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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): January 31, 2018 (January 31, 2018)
 _______________________________________________ 
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, Bldg One, Suite 200, 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))
 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
 
Emerging growth company
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨




Item 2.02 — Results of Operations and Financial Condition
On January 31, 2018, EZCORP, Inc. issued a press release announcing its results of operations and financial condition for the quarter ended December 31, 2017. 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 on a constant currency basis ("constant currency"). We use constant currency results to evaluate our Latin America Pawn operations, which are denominated primarily in Mexican pesos and other Latin American currencies. As the results of Camira Administration Corp. and subsidiaries (“GPMX”) are not included in fiscal 2017, such results included on a constant currency basis reflect the actual exchange rates in effect during the current quarter without adjustment. We believe that presentation of constant currency results is meaningful and useful in understanding the activities and business metrics of our Latin America Pawn operations and reflect an additional way of viewing aspects of our business that, when viewed with GAAP results, provide a 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.
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 2018 earnings conference call (to be held on February 1, 2018) 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.




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:
January 31, 2018
 
 
 
By:
 
/s/ David McGuire
 
 
 
 
 
 
 
David McGuire
 
 
 
 
 
 
 
Deputy Chief Financial Officer and Chief Accounting Officer


Exhibit


https://cdn.kscope.io/d55456b98c066801739ab443f6eda2df-fy2014q1ezcorpa01a04a11.jpg
EZCORP Announces Strong First Quarter Financial Results
Earnings per share up 53%
Austin, Texas (January 31, 2018) — EZCORP, Inc. (NASDAQ: EZPW), a leading provider of pawn loans in the United States and Latin America, today announced results for its first quarter ended December 31, 2017.
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.
HIGHLIGHTS FOR FIRST QUARTER OF FISCAL 2018
•
Diluted earnings per share increased 53% to $0.23 — Eighth consecutive quarter of year-over-year (YOY) earnings growth.
•
U.S. Pawn continued profit growth — Segment contribution increased 2% despite continuing impact of FY17 hurricanes.
•
Latin America Pawn* more than doubled profit — Segment contribution up 114%, including strategic acquisitions.
•
Strong PLO growth — Total consolidated pawn loans outstanding (PLO) grew 9%, including acquired stores. Latin American Pawn same store PLO grew 16% (11% on a constant currency basis1). U.S. Pawn same store PLO increased 3% in stores unaffected by the FY17 hurricanes. Including the affected stores, U.S. Pawn same store PLO decreased 1%.
•
Latin American store count increased 56% — Acquired 133 pawn stores and opened four new stores in Latin America. The segment now comprises 43% of total consolidated pawn stores.
•
Improved liquidity — Cash and cash equivalents increased 78% to $113.6 million, with operating cash flow in the quarter of $17.4 million.
CEO COMMENTARY AND OUTLOOK
Chief Executive Officer Stuart Grimshaw stated, “We maintained focus and delivered significant increases in net revenues, earnings and operating cash flow by driving growth in all areas of our operations.
“Latin America was a particular bright spot, more than doubling its contribution to the bottom line. In addition to strong organic growth in our Mexico pawn business, we acquired 112 stores in countries outside of Mexico and 21 stores in the northwest portion of Mexico where we were not previously represented. These acquired stores have exceeded our expectations in the short period we have owned them, and we have ample opportunity to open and acquire more stores as we continue to grow and diversify our revenue base.
“Profits also expanded in the U.S., despite some continuing short-term impacts from last quarter's hurricanes. With gross margin expansion and continued expense control, our U.S. Pawn contribution was up 2%."
Mr. Grimshaw concluded, “Our team delivered over 50% growth in both pre-tax and after-tax earnings by executing on pawn fundamentals, expanding our revenue base in the high growth Latin American market and leveraging our systems and expense structure. Our continued focus on these initiatives provides a strong foundation for further profit growth.”

1“Constant currency” basis, which is a non-GAAP measure, excludes the impact of foreign currency exchange rate fluctuations. For additional information about these calculations, as well as a reconciliation to the comparable GAAP financial measures, see “Non-GAAP Financial Information” at the end of this release.

*We have combined the results of newly acquired stores in Guatemala, El Salvador, Honduras and Peru with the results of our Mexico pawn business (including the newly acquired Mexico stores), and that reporting segment is now referred to as "Latin America Pawn."


