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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): February 2, 2017 (February 2, 2017)
 _______________________________________________ 
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.)
2500 Bee Cave Road, Rollingwood, 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 February 2, 2017, EZCORP, Inc. will issue a press release announcing its results of operations and financial condition for the quarter ended December 31, 2016. A copy of that press release is attached as Exhibit 99.1.
In addition to the financial information prepared in conformity with generally accepted accounting principles in the United States of America ("GAAP"), we provide certain other non-GAAP financial information such as constant currency results ("constant currency"). Management believes that presentation of non-GAAP financial information is meaningful and useful in understanding the activities and business metrics of our Mexico Pawn operations, which are denominated in Mexican pesos. Management believes that these non-GAAP financial measures reflect an additional way of viewing aspects of our business that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our business. Management provides 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 instead of or superior to, its 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. 
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 7.01 — Regulation FD Disclosure
A copy of the presentation materials that management will review during the Company’s first quarter 2017 earnings conference call (to be held on February 3, 2017) will be posted in the Investor Relations section of the Company’s website at www.ezcorp.com.
Item 9.01 — Financial Statements and Exhibits
(d)
Exhibits.
99.1
Press Release, dated February 2, 2017, announcing EZCORP, Inc.’s results of operations and financial condition for the quarter ended December 31, 2016.




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
EZCORP, INC.
 
 
 
 
 
 
 
 
Date:
February 2, 2017
 
 
 
By:
 
/s/ David McGuire
 
 
 
 
 
 
 
David McGuire
 
 
 
 
 
 
 
Deputy Chief Financial Officer and Chief Accounting Officer




EXHIBIT INDEX
Exhibit
No.
  
Description of Exhibit
 
 
 
99.1
  
Press Release, dated February 2, 2017, announcing EZCORP, Inc.’s results of operations and financial condition for the quarter ended December 31, 2016.


Exhibit


https://cdn.kscope.io/1fe61be23bd7851638f3a30b19beb3a8-fy2014q1ezcorpa01a04a01.jpg
EZCORP Announces First Quarter Fiscal 2017 Results
•
Total revenue up $5.1 million to $192.6 million (up $9.8 million to $197.4 million on a constant currency basis1).
•
Profit before tax more than doubled to $13.0 million ($13.9 million on a constant currency basis); four consecutive quarters of YOY profit growth.
•
Earnings per share from continuing operations increased to $0.15 from $0.06.
All amounts in this release are from EZCORP continuing operations and in conformity with U.S. generally accepted accounting principles ("GAAP") unless otherwise noted. Comparisons shown in this release are to the same period in the prior year unless otherwise noted.
Austin, Texas (February 2, 2017) — EZCORP, Inc. (NASDAQ: EZPW), a leading provider of pawn loans in the United States and Mexico, today announced results for its first quarter ended December 31, 2016.
HIGHLIGHTS FOR FIRST QUARTER FISCAL 2017
Improvements to earning assets generated revenue and profit growth:
•
Positive PLO growth in U.S. and Mexico:
◦
Market leading growth in same store pawn loans outstanding (PLO) up 3% in U.S. and down 4% in Mexico (up 14% on a constant currency basis).
◦
Leading the U.S. market with average PLO of $287,000 per store.
•
Delivering profitable growth:
◦
Growth in revenue and profit before tax, four consecutive quarters of YOY profit growth.
◦
Corporate expense savings of 30%; on track for $50 million in FY18.
◦
Significant investment in field leadership and customer-facing team members in U.S. Pawn, adding 224 store Team Members, nine field human resources managers, six District Managers and two Divisional Vice Presidents to improve customer experience, particularly during peak sales season; offset impacts of staff turnover; and better coach & mentor store managers.
Strong liquidity position to support growth:
•
$63.7 million cash balance at quarter-end plus $50 million undrawn on our credit facility.
•
Collected $7.8 million in principal on notes receivable from the Grupo Finmart sale during the current quarter, and anticipate collection of an additional $37.4 million in principal during the remainder of fiscal 2017.
CEO COMMENTARY AND OUTLOOK
Stuart Grimshaw, EZCORP's Chief Executive Officer, said: "Our first quarter results reflect the continued intense focus on market leadership in meeting our customers' desire for cash whenever they want it, combined with consistent execution in pawn fundamentals. We delivered strong operating results in our pawn businesses in the U.S. and Mexico with continued growth in same store pawn loans outstanding (PLO), the most influential driver of revenue and profitability.

