,656	$	567	$	341,913	$	384,246	$	(51,710)	$	675,016

See accompanying notes to unaudited interim condensed consolidated financial statements

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EZCORP, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six Months Ended March 31,
(in thousands)	2023		2022

Operating activities:
Net income	$	9,988	$	30,608
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	15,951		15,024
Amortization of debt discount and deferred financing costs	736		698
Non-cash lease expense	27,546		25,746

Deferred income taxes	(6,987)		212

Other adjustments	(2,386)		(708)
Provision for inventory reserve	280		(1,780)
Stock compensation expense	3,741		2,158
Equity in net loss of unconsolidated affiliates	30,917		301
Net loss on extinguishment of debt	3,545		—
Changes in operating assets and liabilities, net of acquisitions:
Service charges and fees receivable	1,357		687
Inventory	(2,306)		(2,779)
Prepaid expenses, other current assets and other assets	(3,639)		88

Accounts payable, accrued expenses and other liabilities	(43,969)		(50,258)
Customer layaway deposits	1,426		2,342
Income taxes	8,852		6,576
Dividends from unconsolidated affiliates	1,775		1,660
Net cash provided by operating activities	46,827		30,575
Investing activities:
Loans made	(378,717)		(329,459)
Loans repaid	230,604		199,836
Recovery of pawn loan principal through sale of forfeited collateral	171,504		129,311
Capital expenditures, net	(18,439)		(10,498)
Acquisitions, net of cash acquired	(12,968)		—
Issuance of notes receivable	(15,500)		(1,000)
Investment in unconsolidated affiliates	(2,133)		(3,577)
Investment in other investments	(15,000)		(16,500)

Net cash used in investing activities	(40,649)		(31,887)
Financing activities:
Taxes paid related to net share settlement of equity awards	(1,149)		(792)

Proceeds from issuance of debt	230,000		—
Debt issuance cost	(7,458)		—
Cash paid on extinguishment of debt	(1,951)		—
Payments on debt	(178,488)		—
Repurchase of common stock	(10,978)		—
Net cash provided by (used in) financing activities	29,976		(792)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	1,056		2,157
Net increase in cash, cash equivalents and restricted cash	37,210		53
Cash, cash equivalents and restricted cash at beginning of period	214,369		263,624
Cash, cash equivalents and restricted cash at end of period	$	251,579	$	263,677

See accompanying notes to unaudited interim condensed consolidated financial statements

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Notes to Interim Condensed Consolidated Financial Statements
(Unaudited)

NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

EZCORP, Inc. (collectively with its subsidiaries, the “Company,” “we,” “us,” or “our”) is a provider of pawn loans in the United States ("U.S.") and Latin America. Pawn loans are non-recourse loans collateralized by tangible property. We also sell merchandise, primarily collateral forfeited from pawn lending operations and pre-owned merchandise purchased from customers.

Basis of Presentation

The accompanying interim unaudited condensed consolidated financial statements (“Condensed Consolidated Financial Statements”) have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

These Condensed Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the year ended September 30, 2022, filed with the Securities and Exchange Commission ("SEC") on November 16, 2022 (“2022 Annual Report”).

In the opinion of management, the accompanying Condensed Consolidated Financial Statements include all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation. Financial results for the three and six-month period ended March 31, 2023, are not necessarily indicative of results that may be expected for the fiscal year ending September 30, 2023 or any other period due, in part, to seasonal variations. There have been no changes that have had a material impact in significant accounting policies as described in our 2022 Annual Report.

Principles of Consolidation

The accompanying Condensed Consolidated Financial Statements include the accounts of EZCORP, Inc. and its wholly-owned subsidiaries. We use the equity method of accounting for entities in which we have a 50% or less investment and exercise significant influence. We account for equity investments for which we do not have significant influence and without readily determinable fair values at cost with adjustments for observable changes in price in orderly transactions for identical or similar investments of the same issuer or impairments. All inter-company accounts and transactions have been eliminated in consolidation.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions include the determination of inventory reserves, expected credit losses, useful lives of long-lived and intangible assets, valuation of share-based compensation, valuation of equity investments, valuation of deferred tax assets and liabilities, loss contingencies related to litigation and discount rates used for operating leases. We base our estimates on historical experience, observable trends and various other assumptions we believe are reasonable. Actual results may differ materially from these estimates under different assumptions or conditions.

Recently Issued Accounting Pronouncements

We reviewed all recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a material impact on our Condensed Consolidated Financial Statements.

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NOTE 2: GOODWILL

The following table summarizes the changes in the carrying amount of goodwill by segment and in total:


	Six Months Ended March 31, 2023
(in thousands)	U.S. Pawn		Latin America Pawn		Consolidated

Balances as of September 30, 2022	$	245,503	$	41,325	$	286,828
Acquisitions	9,468		—		9,468


Effect of foreign currency translation changes	—		3,782		3,782
Balances as of March 31, 2023	$	254,971	$	45,107	$	300,078


	Six Months Ended March 31, 2022
(in thousands)	U.S. Pawn		Latin America Pawn		Consolidated

Balances as of September 30, 2021	$	244,471	$	41,287	$	285,758

Measurement period adjustments	—		(678)		$	(678)
Effect of foreign currency translation changes	—		1,134		1,134

Balances as of March 31, 2022	$	244,471	$	41,743	$	286,214

During the first quarter of fiscal 2023, we acquired nine pawn stores located in Houston, Texas and one luxury pawn store in Las Vegas, Nevada for total cash consideration of $13.0 million, inclusive of all ancillary arrangements, of which $9.4 million was recorded as goodwill. These acquisitions expand our position in these strategic markets and expands our offerings by providing a dedicated and targeted focus on higher-end products. These acquisitions were immaterial, individually and in the aggregate, and we have therefore omitted or aggregated certain disclosures.

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NOTE 3: (LOSS) EARNINGS PER SHARE

The following table reconciles the number of common shares used to compute basic and diluted (loss) earnings per share attributable to EZCORP Inc., shareholders:


	Three Months Ended March 31,				Six Months Ended March 31,
(in thousands, except per share amounts)	2023		2022		2023		2022

Basic (loss) earnings per common share:
Net (loss) income - basic	$	(6,790)	$	14,887	$	9,988	$	30,608
Weighted shares outstanding - basic	55,648		56,561		55,981		56,370
Basic (loss) earnings per common share	$	(0.12)	$	0.26	$	0.18	$	0.54

Diluted (loss) earnings per common share:
Net (loss) income - basic	$	(6,790)	$	14,887	$	9,988	$	30,608
Add: Convertible Notes interest expense, net of tax*	—		1,846		(2,733)		3,730



Net (loss) income - diluted	$	(6,790)	$	16,733	$	7,255	$	34,338
Weighted shares outstanding - basic	55,648		56,561		55,981		56,370
Equity-based compensation awards - effect of dilution**	—		622		1,067		676
Convertible Notes - effect of dilution	—		25,224		8,221		25,224



Weighted shares outstanding - diluted	55,648		82,407		65,269		82,270
Diluted (loss) earnings per common share	$	(0.12)	$	0.20	$	0.11	$	0.42

Potential common shares excluded from the calculation of diluted (loss) earnings per common share above:
Equity-based compensation awards**	1,014		—		—		—
Convertible Notes***	30,417		—		20,141		—



Restricted stock****	1,504		1,756		1,528		1,847
Total	32,935		1,756		21,669		1,847

* The six months ended March 31, 2023 includes $5.4 million gain on the partial extinguishment of debt, associated with the 2025 Convertible Notes, which was recorded to "Interest expense" in the Company's condensed consolidated statement of operations. See Note 7: Debt for additional information.

** Includes time-based share-based awards and performance based awards for which targets for fiscal year tranches have been achieved and vesting is subject only to achievement of service conditions.

*** See Note 7: Debt for conversion rate of the 2024 Convertible Notes, 2025 Convertible Notes, and 2029 Convertible Notes.

**** Includes antidilutive share-based awards as well as performance-based share-based awards that are contingently issuable, but for which the condition for issuance has not been met as of the end of the reporting period.

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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.

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	March 31, 2023		March 31, 2022		September 30, 2022
Lease assets:
Operating lease right-of-use assets	Right-of-use assets, net	$	234,287	$	204,343	$	221,405
Financing lease assets	Other assets	1,289		—		181
Total lease assets		$	235,576	$	204,343	$	221,586




Lease liabilities:
Current:
Operating lease liabilities	Operating lease liabilities, current	$	53,921	$	52,446	$	52,334
Financing lease liabilities	Accounts payable, accrued expenses and other current liabilities	282		—		37
Total current lease liabilities		$	54,203	$	52,446	$	52,371

Non-current:
Operating lease liabilities	Operating lease liabilities	$	191,874	$	163,506	$	180,756
Financing lease liabilities	Other long-term liabilities	1,024		—		148
Total non-current lease liabilities		$	192,898	$	163,506	$	180,904
Total lease liabilities		$	247,101	$	215,952	$	233,275

The table below provides major components of our lease costs:


	Three Months Ended March 31,				Six Months Ended March 31,
(in thousands)	2023		2022		2023		2022

Operating lease cost:
Operating lease cost *	$	18,023	$	16,789	$	35,518	$	33,151
Variable lease cost	4,028		3,834		7,880		7,376
Total operating lease cost	$	22,051	$	20,623	$	43,398	$	40,527

Financing lease cost:
Amortization of financing lease assets	$	55	$	—	$	74	$	—
Interest on financing lease liabilities	24		—		35		—
Total financing lease cost	$	79	$	—	$	109	$	—
Total lease cost	$	22,130	$	20,623	$	43,507	$	40,527

* Includes a reduction for sublease rental income of $1.1 million and $0.8 million for the three months ended March 31, 2023 and 2022, respectively and $1.8 million and $1.7 million for the six months ended March 31, 2023 and 2022, 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" and "General and Administrative" expense, based on the underlying lease use. Cash paid for operating leases was $18.9 million and $18.0 million for the three months ended March 31, 2023 and 2022, respectively and $37.4 million and $35.6 million for the six months ended March 31, 2023 and 2022, respectively.

