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EZPW 09.30.2012 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): November 6, 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 November 6, 2012, EZCORP, Inc. issued a press release announcing its results of operations and financial condition for the Fourth fiscal quarter and year ended September 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 year ended September 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 year's 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.

Item 7.01 — Regulation FD Disclosure
On November 6, 2012, EZCORP, Inc. announced that it had entered into a multi-year agreement with The Western Union Company to provide money transfer and other payment services at EZCORP's locations in the United States, Mexico and Canada. A copy of that press release is attached as Exhibit 99.2.

The information set forth under Item 2.02 and Item 7.01, including Exhibits 99.1 and 99.2, 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 November 6, 2012, announcing EZCORP, Inc.’s results of operations and financial condition for the fourth fiscal quarter and year ended September 30, 2012
99.2
Press Release, dated November 6, 2012, announcing EZCORP, Inc.'s multi-year agreement with The Western Union Company


2


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:
November 6, 2012
 
 
 
By:
 
/s/ Mark Kuchenrither
 
 
 
 
 
 
 
Mark Kuchenrither
 
 
 
 
 
 
 
Executive Vice President and Chief Financial Officer
 
 
 
 
 
 
 
 

3


EXHIBIT INDEX

Exhibit
No.
  
Description of Exhibit
 
 
 
99.1
  
Press Release, dated November 6, 2012, announcing EZCORP, Inc.’s results of operations and financial condition for the fourth fiscal quarter and year ended September 30, 2012.
99.2
 
Press Release, dated November 6, 2012, announcing EZCORP, Inc.'s multi-year agreement with The Western Union Company.

4
EZPW 09.30.2012 EX 99.1


99.1


EZCORP REPORTS RECORD REVENUES, INCOME AND EARNINGS PER SHARE

AUSTIN, Texas (November 6, 2012) – EZCORP, Inc. (NASDAQ: EZPW), a leading provider of instant cash solutions for consumers, today announced record results for its fourth quarter and fiscal year ended September 30, 2012.
For the quarter, total revenues were $258.4 million, net income was $38.6 million and earnings per share were $0.75, all records for the Company's fourth fiscal quarter.
The Company also generated record-setting performance for the full fiscal year. Compared with the prior year, total revenues increased 14% to $992.5 million, net income increased 18% to $143.7 million and earnings per share increased 16% to $2.81, all records for the Company. The Company also added 151 locations in three countries, acquired majority ownership in two lending companies in Mexico and the United Kingdom and signed a multi-year agreement with Western Union to provide money transfer and other payment services across its growing network.
  
Key Drivers
•
International Performance - Reflecting the continued successful execution of the Company's geographic, product and channel diversification strategy, 31% of the Company's consolidated segment contribution in the quarter was attributable to areas outside the United States, up from 8% a year earlier. Furthermore, combined total revenue in the Latin America and Other International segments more than doubled during the quarter compared to the same quarter last year. For the full fiscal year, earnings generated outside the United States increased from 8% of consolidated segment contribution to 18%. These 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.

•
Mexico Pawn Operations - Empeño Fácil, the Company's Mexico pawn operation, continued its strong performance. Compared to the fourth quarter of last year, merchandise sales were up 51%, pawn service charges were up 40% and pawn loan balances increased 54%. Jewelry scrapping sales declined 15% reflective of the continued challenging gold dynamics. Year-over-year increases were due to the continued development and maturity of the existing store base and the addition of new stores. The Company now operates 230 pawn stores in Mexico, having opened 52 during fiscal 2012.

•
Mexico Payroll Withholding Lending - Crediamigo recorded net revenues of $10.4 million in the quarter, and $27.4 million since the acquisition in late January, with bad debt as a percentage of fees of 1%. As expected, Crediamigo again refinanced portions of its $90 million third party debt at lower rates of interest. The lower interest rates will result in significantly reduced interest expense going forward. The weighted average interest rate on Crediamigo's third party debt is now 11%, compared to 19% before acquisition. Purchase accounting income impact during the quarter totaled $6.7 million, of which $4.0 million was attributable to EZCORP, with the majority of the adjustment coming from the accelerated amortization of debt premium associated with the refinanced debt. When reduced by income taxes and the noncontrolling interest, the net income attributable to EZCORP was $8.2 million for the quarter and $10.1 million during the fiscal year.

