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EZPW 06.30.2012 8-K


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________ 
FORM 8-K
_______________________________________________________ 

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 24, 2012
 _______________________________________________ 
EZCORP, Inc.
(Exact name of registrant as specified in its charter)
 _______________________________________________________ 
Delaware
 
0-19424
 
74-2540145
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
1901 Capital Parkway, Austin, Texas 78746
(Address of principal executive offices) (zip code)
Registrant’s telephone number, including area code: (512) 314-3400
_______________________________________________________ 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
 
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
 
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
 
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 





Item 2.02 — Results of Operations and Financial Condition
On July 24, 2012, EZCORP, Inc. issued a press release announcing its results of operations and financial condition for the third fiscal quarter ended June 30, 2012. A copy of that press release is attached as Exhibit 99.1.
As used herein, “GAAP” refers to accounting principles generally accepted in the United States.
The press release furnished in Exhibit 99.1 presents the financial results in accordance with GAAP. In addition, net income, consolidated operating income and earnings per share for the nine months ended June 30, 2011 are also presented on a non-GAAP basis. Information sufficient to reconcile the non-GAAP measure to the GAAP measure is also presented. This non-GAAP financial measure is not meant to be considered in isolation or as a substitute for the corresponding GAAP measure.
As noted in the press release, the only difference between the presented non-GAAP measures and the GAAP measures is the exclusion of the effect of a one-time charge related to the retirement of the Company’s former Chief Executive Officer and related tax benefit. The Company believes that excluding this one-time charge from the Company’s prior nine month period GAAP results allows management and investors to better understand the Company’s financial performance from period to period and in relation to the Company’s operating results. Management does not believe that the excluded one-time charge is reflective of underlying operating performance. The presentation of these non-GAAP financial measures facilitates an enhanced understanding of the Company’s actual and expected performance and enables more meaningful period-to-period comparisons.
The information set forth under this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference in any filing made by EZCORP under the Securities Act of 1933 or the Securities Exchange Act of 1934.

Item 9.01 Financial Statements and Exhibits.

(d)
Exhibits.

99.1
Press Release, dated July 24, 2012, announcing EZCORP, Inc.’s results of operations and financial condition for the third fiscal quarter ended June 30, 2012





SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
EZCORP, INC.
 
 
 
 
 
 
Date:
July 24, 2012
 
 
 
By:
 
/s/ Stephen A. Stamp
 
 
 
 
 
 
 
Stephen A. Stamp
 
 
 
 
 
 
 
Senior Vice President and Chief Financial Officer
 
 
 
 
 
 
 
 




EXHIBIT INDEX

Exhibit
No.
  
Description of Exhibit
 
 
 
99.1
  
Press Release, dated July 24, 2012, announcing EZCORP, Inc.’s results of operations and financial condition for the second fiscal quarter ended June 30, 2012.


EZPW 06.30.2012 EX 99.1


Exhibit 99.1



EZCORP REPORTS RECORD THIRD QUARTER NET INCOME OF $28.5 MILLION,
DRIVEN BY STRONG INTERNATIONAL GROWTH

AUSTIN, Texas (July 24, 2012) – EZCORP, Inc. (NASDAQ: EZPW), a leading provider of instant cash solutions for consumers, today announced results for its third fiscal quarter ended June 30, 2012. For the quarter, net income was $28.5 million, a company record for its third fiscal quarter, and earnings per share were $0.56. For the year-to-date, the company reported a 23% increase in net income and a 20% increase in earnings per share, compared with the comparable period last year (13% and 11%, respectively, on a non-GAAP basis).
  
Key Drivers

•
International Growth - With continued execution of the company's geographic and product diversification strategy, nearly 20% of the company's consolidated segment contribution in the quarter was attributable to areas outside the United States, up from 9% a year earlier. Total revenue in the Latin America and Other International segments combined more than doubled, with combined segment contribution increasing 142%. These year-over-year increases are the result of continued strength in the company's Empeño Fácil business in Mexico, the acquisition of controlling interests in Crediamigo and Cash Genie, and the company's strategic investments in the United Kingdom and Australia.