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


	Six Months Ended March 31,
	2023		2022

Weighted-average remaining lease term (years):
Operating leases	5.16		5.00
Financing leases	3.97		N/A

Weighted-average discount rate:
Operating leases	8.42	%	8.27	%
Financing leases	11.14	%	N/A

As of March 31, 2023, maturities of lease liabilities under ASC 842 by fiscal year were as follows:


(in thousands)	Operating Leases		Financing Leases
Remaining 2023	$	36,727	$	310
Fiscal 2024	68,717		413
Fiscal 2025	58,855		413
Fiscal 2026	48,125		401
Fiscal 2027	34,973		81
Thereafter	55,547		—
Total lease liabilities	$	302,944	$	1,618
Less: portion representing imputed interest	57,149		312
Total net lease liabilities	$	245,795	$	1,306
Less: current portion	53,921		282
Total long term net lease liabilities	$	191,874	$	1,024

We recorded $34.5 million and $28.1 million in non-cash additions to our right-of-use assets and lease liabilities for the six months ended March 31, 2023 and March 31, 2022, respectively.

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NOTE 5: STRATEGIC INVESTMENTS

Cash Converters International Limited

The following table presents the Company's ownership in Cash Converters International Limited ("Cash Converters") for the periods presented:


Date of purchase	Purchase amount (in thousands)	Shares purchased	Shares owned	Ownership percentage
October 1, 2021	$2,500	13,000,000	236,702,991	37.7	%
March 10, 2022	$1,000	5,500,000	242,239,157	38.6	%
April 5, 2022	$2,500	13,000,000	255,239,157	40.7	%
September 15, 2022	$900	5,700,000	260,939,157	41.6	%
November 2, 2022	$2,100	13,000,000	273,939,157	43.7	%

On October 2021, April 2022 and November 2022, we received cash dividends of $1.7 million, $1.7 million and $1.8 million, respectively, from Cash Converters.

The following tables present summary financial information for Cash Converters most recently reported results at December 31, 2022 after translation to U.S. dollars:


	December 31,
(in thousands)	2022		2021

Current assets	$	189,179	$	162,558
Non-current assets	98,301		185,780
Total assets	$	287,480	$	348,338

Current liabilities	$	91,601	$	59,701
Non-current liabilities	56,792		59,915
Shareholders’ equity	139,087		228,722
Total liabilities and shareholders’ equity	$	287,480	$	348,338


	Half-Year Ended December 31,
(in thousands)	2022		2021

Gross revenues	$	98,768	$	84,185
Gross profit	63,800		55,280
Net profit	(73,197)		1

During the quarter ended March 31, 2023, we recorded a $32.5 million loss on our share of losses from Cash Converters, which included $32.4 million as our share of their non-cash goodwill impairment charge, that was recorded to "Equity in net loss of unconsolidated affiliates" in the condensed consolidated statements of operations.

See Note 6: Fair Value Measurements for the fair value and carrying value of our investment in Cash Converters.

Founders One, LLC

In October 2021, we invested $15.0 million in exchange for a non-redeemable voting participating preferred equity interest in Founders One, LLC (“Founders”), a then newly-formed entity with one other member. Founders used that $15.0 million to acquire an equity interest in Simple Management Group, Inc. (“SMG”).

On December 2, 2022, we contributed an additional $15.0 million to Founders associated with our preferred interest, which proceeds were used by Founders to acquire additional common stock in SMG. In addition, 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.

We have an interest in Founders, a variable interest entity, but because the Company is not the primary beneficiary, we do not consolidate Founders. Further, as we are not the appointed manager, we do not have the ability to direct the activities of the investment entity that most significantly impact its economic performance. Consequently, our equity investment in Founders is accounted for utilizing the measurement alternative within Accounting Standards Codification ("ASC") 321, Investments — Equity Securities. Our $30.0 million carrying value of the investment and $15.0 million Demand Promissory Note are included in “Other investments” and "Prepaid expenses and other current assets"

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in our consolidated balance sheets, respectively. Our maximum exposure for losses related to our investment in Founders is our $30.0 million equity investment and $15.0 million Demand Promissory Note plus accrued and unpaid interest.

See Note 6: Fair Value Measurements for the fair values and carrying values of our investment in and loan to Founders, respectively.

NOTE 6: FAIR VALUE MEASUREMENTS

The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:

•Level 1 — Quoted market prices in active markets for identical assets or liabilities.

•Level 2 — Other observable market-based inputs or unobservable inputs that are corroborated by market data.

•Level 3 — Unobservable inputs that are not corroborated by market data.

We have elected not to measure at fair value any eligible items for which fair value measurement is optional.

There were no transfers in or out of Level 1, Level 2 or Level 3 for financial assets or liabilities measured at fair value on a recurring basis during the periods presented.

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Financial Assets and Liabilities Not Measured at Fair Value

The tables below present our estimates of fair value of financial assets and liabilities that were not measured at fair value:


	Carrying Value		Estimated Fair Value
	March 31, 2023		March 31, 2023		Fair Value Measurement Using
(in thousands)					Level 1		Level 2		Level 3

Financial assets:
2.89% promissory note receivable due April 2024	$	1,233	$	1,233	$	—	$	—	$	1,233
12.00% promissory note receivable from Founders	15,600		15,600		—		—		15,600

Investments in unconsolidated affiliates	10,681		42,917		42,917		—		—
Other investments	39,220		39,220		—		—		39,220
Financial liabilities:
2024 Convertible Notes	$	34,184	$	34,389	$	—	$	34,389	$	—
2025 Convertible Notes	102,312		94,690		—		94,690		—
2029 Convertible Notes	222,791		221,529		—		221,529		—


	Carrying Value		Estimated Fair Value
	March 31, 2022		March 31, 2022		Fair Value Measurement Using
(in thousands)					Level 1		Level 2		Level 3

Financial assets:
2.89% promissory note receivable due April 2024	$	1,198	$	1,198	$	—	$	—	$	1,198
Investments in unconsolidated affiliates	42,002		51,502		44,529		—		6,973
Other investments	18,000		18,000		—		—		18,000
Financial liabilities:
2024 Convertible Notes	$	142,248	$	141,594	$	—	$	141,594	$	—
2025 Convertible Notes	169,920		153,525		—		153,525		—


	Carrying Value		Estimated Fair Value
	September 30, 2022		September 30, 2022		Fair Value Measurement Using
(in thousands)					Level 1		Level 2		Level 3

Financial assets:
2.89% promissory note receivable due April 2024	$	1,215	$	1,215	$	—	$	—	$	1,215
Investments in unconsolidated affiliates	37,733		40,279		40,279		—		—
Other investments	24,220		24,220		—		—		24,220
Financial liabilities:
2024 Convertible Notes	$	142,575	$	157,727	$	—	$	157,727	$	—
2025 Convertible Notes	170,328		147,488		—		147,488		—

Due to the short-term nature of cash and cash equivalents, pawn loans and pawn service charges receivable, we estimate that the carrying value approximates fair value. We consider our cash and cash equivalents to be measured using Level 1 inputs and our pawn loans, pawn service charges receivable and other debt to be measured using Level 3 inputs. Significant increases or decreases in the underlying assumptions used to value pawn loans, pawn service charges receivable, fees and interest receivable and other debt could significantly increase or decrease these fair value estimates.

The Company remeasures its acquisition-related contingent obligation associated with the acquisition in June 2021 of PLO del Bajio S. de R.S. de C.V., which owned stores operating under the name "Cash Apoyo Efectivo," at the end of each reporting period. This remeasurement resulted in a $2.5 million reduction of the obligation with an offset recorded to "Other" as an operating item in our condensed consolidated statement of operations during the second quarter of fiscal 2023. The remaining obligation of $2.5 million is included in "Accounts payable, accrued expenses and other current liabilities" in our Consolidated Balance Sheet as of March 31, 2023. The key assumptions used to determine the fair value of acquisition-related contingent consideration are estimated by management, not observable in the market and, therefore, considered Level 3 inputs within the fair value hierarchy.

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In March 2019, we received $1.1 million in previously escrowed seller funds as a result of settling certain indemnification claims with the seller of GPMX. In April 2019, we loaned the $1.1 million back to the seller of GPMX in exchange for a promissory note. The note bears interest at the rate of 2.89% per annum and is secured by certain marketable securities owned by the seller and held in a U.S. brokerage account. All principal and accrued interest is due and payable in April 2024. The fair value of the note approximated its carrying value as of March 31, 2023.

In December 2022, 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. The note bears interest at the rate of 12.00% per annum, and all principal and accrued interest is due on demand. The fair value of the note approximated its carrying value as of March 31, 2023.

We use the equity method of accounting to account for our ownership interest in Cash Converters. The inputs used to generate the fair value of the investment in Cash Converters were considered Level 1 inputs. These inputs consist of (a) the quoted stock price on the Australian Stock Exchange multiplied by (b) the number of shares we owned multiplied by (c) the applicable foreign currency exchange rate as of the end of our reporting period. We included no control premium for owning a large percentage of outstanding shares.

The $39.2 million in "Other investments" as of March 31, 2023, includes $30.0 million related to our investment in Founders and $6.2 million related to our investment in Rich Data Corporation ("RDC"). We believe the investment's fair value approximated its carrying value although such fair value is highly variable and includes significant unobservable inputs. The $18.0 million "Other investments" as of March 31, 2022, includes $15.0 million related to our investment in Founders.

We determined the fair value of the 2024, 2025 and 2029 Convertible Notes using quoted price inputs. The notes are not actively traded, and thus the price inputs represent a Level 2 measurement. As the quoted price inputs are highly variable from day to day, the fair value estimates disclosed above could significantly increase or decrease.