"We continue to drive corporate expense savings as we move to a leaner business model and remain on track to reduce corporate expense to $50 million in FY18 from $68 million in FY16. We are reinvesting a portion of the savings into initiatives to better serve our customers, including product and customer data analytics and feedback; upgrading our technology; and training, coaching and mentoring programs for our field team. We have also made significant investments in field leadership and customer-facing Team Members. We plan to open about ten new stores in Mexico in FY17.

1In addition to the financial information prepared in conformity with U.S. generally accepted accounting principles (“GAAP”), we provide certain financial information on a “constant currency” basis, which excludes the impact of foreign currency exchange rate fluctuations. For additional information about the constant currency calculations, as well as a reconciliation of the constant currency financial measures to the comparable GAAP financial measures, see “Non-GAAP Financial Information” at the end of this release.



"We are confident that all these initiatives will continue to improve our pawn operating performance and provide a platform for profitable growth."
CONSOLIDATED RESULTS
•
Total revenue up $5.1 million to $192.6 million, and income from continuing operations net of tax increased $4.8 million to $8.3 million. (On a constant currency basis, total revenue was up $9.8 million to $197.4 million and income from continuing operations net of tax was up $5.6 million to $9.1 million.) These results were driven by continued intense focus on market leadership in meeting our customers' desire for cash.
•
Total operating expenses decreased $7.4 million, or 7% (5% on a constant currency basis). This included a corporate expense decrease of $6.1 million to $13.9 million, or 30% lower, driven by a leaner business model.
OPERATING METRICS
U.S. Pawn Segment
•
Continued focus on meeting customers' desire for cash resulted in an increase in total PLO of 4% to $148.6 million, up 3% on a same store basis.
•
Pawn Service Charges (PSC) increased 4% to $61.0 million, up 3% on a same store basis.
•
Merchandise sales increased 3%, both in total and on a same store basis. The merchandise sales gross margin of 36% remained within our target range of 35-38%, although it was 400bps lower than the prior-year quarter.
•
Slight increase in aged inventory to 9% from 8% of total inventory at the end of the previous quarter, although improved to 9% from 11% at the end of the prior-year quarter.
•
Operations expense increased $3.8 million, or up 6%, primarily due to:
▪
224 customer-facing store Team Members, and field leadership positions including two Divisional Vice Presidents, six District Managers and nine field Human Resources Managers; and
▪
Commenced store preventative maintenance program.
▪
Segment profit before tax decreased $1.7 million, or 6%, to $27.1 million as a result of increased investments in store operations (as shown above).
Mexico Pawn Segment
•
PLO decreased 3% to $14.1 million, compared to an increase of 13% in the prior-year quarter (up 16% to $16.8 million on a constant currency basis. PSC remained flat at $8.0 million, but was up 18% to $9.4 million on a constant currency basis.
•
Merchandise sales were flat, both in total and on a same store basis (up 19% in constant currency). Merchandise margin of 31%, 400bps lower than the prior-year quarter.
•
Segment profit before tax increased 194%, or $2.8 million, to $4.2 million (up 249%, or $3.6 million on a constant currency basis).
•
Maintained aged inventory levels at 5% of gross inventory, although slight increase from 3% at the end of the previous quarter.
CONFERENCE CALL
EZCORP will host a conference call on Friday, February 3, 2017, at 7:30am Central Time to discuss first quarter results. Analysts and institutional investors may participate on the conference call by dialing (877) 201-0168, Conference ID: 62600120, international dialing (647) 788-4901. The conference call will be webcast simultaneously to the public through this link: http://investors.ezcorp.com/. A replay of the conference call will be available online at http://investors.ezcorp.com/ shortly after the call.