•
U.K. Online Lending - Cash Genie, the Company's U.K online lending business, was profitable for the year as expected. Cash Genie is one of the top 10 largest online lenders in the U.K.

•
Affiliates - The Company's equity investments in Albemarle & Bond Holdings PLC and Cash Converters International Limited combined generated a 9% and 7% increase, in earnings attributable to EZCORP for the quarter and full fiscal year, respectively, as compared to the prior same periods.




•
Storefront Growth - During the quarter, the Company added 12 new stores (2 acquired and 10 de novo). For the full fiscal year, the Company added 151 new stores (96 acquired, of which 45 came with the Crediamigo acquisition, and 55 de novo) and now operates 1,262 locations in the United States, Canada and Mexico. Based on the strength of its high return de novo performance over the last several years, the Company expects to accelerate its de novo openings in fiscal 2013 and beyond. During fiscal 2013, the Company expects to triple its annual de novo openings compared to fiscal 2012, opening roughly 175 locations in the United States, Mexico and Canada.

•
U.S. Pawn Performance - U.S. Pawn loan balances grew 5% to $141 million at quarter-end, and pawn service charges increased 10% during the quarter, compared with the year-ago quarter. With the exception of jewelry sales and scrapping activities, the Company's pawn operations in the United States showed continued strength. General merchandise pawn loan balances grew 9% compared to the prior year quarter, with sales of general merchandise up 18%. Excluding earnings from scrap, the U.S. pawn operating contribution for the quarter increased 15% over the same quarter last year, while the year-over-year increase was 18%.

•
Gold - In terms of dollars, jewelry as a percentage of total U.S. pawn loan balances has remained largely unchanged quarter-over-quarter, while jewelry redemption rates increased 50 bps, resulting in a 17% same-store decrease in jewelry scrapping sales in the quarter and a 24% 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 prior year quarter caused a deterioration of approximately $11 million in net revenue for the U.S. and Canada segment.

•
Consumer Lending Performance - Consumer loan balances increased to $96 million globally at September 30, driving consumer loan fees earned during the quarter up 27%. In addition, improved underwriting and collections effectiveness, coupled with consolidation of the lower risk profile Crediamigo business, led to a significant improvement in bad debt as a percentage of consumer loan fees. On a consolidated basis, the measure improved 220 bps (from 24% to 22%). Within the United States, fee net revenues decreased by 5%, driven by regulatory pressures within Texas, but mostly offset by growth in other states; installment loan net revenues increased by 50% and auto title net revenues were flat.


Consolidated Financial Highlights – Three months ended September 30, 2012 versus the prior year quarter
•
Total revenues of $258.4 million, up 10%, were driven by a 27% increase in consumer loan fees, a 14% increase in merchandise sales and a 13% increase in pawn service charges.
•
Net revenues of $163.3 million were up 11%, with the increase primarily attributable to a combination of margin rate improvement in merchandise sales and 220 bps improvement in bad debt expense.
•
Net income increased 6% to $38.6 million, and diluted earnings per share were $0.75, up 4% over prior year's quarter.
•
Cash and cash equivalents at quarter-end were $52.8 million, with debt of $219.9 million (including Crediamigo third party debt of $89.9 million, all of which is non-recourse to EZCORP).
•
For the quarter, administrative expense of $30.3 million reflected an $11.3 million increase over the same quarter last year, $5.0 million of which result from the consolidation of Crediamigo and Cash Genie. Of the remaining $6.3 million increase, roughly half was associated with supporting accelerated growth of the de novo and international operations.
•
Income tax expense for the quarter was 29% of income before income taxes, compared with 35% last year fourth quarter. The decrease in rate was attributable to increased earnings outside the United States and the benefit of state net operating loss carryovers.

