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): January 20, 2011

EZCORP, Inc.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation)		0-19424 (Commission File Number)		74-2540145 (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 January 20, 2011, EZCORP, Inc. issued a press release announcing its results of operations and financial condition for the first fiscal quarter ended December 31, 2010 and increasing annual earnings guidance. A copy of that press release is attached as Exhibit 99.1.

The press release furnished in Exhibit 99.1 presents the financial results and expected earnings per share for fiscal 2011 in accordance with GAAP. In addition, net income, consolidated operating income and earnings per share for the first fiscal quarter, as well as expected earnings per share for fiscal 2011, are presented on a non-GAAP basis. Information sufficient to reconcile each non-GAAP measure to the related GAAP measure is also presented. These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for the corresponding GAAP measures.

As noted in the press release, the only difference between the presented non-GAAP measures and the GAAP measures is the exclusion of the affect 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 current period GAAP results as well as expected 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 January 20, 2011, announcing EZCORP, Inc.’s results of operations and financial condition for the first fiscal quarter ended December 31, 2010 and increasing annual earnings guidance.

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.

EXHIBIT INDEX

Exhibit
No.		Description of Exhibit
99.1		Press Release, dated January 20, 2011, announcing EZCORP, Inc.’s results of operations and financial condition for the first fiscal quarter ended December 31, 2010 and increasing annual earnings guidance.

Exhibit 99.1

EZCORP CONTINUES ROBUST EARNINGS GROWTH
- - All Segments Post Double-Digit Operating Income Gains

AUSTIN, Texas (January 20, 2011) — EZCORP, Inc. (Nasdaq: EZPW), a leading provider of specialty consumer financial services, today announced results for its first fiscal quarter ended December 31, 2010. Highlights include:

	•		Non-GAAP earnings per share of $0.69, up 33% over prior year quarter; GAAP earnings per share of $0.55, up 6% over prior year quarter.
	•		Non-GAAP net income of $34.5 million, up 34%; GAAP net income of $27.4 million, up 7%.
	•		Total revenues of $218.8 million, up 18% over prior year quarter.
	•		Non-GAAP consolidated operating income of $50.3 million (38% of net revenue), up 29% over prior year quarter; GAAP consolidated operating income of $39.4 million (29% of net revenue), up 1% over prior year quarter.
	•		Store level operating income up $11.6 million in U.S. Pawn, $1.6 million in Empeño Fácil and $1.8 million in EZMONEY.
	•		Pre-tax contribution from strategic affiliates of $3.4 million, up from $1.3 million in prior year quarter.

Non-GAAP results exclude a previously announced one-time charge related to the retirement of the Company’s former Chief Executive Officer.

Commenting on these results, President and Chief Executive Officer, Paul Rothamel, stated, “We are excited to get the new fiscal year off to a great start, with 13% same store revenue growth and all segments posting double-digit operating income growth. Accentuating the ability to leverage our expense structure through increased scale, our team members turned an 18% total revenue increase into a 34% growth in net income excluding the one-time charge.”

Rothamel added, “Our geographic diversification continued this quarter with 29 new stores in Mexico, Canada and domestic areas outside Texas. As a benefit of this diversification and continued growth in our newer products, U.S. payday lending, while remaining strong, now represents 16% of our total revenues compared to 20% a year ago.”

The Company also announced that it expects fiscal 2011 earnings per share, excluding the one-time charge described above, to increase 22% year-over-year to $2.40 ($2.26 on a GAAP basis). This is an increase from its previous estimate of $2.35 per share ($2.21 on a GAAP basis).

About EZCORP

EZCORP is a leading provider of specialty consumer financial services. It provides collateralized non-recourse loans, commonly known as pawn loans, and a variety of short-term consumer loans, including payday loans, installment loans and auto title loans, or fee-based credit services to customers seeking loans. At its pawn stores, the company also sells merchandise, primarily collateral forfeited from its pawn lending operations.

EZCORP operates more than 1,000 stores, including over 500 pawn stores in the U.S. and Mexico and over 500 short-term consumer loan stores in the U.S. and Canada. The company also has significant investments in Albemarle & Bond Holdings PLC (ABM.L), one of the U.K.’s largest pawnbroking businesses with over 130 stores, and Cash Converters International Limited (CCV.L and CCV.AUS), which franchises and operates a worldwide network of over 500 stores that provide 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. 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 changing market conditions in the overall economy and the industry, consumer demand for the Company’s services and merchandise, actions of third parties who offer services and products in the Company’s locations and changes in the regulatory environment. 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, non-GAAP consolidated operating income and non-GAAP earnings per share for the current period, as well as non-GAAP expected earnings per share for fiscal 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. The Company’s management uses these non-GAAP financial measures to understand the Company’s 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.