•
Storefront Growth − During the quarter, the company added 30 new stores (9 acquired and 21 de novo). So far this fiscal year, the company has added 139 new stores (94 acquired and 45 de novo) and now operates 1,250 locations in the United States, Canada and Mexico.

•
Mexico Pawn Operations − Empeño Fácil, the company's Mexico pawn operation, continued its strong performance. Compared to the third quarter of last year, merchandise sales were up 59%, pawn service charges were up 37%, and pawn loan balances increased 37%. In a challenging gold environment, jewelry scrapping sales were up 6%. These year-over-year increases are attributable to the continued development and maturity of the existing store base and the addition of new stores. The company now operates 223 pawn stores in Mexico, having opened 45 this fiscal year.

•
Consumer Lending Performance - Consumer loan balances increased to $79.1 million globally at June 30, driving consumer loan fees earned during the quarter up 38%. In addition, improved underwriting and collections effectiveness, coupled with the consolidation of the lower risk profile Crediamigo business, led to a significant improvement in bad debt as a percentage of consumer loan fees. In the U.S. & Canada segment, that measure improved 450 bps (from 28.4% to 23.9%), and on a consolidated basis, the measure improved 740 bps (from 28.4% to 21.0%).

•
U.S. Pawn Performance − With the exception of jewelry sales and scrapping activities, the company's pawn operations in the United States showed continued strength. Merchandise sales were up 12%, with sales of general merchandise up 23%. Pawn loan balances grew 7% to $134.1 million at quarter-end, and pawn service charges increased 14%.

•
Gold - Moderating gold prices and declining gram volume in the United States continued to negatively impact year-over-year profitability in the quarter. Fewer purchases of gold, coupled with less jewelry forfeited from pawn lending operations, resulted in a 26% decrease in same-store jewelry scrapping sales and a 19% same-store decrease in jewelry merchandise sales. The company estimates that, on a same-store basis, the change in gold metrics (price and volume) from the year-over-year quarter caused a decrease of $6 million in net revenue for the U.S. & Canada segment.






Consolidated Financial Highlights – Three months ended June 30, 2012 versus the prior year quarter

•
Total revenues of $229.0 million, up 13%, were driven by a 16% increase in pawn service charges, a 38% increase in consumer loan fees and an 18% increase in merchandise sales.
•
Net revenues of $145.3 million, were up 18%, with the increase attributable to improvement in bad debt expense.
•
Net income was up 8% to $28.5 million, a company record for the third fiscal quarter, and diluted earnings per share were $0.56, up 6%.
•
Combined loan balances (pawn and consumer loans, including CSO) at quarter-end were $250.0 million, up 43%, and reflected growth in all segments. Cash and cash equivalents at quarter-end were $51.8 million, with debt of $206.9 million (including Crediamigo third party debt of $92.2 million, all of which is non-recourse to EZCORP).
•
Administrative expense of $22.7 million includes an $8.3 million increase over last year, $4.9 million of which result from the consolidation of Crediamigo and Cash Genie, which are not store-based operations. With the exception of sales commissions, the majority of their cost base is included in administrative expenses. The remainder includes the company's continued investment in growth and profitability initiatives.
•
Income tax expense for the quarter was 30% of income before income taxes, compared with 35% last year, as the company's effective tax rate for the year was reduced from 35% to 33.5%, reflecting the success and growth of the company's business in areas outside the United States.
•
The company continued to deliver strong return on average equity of 20% for the trailing twelve months.

Strategic Acquisitions

•
Crediamigo recorded total revenues of $10.8 million and bad debt as a percentage of fees of 6.1%, which produced net revenues of $10.2 million. During the quarter, Crediamigo refinanced a portion of its $92.2 million of third party debt at a lower rate of interest. This refinancing led to a one-time reduction in interest expense of $2.8 million during the third quarter due to accelerated amortization of debt premium associated with the refinanced debt. The lower interest rate will result in reduced interest expense going forward. When combined with business results and reduced by taxes and the noncontrolling interest, the net income attributable to EZCORP was $1.8 million for the quarter. Crediamigo is continuing to refinance other portions of its debt at lower interest rates, which will further enhance future profitability.
•
On April 14, the company acquired 72% of the shares in Artiste Holding Limited, which provides online loans in the U.K. under the name “Cash Genie.” Cash Genie is one of the top 10 largest online lenders in the U.K. The company expects that Cash Genie will be accretive to earnings within its first year following acquisition.