Consolidated Financial Highlights – Fiscal year ended September 30, 2012 versus the prior year
•
Total revenues increased 14% to a record $992.5 million due primarily to a 21% increase in consumer loan fees, a 19% increase in merchandise sales and a 17% increase in pawn service charges.
•
Net revenues increased 17% due primarily to a 30 bps improvement on merchandise margins and a 260 bps improvement in consumer bad debt expense.
•
Net income increased 18% to $143.7 million for the fiscal year, and diluted earnings per share were $2.81, a 16% increase over the prior year.

2 of 12


•
For the fiscal year, administrative expense of $94.0 million reflects an $18.8 million increase over last year, $11.7 million of which result from the consolidation of Crediamigo and Cash Genie. The remaining $7.1 million year-over-year increase was attributable to supporting the Company's domestic and international growth.
•
The Company's effective tax rate for the year was reduced from 35% to 32%, reflecting the continued success and growth of the Company's business in areas outside the United States and the benefit of state NOL's mentioned previously.
•
The Company delivered strong return on equity of 19% for the trailing twelve months.

Strategic Developments
The Company also announced that it has entered into a multi-year agreement with The Western Union Company, a leader in global payment services. The agreement will allow the Company to offer its customers Western Union's products and services (such as money transfer, money order and consumer bill payment services) through its ever widening network. The roll-out of these services is anticipated to begin in the first half of the Company's fiscal year 2013.

CEO Comments
Commenting on the year's results, EZCORP's President and Chief Executive Officer, Paul Rothamel, said "I am very pleased with our 2012 performance as we delivered record financial results in revenue, net income and EPS in a difficult trading environment. We also positioned the Company for long-term growth as we continue our multi-year plan to maximize our core pawn and lending business, diversify our geographic footprint, and innovate new products, services and channels.
"While we have doubled our revenues and net income over the last three years, we expect 2013 to be a year of investment to position the Company to again double in size over the next four to five years. We will continue to solidify our market leading position by accelerating our proven de novo store growth in the United States and Mexico; we will capitalize on our investments in Crediamigo and Cash Genie; and we will continue to look for additional investments that position us first in the customers' mind for instant cash.
"We expect these investments to propel the Company to double digit revenue and net income growth in fiscal 2014 and beyond."

Company Outlook
The Company expects fiscal 2013 earnings per share to be between $2.55 and $2.80, which would be down 9% to roughly flat from fiscal 2012. The Company expects first quarter earnings per share to be between $0.55 and $0.60, down from $0.78 in the first quarter of fiscal 2012. The decrease in the quarter is driven primarily by expected continued weaknesses in the gold marketplace, regulatory pressures in Texas (the Company's largest financial services market), and the drag associated with accelerated de novo growth and U.S. online lending initiatives. The Company expects to return to quarter-over-quarter earnings growth in the second half of the fiscal year.



3 of 12





About EZCORP
EZCORP is a leading provider of instant cash solutions for consumers employing approximately 6,500 teammates and operating 1,262 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 180 full-line stores offering pawnbroking, jewelry retailing, gold buying and financial services; and in Cash Converters International Limited (CCV.ASX), which franchises and operates a worldwide network of almost 700 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 fiscal year ended September 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

4 of 12



EZCORP, Inc.
Highlights of Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data and percents)
 
 
Three Months Ended September 30,
 
Fiscal Year Ended September 30,
 
2012
 
2011
 
2012
 
2011
Revenues:
 
 
 
 
 
 
 
Merchandise sales
$
77,561

 
$
67,856

 
$
335,410

 
$
282,083

Jewelry scrapping sales
56,767

 
63,048

 
208,319

 
212,479

Pawn service charges
63,243

 
56,191

 
235,642

 
201,135

Consumer loan fees
58,760

 
46,299

 
207,671

 
171,951

Other
2,021

 
691

 
5,425

 
1,669

Total revenues
258,352

 
234,085

 
992,467

 
869,317

Merchandise cost of goods sold
43,484

 
39,419

 
192,014

 
162,060

Jewelry scrapping cost of goods sold
38,915

 
36,943

 
134,848

 
133,560

Consumer loan bad debt
12,635

 
10,964

 
41,377

 
38,759

Net revenue
163,318

 
146,759

 
624,228

 
534,938

Operations expense
76,007

 
69,750

 
303,486

 
267,052

Administrative expense
30,274

 
19,020

 
94,035

 
75,270

Depreciation
6,484

 
4,819

 
23,289

 
17,489

Amortization
(1,107
)
 