ABOUT EZCORP
EZCORP is a leading provider of pawn loans in the United States and Mexico. At our pawn stores, we also sell merchandise, primarily collateral forfeited from pawn lending operations and used merchandise purchased from customers. 
FORWARD LOOKING STATEMENTS
This announcement contains certain forward-looking statements regarding the company’s strategy, initiatives and expected performance. These statements are based on the company’s current expectations as to the outcome and timing of future events. All statements, other than statements of historical facts, including all statements regarding the company's strategy, initiatives and future performance, that address activities or results that the company plans, expects, believes, projects, estimates or anticipates, will, should or may occur in the future, including future financial or operating results, are forward-looking statements. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of uncertainties and other factors, including operating risks, liquidity risks, legislative or regulatory developments, market factors or current or future litigation. For a discussion of these and other factors affecting the company’s business and prospects, see the company’s annual, quarterly and other reports filed with the Securities and Exchange Commission. The company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

Contact:
Jeff Christensen
Vice President, Investor Relations
Email: jeff_christensen@ezcorp.com
Phone: (512) 437-3545





EZCORP, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
Three Months Ended December 31,
 
2016
 
2015
 
 
 
 
 
(Unaudited)
 
(in thousands, except per share amounts)
Revenues:
 
 
 
Merchandise sales
$
111,513

 
$
108,584

Jewelry scrapping sales
9,798

 
9,621

Pawn service charges
69,013

 
66,594

Other revenues
2,300

 
2,758

Total revenues
192,624

 
187,557

Merchandise cost of goods sold
71,732

 
66,259

Jewelry scrapping cost of goods sold
8,344

 
8,076

Other cost of revenues
583

 
612

Net revenues
111,965

 
112,610

Operating expenses:
 
 
 
Operations
77,646

 
76,018

Administrative
13,927

 
19,983

Depreciation and amortization
6,373

 
7,542

(Gain) loss on sale or disposal of assets
(77
)
 
33

Restructuring
—

 
1,692

Total operating expenses
97,869

 
105,268

Operating income
14,096

 
7,342

Interest expense
5,565

 
4,127

Interest income
(2,616
)
 
(9
)
Equity in net income of unconsolidated affiliate
(1,478
)
 
(2,055
)
Other (income) expense
(423
)
 
102

Income from continuing operations before income taxes
13,048

 
5,177

Income tax expense
4,782

 
1,758

Income from continuing operations, net of tax
8,266

 
3,419

Loss from discontinued operations, net of tax
(1,228
)
 
(11,685
)
Net income (loss)
7,038

 
(8,266
)
Net loss attributable to noncontrolling interest
(127
)
 
(792
)
Net income (loss) attributable to EZCORP, Inc.
$
7,165

 
$
(7,474
)
 
 
 
 
Basic earnings per share attributable to EZCORP, Inc. — continuing operations
$
0.15

 
$
0.06

Diluted earnings per share attributable to EZCORP, Inc. — continuing operations
$
0.15

 
$
0.06

 
 
 
 
Weighted-average basic shares outstanding
54,158

 
54,895

Weighted-average diluted shares outstanding
54,214

 
54,909





EZCORP, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
 
December 31,
2016
 
September 30,
2016
 
 
 
 
 
(Unaudited)
 
 
Assets:
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
63,707

 
$
65,737

Pawn loans
162,696

 
167,329

Pawn service charges receivable, net
30,967

 
31,062

Inventory, net
143,440

 
140,224

Notes receivable, net
36,180

 
41,946

Income taxes receivable
1,518

 
2,533

Prepaid expenses and other current assets
34,724

 
33,312

Total current assets
473,232

 
482,143

Investment in unconsolidated affiliate
39,875

 
37,128

Property and equipment, net
54,881

 
58,455

Goodwill
253,585

 
253,976

Intangible assets, net
31,708

 
30,681

Non-current notes receivable, net
39,365

 
41,119

Deferred tax asset, net
34,667

 
35,303

Other assets, net
37,187

 
44,439

Total assets
$
964,500

 
$
983,244

 
 
 
 
Liabilities and equity:
 
 
 
Current liabilities:
 
 
 
Accounts payable, accrued expenses and other current liabilities
$
68,694

 
$
84,285

Customer layaway deposits
9,729

 
10,693

Total current liabilities
78,423

 
94,978

Long-term debt, net
278,936

 
283,611

Other long-term liabilities
8,259

 
10,450

Total liabilities
365,618

 
389,039

Commitments and contingencies
 
 
 
Stockholders’ equity:
 
 
 