Company Outlook

The Company expects that, as a result of continuation of recent gold and jewelry trends, earnings for the full year will be at the lower end of its previously announced guidance range of $2.85 to $2.95 per share.
Commenting on the quarter's results, EZCORP's President and Chief Executive Officer, Paul Rothamel, said “I am pleased with our financial performance this year and the overall trajectory of our business as we continue to transition EZCORP to a multi-national provider of instant cash solutions to a growing marketplace. Our investments in new stores, new products and new businesses continue to improve our ability to serve the sophisticated consumer. We expect these high-return investments, funded with our conservative capital structure and balance sheet, will provide very strong shareholder value for years to come.”


2 of 11





About EZCORP
EZCORP is a leading provider of instant cash solutions for consumers. Through 1,250 company-operated pawn, buy/sell and personal financial services locations in the U.S., Mexico and Canada, we provide a variety of instant cash solutions, including pawn loans, consumer loans, and fee-based credit services to customers seeking loans. At our pawn and buy/sell stores, we also sell merchandise, primarily collateral forfeited from pawn lending operations and used merchandise purchased from customers.
EZCORP owns controlling interests in Prestaciones Finmart, S.A.P.I. de C.V., SOFOM, E.N.R. (doing business under the name “Crediamigo”), a leading provider of payroll deduction loans in Mexico, and in Artiste Holding Limited (doing business under the name “Cash Genie”), a leading provider of online loans in the U.K. The company also has significant investments in Albemarle & Bond Holdings PLC (ABM.L), one of the U.K.’s largest pawnbroking businesses with over 170 full-line stores offering pawnbroking, jewelry retailing, gold buying and financial services; and in Cash Converters International Limited (CCV.L and CCV.ASX), which franchises and operates a worldwide network of over 600 stores that provide personal financial services and sell pre-owned merchandise.

Special Note Regarding Forward-Looking Statements
This announcement contains certain forward-looking statements regarding the Company’s expected operating and financial performance for future periods, including expected future earnings and growth rates. These statements are based on the Company’s current expectations. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of uncertainties and other factors, including changes in the regulatory environment, changing market conditions in the overall economy and the industry, fluctuations in gold prices or the desire of our customers to pawn or sell their gold items, and consumer demand for the Company’s services and merchandise. For a discussion of these and other factors affecting the Company’s business and prospects, see the Company’s annual, quarterly and other reports filed with the Securities and Exchange Commission.

Use of Non-GAAP Financial Measures
In addition to reporting financial results in accordance with generally accepted accounting principles (GAAP), the Company has provided non-GAAP net income and non-GAAP earnings per share for the nine months ended June 30, 2011. The only difference between the presented non-GAAP measures and the most closely comparable GAAP measures is the exclusion of a one-time charge related to the retirement of the Company’s former Chief Executive Officer and the related tax benefit included in the quarter ended December 31, 2010. The Company’s management uses these non-GAAP financial measures to understand its financial performance from period to period. Management does not believe that the excluded one-time charge is reflective of underlying operating performance. The non-GAAP financial measures are not meant to be considered in isolation or as a substitute for the corresponding GAAP measures, but rather are provided to facilitate an enhanced understanding of the Company’s actual and expected performance and to enable more meaningful period-to-period comparisons. A reconciliation of the non-GAAP financial measures to the most closely comparable GAAP financial measures is provided in the accompanying financial schedules.

EZCORP Investor Relations
(512) 314-2220
Investor_Relations@ezcorp.com
www.ezcorp.com

3 of 11



EZCORP, Inc.
Highlights of Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data and percents)
 
 
Three Months Ended
June 30,
 
Nine Months Ended
June 30,
 
2012
 
2011
 
2012
 
2011
Revenues:
 
 
 
 
 
 
 