CONSOLIDATED RESULTS
•
Diluted earnings per share rose 53% to $0.23. Growth and expansion in Latin America, profit growth in the U.S. and disciplined expense control drove improvement in net revenue, operating leverage and earnings.
•
Consolidated PLO, the most influential driver of revenue and profitability, increased 9%.
•
Net revenues improved 9% to $122.4 million (up 9% to $121.6 million on a constant currency basis). This was primarily due to an 11% increase in pawn service charges (PSC) and a 2% increase in merchandise sales, accompanied by a 170 bps improvement in sales margins to 37%. On a constant currency basis, PSC grew 10% and merchandise sales rose 1%.
•
Store count expansion in Latin America caused consolidated operations expenses to grow 8% to $83.6 million (up 6% to $83.2 million on a constant currency basis). As a percentage of net revenues, operations expenses improved 100 bps to 68%.
•
Corporate expenses decreased 4% to $13.3 million, reflecting continued discipline in controlling costs.
•
This quarter's income tax expense included a charge of $2.8 million related to the revaluation of net deferred tax assets as a result of the new U.S. tax reform law enacted on December 22, 2017. An additional revaluation will be required at September 30, 2018.
•
Cash and cash equivalents at the end of the quarter were $113.6 million, up 78%. Collected $2.8 million in principal and interest, as scheduled, on the notes receivable related to the sale of Grupo Finmart in September 2016.
U.S. PAWN SEGMENT RESULTS
•
Segment contribution was up 2% to $27.8 million, despite the continued impact of the FY17 hurricanes. This was the first full quarter of operations reflecting the impact of those hurricanes on PLO, PSC and sales.
•
Same store PLO increased 3% in U.S. stores unaffected by the hurricanes. Including the affected stores, same store PLO decreased 1%. Pawn loan balances in affected stores are expected to return to normal levels after the annual U.S. tax refund season.
•
Net revenues remained relatively constant, reflecting the continuing impact of the FY17 hurricanes. A 2% decrease in PSC, combined with a 4% decrease in merchandise sales, was offset by a 220 bps increase in merchandise sales gross margin of 39%. The fiscal 2018 merchandise margin is expected to be within the 35%-38% target range.
•
U.S. Pawn operations expenses improved 2% to $66.3 million.
LATIN AMERICA PAWN SEGMENT RESULTS
•
Pawn store count expanded 56% with 133 pawn stores acquired and four stores opened in Latin America during the first quarter. Expect to open eight additional stores in Latin America in the second quarter of fiscal 2018.
•
Segment contribution increased 114% to $9.0 million (up 106% to $8.7 million on a constant currency basis).
•
PLO up 120% to $31.0 million (up 114% to $30.2 million on a constant currency basis). Same store PLO rose 16% (up 11% on a constant currency basis).
•
Net revenues grew 79% to $24.0 million, and PSC increased 109% to $16.7 million (up 103% to $16.2 million on a constant currency basis).
•
Merchandise sales increased 33% in total and 9% on a same store basis (up 27% in total and 4% in same stores on a constant currency basis). The merchandise sales margin of 32% increased 70 bps.
•
Latin America operations expenses improved to 61% of net revenues from 64% in the prior-year quarter.




CONFERENCE CALL
EZCORP will host a conference call on Thursday, February 1, 2018, 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: 3484945, or internationally by 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 ends.
ABOUT EZCORP
EZCORP is a leading provider of pawn loans in the United States and Latin America. It also sells merchandise, primarily collateral forfeited from pawn lending operations and used merchandise purchased from customers. EZCORP is a member of the Russell 2000 Index, S&P SmallCap 600 Index, S&P 1000 Index and Nasdaq Composite Index.
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,
 
2017
 
2016
 
 
 
 
 
(Unaudited)
 
(in thousands, except per share amounts)
Revenues:
 
 
 
Merchandise sales
$
113,588

 
$
111,513

Jewelry scrapping sales
12,213

 
9,798

Pawn service charges
76,360

 
69,013

Other revenues
2,347

 
2,300

Total revenues
204,508

 
192,624

Merchandise cost of goods sold
71,167

 
71,732

Jewelry scrapping cost of goods sold
10,337

 
8,344

Other cost of revenues
577

 
583

Net revenues
122,427

 
111,965

Operating expenses:
 
 
 
Operations
83,610

 
77,646

Administrative
13,318

 
13,927

Depreciation and amortization
5,723

 
6,373

Loss (gain) on sale or disposal of assets
39

 
(77
)
Total operating expenses
102,690

 
97,869

Operating income
19,737

 
14,096

Interest expense
5,847

 
5,565

Interest income
(4,270
)
 
(2,616
)
Equity in net income of unconsolidated affiliate
(1,450
)
 
(1,478
)
Other income
(182
)
 
(423
)
Income from continuing operations before income taxes
19,792

 
13,048

Income tax expense
7,437

 
4,782

Income from continuing operations, net of tax
12,355

 
8,266

Loss from discontinued operations, net of tax
(222
)
 