NOTE 7: DEBT

The following table presents the Company's debt instruments outstanding:


	March 31, 2023						March 31, 2022						September 30, 2022
(in thousands)	Gross Amount		Debt Issuance Costs		Carrying Amount		Gross Amount		Debt Issuance Costs		Carrying Amount		Gross Amount		Debt Issuance Costs		Carrying Amount

2029 Convertible Notes	$	230,000	$	(7,209)	$	222,791	$	—	$	—	$	—	$	—	$	—	$	—
2025 Convertible Notes	103,373		(1,061)		102,312		172,500		(2,580)		169,920		172,500		(2,172)		170,328
2024 Convertible Notes	34,389		(205)		34,184		143,750		(1,502)		142,248		143,750		(1,175)		142,575



Total long-term debt	$	367,762	$	(8,475)	$	359,287	$	316,250	$	(4,082)	$	312,168	$	316,250	$	(3,347)	$	312,903

The following table presents the Company's contractual maturities related to the debt instruments as of March 31, 2023:


	Schedule of Contractual Maturities
(in thousands)	2029 Convertible Notes		2025 Convertible Notes		2024 Convertible Notes		Total

Remaining 2023	$	—	$	—	$	—	$	—
Fiscal 2024	—		—		34,389		34,389
Fiscal 2025	—		103,373		—		103,373
Fiscal 2026	—		—		—		—
Fiscal 2027	—		—		—		—
Thereafter	230,000		—		—		230,000
Total long-term debt	$	230,000	$	103,373	$	34,389	$	367,762

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The following table presents the Company's interest expense related to the Convertible Notes for the three and six months ended March 31, 2023 and 2022:


	Three Months Ended March 31,				Six Months Ended March 31,
(in thousands)	2023		2022		2023		2022

2029 Convertible Notes:
Contractual interest expense	$	2,156	$	—	$	2,587	$	—
Amortization of deferred financing costs	197		—		249		—

Total interest expense	$	2,353	$	—	$	2,836	$	—

2025 Convertible Notes:
Contractual interest expense	$	614	$	1,024	$	1,556	$	2,048
Amortization of deferred financing costs	120		182		308		389
Gain on extinguishment	—		—		(5,389)		—
Total interest expense	$	734	$	1,206	$	(3,525)	$	2,437

2024 Convertible Notes:
Contractual interest expense	$	247	$	1,033	$	1,123	$	2,066
Amortization of deferred financing costs	41		142		179		309
Loss on extinguishment	—		—		8,935		—
Total interest expense	$	288	$	1,175	$	10,237	$	2,375

3.750% Convertible Senior Notes Due 2029

In December 2022, we issued $230.0 million aggregate principal amount of 3.750% Convertible Senior Notes Due 2029 (the “2029 Convertible Notes”). The 2029 Convertible Notes were issued pursuant to an indenture dated December 12, 2022 (the "2022 Indenture") by and between the Company and Truist Bank, as trustee. The 2029 Convertible Notes were issued in a private offering under Rule 144A under the Securities Act of 1933. The 2029 Convertible Notes pay interest semi-annually in arrears at a rate of 3.750% per annum on June 15 and December 15 of each year, commencing June 15, 2023, and mature on December 15, 2029 (the "2029 Maturity Date"), unless converted, redeemed or repurchased in accordance with the terms prior to such date. At maturity, the holders of the 2029 Convertible Notes will be entitled to receive cash equal to the principal of the 2029 Convertible Notes plus accrued interest.

The effective interest rate for the three and six months ended March 31, 2023 was approximately 4.28%. As of March 31, 2023, the remaining unamortized debt issuance costs will be amortized using the effective interest method through the 2029 Maturity Date assuming no early conversion.

The 2029 Convertible Notes are convertible based on an initial conversion rate of 89.0313 shares of Class A Common Stock per $1,000 principal amount (equivalent to an initial conversion price of $11.23 per share). The conversion rate will not be adjusted for any accrued and unpaid interest. The 2029 Convertible Notes contain certain make-whole fundamental change premiums and customary anti-dilution adjustments. Upon conversion, we may settle in cash, shares of Class A Common Stock or any combination thereof, at our election.

Prior to June 15, 2029, the 2029 Convertible Notes will be convertible only under the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ending on March 31, 2023 (and only during such fiscal quarter), if the last reported sale price of our Class A Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price, as defined in the 2022 Indenture, per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our Class A Common Stock and the conversion rate on such trading day; (3) if we call any or all of the 2029 Convertible Notes for redemption, at any time prior to the close of business on the business day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events, as defined in the 2022 Indenture. On or after June 15, 2029 until the close of business on the business day immediately preceding the 2029 Maturity Date, holders of 2029 Convertible Notes may, at their option, convert their 2029 Convertible Notes at any time, regardless of the foregoing circumstances.

We may not redeem the Notes prior to December 21, 2026. At our option, we may redeem for cash all or any portion of the 2029 Convertible Notes on or after December 21, 2026, if the last reported sale price of the Class A Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately

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preceding the date on which we provide notice of redemption. The redemption price will be equal to 100% of the principal amount of the 2029 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of March 31, 2023. As of March 31, 2023, the if-converted value of the 2029 Convertible Notes did not exceed the principal amount.

Note Repurchases

In December 2022, the Company repurchased approximately $109.4 million aggregate principal amount of 2.875% Convertible Senior Notes Due 2024 for approximately $117.5 million plus accrued interest and approximately $69.1 million aggregate principal amount of 2.375% Convertible Senior Notes Due 2025 for approximately $62.9 million plus accrued interest and recognized a $3.5 million loss on extinguishment of debt recorded to "Interest expense" in the Company's condensed consolidated statement of operations.

2.375% 2025 Convertible Senior Notes Due 2025

In May 2018, we issued $172.5 million aggregate principal amount of 2.375% Convertible Senior Notes Due 2025 (the “2025 Convertible Notes”), for which $103.4 million remains outstanding as of March 31, 2023. The 2025 Convertible Notes were issued pursuant to an indenture dated May 14, 2018 (the "2018 Indenture") by and between the Company and Wells Fargo Bank, National Association, as the original trustee. Effective October 1, 2019, Truist (formerly BB&T) assumed the duties and responsibilities as trustee under the 2018 Indenture. The 2025 Convertible Notes were issued in a private offering under Rule 144A under the Securities Act of 1933. The 2025 Convertible Notes pay interest semi-annually in arrears at a rate of 2.375% per annum on May 1 and November 1 of each year, commencing November 1, 2018, and mature on May 1, 2025 (the "2025 Maturity Date"), unless converted, redeemed or repurchased in accordance with the terms prior to such date.

The effective interest rate for the three and six months ended March 31, 2023 was approximately 2.88% for the 2025 Convertible Notes. As of March 31, 2023, the remaining unamortized debt issuance costs will be amortized using the effective interest method through the 2025 Maturity Date assuming no early conversion.

The 2025 Convertible Notes are convertible based on an initial conversion rate of 62.8931 shares of Class A Common Stock per $1,000 principal amount (equivalent to an initial conversion price of $15.90 per share). The conversion rate will not be adjusted for any accrued and unpaid interest. The 2025 Convertible Notes contain certain make-whole fundamental change premiums and customary anti-dilution adjustments. Upon conversion, we may settle in cash, shares of Class A Common Stock or any combination thereof, at our election.

Prior to November 1, 2024, the 2025 Convertible Notes are convertible only under the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ended on June 30, 2018 (and only during such fiscal quarter), if the last reported sale price of our Class A Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price, as defined in the 2018 Indenture, per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our Class A Common Stock and the conversion rate on such trading day; (3) if we call any or all of the 2025 Convertible Notes for redemption, at any time prior to the close of business on the business day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events, as defined in the 2018 Indenture. On or after November 1, 2024 until the close of business on the business day immediately preceding the 2025 Maturity Date, holders of 2025 Convertible Notes may, at their option, convert their 2025 Convertible Notes at any time, regardless of the foregoing circumstances.

We may not redeem the 2025 Convertible Notes prior to May 1, 2022. At our option, we may redeem for cash all or any portion of the 2025 Convertible Notes on or after May 1, 2022, if the last reported sale price of the Class A Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption. The redemption price will be equal to 100% of the principal amount of the 2025 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of March 31, 2023. As of March 31, 2023, the if-converted value of the 2025 Convertible Notes did not exceed the principal amount.

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2.875% Convertible Senior Notes Due 2024

In July 2017, we issued $143.75 million aggregate principal amount of 2.875% Convertible Senior Notes Due 2024 (the “2024 Convertible Notes”), for which $34.4 million remains outstanding as of March 31, 2023. The 2024 Convertible Notes were issued pursuant to an indenture dated July 5, 2017 (the "2017 Indenture") by and between the Company and Wells Fargo Bank, National Association, as the original trustee. Effective October 1, 2019, Truist (formerly BB&T) assumed the duties and responsibilities as trustee under the 2017 Indenture. The 2024 Convertible Notes were issued in a private offering under Rule 144A under the Securities Act of 1933. The 2024 Convertible Notes pay interest semi-annually in arrears at a rate of 2.875% per annum on January 1 and July 1 of each year, commencing January 1, 2018, and mature on July 1, 2024 (the "2024 Maturity Date"), unless converted, redeemed or repurchased in accordance with the terms prior to such date. At maturity, the holders of the 2024 Convertible Notes will be entitled to receive cash equal to the principal of the 2024 Convertible Notes plus accrued interest.

The effective interest rate for the three and six months ended March 31, 2023 was approximately 3.35%. As of March 31, 2023, the remaining unamortized debt issuance costs will be amortized using the effective interest method through the 2024 Maturity Date assuming no early conversion.

The 2024 Convertible Notes are convertible based on an initial conversion rate of 100 shares of Class A Common Stock per $1,000 principal amount (equivalent to an initial conversion price of $10.00 per share). The conversion rate will not be adjusted for any accrued and unpaid interest. The 2024 Convertible Notes contain certain make-whole fundamental change premiums and customary anti-dilution adjustments. Upon conversion, we may settle in cash, shares of Class A Common Stock or any combination thereof, at our election.

Prior to January 1, 2024, the 2024 Convertible Notes will be convertible only under the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ending on September 30, 2017 (and only during such fiscal quarter), if the last reported sale price of our Class A Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price, as defined in the 2017 Indenture, per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our Class A Common Stock and the conversion rate on such trading day; (3) if we call any or all of the 2024 Convertible Notes for redemption, at any time prior to the close of business on the business day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events, as defined in the 2017 Indenture. On or after January 1, 2024 until the close of business on the business day immediately preceding the 2024 Maturity Date, holders of 2024 Convertible Notes may, at their option, convert their 2024 Convertible Notes at any time, regardless of the foregoing circumstances.