Merchandise sales
$
75,958

 
$
64,574

 
$
257,849

 
$
214,227

Jewelry scrapping sales
41,974

 
50,771

 
151,552

 
149,431

Pawn service charges
56,163

 
48,365

 
172,399

 
144,944

Consumer loan fees
53,504

 
38,870

 
148,911

 
125,652

Other
1,365

 
572

 
3,404

 
978

Total revenues
228,964

 
203,152

 
734,115

 
635,232

Merchandise cost of goods sold
44,254

 
36,691

 
148,530

 
122,641

Jewelry scrapping cost of goods sold
28,199

 
32,437

 
95,933

 
96,617

Consumer loan bad debt
11,251

 
11,027

 
28,742

 
27,795

Net revenue
145,260


122,997

 
460,910

 
388,179

Operations expense
75,709

 
66,753

 
227,479

 
197,302

Administrative expense
22,697

 
14,379

 
63,761

 
56,250

Depreciation
6,215

 
4,458

 
16,805

 
12,670

Amortization
1,162

 
221

 
3,086

 
654

(Gain) / loss on sales / disposal of assets
312

 
169

 
138

 
(2
)
Operating income
39,165

 
37,017

 
149,641

 
121,305

Interest income
(133
)
 
(21
)
 
(486
)
 
(35
)
Interest expense
1,030

 
586

 
4,180

 
1,186

Equity in net income of unconsolidated affiliates
(4,197
)
 
(4,099
)
 
(12,935
)
 
(12,157
)
Other
160

 
(103
)
 
(157
)
 
(160
)
Income before income taxes
42,305

 
40,654

 
159,039

 
132,471

Income tax expense
12,594

 
14,127

 
52,603

 
46,677

Net income
29,711

 
26,527

 
106,436

 
85,794

Attributable to reedemable noncontrolling interest
1,188

 
—

 
1,300

 
—

Net income attributable to EZCORP, Inc.
$
28,523

 
$
26,527

 
$
105,136

 
$
85,794

 
 
 
 
 
 
 
 
Net income per share, diluted
$
0.56

 
$
0.53

 
$
2.06

 
$
1.71

Weighted average shares, diluted
51,340

 
50,385

 
51,042

 
50,292


4 of 11


EZCORP, Inc.
Highlights of Consolidated Balance Sheets
(in thousands)
 
 
June 30, (unaudited)
 
September 30,
 
2012
 
2011
 
2011
Assets:
 
 
 
 
 
Current assets:
 
 
 
 
 
Cash and cash equivalents
$
51,825

 
$
27,492

 
$
23,969

Pawn loans
147,503

 
134,633

 
145,318

Consumer loans, net
28,487

 
14,437

 
14,611

Pawn service charges receivable, net
26,092

 
24,372

 
26,455

Consumer loan fees receivable, net
25,729

 
6,884

 
6,775

Inventory, net
94,421

 
79,031

 
90,373

Deferred tax asset
18,226

 
16,150

 
18,125

Federal income tax receivable
9,898

 
3,099

 
—

Prepaid expenses and other assets
40,268

 
21,932

 
30,611

Total current assets
442,449

 
328,030

 
356,237

Investments in unconsolidated affiliates
125,309

 
114,777

 
120,319

Property and equipment, net
100,196

 
75,049

 
78,498

Goodwill
321,423

 
167,017

 
173,206

Intangible assets, net
78,666

 
20,192

 
19,790

Non-current consumer loans, net
50,587

 
—

 
—

Other assets, net
19,443

 
8,556

 
8,400

Total assets
$
1,138,073

 
$
713,621

 
$
756,450

Liabilities and stockholders’ equity:
 
 
 
 
 
Current liabilities:
 
 
 
 
 
Accounts payable and other accrued expenses
$
71,091

 
$
53,242

 
$
57,400

Current maturities of long-term debt
31,126

 
—

 
—

Customer layaway deposits
6,740

 
6,131

 
6,176

Federal income taxes payable
—

 
—

 
693

Total current liabilities
108,957

 
59,373

 
64,269

Long-term debt, less current maturities
175,740

 
26,500

 
17,500

Deferred tax liability
7,788

 
1,237

 
8,331

Deferred gains and other long-term liabilities
14,951

 
2,209

 
2,102

Total liabilities
307,436

 
89,319

 
92,202

Temporary equity:
 
 
 
 
 