201

 
1,979

 
855

(Gain) / loss on sales / disposal of assets
(139
)
 
311

 
(1
)
 
309

Operating income
51,799

 
52,658

 
201,440

 
173,963

Interest income
(322
)
 
(2
)
 
(808
)
 
(37
)
Interest expense
(4,922
)
 
504

 
(742
)
 
1,690

Equity in net income of unconsolidated affiliates
(4,465
)
 
(4,080
)
 
(17,400
)
 
(16,237
)
Other
(1,053
)
 
(4
)
 
(1,210
)
 
(164
)
Income before income taxes
62,561

 
56,240

 
221,600

 
188,711

Income tax expense
18,420

 
19,875

 
71,023

 
66,552

Net income
44,141

 
36,365

 
150,577

 
122,159

Attributable to redeemable noncontrolling interest
5,569

 
—

 
6,869

 
—

Net income attributable to EZCORP, Inc.
$
38,572

 
$
36,365

 
$
143,708

 
$
122,159

 
 
 
 
 
 
 
 
Net income per share, diluted
$
0.75

 
$
0.72

 
$
2.81

 
$
2.43

Weighted average shares, diluted
51,394

 
50,589

 
51,133

 
50,369


5 of 12


EZCORP, Inc.
Highlights of Consolidated Balance Sheets
(in thousands)
 
 
September 30,
 
2012
 
2011
Assets:
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
52,814

 
$
23,969

Cash, restricted
1,145

 
—

Pawn loans
157,648

 
145,318

Consumer loans, net
34,152

 
14,611

Pawn service charges receivable, net
29,401

 
26,455

Consumer loan fees receivable, net
30,416

 
6,775

Inventory, net
109,214

 
90,373

Deferred tax asset
14,984

 
18,125

Federal income tax receivable
10,511

 
—

Prepaid expenses and other assets
45,451

 
30,611

Total current assets
485,736

 
356,237

Investments in unconsolidated affiliates
126,066

 
120,319

Property and equipment, net
108,131

 
78,498

Goodwill
374,663

 
173,206

Intangible assets, net
45,185

 
19,790

Non-current consumer loans, net
61,997

 
—

Other assets, net
16,229

 
8,400

Total assets
$
1,218,007

 
$
756,450

Liabilities and stockholders’ equity:
 
 
 
Current liabilities:
 
 
 
Current maturities of long-term debt
$
21,085

 
$
—

Current capital lease obligations
594

 
—

Accounts payable and other accrued expenses
78,925

 
57,400

Customer layaway deposits
7,238

 
6,176

Federal income taxes payable
—

 
693

Total current liabilities
107,842

 
64,269

Long-term debt, less current maturities
198,836

 
17,500

Long-term capital lease obligations
995

 
—

Deferred tax liability
7,922

 
8,331

Deferred gains and other long-term liabilities
13,903

 
2,102

Total liabilities
329,498

 
92,202

Temporary equity:
 
 
 
Redeemable noncontrolling interest
53,681

 
—

Stockholders’ equity
834,828

 
664,248

Total liabilities and stockholders’ equity
$
1,218,007

 
$
756,450

 
 
 
 

6 of 12


EZCORP, Inc.
Operating Segment Results (Unaudited)
(In thousands)
 
 
Three Months Ended September 30, 2012
 
U.S. & Canada
 
Latin America
 
Other
International
 
Consolidated
Revenues:
 
 
 
 
 
 
 