Class A Non-voting Common Stock, par value $.01 per share; shares authorized: 100 million as of December 31, 2016 and September 30, 2016; issued and outstanding: 51,306,608 as of December 31, 2016 and 51,129,144 as of September 30, 2016
513

 
511

Class B Voting Common Stock, convertible, par value $.01 per share; 3 million shares authorized; issued and outstanding: 2,970,171
30

 
30

Additional paid-in capital
319,825

 
318,723

Retained earnings
326,973

 
319,808

Accumulated other comprehensive loss
(47,577
)
 
(44,089
)
EZCORP, Inc. stockholders’ equity
599,764

 
594,983

Noncontrolling interest
(882
)
 
(778
)
Total equity
598,882

 
594,205

Total liabilities and equity
$
964,500

 
$
983,244





EZCORP, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
Three Months Ended December 31,
 
2016
 
2015
 
 
 
 
 
(Unaudited)
 
(in thousands)
Operating activities:
 
 
 
Net income (loss)
$
7,038

 
$
(8,266
)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
 
 
 
Depreciation and amortization
6,373

 
8,090

Amortization of debt discount and deferred financing costs
2,826

 
3,195

Amortization of prepaid commissions
—

 
4,023

Accretion of notes receivable discount
(1,029
)
 
—

Consumer loan loss provision
583

 
9,691

Deferred income taxes
750

 
(4,744
)
Other adjustments
295

 
(1,966
)
(Gain) loss on sale or disposal of assets
(77
)
 
33

Stock compensation
1,808

 
833

Income from investment in unconsolidated affiliate
(1,478
)
 
(2,055
)
Changes in operating assets and liabilities:
 
 
 
Service charges and fees receivable
(83
)
 
6,381

Inventory
(615
)
 
(2,107
)
Prepaid expenses, other current assets and other assets
(3,856
)
 
(5,592
)
Accounts payable and other, deferred gains and other long-term liabilities
(21,948
)
 
(10,776
)
Customer layaway deposits
(881
)
 
(310
)
Income taxes receivable and payable, current, net of excess tax benefit from stock compensation
5,004

 
4,045

Payments of restructuring charges
—

 
(4,943
)
Net cash used in operating activities
(5,290
)
 
(4,468
)
Investing activities:
 
 
 
Loans made
(156,457
)
 
(173,162
)
Loans repaid
91,283

 
106,372

Recovery of pawn loan principal through sale of forfeited collateral
64,430

 
58,566

Additions to property and equipment
(2,326
)
 
(1,139
)
Principal collections on notes receivable
7,831

 
—

Net cash provided by (used in) investing activities
4,761

 
(9,363
)
Financing activities:
 
 
 
Taxes paid related to net share settlement of equity awards
(706
)
 
—

Payout of deferred consideration
—

 
(8,915
)
Proceeds from settlement of forward currency contracts
—

 
3,557

Change in restricted cash
—

 
(1,261
)
Proceeds from borrowings, net of issuance costs
—

 
14,302

Payments on borrowings
—

 
(29,358
)
Net cash used in financing activities
(706
)
 
(21,675
)
Effect of exchange rate changes on cash and cash equivalents
(795
)
 
(837
)
Net decrease in cash and cash equivalents
(2,030
)
 
(36,343
)
Cash and cash equivalents at beginning of period
65,737

 
59,124

Cash and cash equivalents at end of period
$
63,707

 
$
22,781





EZCORP, Inc.
OPERATING SEGMENT RESULTS (UNAUDITED)
 
Three Months Ended December 31, 2016
  
U.S. Pawn
 
Mexico Pawn
 
Other
International
 
Total Segments
 
Corporate Items
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands)
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Merchandise sales
$
94,861

 
$
16,652

 
$
—

 
$
111,513

 
$
—

 
$
111,513

Jewelry scrapping sales
8,845

 
953

 
—

 
9,798

 
—

 
9,798

Pawn service charges
61,045

 
7,968

 
—

 
69,013

 
—

 
69,013

Other revenues
51

 
131

 
2,118

 
2,300

 
—

 
2,300

Total revenues
164,802

 
25,704

 
2,118

 
192,624

 
—

 
192,624

Merchandise cost of goods sold
60,248

 
11,484

 
—

 
71,732

 
—

 
71,732

Jewelry scrapping cost of goods sold
7,550

 
794

 
—

 
8,344

 
—

 
8,344

Other cost of revenues
—

 
—

 
583

 
583

 
—

 
583

Net revenues
97,004

 
13,426

 
1,535

 
111,965

 
—

 
111,965

Segment and corporate expenses (income):
 