Redeemable noncontrolling interest
44,864

 
—

 
—

Stockholders’ equity
785,773

 
624,302

 
664,248

Total liabilities and stockholders’ equity
$
1,138,073

 
$
713,621

 
$
756,450

 
 
 
 
 
 

5 of 11


EZCORP, Inc.
Operating Segment Results (Unaudited)
(In thousands)
 
 
Three Months Ended June 30, 2012
 
U.S. & Canada
 
Latin America
 
Other
International
 
Consolidated
Revenues:
 
 
 
 
 
 
 
Merchandise sales
$
65,799

 
$
10,159

 
$
—

 
$
75,958

Jewelry scrapping sales
37,456

 
4,518

 
—

 
41,974

Pawn service charges
49,979

 
6,184

 
—

 
56,163

Consumer loan fees
39,243

 
10,381

 
3,880

 
53,504

Other
649

 
558

 
158

 
1,365

Total revenues
193,126

 
31,800

 
4,038

 
228,964

Merchandise cost of goods sold
38,519

 
5,735

 
—

 
44,254

Jewelry scrapping cost of goods sold
24,415

 
3,784

 
—

 
28,199

Consumer loan bad debt
9,368

 
632

 
1,251

 
11,251

Net revenues
120,824

 
21,649

 
2,787

 
145,260

Operating expenses:
 
 
 
 
 
 

Store operations
65,975

 
8,792

 
942

 
75,709

Administrative
5,970

 
4,335

 
1,870

 
12,175

Depreciation
3,622

 
1,054

 
73

 
4,749

Amortization
142

 
999

 
21

 
1,162

Loss on sale/disposal of assets
93

 
(4
)
 
223

 
312

Interest, net
(1
)
 
22

 
(1
)
 
20

Equity in net income of unconsolidated affiliates
—

 
—

 
(4,197
)
 
(4,197
)
Other
614

 
(13
)
 
(441
)
 
160

Segment contribution
$
44,409

 
$
6,464

 
$
4,297

 
$
55,170

Corporate expenses
 
 
 
 
 
 
12,865

Income before taxes
 
 
 
 
 
 
42,305

Income tax expense
 
 
 
 
 
 
12,594

Net income
 
 
 
 
 
 
29,711

Net income attributable to reedemable noncontrolling interest
 
 
 
 
 
 
1,188

Net income attributable to EZCORP, Inc.
 
 
 
 
 
 
$
28,523


6 of 11


EZCORP, Inc.
Operating Segment Results (Unaudited)
(In thousands)
 
 
Three Months Ended June 30, 2011
 
U.S. & Canada
 
Latin America
 
Other
International
 
Consolidated
Revenues:
 
 
 
 
 
 
 
Merchandise sales
$
58,173

 
$
6,401

 
$
—

 
$
64,574

Jewelry scrapping sales
46,514

 
4,257

 
—

 
50,771

Pawn service charges
43,846

 
4,519

 
—

 
48,365

Consumer loan fees
38,870

 
—

 
—

 
38,870

Other
566

 
6

 
—

 
572

Total revenues
187,969

 
15,183

 
—

 
203,152

Merchandise cost of goods sold
32,924

 
3,767

 
—

 
36,691

Jewelry scrapping cost of goods sold
28,951

 
3,486

 
—

 
32,437

Consumer loan bad debt
11,027

 
—

 
—

 
11,027

Net revenues
115,067

 
7,930

 
—

 
122,997

Operating expenses:
 
 
 
 
 
 

Store operations
61,347

 
5,406

 
—

 
66,753

Administrative
4,293

 
1,014

 
506

 
5,813

Depreciation
2,828

 
639

 
—

 
3,467

Amortization
117

 
104

 
—

 
221

Gain on sale/disposal of assets
157

 
12

 
—

 
169

Interest, net
20

 
2

 
—

 
22

Equity in net income of unconsolidated affiliates
—

 
—

 
(4,099
)
 
(4,099
)
Other
2

 
2

 
(107
)
 
(103
)
Segment contribution
$
46,303

 
$
751

 
$
3,700

 
$
50,754

Corporate expenses
 
 
 
 
 
 
10,100

Income before taxes
 
 
 
 
 
 
40,654

Income tax expense
 
 
 
 
 
 
14,127

Net income
 
 
 
 
 
 
26,527

Net income attributable to redeemable noncontrolling interest
 
 
 
 
 
 
—

Net income attributable to EZCORP, Inc.
 