Merchandise sales
$
65,612

 
$
11,949

 
$
—

 
$
77,561

Jewelry scrapping sales
52,851

 
3,916

 
—

 
56,767

Pawn service charges
55,791

 
7,452

 
—

 
63,243

Consumer loan fees
43,825

 
9,137

 
5,798

 
58,760

Other
1,325

 
546

 
150

 
2,021

Total revenues
219,404

 
33,000

 
5,948

 
258,352

Merchandise cost of goods sold
36,816

 
6,668

 
—

 
43,484

Jewelry scrapping cost of goods sold
35,853

 
3,062

 
—

 
38,915

Consumer loan bad debt
11,269

 
(831
)
 
2,197

 
12,635

Net revenues
135,466

 
24,101

 
3,751

 
163,318

Operating expenses:
 
 
 
 
 
 
 
Store operations
69,256

 
5,918

 
833

 
76,007

Administrative
8,051

 
4,317

 
2,306

 
14,674

Depreciation
3,811

 
1,148

 
67

 
5,026

Amortization
111

 
(1,262
)
 
25

 
(1,126
)
Loss on sale/disposal of assets
(155
)
 
16

 
—

 
(139
)
Interest, net
(6
)
 
(6,262
)
 
—

 
(6,268
)
Equity in net income of unconsolidated affiliates
—

 
—

 
(4,465
)
 
(4,465
)
Other
(992
)
 
(7
)
 
(54
)
 
(1,053
)
Segment contribution
$
55,390

 
$
20,233

 
$
5,039

 
$
80,662

Corporate expenses:
 
 
 
 
 
 
 
Administrative
 
 
 
 
 
 
15,600

Depreciation
 
 
 
 
 
 
1,458

Amortization
 
 
 
 
 
 
19

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

Interest, net
 
 
 
 
 
 
1,024

Income before taxes
 
 
 
 
 
 
62,561

Income tax expense
 
 
 
 
 
 
18,420

Net income
 
 
 
 
 
 
44,141

Net income attributable to redeemable noncontrolling interest
 
 
 
 
 
5,569

Net income attributable to EZCORP, Inc.
 
 
 
 
 
 
$
38,572


7 of 12


EZCORP, Inc.
Operating Segment Results (Unaudited)
(In thousands)
 
 
Three Months Ended September 30, 2011
 
U.S. & Canada
 
Latin America
 
Other
International
 
Consolidated
Revenues:
 
 
 
 
 
 
 
Merchandise sales
$
59,948

 
$
7,908

 
$
—

 
$
67,856

Jewelry scrapping sales
58,414

 
4,634

 
—

 
63,048

Pawn service charges
50,879

 
5,312

 
—

 
56,191

Consumer loan fees
46,299

 
—

 
—

 
46,299

Other
603

 
88

 
—

 
691

Total revenues
216,143

 
17,942

 
—

 
234,085

Merchandise cost of goods sold
34,783

 
4,636

 
—

 
39,419

Jewelry scrapping cost of goods sold
33,939

 
3,004

 
—

 
36,943

Consumer loan bad debt
10,964

 
—

 
—

 
10,964

Net revenues
136,457

 
10,302

 
—

 
146,759

Operating expenses:
 
 
 
 
 
 
 
Store operations
63,647

 
6,103

 
—

 
69,750

Administrative
5,341

 
1,417

 
237

 
6,995

Depreciation
3,017

 
723

 
—

 
3,740

Amortization
103

 
98

 
—

 
201

Gain on sale/disposal of assets
311

 
—

 
—

 
311

Interest, net
10

 
—

 
—

 
10

Equity in net income of unconsolidated affiliates
—

 
—

 
(4,080
)
 
(4,080
)
Other
(8
)
 
4

 
—

 
(4
)
Segment contribution
$
64,036

 
$
1,957

 
$
3,843

 
$
69,836

Corporate expenses:
 
 
 
 
 
 
 
Administrative
 
 
 
 
 
 
12,025

Depreciation
 
 
 
 
 
 
1,079

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

Interest, net
 
 
 
 
 
 
492

Income before taxes
 
 
 
 
 
 
56,240

Income tax expense
 
 
 
 
 
 
19,875

Net income
 
 
 
 
 
 
36,365

Net income attributable to redeemable noncontrolling interest
 
 
 
 
 
—

Net income attributable to EZCORP, Inc.
 