At our option, we may redeem for cash all or any portion of the 2024 Convertible Notes on or after July 6, 2021, if the last reported sale price of the Class A Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption. The redemption price will be equal to 100% of the principal amount of the 2024 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of March 31, 2023. As of March 31, 2023, the if-converted value of the 2024 Convertible Notes did not exceed the principal amount.

NOTE 8: COMMON STOCK AND STOCK COMPENSATION

Common Stock Repurchase Program

On May 3, 2022, the Company's Board of Directors (the "Board") authorized the repurchase of up to $50 million of our Class A Common Stock over three years (the "Common Stock Repurchase Program"). Execution of the program will be responsive to fluctuating market conditions and valuations, liquidity needs and the expected return on investment compared to other opportunities.

The amount and timing of purchases will be dependent on a variety of factors, including stock price, trading volume, general market conditions, legal and regulatory requirements, general business conditions, the level of cash flows, and corporate considerations determined by management and the Board, such as liquidity and capital needs and the availability of attractive alternative investment opportunities. The Board of Directors has reserved the right to modify, suspend or terminate the program at any time. As of March 31, 2023, the Company has repurchased and retired 929,336 shares of our Class A Common Stock for $8.0 million under the Common Stock Repurchase Program, of which $3.9 million was repurchased during the quarter ended March 31, 2023. The repurchase amount is allocated between "Additional paid-in capital" and "Retained earnings" in our condensed consolidated balance sheets.

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Other Common Stock Repurchases

During December 2022, the Company used approximately $5.0 million of the net proceeds from the 2029 Convertible Notes offering to repurchase for cash 578,703 shares of its Class A common stock from purchasers of the notes in privately negotiated transactions. Such transactions were authorized separately from, and not considered a part of, the publicly announced share repurchase program discussed above. The repurchase amount is allocated between "Additional paid-in capital" and "Retained earnings" in our condensed consolidated balance sheets.

Stock Compensation

We maintain a Board-approved incentive plan to retain the services of our valued officers, directors and employees and to incentivize such persons to make contributions to our company and motivate excellent performance (the "Incentive Plan"). Under the Incentive Plan, we grant awards of restricted stock or restricted stock units to employees and non-employee directors. Awards granted to employees are typically subject to performance and service conditions. Awards granted to non-employee directors are time-based awards subject only to service conditions. Awards granted under the Incentive Plan are measured at the grant date fair value with compensation costs associated with the awards recognized over the requisite service period, usually the vesting period, on a straight-line basis.

The following table presents a summary of stock compensation activity:


	Shares	Weighted Average Grant Date Fair Value

Outstanding as of September 30, 2022	2,113,323	$	5.88
Granted	1,008,180	7.82
Released (a)	(480,238)	4.86
Cancelled	(54,497)	6.55
Outstanding as of March 31, 2023	2,586,768	$	6.81

(a) 114,311 shares were withheld to satisfy related income tax withholding.

NOTE 9: CONTINGENCIES

Currently, and from time to time, we are involved in various claims, disputes, lawsuits, investigations, and legal and regulatory proceedings, including the matter described below. We accrue for contingencies if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because these matters are inherently unpredictable and unfavorable developments or resolutions can occur, assessing contingencies requires judgments and is highly subjective about future events, and the amount of resulting loss may differ from these estimates. We do not believe the resolution of any particular matter will have a material adverse effect on our financial condition, results of operations or liquidity.

On October 14, 2021, Andrew Kowlessar filed an action in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida styled Andrew Kowlessar, individually and on behalf of all others similarly situated vs. EZCORP, Inc. d/b/a Value Pawn & Jewelry. The matter subsequently was amended and removed to the United States District Court of the Southern District of Florida as Andrew Kowlessar, individually and on behalf of all others similarly situated vs. EZPAWN Florida, Inc. d/b/a Value Pawn & Jewelry. In May 2022, the federal court action was dismissed and the case was refiled in the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida. The complaint was brought under Section 501.059, Florida Statutes, the Florida Telephone Solicitation Act (“Act”), and alleges certain text messages were sent in violation of the Act. The matter involves claims by a single individual, but alleges a class of persons who may have similar claims of violations of the Act and seeks class certification. On June 16, 2022, following discovery and pre-trial mediation, the parties agreed to a settlement of all asserted claims and entered into a Settlement Agreement and Release, which was approved by the court on October 24, 2022. The period for submitting claims expired on November 8, 2022. The Company recorded a $2.0 million charge during the quarter ended June 30, 2022, which amount has since been paid to the third party claims administrator in final satisfaction of claims and related costs. The claims administrator is in the process of disbursing settlement funds.

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NOTE 10: SEGMENT INFORMATION

Our operations are primarily managed on a geographical basis and are comprised of three reportable segments. The factors for determining our reportable segments include the manner in which our chief operating decision maker ("CODM") evaluates performance for purposes of allocating resources and assessing performance.

We currently report our segments as follows:

•U.S. Pawn — all pawn activities in the United States;

•Latin America Pawn — all pawn activities in Mexico and other parts of Latin America; and

•Other Investments — primarily our equity interest in the net income of Cash Converters along with our investment in Founders and RDC.

There are no inter-segment revenues presented below, and the amounts below were determined in accordance with the same accounting principles used in our condensed consolidated financial statements.

The following tables present revenue for each reportable segment, disaggregated revenue within our three reportable segments and Corporate, segment profits and segment contribution.


	Three Months Ended March 31, 2023
(in thousands)	U.S. Pawn		Latin America Pawn		Other Investments		Total Segments		Corporate Items		Consolidated

Revenues:
Merchandise sales	$	108,740	$	43,767	$	—	$	152,507	$	—	$	152,507
Jewelry scrapping sales	9,814		3,011		—		12,825		—		12,825
Pawn service charges	69,945		23,085		—		93,030		—		93,030
Other revenues	32		19		10		61		—		61
Total revenues	188,531		69,882		10		258,423		—		258,423
Merchandise cost of goods sold	67,643		29,696		—		97,339		—		97,339
Jewelry scrapping cost of goods sold	8,550		3,352		—		11,902		—		11,902

Gross profit	112,338		36,834		10		149,182		—		149,182
Segment and corporate expenses (income):
Store expenses	71,946		29,323		—		101,269		—		101,269
General and administrative	—		—		—		—		15,609		15,609

Depreciation and amortization	2,560		2,332		—		4,892		3,071		7,963
Loss (gain) loss on sale or disposal of assets	81		(8)		—		73		—		73
Other	—		(2,465)		—		(2,465)		—		(2,465)
Interest expense	—		—		—		—		3,390		3,390
Interest income	(1)		(298)		—		(299)		(1,599)		(1,898)
Equity in net loss of unconsolidated affiliates	—		—		32,501		32,501		—		32,501

Other (income) expense	—		(46)		6		(40)		120		80

Segment contribution (loss)	$	37,752	$	7,996	$	(32,497)	$	13,251
Income (loss) before income taxes							$	13,251	$	(20,591)	$	(7,340)

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	Three Months Ended March 31, 2022
(in thousands)	U.S. Pawn		Latin America Pawn		Other Investments		Total Segments		Corporate Items		Consolidated

Revenues:
Merchandise sales	$	100,064	$	33,492	$	—	$	133,556	$	—	$	133,556
Jewelry scrapping sales	3,480		2,210		—		5,690		—		5,690
Pawn service charges	58,772		17,911		—		76,683		—		76,683
Other revenues	24		—		29		53		—		53
Total revenues	162,340		53,613		29		215,982		—		215,982
Merchandise cost of goods sold	58,613		23,633		—		82,246		—		82,246
Jewelry scrapping cost of goods sold	2,798		2,010		—		4,808		—		4,808

Gross profit	100,929		27,970		29		128,928		—		128,928
Segment and corporate expenses (income):
Store expenses	64,492		21,251		—		85,743		—		85,743
General and administrative	—		—		—		—		12,227		12,227

Depreciation and amortization	2,625		1,891		—		4,516		2,934		7,450
Loss on sale or disposal of assets and other	—		(9)		—		(9)		(688)		(697)

Interest expense	—		—		—		—		2,527		2,527
Interest income	—		(255)		—		(255)		—		(255)
Equity in net income of unconsolidated affiliates	—		—		1,439		1,439		—		1,439

Other (income) expense	—		334		8		342		29		371
Segment contribution	$	33,812	$	4,758	$	(1,418)	$	37,152
Income (loss) before income taxes							$	37,152	$	(17,029)	$	20,123


	Six Months Ended March 31, 2023
(in thousands)	U.S. Pawn		Latin America Pawn		Other Investments		Total Segments		Corporate Items		Consolidated

Revenues:
Merchandise sales	$	227,054	$	89,240	$	—	$	316,294	$	—	$	316,294
Jewelry scrapping sales	16,990		3,719		—		20,709		—		20,709
Pawn service charges	139,255		46,368		—		185,623		—		185,623
Other revenues	57		35		32		124		—		124
Total revenues	383,356		139,362		32		522,750		—		522,750
Merchandise cost of goods sold	140,899		61,317		—		202,216		—		202,216
Jewelry scrapping cost of goods sold	14,766		4,089		—		18,855		—		18,855

Gross profit	227,691		73,956		32		301,679		—		301,679
Segment and corporate expenses (income):
Store expenses	145,250		56,822		—		202,072		—		202,072
General and administrative	—		(3)		—		(3)		31,088		31,085

Depreciation and amortization	5,315		4,547		—		9,862		6,089		15,951
Loss (gain) on sale or disposal of assets	84		(27)		—		57		—		57
Other	—		(2,465)		—		(2,465)		—		(2,465)
Interest expense	—		—		—		—		9,580		9,580
Interest income	(1)		(467)		—		(468)		(2,094)		(2,562)
Equity in net loss of unconsolidated affiliates	—		—		30,917		30,917		—		30,917

Other expense (income)	—		24		10		34		(188)		(154)