 
 
 
 
 
$
26,527



7 of 11


EZCORP, Inc.
Operating Segment Results (Unaudited)
(In thousands)
 
 
Nine Months Ended June 30, 2012
 
U.S. & Canada
 
Latin America
 
Other
International
 
Consolidated
Revenues:
 
 
 
 
 
 
 
Merchandise sales
$
227,849

 
$
30,000

 
$
—

 
$
257,849

Jewelry scrapping sales
139,736

 
11,816

 
—

 
151,552

Pawn service charges
154,854

 
17,545

 
—

 
172,399

Consumer loan fees
127,061

 
17,764

 
4,086

 
148,911

Other
2,444

 
802

 
158

 
3,404

Total revenues
651,944

 
77,927

 
4,244

 
734,115

Merchandise cost of goods sold
132,469

 
16,061

 
—

 
148,530

Jewelry scrapping cost of goods sold
87,102

 
8,831

 
—

 
95,933

Consumer loan bad debt
26,136

 
1,140

 
1,466

 
28,742

Net revenues
406,237

 
51,895

 
2,778

 
460,910

Operating expenses:
 
 
 
 
 
 

Store operations
203,190

 
23,001

 
1,288

 
227,479

Administrative
17,841

 
9,964

 
2,292

 
30,097

Depreciation
10,121

 
2,576

 
109

 
12,806

Amortization
414

 
2,651

 
21

 
3,086

(Gain)/loss on sale/disposal of assets
(82
)
 
(3
)
 
223

 
138

Interest, net
3

 
1,755

 
(1
)
 
1,757

Equity in net income of unconsolidated affiliates
—

 
—

 
(12,935
)
 
(12,935
)
Other
345

 
3

 
(505
)
 
(157
)
Segment contribution
$
174,405

 
$
11,948

 
$
12,286

 
$
198,639

Corporate expenses
 
 
 
 
 
 
39,600

Income before taxes
 
 
 
 
 
 
159,039

Income tax expense
 
 
 
 
 
 
52,603

Net income
 
 
 
 
 
 
106,436

Net income attributable to redeemable noncontrolling interest
 
 
 
 
 
 
1,300

Net income attributable to EZCORP, Inc.
 
 
 
 
 
 
$
105,136


8 of 11


EZCORP, Inc.
Operating Segment Results (Unaudited)
(In thousands)
 
 
Nine Months Ended June 30, 2011
 
U.S. & Canada
 
Latin America
 
Other
International
 
Consolidated
Revenues:
 
 
 
 
 
 
 
Merchandise sales
$
196,898

 
$
17,329

 
$
—

 
$
214,227

Jewelry scrapping sales
138,068

 
11,363

 
—

 
149,431

Pawn service charges
133,355

 
11,589

 
—

 
144,944

Consumer loan fees
125,652

 
—

 
—

 
125,652

Other
944

 
34

 
—

 
978

Total revenues
594,917

 
40,315

 
—

 
635,232

Merchandise cost of goods sold
112,605

 
10,036

 
—

 
122,641

Jewelry scrapping cost of goods sold
87,416

 
9,201

 
—

 
96,617

Consumer loan bad debt
27,795

 
—

 
—

 
27,795

Net revenues
367,101

 
21,078

 
—

 
388,179

Operating Expenses:
 
 
 
 
 
 

Store operations
182,769

 
14,533

 
—

 
197,302

Administrative
14,103

 
3,030

 
558

 
17,691

Depreciation
8,194

 
1,723

 
—

 
9,917

Amortization
353

 
301

 
—

 
654

(Gain)/loss on sale/disposal of assets
(15
)
 
13

 
—

 
(2
)
Interest, net
20

 
4

 
—

 
24

Equity in net income of unconsolidated affiliates
—

 
—

 
(12,157
)
 
(12,157
)
Other
5

 
3

 
(168
)
 
(160
)
Segment contribution
$
161,672

 
$
1,471

 
$
11,767

 
$
174,910

Corporate expenses
 
 
 
 
 
 
42,439

Income before taxes
 
 
 
 
 
 
132,471

Income tax expense
 
 
 
 
 
 
46,677

Net income
 
 
 
 
 
 
85,794

Net income attributable to redeemable noncontrolling interest
 
 
 
 
 
 
—

Net income attributable to EZCORP, Inc.
 