 
 
 
 
 
$
36,365



8 of 12


EZCORP, Inc.
Operating Segment Results (Unaudited)
(In thousands)
 
 
Fiscal Year Ended September 30, 2012
 
U.S. & Canada
 
Latin America
 
Other
International
 
Consolidated
Revenues:
 
 
 
 
 
 
 
Merchandise sales
$
293,461

 
$
41,949

 
$
—

 
$
335,410

Jewelry scrapping sales
192,587

 
15,732

 
—

 
208,319

Pawn service charges
210,645

 
24,997

 
—

 
235,642

Consumer loan fees
170,886

 
26,901

 
9,884

 
207,671

Other
3,769

 
1,348

 
308

 
5,425

Total revenues
871,348

 
110,927

 
10,192

 
992,467

Merchandise cost of goods sold
169,285

 
22,729

 
—

 
192,014

Jewelry scrapping cost of goods sold
122,955

 
11,893

 
—

 
134,848

Consumer loan bad debt
37,405

 
309

 
3,663

 
41,377

Net revenues
541,703

 
75,996

 
6,529

 
624,228

Operating expenses:
 
 
 
 
 
 
 
Store operations
272,446

 
28,919

 
2,121

 
303,486

Administrative
25,893

 
14,281

 
4,597

 
44,771

Depreciation
13,930

 
3,725

 
177

 
17,832

Amortization
526

 
1,388

 
46

 
1,960

(Gain)/loss on sale/disposal of assets
(235
)
 
12

 
223

 
—

Interest, net
(3
)
 
(4,507
)
 
(1
)
 
(4,511
)
Equity in net income of unconsolidated affiliates
—

 
—

 
(17,400
)
 
(17,400
)
Other
(647
)
 
(4
)
 
(559
)
 
(1,210
)
Segment contribution
$
229,793

 
$
32,182

 
$
17,325

 
$
279,300

Corporate expenses:
 
 
 
 
 
 
 
Administrative
 
 
 
 
 
 
49,264

Depreciation
 
 
 
 
 
 
5,457

Amortization
 
 
 
 
 
 
19

(Gain)/loss on sale/disposal of assets
 
 
 
 
 
 
(1
)
Interest, net
 
 
 
 
 
 
2,961

Income before taxes
 
 
 
 
 
 
221,600

Income tax expense
 
 
 
 
 
 
71,023

Net income
 
 
 
 
 
 
150,577

Net income attributable to redeemable noncontrolling interest
 
 
 
 
 
6,869

Net income attributable to EZCORP, Inc.
 
 
 
 
 
 
$
143,708


9 of 12


EZCORP, Inc.
Operating Segment Results (Unaudited)
(In thousands)
 
 
Fiscal Year Ended September 30, 2011
 
U.S. & Canada
 
Latin America
 
Other
International
 
Consolidated
Revenues:
 
 
 
 
 
 
 
Merchandise sales
$
256,846

 
$
25,237

 
$
—

 
$
282,083

Jewelry scrapping sales
196,482

 
15,997

 
—

 
212,479

Pawn service charges
184,234

 
16,901

 
—

 
201,135

Consumer loan fees
171,951

 
—

 
—

 
171,951

Other
1,547

 
122

 
—

 
1,669

Total revenues
811,060

 
58,257

 
—

 
869,317

Merchandise cost of goods sold
147,388

 
14,672

 
—

 
162,060

Jewelry scrapping cost of goods sold
121,355

 
12,205

 
—

 
133,560

Consumer loan bad debt
38,759

 
—

 
—

 
38,759

Net revenues
503,558

 
31,380

 
—

 
534,938

Operating Expenses:
 
 
 
 
 
 
 