Segment contribution (loss)	$	77,043	$	15,525	$	(30,895)	$	61,673
Income (loss) before income taxes							$	61,673	$	(44,475)	$	17,198

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	Six Months Ended March 31, 2022
(in thousands)	U.S. Pawn		Latin America Pawn		Other Investments		Total Segments		Corporate Items		Consolidated

Revenues:
Merchandise sales	$	202,142	$	69,134	$	—	$	271,276	$	—	$	271,276
Jewelry scrapping sales	8,460		4,174		—		12,634		—		12,634
Pawn service charges	115,329		37,379		—		152,708		—		152,708
Other revenues	46		240		72		358		—		358
Total revenues	325,977		110,927		72		436,976		—		436,976
Merchandise cost of goods sold	116,445		48,912		—		165,357		—		165,357
Jewelry scrapping cost of goods sold	6,773		3,807		—		10,580		—		10,580

Gross profit	202,759		58,208		72		261,039		—		261,039
Segment and corporate expenses (income):
Store expenses	129,181		43,333		—		172,514		—		172,514
General and administrative	—		—		—		—		27,772		27,772

Depreciation and amortization	5,295		3,871		—		9,166		5,858		15,024
Gain on sale or disposal of assets and other	—		(4)		—		(4)		(688)		(692)

Interest expense	—		—		—		—		4,958		4,958
Interest income	—		(437)		—		(437)		(122)		(559)
Equity in net income of unconsolidated affiliates	—		—		301		301		—		301
Other (income) expense	—		200		(4)		196		55		251
Segment contribution	$	68,283	$	11,245	$	(225)	$	79,303
Income (loss) before income taxes							$	79,303	$	(37,833)	$	41,470

The following table presents separately identified net earning assets by segment:


(in thousands)	U.S. Pawn		Latin America Pawn		Other Investments		Corporate Items		Total

As of March 31, 2023
Pawn loans	$	157,043	$	49,053	$	—	$	—	$	206,096
Inventory, net	112,147		38,150		—		—		150,297

As of March 31, 2022
Pawn loans	$	133,515	$	40,103	$	—	$	—	$	173,618
Inventory, net	93,320		26,570		—		—		119,890

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NOTE 11: SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION

The following table provides supplemental information on net amounts included in our condensed consolidated balance sheets:


(in thousands)	March 31, 2023		March 31, 2022		September 30, 2022

Gross pawn service charges receivable	$	42,335	$	35,886	$	44,192
Allowance for uncollectible pawn service charges receivable	(9,219)		(7,567)		(10,716)
Pawn service charges receivable, net	$	33,116	$	28,319	$	33,476

Gross inventory	$	153,348	$	123,944	$	153,673
Inventory reserves	(3,051)		(4,054)		(2,058)
Inventory, net	$	150,297	$	119,890	$	151,615

Prepaid expenses and other	$	7,677	$	10,245	$	8,336
Accounts receivable, notes receivable and other	27,817		8,255		8,435
Income taxes prepaid and receivable	10,070		8,767		17,923
Prepaid expenses and other current assets	$	45,564	$	27,267	$	34,694

Property and equipment, gross	$	325,458	$	293,087	$	306,667
Accumulated depreciation	(265,683)		(242,213)		(249,942)
Property and equipment, net	$	59,775	$	50,874	$	56,725

Accounts payable	$	18,443	$	17,756	$	24,056
Accrued payroll	8,842		8,631		8,365
Incentive accrual	8,997		8,196		17,403
Other payroll related expenses	8,351		7,877		9,592
Accrued sales and VAT taxes	6,949		8,022		7,279
Accrued income taxes payable	3,662		4,346		2,663
Other current liabilities	17,451		14,867		15,151
Accounts payable, accrued expenses and other current liabilities	$	72,695	$	69,695	$	84,509

The following table provides supplemental disclosure of Consolidated Statements of Cash Flows information:


	Six Months Ended March 31,
(in thousands)	2023		2022

Supplemental disclosure of cash flow information
Cash and cash equivalents	$	243,128	$	254,964
Restricted cash	8,451		8,713
Total cash and cash equivalents and restricted cash	$	251,579	$	263,677

Non-cash investing and financing activities:
Pawn loans forfeited and transferred to inventory	$	159,398	$	134,562
Transfer of consideration for other investment	—		1,500
Transfer of equity consideration for acquisition	99		—
Acquisition earn-out contingency	2,000		—
Accrued acquisition consideration	1,145		—

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to inform the reader about matters affecting the financial condition and results of operations of EZCORP, Inc. and its subsidiaries (collectively, “we,” “us”, “our”, "EZCORP" or the “Company”). The following discussion should be read together with our condensed consolidated financial statements and related notes included elsewhere within this report. This discussion contains forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements. See "Part I, Item 1A — Risk Factors" of our Annual Report on Form 10-K for the year ended September 30, 2022, as supplemented by the information set forth in “Part I, Item 3 — Quantitative and Qualitative Disclosures about Market Risk” and "Part II, Item 1A — Risk Factors" of this Report, for a discussion of certain risks, uncertainties and assumptions associated with these statements.

Business Overview

EZCORP is a Delaware corporation headquartered in Austin, Texas. We are a leading provider of pawn services in the United States and Latin America. Pawn loans are nonrecourse loans collateralized by personal property. We also sell merchandise, primarily collateral forfeited from unpaid loans or goods purchased directly from customers.

We exist to serve our customers’ short-term cash needs, helping them to live and enjoy their lives. We are focused on three strategic pillars:



Strengthen the Core			Relentless focus on superior execution and operational excellence in our core pawn business
Cost Efficiency and Simplification			Shape a culture of cost efficiency through ongoing focus on simplification and optimization
Innovate and Grow			Broaden customer engagement to service more customers more frequently in more locations

Pawn Activities

At our pawn stores, we advance cash against the value of collateralized tangible personal property. We earn pawn service charges (“PSC”) for those cash advances, and the PSC rate varies by state and transaction size. At the time of the transaction, we take possession of the pawned collateral, which consists of tangible personal property, generally jewelry, consumer electronics, tools, sporting goods or musical instruments. If the customer chooses to redeem their pawn, they will repay the amount advanced plus any accrued PSC. If the customer chooses not to redeem their pawn, the pawned collateral becomes our inventory, which we sell in our retail merchandise sales activities or, in some cases, scrap for its inherent gold or precious stone content. Consequently, the success of our pawn business is largely dependent on our ability to accurately assess the probability of pawn redemption and the estimated resale or scrap value of the collateralized personal property.

Our ability to offer quality second-hand goods at prices significantly lower than original retail prices attracts value-conscious customers. The gross profit on sales of inventory depends primarily on our assessment of the estimated resale or scrap value at the time the property is either accepted as pawn collateral or purchased and our ability to sell that merchandise in a timely manner. As a significant portion of our inventory and sales involve gold and jewelry, our results can be influenced by the market price of gold and diamonds.

Growth and Expansion

Our strategy is to expand the number of locations we operate through opening new (“de novo”) locations and through acquisitions and investments in both Latin America, the United States and potential new markets. Our ability to open de novo stores, acquire new stores and make other related investments is dependent on several variables, such as projected achievement of internal investment hurdles, the availability of acceptable sites or acquisition candidates, the alignment of acquirer/seller price expectations, the regulatory environment, local zoning ordinances, access to capital and the availability of qualified personnel.

Seasonality and Quarterly Results

In the United States, PSC is historically highest in our fourth fiscal quarter (July through September) due to a higher average loan balance during the summer lending season. PSC is historically lowest in our third fiscal quarter (April through June) following the tax refund season and merchandise sales are highest in our first and second fiscal quarters (October through March) due to the holiday season, jewelry sales

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surrounding Valentine’s Day and the availability of tax refunds. In Latin America, most of our customers receive additional compensation from their employers in December, and many receive additional compensation in June or July, applying downward pressure on loan balances and fueling some merchandise sales in those periods. As a net effect of these and other factors and excluding discrete charges, our consolidated income/loss before tax is generally highest in our first fiscal quarter (October through December) and lowest in our third fiscal quarter (April through June).

Financial Highlights

We remain focused on optimizing our balance of pawn loans outstanding (“PLO”) and the resulting higher PSC. The following chart presents sources of gross profit, including PSC, merchandise sales gross profit ("Merchandise sales GP") and jewelry scrapping gross profit ("Jewelry Scrapping GP") for the three and six months ended March 31, 2023 and 2022:

The following chart presents sources of gross profit by geographic disbursement for the three and six months ended March 31, 2023 and 2022:

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Results of Operations

Non-GAAP Constant Currency and Same Store Financial Information

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, we provide certain other non-GAAP financial information on a constant currency basis ("constant currency") and "same store" basis. We use constant currency results to evaluate our Latin America Pawn operations, which are denominated primarily in Mexican pesos, Guatemalan quetzales and other Latin American currencies. We analyze results on a same store basis (which is defined as stores open during the entirety of the comparable periods) to better understand existing store performance without the influence of increases or decreases resulting solely from changes in store count. We believe presentation of constant currency and same store results is meaningful and useful in understanding the activities and business metrics of our Latin America Pawn operations and reflect an additional way of viewing aspects of our business that, when viewed with GAAP results, provide a better understanding and evaluation of factors and trends affecting our business. We provide non-GAAP financial information for informational purposes and to enhance understanding of our GAAP consolidated financial statements. We use this non-GAAP financial information to evaluate and compare operating results across accounting periods. Readers should consider the information in addition to, but not rather than or superior to, our financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.