 
 
 
 
 
 
 
 
 
 
Operations
67,350

 
8,640

 
1,656

 
77,646

 
—

 
77,646

Administrative
—

 
—

 
—

 
—

 
13,927

 
13,927

Depreciation and amortization
2,617

 
631

 
50

 
3,298

 
3,075

 
6,373

Gain on sale or disposal of assets
(71
)
 
(6
)
 
—

 
(77
)
 
—

 
(77
)
Interest expense
—

 
2

 
—

 
2

 
5,563

 
5,565

Interest income
—

 
(67
)
 
—

 
(67
)
 
(2,549
)
 
(2,616
)
Equity in net income of unconsolidated affiliate
—

 
—

 
(1,478
)
 
(1,478
)
 
—

 
(1,478
)
Other (income) expense
(5
)
 
11

 
(1
)
 
5

 
(428
)
 
(423
)
Segment contribution
$
27,113

 
$
4,215

 
$
1,308

 
$
32,636

 
 
 
 
Income from continuing operations before income taxes
 
 
 
 
 
 
$
32,636

 
$
(19,588
)
 
$
13,048





EZCORP, Inc.
OPERATING SEGMENT RESULTS (UNAUDITED)
 
Three Months Ended December 31, 2015
  
U.S. Pawn
 
Mexico Pawn
 
Other
International
 
Total Segments
 
Corporate Items
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands)
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Merchandise sales
$
91,994

 
$
16,586

 
$
4

 
$
108,584

 
$
—

 
$
108,584

Jewelry scrapping sales
9,600

 
—

 
21

 
9,621

 
—

 
9,621

Pawn service charges
58,621

 
7,973

 
—

 
66,594

 
—

 
66,594

Other revenues
193

 
191

 
2,374

 
2,758

 
—

 
2,758

Total revenues
160,408

 
24,750

 
2,399

 
187,557

 
—

 
187,557

Merchandise cost of goods sold
55,461

 
10,798

 
—

 
66,259

 
—

 
66,259

Jewelry scrapping cost of goods sold
8,060

 
—

 
16

 
8,076

 
—

 
8,076

Other cost of revenues
—

 
—

 
612

 
612

 
—

 
612

Net revenues
96,887

 
13,952

 
1,771

 
112,610

 
—

 
112,610

Segment and corporate expenses (income):
 
 
 
 
 
 
 
 
 
 
 
Operations
63,545

 
11,193

 
1,280

 
76,018

 
—

 
76,018

Administrative
—

 
—

 
—

 
—

 
19,983

 
19,983

Depreciation and amortization
3,560

 
801

 
51

 
4,412

 
3,130

 
7,542

Loss on sale or disposal of assets
7

 
26

 
—

 
33

 
—

 
33

Interest expense
86

 
40

 
—

 
126

 
4,001

 
4,127

Interest income
(1
)
 
—

 
—

 
(1
)
 
(8
)
 
(9
)
Equity in net income of unconsolidated affiliate
—

 
—

 
(2,055
)
 
(2,055
)
 
—

 
(2,055
)
Restructuring
891

 
328

 
204

 
1,423

 
269

 
1,692

Other expense (income)
—

 
128

 
(3
)
 
125

 
(23
)
 
102

Segment contribution
$
28,799

 
$
1,436

 
$
2,294

 
$
32,529

 
 
 
 
Income from continuing operations before income taxes
 
 
 
 
 
 
$
32,529

 
$
(27,352
)
 
$
5,177





EZCORP, Inc.
STORE COUNT ACTIVITY (UNAUDITED)
 
Three Months Ended December 31, 2016
 
Company-owned Stores
 
U.S. Pawn
 
Mexico Pawn
 
Other International
 
Consolidated
 
 
 
 
 
 
 
 
As of September 30, 2016
520

 
239

 
27

 
786

New locations opened
—

 
—

 
—

 
—

Locations sold, combined or closed
(3
)
 