Store operations
246,416

 
20,636

 
—

 
267,052

Administrative
19,444

 
4,447

 
795

 
24,686

Depreciation
11,211

 
2,446

 
—

 
13,657

Amortization
456

 
399

 
—

 
855

(Gain)/loss on sale/disposal of assets
296

 
13

 
—

 
309

Interest, net
30

 
4

 
—

 
34

Equity in net income of unconsolidated affiliates
—

 
—

 
(16,237
)
 
(16,237
)
Other
(3
)
 
7

 
(168
)
 
(164
)
Segment contribution
$
225,708

 
$
3,428

 
$
15,610

 
$
244,746

Corporate expenses:
 
 
 
 
 
 
 
Administrative
 
 
 
 
 
 
50,584

Depreciation
 
 
 
 
 
 
3,832

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

Interest, net
 
 
 
 
 
 
1,619

Income before taxes
 
 
 
 
 
 
188,711

Income tax expense
 
 
 
 
 
 
66,552

Net income
 
 
 
 
 
 
122,159

Net income attributable to redeemable noncontrolling interest
 
 
 
 
 
—

Net income attributable to EZCORP, Inc.
 
 
 
 
 
 
$
122,159



10 of 12


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

 
Consolidated
 
 
Beginning of period
982

 
268

 
—

 
1,250

 
12

De novo
5

 
8

 
—

 
13

 
—

Acquired
2

 
—

 
—

 
2

 
—

Sold, combined or closed
(2
)
 
(1
)
 
—

 
(3
)
 
(2
)
End of period
987

 
275

 
—

 
1,262

 
10

 
 
 
 
 
 
 
 
 
 
 
Fiscal Year Ended September 30, 2012
 
Company-owned Stores
 
Franchises
 
U.S. & Canada
 
Latin America
 
Other
International
 
Consolidated
 
 
Beginning of period
933

 
178

 
—

 
1,111

 
13

De novo
17

 
54

 
—

 
71

 
—

Acquired
51

 
45

 
—

 
96

 
—

Sold, combined or closed
(14
)
 
(2
)
 
—

 
(16
)
 
(3
)
End of period
987

 
275

 
—

 
1,262

 
10


11 of 12


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.
 
 
Fiscal Year Ended September 30, 2012
 
Fiscal Year Ended September 30, 2011
 
GAAP
 
Non-GAAP
Adjustments
 
Non-GAAP
 
GAAP
 
Non-GAAP
Adjustments
 
Non-GAAP
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue
$
624,228

 
—

 
$
624,228

 
$
534,938

 
—

 
$
534,938

Operations expense
303,486

 
—

 
303,486

 
267,052

 
—

 
267,052

Administrative expense
94,035

 
—

 
94,035

 
75,270

 
(10,945
)
 
64,325

Depreciation
23,289

 
—

 
23,289

 
17,489

 
—

 
17,489

Amortization
1,979

 
—

 
1,979

 
855

 
—

 
855

(Gain) / loss on sale/disposal of assets
(1
)
 
—

 
(1
)
 
309

 
—

 
309

Operating income
201,440

 
—


201,440

 
173,963

 
10,945

 
184,908

Interest income
(808
)
 
—

 
(808
)
 
(37
)
 
—

 
(37
)
Interest expense
(742
)
 
—

 
(742
)
 
1,690

 
—

 
1,690

Equity in net income of unconsolidated affiliates
(17,400
)
 
—

 
(17,400
)
 
(16,237
)
 
—

 
(16,237
)
Other
(1,210
)
 
—

 
(1,210
)
 
(164
)
 
—

 
(164
)
Income before income taxes
221,600

 
—

 
221,600

 
188,711

 
10,945

 
199,656

Income tax expense
71,023

 
—

 
71,023

 
66,552

 
3,831

 
70,383

Net income
150,577

 
—

 
150,577

 
122,159

 
7,114

 
129,273

Attributable to noncontrolling interest
6,869

 
—

 
6,869

 
—

 
—

 
—

Net income attributable to EZCORP, Inc.
$
143,708

 
$
—

 
$
143,708

 
$
122,159

 
$
7,114

 
$
129,273

Net income per share, diluted
$
2.81

 
$
—

 
$
2.81

 
$
2.43

 
$
0.14

 
$
2.57

Weighted average shares, diluted
51,133

 
—

 
51,133

 
50,369

 
50,369

 
50,369


12 of 12
EZPW 09.30.2012 EX 99.2

99.2
 
 
 