 
 
 
 
 
$
85,794



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EZCORP, Inc.
Store Count Activity
 
 
Three Months Ended June 30, 2012
 
Company-owned Stores
 
Franchises
 
U.S. & Canada
 
Latin America
 
Other
International

 
Consolidated
 
 
Beginning of period
970

 
250

 
—

 
1,220

 
12

De novo
4

 
19

 
—

 
23

 
—

Acquired
9

 
—

 
—

 
9

 
—

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

 
(2
)
 
—

End of period
982

 
268

 
—

 
1,250

 
12

 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended June 30, 2012
 
Company-owned Stores
 
Franchises
 
U.S. & Canada
 
Latin America
 
Other
International
 
Consolidated
 
 
Beginning of period
933

 
178

 
—

 
1,111

 
13

De novo
12

 
46

 
—

 
58

 
—

Acquired
49

 
45

 
—

 
94

 
—

Sold, combined or closed
(12
)
 
(1
)
 
—

 
(13
)
 
(1
)
End of period
982

 
268

 
—

 
1,250

 
12


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Reconciliation of GAAP to Non-GAAP Results (Unaudited)
(in thousands, except per share data)
The following tables provide a reconciliation of the differences between the reported or projected non-GAAP financial measures for the periods indicated and the most comparable GAAP financial measures. The non-GAAP financial measures presented may not be directly comparable to similarly titled measures reported by other companies and their usefulness for such purposes are therefore limited. EZCORP management believes presentation of the non-GAAP financial measures enhances investors’ ability to analyze the Company’s operating results. However, non-GAAP financial measures are not an alternative to GAAP financial measures and should be read only in conjunction with financial measures presented on a GAAP basis.
 
 
Nine Months Ended June 30, 2012
 
Nine Months Ended June 30, 2011
 
GAAP
 
Non-GAAP
Adjustments
 
Non-GAAP
 
GAAP
 
Non-GAAP
Adjustments
 
Non-GAAP
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue
$
460,910

 
—

 
$
460,910

 
$
388,179

 
—

 
$
388,179

Operations expense
227,479

 
—

 
227,479

 
197,302

 
—

 
197,302

Administrative expense
63,761

 
—

 
63,761

 
56,250

 
(10,945
)
 
45,305

Depreciation
16,805

 
—

 
16,805

 
12,670

 
—

 
12,670

Amortization
3,086

 
—

 
3,086

 
654

 
—

 
654

(Gain) / loss on sale/disposal of assets
138

 
—

 
138

 
(2
)
 
—

 
(2
)
Operating income
149,641

 
—

 
149,641

 
121,305

 
10,945

 
132,250

Interest income
(486
)
 
—

 
(486
)
 
(35
)
 
—

 
(35
)
Interest expense
4,180

 
—

 
4,180

 
1,186

 
—

 
1,186

Equity in net income of unconsolidated affiliates
(12,935
)
 
—

 
(12,935
)
 
(12,157
)
 
—

 
(12,157
)
Other
(157
)
 
—

 
(157
)
 
(160
)
 
—

 
(160
)
Income before income taxes
159,039

 
—

 
159,039

 
132,471

 
10,945

 
143,416

Income tax expense
52,603

 
—

 
52,603

 
46,677

 
3,831

 
50,508

Net income
106,436

 
—

 
106,436

 
85,794

 
7,114

 
92,908

Attributable to noncontrolling interest
1,300

 
—

 
1,300

 
—

 
—

 
—

Net income attributable to EZCORP, Inc.
$
105,136

 
$
—

 
$
105,136

 
$
85,794

 
$
7,114

 
$
92,908

Net income per share, diluted
$
2.06

 
$
—


$
2.06

 
$
1.71

 
$
0.14

 
$
1.85

Weighted average shares, diluted
51,042

 
—

 
51,042

 
50,292

 
50,292

 
50,292


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