—

 
—

 
(3
)
As of December 31, 2016
517

 
239

 
27

 
783

 
Three Months Ended December 31, 2015
 
Company-owned Stores
 
 
 
U.S. Pawn
 
Mexico Pawn
 
Other International
 
Consolidated
 
Franchises
 
 
 
 
 
 
 
 
 
 
As of September 30, 2015
522

 
237

 
27

 
786

 
1

New locations opened
—

 
1

 
—

 
1

 
—

Locations sold, combined or closed
(6
)
 
(1
)
 
—

 
(7
)
 
—

As of December 31, 2015
516

 
237

 
27

 
780

 
1

Non-GAAP Financial Information (Unaudited)
In addition to the financial information prepared in conformity with generally accepted accounting principles in the United States of America ("GAAP"), we provide certain other non-GAAP financial information on a constant currency basis ("constant currency"). We use constant currency and ongoing segment contribution results to evaluate results of our Mexico Pawn operations, which are denominated in Mexican pesos and believe that presentation of constant currency results are meaningful and useful in understanding the activities and business metrics of our Mexico Pawn operations and reflect an additional way of viewing aspects of our business that, when viewed with GAAP results, provide a more complete understanding 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 instead of 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 Mexican pesos 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. 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. The end-of-period exchange rate as of December 31, 2016 and 2015 was 20.7 to 1 and 17.3 to 1, respectively. The approximate average exchange rate for the three months ended December 31, 2016 and 2015 was 19.8 to 1 and 16.8 to 1, respectively, however our statement of operations constant currency results reflect the impact of monthly effects of exchange rates and so are not directly calculable from the above rates. Constant currency results, where presented, also exclude the foreign currency gain or loss and the related foreign currency derivative gain or loss impact.
The following information provides reconciliations of certain non-GAAP financial measures presented in this press release to the most directly comparable financial measures calculated and presented in accordance with GAAP as of and for the three months ended December 31, 2016.




Miscellaneous Non-GAAP Financial Measures
 
U.S. Dollar Amount
 
Percentage Change YOY
 
 
 
 
 
(in millions)
 
 
Consolidated revenue
$
192.6

 
3
 %
Currency exchange rate fluctuations
4.8

 
 
Constant currency consolidated revenue
$
197.4

 
5
 %
 
 
 
 
Consolidated income from continuing operations before income taxes
$
13.0

 
152
 %
Currency exchange rate fluctuations
0.9

 
 
Constant currency income from continuing operations before income taxes
$
13.9

 
167
 %
 
 
 
 
Mexico Pawn same store loans outstanding
$
13.7

 
(4
)%
Currency exchange rate fluctuations
2.6

 
 
Constant currency Mexico Pawn same store loans outstanding
$
16.3

 
14
 %
 
 
 
 
Consolidated income from continuing operations, net of tax
$
8.3

 
142
 %
Currency exchange rate fluctuations
0.8

 
 
Constant currency income from continuing operations, net of tax
$
9.1

 
165
 %
 
 
 
 
Consolidated operating expenses
$
97.9

 
(7
)%
Currency exchange rate fluctuations
1.7

 
 
Constant currency consolidated operating expenses
$
99.6

 
(5
)%
 


 
 
Mexico Pawn loans outstanding
$
14.1

 
(3
)%
Currency exchange rate fluctuations
2.7

 
 
Constant currency Mexico Pawn loans outstanding
$
16.8

 
16
 %
 
 
 
 
Mexico Pawn service charges
$
8.0

 
—
 %
Currency exchange rate fluctuations
1.4

 
 
Constant currency Mexico Pawn service charges
$
9.4

 
18
 %
 
 
 
 
Mexico Pawn merchandise revenue
$
16.7

 
—
 %
Currency exchange rate fluctuations
3.1

 
 
Constant currency Mexico Pawn merchandise revenue
$
19.8

 
19
 %
 
 
 
 
Mexico Pawn same store merchandise revenue
$
16.1

 
—
 %
Currency exchange rate fluctuations
3.0

 
 
Constant currency Mexico Pawn same store merchandise revenue
$
19.1

 
19
 %
 
 
 
 
Mexico Pawn segment profit before tax
$
4.2

 
194
 %
Currency exchange rate fluctuations
0.8

 
 
Constant currency Mexico Pawn segment profit before tax
$
5.0

 
249
 %