Media Contacts:
 
 
 
EZCORP Investor Relations:
L’Teisha Ryan, Western Union
 
 
 
(512) 314-2220
+1 (720) 332-3824
 
 
 
Investor_Relations@ezcorp.com
lteisha.ryan@WesternUnion.com
 
 
 
www.ezcorp.com

Western Union and EZCORP Sign Agreement

Western Union Services Will Be Available at over 1,200 EZCORP-Operated Store Locations in the United States, Mexico and Canada

ENGLEWOOD, Colorado and AUSTIN, Texas – November 6, 2012 – The Western Union Company (NYSE: WU), a leader in global payments, and EZCORP, Inc. (NASDAQ: EZPW), a leading provider of instant cash solutions for consumers, today announced an agreement.

Under the terms of the agreement, Western Union Money Transfer®, money order and consumer bill payment services will be available at over 900 EZCORP-operated store locations in the United States. Western Union money transfer services also will be available at more than 300 EZCORP-operated store locations in Mexico and Canada.

“Our agreement with Western Union will allow EZCORP to provide vital money transfer and other payment services, thereby deepening our relationship with our customer base,” said Paul Rothamel, EZCORP’s President and Chief Executive Officer. “Western Union is an established global brand, and the company facilitates the reliable and timely movement of money through a substantial international network. Aligning with Western Union is a natural choice for EZCORP, as we remain committed to providing exceptional service and meeting our customers’ wide variety of financial needs.”

EZCORP operates more than 900 locations in the United States under various brand names, including EZPAWN, Value Pawn & Jewelry and EZMONEY. The company’s presence in Mexico includes 230 Empeño Fácil or Empeñe Su Oro stores, and a 60% ownership interest in Crediamigo, a specialty consumer finance company. In Canada, EZCORP operates 70 cash advance and buy/sell stores under the brand names Cash Converters and Cashmax. The company also has strategic relationships with Albemarle & Bond Holdings PLC, one of the U.K.’s largest pawnbroking businesses, and Cash Converters International Limited, which franchises and operates a worldwide network of personal financial services and retail stores. EZCORP was named to Fortune Magazine’s 100 fastest growing companies list in both 20101 and 20112.

“Western Union is positioned at the nexus between cash and electronic technologies,” said Victoria Lopez-Negrete, Senior Vice President and General Manager, North America at Western


Union. “Our relationship with EZCORP will now enable consumers to send and receive money transfers, purchase money orders and make bill payments – all in one convenient location.”

About EZCORP
EZCORP is a leading provider of instant cash solutions for consumers employing 6,500 teammates and operating 1,262 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 180 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 almost 700 stores that provide personal financial services and sell pre-owned merchandise. For more information, visit www.ezcorp.com.

About Western Union
The Western Union Company (NYSE: WU) is a leader in global payment services. Together with its Vigo, Orlandi Valuta, Pago Facil and Western Union Business Solutions branded payment services, Western Union provides consumers and businesses with fast, reliable and convenient ways to send and receive money around the world, to send payments and to purchase money orders. As of September 30, 2012, the Western Union, Vigo and Orlandi Valuta branded services were offered through a combined network of approximately 510,000 agent locations in 200 countries and territories. In 2011, The Western Union Company completed 226 million consumer-to-consumer transactions worldwide, moving $81 billion of principal between consumers, and 425 million business payments. For more information, visit www.westernunion.com.



1.
Fortune Magazine Fastest Growing Companies List, 2010:
http://money.cnn.com/magazines/fortune/fortunefastestgrowing/2010/full_list/index.html
2.
Fortune Magazine Fastest Growing Companies List, 2011:
http://money.cnn.com/magazines/fortune/fortunefastestgrowing/2011/full_list/index.html























2