For additional information, contact Investor Relations at (512) 314-2220.

EZCORP, Inc.
Highlights of Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data and percents)

		Three Months Ended December 31,								Increase				Percent
		2010				2009				(Decrease)				Change
Revenues:
Merchandise sales		$	67,730			$	62,476			$	5,254				8.4
Jewelry scrapping sales			50,665				37,442				13,223				35.3
Pawn service charges			49,810				40,797				9,013				22.1
Signature loan fees			40,066				38,678				1,388				3.6
Auto title loan fees			6,244				3,102				3,142				101.3
Other			4,311				2,256				2,055				91.1
Total revenues			218,826				184,751				34,075				18.4
Cost of goods sold:
Cost of merchandise sales			41,311				39,264				2,047				5.2
Cost of jewelry scrapping sales			32,255				23,306				8,949				38.4
Total cost of goods sold			73,566				62,570				10,996				17.6
Bad debt:
Signature loan bad debt			10,046				8,790				1,256				14.3
Auto title loan bad debt			982				460				522				113.5
Total bad debt			11,028				9,250				1,778				19.2
Net revenue			134,232				112,931				21,301				18.9
Operations expense			64,504				58,181				6,323				10.9
Administrative expense			26,138				12,297				13,841				112.6
Depreciation and amortization			4,179				3,356				823				24.5
Loss on sale/disposal of assets			7				211				(204	)			(96.7	)
Operating income			39,404				38,886				518				1.3
Interest income			(3	)			(8	)			5				(62.5	)
Interest expense			300				365				(65	)			(17.8	)
Equity in net income of unconsolidated affiliates			(3,367	)			(1,283	)			(2,084	)			162.4
Other			(61	)			(15	)			(46	)			—
Income before income taxes			42,535				39,827				2,708				6.8
Income tax expense			15,106				14,120				986				7.0
Net income		$	27,429			$	25,707			$	1,722				6.7
Net income per share, diluted		$	0.55			$	0.52			$	0.03				5.7
Weighted average shares, diluted			50,119				49,400

										Amount or
										Percentage Point (ppt)
OTHER DATA:										Increase (Decrease)
Gross margin on merchandise sales			39.0	%			37.2	%			1.8			ppts
Gross margin on jewelry scrapping sales			36.3	%			37.8	%			(1.5	)		ppts
Gross margin on total sales			37.9	%			37.4	%			0.5			ppts
Signature loan bad debt as percent of fees			25.1	%			22.7	%			2.4			ppts
Auto title loan bad debt as percent of fees			15.7	%			14.8	%			0.9			ppts
Annualized inventory turnover			3.8				3.7				0.1
Operating income margin			29.4	%			34.4	%			(5.0	)		ppts

EZCORP, Inc.
Highlights of Consolidated Balance Sheets (Unaudited)
(in thousands, except per share data and store counts)

		December 31,
		2010				2009
Assets:
Current assets:
Cash and cash equivalents		$	23,908			$	17,032
Pawn loans			124,388				103,446
Signature loans, net			11,953				8,934
Auto title loans, net			3,307				2,110
Pawn service charges receivable, net			24,068				19,662
Signature loan fees receivable, net			6,141				6,044
Auto title loan fees receivable, net			1,600				827
Inventory, net			77,677				63,515
Deferred tax asset			23,248				15,671
Prepaid expenses and other assets			20,724				20,654
Total current assets			317,014				257,895
Investments in unconsolidated affiliates			108,959				90,455
Property and equipment, net			66,641				52,378
Deferred tax asset, non-current			—				5,011
Goodwill			128,181				101,134
Other assets, net			24,252				19,931
Total assets		$	645,047			$	526,804
Liabilities and stockholders’ equity:
Current liabilities:
Current maturities of long-term debt		$	10,000			$	10,000
Accounts payable and other accrued expenses			48,986				39,692
Customer layaway deposits			5,950				2,697
Federal income taxes payable			5,267				6,480
Total current liabilities			70,203				58,869
Long-term debt, less current maturities			12,500				22,500
Deferred tax liability			1,619				—
Deferred gains and other long-term liabilities			2,419				2,840
Total stockholders’ equity			558,306				442,595
Total liabilities and stockholders’ equity		$	645,047			$	526,804
Pawn loan balance per ending pawn store		$	236			$	235
Inventory per ending pawn store		$	147			$	144
Book value per share		$	11.18			$	9.08
Tangible book value per share		$	8.29			$	6.68
Pawn store count — end of period			528				440
Signature loan store count — end of period			504				480
Shares outstanding — end of period			49,923				48,732