Constant currency results reported herein are calculated by translating consolidated balance sheet and consolidated statement of operations items denominated in local currency to U.S. dollars using the exchange rate from the prior-year comparable period, as opposed to the current period, in order to exclude the effects of foreign currency rate fluctuations. In addition, we have an equity method investment that is denominated in Australian dollars and is translated into U.S. dollars. We used the end-of-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. Our statement of operations constant currency results reflect the monthly exchange rate fluctuations and are not directly calculable from the rates below. Constant currency results, where presented, also exclude the foreign currency gain or loss. The end-of-period and approximate average exchange rates for each applicable currency as compared to U.S. dollars as of and for the three and six months ended March 31, 2023 and March 31, 2022 were as follows:


	March 31,		Three Months Ended March 31,		Six Months Ended March 31,
	2023	2022	2023	2022	2023	2022

Mexican peso	18.1	19.9	18.7	20.5	19.2	20.6
Guatemalan quetzal	7.6	7.5	7.6	7.5	7.6	7.5
Honduran lempira	24.4	24.1	24.3	24.2	24.3	24.0

Australian dollar	1.5	1.3	1.5	1.4	1.5	1.4

Operating Results

Segments

We manage our business and report our financial results in three reportable segments:

•U.S. Pawn — Represents all pawn activities in the United States;

•Latin America Pawn — Represents all pawn activities in Mexico and other parts of Latin America; and

•Other Investments — Represents our equity interest in the net income of Cash Converters along with our investment in Founders and RDC.

Store Count by Segment


	Three Months Ended March 31, 2023
	U.S. Pawn	Latin America Pawn	Consolidated

As of December 31, 2022	525	661	1,186
New locations opened	2	11	13


As of March 31, 2023	527	672	1,199

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	Three Months Ended March 31, 2022
	U.S. Pawn	Latin America Pawn	Consolidated

As of December 31, 2021	516	633	1,149
New locations opened	—	3	3


As of March 31, 2022	516	636	1,152


	Six Months Ended March 31, 2023
	U.S. Pawn	Latin America Pawn	Consolidated

As of September 30, 2022	515	660	1,175
New locations opened	2	13	15
Locations acquired	10	—	10
Locations sold, combined or closed	—	(1)	(1)
As of March 31, 2023	527	672	1,199


	Six Months Ended March 31, 2022
	U.S. Pawn	Latin America Pawn	Consolidated

As of September 30, 2021	516	632	1,148
New locations opened	—	4	4


As of March 31, 2022	516	636	1,152

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Three Months Ended March 31, 2023 vs. Three Months Ended March 31, 2022

These tables, as well as the discussion that follows, should be read in conjunction with the accompanying Condensed Consolidated Financial Statements and related notes.

U.S. Pawn

The following table presents selected summary financial data for our U.S. Pawn segment:


	Three Months Ended March 31,						Change
(in thousands)	2023			2022

Gross profit:
Pawn service charges	$	69,945		$	58,772		19%

Merchandise sales	108,740			100,064			9%
Merchandise sales gross profit	41,097			41,451			(1)%
Gross margin on merchandise sales	38		%	41		%	(300)bps

Jewelry scrapping sales	9,814			3,480			182%
Jewelry scrapping sales gross profit	1,264			682			85%
Gross margin on jewelry scrapping sales	13		%	20		%	(700)bps

Other revenues	32			24			33%
Gross profit	112,338			100,929			11%

Segment operating expenses:
Store expenses	71,946			64,492			12%
Depreciation and amortization	2,560			2,625			(2)%
Loss on sale or disposal of assets and other	81			—			*
Segment operating contribution	37,751			33,812			12%

Other segment (income) expense	(1)			—			*
Segment contribution	$	37,752		$	33,812		12%

Other data:
Net earning assets (a)	$	269,190		$	226,835		19%
Inventory turnover	2.6			2.6			—%
Average monthly ending pawn loan balance per store (b)	$	310		$	270		15%
Monthly average yield on pawn loans outstanding	14		%	14		%	—bps



*			Represents a percentage computation that is not mathematically meaningful.
(a)			Balance includes pawn loans and inventory.
(b)			Balance is calculated based upon the average of the monthly ending balances during the applicable period.

PLO ended the quarter at $157.0 million, up 18% (14% on a same store basis).

Total revenue was up 16% and gross profit increased 11%, reflecting increased PSC and higher merchandise sales..

PSC increased 19% as a result of higher average PLO.

Merchandise sales increased 9% and gross margin decreased to 38% from 41%, reflecting a more normalized operating environment. Aged general merchandise increased to 1.4% of total general merchandise inventory, primarily driven by recent acquisitions.

Net inventory increased 20% reflecting a return towards normalized inventory levels. Inventory turnover remained flat at 2.6x.

Store expenses increased 12%, primarily due to increased labor in-line with store activity, higher store count and, to a lesser extent, expenses related to our loyalty program.

Segment contribution increased 12% to $37.8 million, due to the changes noted above.

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Segment store count increased by two de novo stores during this quarter.

Latin America Pawn

The following table presents selected summary financial data for the Latin America Pawn segment, including constant currency results, after translation to U.S. dollars from its functional currencies noted above under “Results of Operations — Non-GAAP Constant Currency and Same Store Financial Information."


	Three Months Ended March 31,
(in thousands)	2023 (GAAP)			2022 (GAAP)			Change (GAAP)	2023 (Constant Currency)			Change (Constant Currency)

Gross profit:
Pawn service charges	$	23,085		$	17,911		29%	$	21,674		21%

Merchandise sales	43,767			33,492			31%	40,694			22%
Merchandise sales gross profit	14,071			9,859			43%	13,012			32%
Gross margin on merchandise sales	32		%	29		%	300bps	32		%	300bps

Jewelry scrapping sales	3,011			2,210			36%	2,846			29%
Jewelry scrapping sales gross profit	(341)			200			(271)%	(314)			(257)%
Gross margin on jewelry scrapping sales	(11)		%	9		%	*	(11)		%	*

Other revenues, net	19			—			*	17			*
Gross profit	36,834			27,970			32%	34,389			23%

Segment operating expenses:
Store expenses	29,323			21,251			38%	27,399			29%

Depreciation and amortization	2,332			1,891			23%	2,160			14%
Other	(2,465)			—			*	(2,336)			*
Segment operating contribution	7,644			4,828			58%	7,166			48%

Other segment income	(352)			70			(603)%	(429)			(713)%
Segment contribution	$	7,996		$	4,758		68%	$	7,595		60%

Other data:
Net earning assets (a)	$	87,203		$	66,673		31%	$	81,237		22%
Inventory turnover	3.5			3.8			(8)%	3.5			(8)%
Average monthly ending pawn loan balance per store (b)	$	71		$	60		18%	$	71		18%
Monthly average yield on pawn loans outstanding	17		%	16		%	100bps	17		%	100bps



*			Represents a percentage computation that is not mathematically meaningful.
(a)			Balance includes pawn loans and inventory.
(b)			Balance is calculated based upon the average of the monthly ending balances during the applicable period.


	2023 Change (GAAP)	2023 Change (Constant Currency)
Same Store data:
PLO	19%	12%
PSC	26%	18%
Merchandise Sales	25%	16%
Merchandise Sales Gross Profit	61%	49%
Store Expenses	32%	24%

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PLO improved to $49.1 million, up 22% (14% on constant currency basis). On a same store basis, PLO increased 19% (12% on a constant currency basis).

Total revenue was up 30% (22% on constant currency basis), while gross profit increased 32% (23% on a constant currency basis), reflecting increased PSC, higher merchandise sales and improved merchandise sales gross profit.

PSC increased 29% (21% on a constant currency basis) as a result of higher average PLO and yield.

Merchandise sales gross margin increased from 29% to 32%. Aged general merchandise inventory increased to 3.2% from 1.0% of total merchandise inventory.

Net inventory increased 44% (33% on a constant currency basis), reflecting a return towards normalized inventory levels. Inventory turnover remains strong at 3.5x.

Store expenses increased 38% (29% on a constant currency basis), primarily due to increased labor in line with store activity and higher store count. Same-store expenses increased 32% (24% on a constant currency basis).

Segment contribution increased 68% (60% on a constant currency basis) to $8.0 million, this increase was primarily due to the reversal of a contingent consideration liability in connection with a previously completed acquisition, which was recorded to "Other," and the changes in revenue and store expenses described above..

Segment store count increased by 11 de novo stores during the quarter.

Other Investments

The following table presents selected financial data for our Other Investments segment after translation to U.S. dollars from its functional currency of primarily Australian dollars:


	Three Months Ended March 31,				Change
(in thousands)	2023		2022

Gross profit:
Consumer loan fees, interest and other	$	10	$	29	(66)%

Gross profit	10		29		(66)%

Segment operating expenses:




Equity in net loss of unconsolidated affiliates	32,501		1,439		2,159%
Segment operating loss	(32,491)		(1,410)		2,204%

Other segment expense	6		8		(25)%
Segment loss	$	(32,497)	$	(1,418)	2,192%

Segment loss was $32.5 million, a decrease of $31.1 million due to the net loss on our share of Cash Converters related to their non-cash goodwill impairment charge taken during the quarter ended March 31, 2023. Additionally, See "Part II, Item 1A — Risk Factors" of this Report. A decline in future operating results of Cash Converters, if any, resulting from the change of law could adversely affect our investment.

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Other Items

The following table reconciles our consolidated segment contribution discussed above to net income attributable to EZCORP, Inc., including items that affect our consolidated financial results but are not allocated among segments:


	Three Months Ended March 31,				Percentage Change
(in thousands)	2023		2022

Segment contribution	$	13,251	$	37,152	(64)%
Corporate expenses (income):
General and administrative	15,609		12,227		28%
Depreciation and amortization	3,071		2,934		5%
(Gain) loss on sale or disposal of assets and other	—		(688)		*
Interest expense	3,390		2,527		34%
Interest income	(1,599)		—		*

Other expense	120		29		*

(Loss) income before income taxes	(7,340)		20,123		(136)%
Income tax (benefit) expense	(550)		5,236		(111)%




Net (loss) income	$	(6,790)	$	14,887	(146)%


*			Represents a percentage computation that is not mathematically meaningful.

Segment contribution decreased $23.9 million or 64% over the prior year quarter primarily due to the decrease in Other Investments segment due to the net loss on our share of Cash Converters, offset by improved operating results of the U.S. Pawn and Latin America Pawn segments above.

General and administrative expense increased $3.4 million or 28%, primarily due to the impact related to the reversal of incentive compensation for the departed CEO in the prior period and to a lesser extent, an overall increase in incentive-based compensation.

Interest income increased $1.6 million, due primarily to our treasury management with increased market interest rates, and, to a lesser extent, loans to certain strategic investees.