(1,228
)
Net income
12,133

 
7,038

Net loss attributable to noncontrolling interest
(615
)
 
(127
)
Net income attributable to EZCORP, Inc.
$
12,748

 
$
7,165

 
 
 
 
Basic earnings per share attributable to EZCORP, Inc. — continuing operations
$
0.24

 
$
0.15

Diluted earnings per share attributable to EZCORP, Inc. — continuing operations
$
0.23

 
$
0.15

 
 
 
 
Weighted-average basic shares outstanding
54,464

 
54,158

Weighted-average diluted shares outstanding
55,682

 
54,214





EZCORP, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
 
December 31,
2017
 
December 31,
2016
 
September 30,
2017
 
 
 
 
 
 
 
(Unaudited)
 
 
Assets:
 
 
 
 
 
Current assets:
 
 
 
 
 
Cash and cash equivalents
$
113,584

 
$
63,707

 
$
164,393

Pawn loans
177,001

 
162,696

 
169,242

Pawn service charges receivable, net
34,054

 
30,967

 
31,548

Inventory, net
163,310

 
143,440

 
154,411

Notes receivable, net
36,682

 
36,180

 
32,598

Prepaid expenses and other current assets
26,516

 
36,242

 
28,765

Total current assets
551,147

 
473,232

 
580,957

Investment in unconsolidated affiliate
45,605

 
39,875

 
43,319

Property and equipment, net
62,098

 
54,881

 
57,959

Goodwill
288,773

 
253,585

 
254,760

Intangible assets, net
43,974

 
31,708

 
32,420

Non-current notes receivable, net
23,343

 
39,365

 
28,377

Deferred tax asset, net
10,997

 
34,667

 
16,856

Other assets, net
16,625

 
37,187

 
9,715

Total assets
$
1,042,562

 
$
964,500

 
$
1,024,363

 
 
 
 
 
 
Liabilities and equity:
 
 
 
 
 
Current liabilities:
 
 
 
 
 
Accounts payable, accrued expenses and other current liabilities
$
60,207

 
$
68,694

 
$
61,543

Customer layaway deposits
10,686

 
9,729

 
11,032

Total current liabilities
70,893

 
78,423

 
72,575

Long-term debt, net
294,761

 
278,936

 
284,807

Other long-term liabilities
8,845

 
8,259

 
7,055

Total liabilities
374,499

 
365,618

 
364,437

Commitments and contingencies
 
 
 
 
 
Stockholders’ equity:
 
 
 
 
 
Class A Non-voting Common Stock, par value $.01 per share; shares authorized: 100 million; issued and outstanding: 51,494,246 as of December 31, 2017; 51,306,608 as of December 31, 2016; and 51,427,832 as of September 30, 2017
515

 
513

 
514

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

 
30

 
30

Additional paid-in capital
351,110

 
319,825

 
348,532

Retained earnings
364,414

 
326,973

 
351,666

Accumulated other comprehensive loss
(44,902
)
 
(47,577
)
 
(38,367
)
EZCORP, Inc. stockholders’ equity
671,167

 
599,764

 
662,375

Noncontrolling interest
(3,104
)
 
(882
)
 
(2,449
)
Total equity
668,063

 
598,882

 
659,926

Total liabilities and equity
$
1,042,562

 
$
964,500

 
$
1,024,363





EZCORP, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
Three Months Ended December 31,
 
2017
 
2016
 
 
 
 
 
(Unaudited)
 
(in thousands)
Operating activities:
 
 
 
Net income
$
12,133

 
$
7,038

Adjustments to reconcile net income to net cash flows from operating activities:
 
 
 
Depreciation and amortization
5,723

 
6,373

Amortization of debt discount and deferred financing costs
3,682

 
2,826

Accretion of notes receivable discount and deferred compensation fee
(2,577
)
 
(1,029
)
Deferred income taxes
3,129

 
750

Other adjustments
601

 
801

Stock compensation expense
2,919

 
1,808

Income from investment in unconsolidated affiliate
(1,450
)
 
(1,478
)
Changes in operating assets and liabilities, net of business acquisitions:
 
 
 
Service charges and fees receivable
(50
)
 
(83
)
Inventory
(1,087
)
 
(615
)
Prepaid expenses, other current assets and other assets
(2,384
)
 
(3,856
)
Accounts payable, accrued expenses and other liabilities
(5,283
)
 
(21,948
)
Customer layaway deposits
(283
)
 
(881
)
Income taxes, net of excess tax benefit from stock compensation
2,295

 
5,004

Net cash provided by (used in) operating activities
17,368

 
(5,290
)
Investing activities:
 