EZCORP, Inc.
Operating Segment Results (Unaudited)
(in thousands, except store counts and percents)

		U.S. Pawn				Empeño				EZMONEY
Three months ended December 31, 2010:		Operations				Fácil				Operations				Consolidated
Revenues:
Merchandise Sales		$	62,341			$	5,389			$	—			$	67,730
Scrap Sales			47,006				3,462				197				50,665
Pawn service charges			46,436				3,374				—				49,810
Signature loan fees			509				—				39,557				40,066
Auto title loan fees			393				—				5,851				6,244
Other			4,081				189				41				4,311
Total revenues			160,766				12,414				45,646				218,826
Merchandise cost of goods sold			38,197				3,114				—				41,311
Scrap cost of goods sold			29,538				2,638				79				32,255
Signature loan bad debt			165				—				9,881				10,046
Auto title loan bad debt			61				—				921				982
Net revenues			92,805				6,662				34,765				134,232
Operations expense			43,196				4,278				17,030				64,504
Store operating income		$	49,609			$	2,384			$	17,735			$	69,728
Gross margin on merchandise sales			38.7	%			42.2	%			N/A				39.0	%
Gross margin on scrap sales			37.2	%			23.8	%			59.9	%			36.3	%
Gross margin on total sales			38.1	%			35.0	%			59.9	%			37.9	%
Annualized inventory turnover			3.7				4.1				N/A				3.8
Signature loan bad debt as percent of fees			32.4	%			N/A				25.0	%			25.1	%
Auto title loan bad debt as percent of fees			15.5	%			N/A				15.7	%			15.7	%
Store operating income margin			53.5	%			35.8	%			51.0	%			51.9	%
Pawn store count — end of period			396				132				—				528
Signature loan store count — end of period			6				—				498				504
Three months ended December 31, 2009:
Revenues:
Merchandise Sales		$	59,211			$	3,265			$	—			$	62,476
Scrap Sales			36,823				607				12				37,442
Pawn service charges			38,941				1,856				—				40,797
Signature loan fees			553				—				38,125				38,678
Auto title loan fees			475				—				2,627				3,102
Other			2,167				89				—				2,256
Total revenues			138,170				5,817				40,764				184,751
Merchandise cost of goods sold			36,906				2,358				—				39,264
Scrap cost of goods sold			22,824				475				7				23,306
Signature loan bad debt			186				—				8,604				8,790
Auto title loan bad debt			70				—				390				460
Net revenues			78,184				2,984				31,763				112,931
Operations expense			40,199				2,164				15,818				58,181
Store operating income		$	37,985			$	820			$	15,945			$	54,750
Gross margin on merchandise sales			37.7	%			27.8	%			N/A				37.2	%
Gross margin on scrap sales			38.0	%			21.7	%			41.7	%			37.8	%
Gross margin on total sales			37.8	%			26.8	%			41.7	%			37.4	%
Annualized inventory turnover			3.7				3.9				N/A				3.7
Signature loan bad debt as percent of fees			33.6	%			N/A				22.6	%			22.7	%
Auto title loan bad debt as percent of fees			14.7	%			N/A				14.8	%			14.8	%
Store operating income margin			48.6	%			27.5	%			50.2	%			48.5	%
Pawn store count — end of period			370				70				—				440
Signature loan store count — end of period			6				—				474				480

Supplemental Non-GAAP Financial Measures

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.

EZCORP, Inc.
Reconciliation of Non-GAAP Consolidated Financial Measures (Unaudited)
(in thousands, except per share data and percents)

		Three Months Ended December 31, 2010
						Non-GAAP
		GAAP				Adjustments				Non-GAAP
Net revenue			134,232				—				134,232
Operations expense			64,504				—				64,504
Administrative expense			26,138				(10,945	)			15,193
Depreciation and amortization			4,179				—				4,179
Loss on sale/disposal of assets			7				—				7
Operating income			39,404				10,945				50,349
Interest income			(3	)			—				(3	)
Interest expense			300				—				300
Equity in net income of unconsolidated affiliates			(3,367	)			—				(3,367	)
Other			(61	)			—				(61	)
Income before income taxes			42,535				10,945				53,480
Income tax expense			15,106				3,831				18,937
Net income		$	27,429			$	7,114			$	34,543
Net income per share, diluted		$	0.55			$	0.14			$	0.69
Weighted average shares, diluted			50,119				—				50,119

		Projected Year Ending September 30, 2011
		Projected				Non-GAAP				Projected
		GAAP				Adjustments				Non-GAAP
Net income per share, diluted		$	2.26			$	0.14			$	2.40