Income tax expense decreased $5.8 million primarily due to a decrease in income before income taxes of $27.5 million this quarter compared to the prior year associated with the net loss on our share of Cash Converters, offset by the improved operating results within the U.S. Pawn segment and the Latin American Pawn segment.

Income tax expense includes other items that do not necessarily correspond to pre-tax earnings and create volatility in our effective tax rate. These items include the net effect of state taxes, non-deductible items and changes in valuation allowances for certain foreign operations. See Annual Report on Form 10-K for the year ended September 30, 2022 Note 11: Income Taxes of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplemental Data” for quantification of these items.

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Six Months Ended March 31, 2023 vs. Six Months Ended March 31, 2022

The tables below and discussion that follows should be read in conjunction with the accompanying condensed consolidated financial statements and related notes.

U.S. Pawn

The following table presents selected summary financial data for the U.S. Pawn segment:


	Six Months Ended March 31,						Change
(in thousands)	2023			2022

Gross profit:
Pawn service charges	$	139,255		$	115,329		21%

Merchandise sales	227,054			202,142			12%
Merchandise sales gross profit	86,155			85,697			1%
Gross margin on merchandise sales	38		%	42		%	(400)bps

Jewelry scrapping sales	16,990			8,460			101%
Jewelry scrapping sales gross profit	2,224			1,687			32%
Gross margin on jewelry scrapping sales	13		%	20		%	(700)bps

Other revenues	57			46			24%
Gross profit	227,691			202,759			12%

Segment operating expenses:
Store expenses	145,250			129,181			12%

Depreciation and amortization	5,315			5,295			—%
Loss on sale or disposal of assets and other	84						*
Segment operating contribution	77,042			68,283			13%

Other segment (income) expense	(1)			—			*
Segment contribution	$	77,043		$	68,283		13%

Other data:
Average monthly ending pawn loan balance per store (a)	$	312		$	270		16%
Monthly average yield on pawn loans outstanding	14		%	14		%	—bps


*			Represents a percentage computation that is not mathematically meaningful.
(a)			Balance is calculated based upon the average of the monthly ending balances during the applicable period.

Pawn service charges increased 21% as a result of higher average PLO for the year.

Merchandise sales increased 12% compared to the prior year. Merchandise sales increase was driven primarily by our continued focus on customer engagement and pricing merchandise to maintain strong inventory turnover. Offsetting the sales increase, merchandise sales gross margin decreased 400 bps reflecting a return toward more normalized margins.

Store expenses increased 12%, primarily due to increased labor in-line with store activity, higher store count and expenses associated with our loyalty program.

Segment contribution increased $8.8 million, primarily due to the changes described above.

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Latin America Pawn

The following table presents selected summary financial data our Latin America Pawn segment, including constant currency results, after translation to U.S. dollars from functional currencies. See “Results of Operations — Non-GAAP Constant Currency and Same Store Financial Information” above.


	Six Months Ended March 31,
(in thousands)	2023 (GAAP)			2022 (GAAP)			Change (GAAP)	2023 (Constant Currency)			Change (Constant Currency)

Gross profit:
Pawn service charges	$	46,368		$	37,379		24%	$	44,153		18%

Merchandise sales	89,240			69,134			29%	84,289			22%
Merchandise sales gross profit	27,923			20,222			38%	26,300			30%
Gross margin on merchandise sales	31		%	29		%	200bps	31		%	200bps

Jewelry scrapping sales	3,719			4,174			(11)%	3,518			(16)%
Jewelry scrapping sales gross profit	(370)			367			(201)%	(343)			(193)%
Gross margin on jewelry scrapping sales	(10)		%	9		%	(1,900)bps	(10)		%	(1,900)bps

Other revenues, net	35			240			*	32			*
Gross profit	73,956			58,208			27%	70,142			21%

Segment operating expenses:
Store expenses	56,822			43,333			31%	53,836			24%
Depreciation and amortization	4,547			3,871			17%	4,285			11%

Other	(2,465)			—			*	(2,336)			*
Segment operating contribution	15,052			11,004			37%	14,357			30%

Other segment income (a)	(473)			(241)			96%	(723)			200%
Segment contribution	$	15,525		$	11,245		38%	$	15,080		34%

Other data:
Average monthly ending pawn loan balance per store (a)	$	71		$	60		18%	$	71		18%
Monthly average yield on pawn loans outstanding	17		%	16		%	100bps	17		%	100bps


*			Represents a percentage computation that is not mathematically meaningful.

(a)			Balance is calculated based upon the average of the monthly ending balances during the applicable period.


	2023 Change (GAAP)	2023 Change (Constant Currency)
Same Store data:
PLO	19%	12%
PSC	22%	16%
Merchandise Sales	24%	17%
Merchandise Sales Gross Profit	56%	47%
Store Expenses	20%	14%

During the six months ended March 31, 2023, our Latin America pawn segment opened thirteen de novo stores.

PSC increased 24% to $46.4 million (18% to $44.2 million on a constant currency basis) as a result of higher average PLO for the year.

Merchandise sales increased 29% (22% on a constant currency basis) and 24% on a same store basis (17% on a constant currency basis). Merchandise sales increase was driven primarily by our continued focus on customer engagement, pricing merchandise to maintain strong inventory turnover and increase in stores. Merchandise sales gross margin increased 200 bps from 29% to 31% and on a constant currency basis, reflecting a return to more normalized margins.

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Store expenses increased by 31% (24% on a constant currency basis) primarily due to higher store count and increased labor in-line with store activity. On a same-store basis, store expenses increased 20% (14% on a constant currency basis) due to rising labor costs resulting from growing transaction volume.

Segment contribution increased $4.3 million, or 38%, to $15.5 million. This increase was primarily due to the reversal of a contingent consideration liability in connection with a previously completed acquisition, which was recorded to "Other," and the changes in revenue and store expenses described above.

Other Investments

The following table presents selected financial data for our Other Investments segment after translation to U.S. dollars from its functional currency of primarily Australian dollars:


	Six Months Ended March 31,				Change
(in thousands)	2023		2022

Gross profit:
Consumer loan fees, interest and other	32		72		(56)%

Gross profit	32		72		(56)%

Segment operating expenses:



Equity in net loss of unconsolidated affiliates	30,917		301		*
Segment operating loss	(30,885)		(229)		*

Other segment loss (income)	10		(4)		(350)%
Segment loss	$	(30,895)	$	(225)	*


*			Represents a percentage computation that is not mathematically meaningful.

Segment loss was $30.9 million, a decrease of $30.7 million from the prior-year six months ended March 31, 2022, primarily due to the net loss on our share of Cash Converters related to their non-cash goodwill impairment charge.

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Other Items


	Six Months Ended March 31,				Percentage Change
(in thousands)	2023		2022

Segment contribution	$	61,673	$	79,303	(22)%
Corporate expenses (income):

General and administrative	31,088		27,772		12%
Depreciation and amortization	6,089		5,858		4%
(Gain) loss on sale or disposal of assets	—		(688)		*
Interest expense	9,580		4,958		93%
Interest income	(2,094)		(122)		*

Other (income) expense	(188)		55		(442)%
Income from continuing operations before income taxes	17,198		41,470		(59)%
Income tax expense	7,210		10,862		(34)%




Net income	$	9,988	$	30,608	(67)%


*			Represents a percentage computation that is not mathematically meaningful.

Segment contribution decreased $17.6 million or 22% over the prior year six months ended March 31, 2022, primarily due to the equity pickup of Cash Converters' net results partially offset by the improved operating results of the segments above.

General and administrative expenses increased $3.3 million or 12%, primarily due to the impact related to the reversal of incentive compensation for the departed CEO in the prior period and to a lesser extent, an overall increase in incentive-based compensation.

Interest expense increased $4.6 million, primarily driven by the net loss recorded on the partial extinguishments of the 2024 convertible notes and 2025 convertible notes, and higher average total debt outstanding at overall higher average effective interest rates due to the issuance of the 2029 convertible notes during December 2022. See Note 7: Debt to the consolidated financials for further discussion.

Income tax expense decreased $3.7 million, primarily due to a decrease in income before income taxes of $24.3 million for the six months ended March 31, 2022 compared to the same prior year six month period.

Liquidity and Capital Resources

Cash and Cash Equivalents

Our cash and equivalents balance was $243.1 million at March 31, 2023 compared to $206.0 million at September 30, 2022. At March 31, 2023, our cash and equivalents were held in cash depository accounts with major banks or invested in high quality, short-term liquid investments.

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Cash Flows

The table and discussion below presents a summary of the selected sources and uses of our cash:


	Six Months Ended March 31,				Percentage Change
(in thousands)	2023		2022

Net cash provided by operating activities	$	46,827	$	30,575	53%
Net cash used in investing activities	(40,649)		(31,887)		27%
Net cash provided by (used in) financing activities	29,976		(792)		*
Effect of exchange rate changes on cash, cash equivalents and restricted cash	1,056		2,157		(51)%
Net increase in cash, cash equivalents and restricted cash	$	37,210	$	53	*


*			Represents a percentage computation that is not mathematically meaningful.

The increase in cash flows provided by operating activities year-over-year was primarily due to an increase in net income (when considering adjustments for non-cash items affecting net income) as well as changes in working capital primarily related to the timing of payments of accounts payable.

The $8.8 million increase in cash flows used in investing activities year-over-year was primarily due to $24.5 million higher outgoing cash flows used to fund acquisitions and strategic investments and an increase of $18.5 million in net pawn lending, partially offset by an $42.2 million increase in the sale of forfeited collateral. Of the $24.5 million increase year-over-year used to fund other investments, the largest amount is $15.0 million related to a note receivable from Founders, as discussed in Note 5: Strategic Investments in Part I, Item 1 - Notes to Interim Condensed Consolidated Financial Statements.

The $30.8 million increase in cash flows provided by financing activities was primarily related to the December 2022 financing of the 2029 Convertible Notes, in which we issued $230.0 million (less issuance costs) principal amount of 3.750% Convertible Senior Notes Due 2029 offset by the extinguishment of approximately $109.4 million aggregate principal amount of our 2024 Convertible Notes for approximately $117.5 million plus accrued interest and approximately $69.1 million aggregate principal amount of our 2025 Convertible Notes for approximately $62.9 million plus accrued interest. In addition, we used approximately $5.0 million of the net proceeds from the 2029 Convertible Notes offering to repurchase 578,703 shares of our Class A common stock from purchasers of the notes in privately negotiated transactions.

The net effect of these changes was a $37.2 million increase in cash on hand during the current year to date period, resulting in a $251.6 million ending cash and restricted cash balance.

Sources and Uses of Cash

In December 2022, we issued $230.0 million aggregate principal amount of 2029 Convertible Notes. In conjunction with the issuance of the 2029 Convertible Notes, we extinguished approximately $109.4 million aggregate principal amount of our 2024 Convertible Notes for approximately $117.5 million plus accrued interest and approximately $69.1 million aggregate principal amount of our 2025 Convertible Notes for approximately $62.9 million plus accrued interest. In addition, we used approximately $5.0 million of the net proceeds from the 2029 Convertible Notes offering to repurchase 578,703 shares of our Class A common stock from purchasers of the notes in privately negotiated transactions. See Note 7 of Notes to Interim Condensed Consolidated Financial Statements included in "Part I, Item 1 — Financial Statements". The shares repurchased in conjunction with the transactions discussed above were authorized separately from, and not considered part of, the publicly announced share repurchase program referred to below.

On May 3, 2022, our Board authorized the repurchase of up to $50 million of our Class A Common Stock over three years. As of March 31, 2023, we have repurchased 929,336 shares of our Class A Common Stock under the program for $8.0 million. Execution of the program will be responsive to fluctuating market conditions and valuations, liquidity needs and the expected return on investment compared to other opportunities.

Under the stock repurchase program, we may purchase Class A Non-Voting common stock from time to time at management’s discretion in accordance with applicable securities laws, including through open market transactions, block or privately negotiated transactions, or any combination thereof. In addition, we may purchase shares pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934.

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The amount and timing of purchases will be dependent on a variety of factors, including stock price, trading volume, general market conditions, legal and regulatory requirements, general business conditions, the level of cash flows and corporate considerations determined by management and the Board, such as liquidity and capital needs and the availability of attractive alternative investment opportunities. The Board of Directors has reserved the right to modify, suspend or terminate the program at any time. See Note 8 of Notes to Interim Condensed Consolidated Financial Statements included in "Part I, Item 1 — Financial Statements."

We anticipate that cash flows from operations and cash on hand will be adequate to fund ongoing operations, debt service requirements, tax payments, any future stock repurchases, strategic investments, our contractual obligations, planned de novo store growth, capital expenditures and working capital requirements through fiscal 2023. We continue to explore acquisition opportunities, both large and small, and may choose to pursue additional debt, equity or equity-linked financings in the future should the need arise. Depending on the level of acquisition activity and other factors, our ability to repay our longer-term debt obligations, including the convertible debt maturing in 2024, 2025 and 2029, may require us to refinance these obligations through the issuance of new debt securities, equity securities, convertible securities or through new credit facilities.

Contractual Obligations

In "Part II, Item 7 — Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended September 30, 2022, we reported that we had $608.0 million in total contractual obligations as of September 30, 2022. There have been no material changes to this total obligation since September 30, 2022, other than the convertible debt refinancing and lease liabilities changes as further discussed in Note 7: Debt and Note 4: Leases, respectively, of Notes to Interim Condensed Consolidated Financial Statements included in "Part I, Item 1 — Financial Statements."

We are responsible for the maintenance, property taxes and insurance at most of our locations. In the fiscal year ended September 30, 2022, these collectively amounted to $15.2 million.

Recently Adopted Accounting Policies and Recently Issued Accounting Pronouncements

Cautionary Statement Regarding Risks and Uncertainties that May Affect Future Results

This Quarterly Report on Form 10-Q, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend that all forward-looking statements be subject to the safe harbors created by these laws. All statements, other than statements of historical facts, regarding our strategy, future operations, financial position, future revenues, projected costs, prospects, plans and objectives are forward-looking statements. These statements are often, but not always, made with words or phrases like "may," "should," "could," "will," "predict," "anticipate," "believe," "estimate," "expect," "intend," "plan," "projection" and similar expressions. Such statements are only predictions of the outcome and timing of future events based on our current expectations and currently available information and, accordingly, are subject to substantial risks, uncertainties and assumptions. Actual results could differ materially from those expressed in the forward-looking statements due to a number of risks and uncertainties, many of which are beyond our control. In addition, we cannot predict all of the risks and uncertainties that could cause our actual results to differ from those expressed in the forward-looking statements. Accordingly, you should not regard any forward-looking statements as a representation that the expected results will be achieved. Important risk factors that could cause results or events to differ from current expectations are identified and described in "Part I, Item 1A — Risk Factors" of our Annual Report on Form 10-K for the year ended September 30, 2022 and "Part II, Item 1A — Risk Factors" of this Report.

We specifically disclaim any responsibility to publicly update any information contained in a forward-looking statement except as required by law. All forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary statement.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risks relating to our operations result primarily from changes in interest rates, gold values and foreign currency exchange rates, and are described in detail in "Part II, Item 7A — Quantitative and Qualitative Disclosures about Market Risk" of our Annual Report on Form 10-K for the year ended September 30, 2022. There have been no material changes in our reported market risks or risk management policies since the filing of our Annual Report on Form 10-K for the year ended September 30, 2022.

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ITEM 4. CONTROLS AND PROCEDURES

This report includes the certifications of our Chief Executive Officer and Chief Financial Officer required by Rule 13a-14 of the Securities Exchange Act of 1934 (the "Exchange Act"). See Exhibits 31.1 and 31.2. This Item 4 includes information concerning the controls and control evaluations referred to in those certifications.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our management evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2023. Our principal executive officer and principal financial officer have concluded that as of March 31, 2023, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Internal Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls or our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with associated policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Note 9: Contingencies of Notes to Interim Condensed Consolidated Financial Statements included in "Part I, Item 1 — Financial Statements."

ITEM 1A. RISK FACTORS

Important risk factors that could affect our operations and financial performance, or that could cause results or events to differ from current expectations, are described in "Part I, Item 1A — Risk Factors" of our Annual Report on Form 10-K for the year ended September 30, 2022, as supplemented by the information set forth below.

A recent law change in Australia could adversely impact Cash Converters’ business

In December 2022, the Australian Parliament passed the Financial Sector Reform Bill 2022, which establishes lending limits on small amount credit contracts. The bill becomes effective in June 2023, and could adversely impact the financial position or results of operations of Cash Converters, in which the Company has an equity investment. Cash Converters recognized a one-time, non-cash impairment expense of AUD$110.5 million against goodwill in their financial statements for the period ended December 31, 2022 and, based upon our 43.7% ownership of Cash Converters, after translation to USD, we recorded a $32.5 million equity method loss during the quarter. A decline in the operating results of Cash Converters, if any, resulting from the change of law could adversely affect our investment.

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ITEM 2. Unregistered Sale of Equity Security and Use of Proceeds

The table below provides certain information about our repurchase of shares of Class A Non-voting Common Stock during the quarter ended March 31, 2023.


	Share Repurchases
	Total Number of Shares Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Programs (1)
	(in thousands, except number of shares and average price information)
January 1, 2023 through January 31, 2023	218,905	$	8.86	218,905	$	44,001
February 1, 2023 through February 28, 2023	83,228	$	9.02	83,228	$	43,250
March 1, 2023 through March 31, 2023	146,198	$	8.54	146,198	$	42,001
Quarter ended March 31, 2023	448,331	$	8.79	448,331	$	42,001


(1)			On May 3, 2022, the Board of Directors approved a share repurchase program, under which we are authorized to repurchase up to $50 million of our Class A Non-Voting common shares over a three-year period. All repurchases under this program were in open market transactions at prevailing market prices and were executed pursuant to a trading plan under Rule 10b5-1 under the Securities Exchange Act of 1934. Execution of the program will be responsive to fluctuating market conditions and valuations, liquidity needs and the expected return on investment compared to other opportunities.

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ITEM 6. EXHIBITS

The following exhibits are filed with, or incorporated by reference into, this report.

Incorporated by Reference

Filed Herewith

Exhibit

Description of Exhibit

Form

File No.

Exhibit

Filing Date

31.1

Certification of Principal Executive Officer, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934

31.2

Certification of Principal Financial Officer, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934

32.1†

Certifications of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350

101.INS

Inline XBRL Instance Document (the instance document does not appear in the interactive data files because the XBRL tags are embedded within the Inline XBRL document)

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Labels Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File in Inline XBRL format (contained in Exhibit 101)

_____________________________


†			The certifications furnished in Exhibit 32.1 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.

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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 thereunto duly authorized.


		EZCORP, INC.

Date:	May 3, 2023	/s/Timothy K. Jugmans
		Timothy K. Jugmans, Chief Financial Officer

Document

Exhibit 31.1

Certification of Lachlan P. Given, Chief Executive Officer,

pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934,

as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Lachlan P. Given, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of EZCORP, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 3, 2023


			/s/ Lachlan P. Given
			Lachlan P. Given
			Chief Executive Officer

Document

Exhibit 31.2

Certification of Timothy K. Jugmans, Chief Financial Officer,

pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934,

as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Timothy K. Jugmans, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of EZCORP, Inc.;

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 3, 2023


			/s/ Timothy K. Jugmans
			Timothy K. Jugmans
			Chief Financial Officer

Document

Exhibit 32.1

Certification of Lachlan P. Given, Chief Executive Officer, and Timothy K. Jugmans, Chief Financial Officer,

pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

The undersigned officers of EZCORP, Inc. hereby certify that (a) EZCORP’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, as filed with the Securities and Exchange Commission, fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934, as amended, and (b) the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of EZCORP.


Date: May 3, 2023			/s/ Lachlan P. Given
			Lachlan P. Given
			Chief Executive Officer


Date: May 3, 2023			/s/ Timothy K. Jugmans
			Timothy K. Jugmans
			Chief Financial Officer