 
 
Loans made
(169,666
)
 
(156,457
)
Loans repaid
103,041

 
91,283

Recovery of pawn loan principal through sale of forfeited collateral
67,144

 
64,430

Additions to property and equipment
(7,917
)
 
(2,326
)
Acquisitions, net of cash acquired
(62,163
)
 
—

Principal collections on notes receivable
2,849

 
7,831

Net cash (used in) provided by investing activities
(66,712
)
 
4,761

Financing activities:
 
 
 
Taxes paid related to net share settlement of equity awards
(311
)
 
(706
)
Net cash used in financing activities
(311
)
 
(706
)
Effect of exchange rate changes on cash and cash equivalents
(1,154
)
 
(795
)
Net decrease in cash and cash equivalents
(50,809
)
 
(2,030
)
Cash and cash equivalents at beginning of period
164,393

 
65,737

Cash and cash equivalents at end of period
$
113,584

 
$
63,707

Non-cash investing and financing activities:
 
 
 
Pawn loans forfeited and transferred to inventory
$
72,649

 
$
68,071

Dividend reinvestment acquisition of additional ownership in unconsolidated affiliate
—

 
1,153

Deferred and contingent consideration
1,920

 
—






EZCORP, Inc.
OPERATING SEGMENT RESULTS (UNAUDITED)
 
Three Months Ended December 31, 2017
  
U.S. Pawn
 
Latin America Pawn
 
Other
International
 
Total Segments
 
Corporate Items
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands)
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Merchandise sales
$
91,494

 
$
22,094

 
$
—

 
$
113,588

 
$
—

 
$
113,588

Jewelry scrapping sales
8,525

 
3,688

 
—

 
12,213

 
—

 
12,213

Pawn service charges
59,705

 
16,655

 
—

 
76,360

 
—

 
76,360

Other revenues
74

 
169

 
2,104

 
2,347

 
—

 
2,347

Total revenues
159,798

 
42,606

 
2,104

 
204,508

 
—

 
204,508

Merchandise cost of goods sold
56,088

 
15,079

 
—

 
71,167

 
—

 
71,167

Jewelry scrapping cost of goods sold
6,842

 
3,495

 
—

 
10,337

 
—

 
10,337

Other cost of revenues
—

 
—

 
577

 
577

 
—

 
577

Net revenues
96,868

 
24,032

 
1,527

 
122,427

 
—

 
122,427

Segment and corporate expenses (income):
 
 
 
 
 
 
 
 
 
 
 
Operations
66,300

 
14,687

 
2,623

 
83,610

 
—

 
83,610

Administrative
—

 
—

 
—

 
—

 
13,318

 
13,318

Depreciation and amortization
2,799

 
845

 
47

 
3,691

 
2,032

 
5,723

Loss on sale or disposal of assets
16

 
10

 
—

 
26

 
13

 
39

Interest expense
—

 
1

 
—

 
1

 
5,846

 
5,847

Interest income
—

 
(637
)
 
—

 
(637
)
 
(3,633
)
 
(4,270
)
Equity in net income of unconsolidated affiliate
—

 
—

 
(1,450
)
 
(1,450
)
 
—

 
(1,450
)
Other (income) expense
(4
)
 
115

 
(83
)
 
28

 
(210
)
 
(182
)
Segment contribution
$
27,757

 
$
9,011

 
$
390

 
$
37,158

 
 
 
 
Income from continuing operations before income taxes
 
 
 
 
 
 
$
37,158

 
$
(17,366
)
 
$
19,792































EZCORP, Inc.
OPERATING SEGMENT RESULTS (UNAUDITED)
 
Three Months Ended December 31, 2016
  
U.S. Pawn
 
Latin America 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.
STORE COUNT ACTIVITY (UNAUDITED)
 
Three Months Ended December 31, 2017
 
Company-owned Stores
 
U.S. Pawn
 
Latin America Pawn
 
Other International
 
Consolidated
 
 
 
 
 
 
 
 
As of September 30, 2017
513

 
246

 
27

 
786

New locations opened
—

 
4

 
—

 
4

Locations acquired
—

 
133

 
—

 
133

As of December 31, 2017
513

 
383

 
27

 
923

 
Three Months Ended December 31, 2016
 
Company-owned Stores
 
U.S. Pawn
 
Latin America Pawn
 
Other International
 
Consolidated
 
 
 
 
 
 
 
 
As of September 30, 2016
520

 
239

 
27

 
786

Locations sold, combined or closed
(3
)
 
—

 
—

 
(3
)
As of December 31, 2016
517

 
239

 
27

 
783

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 results to evaluate our Latin America Pawn operations, which are denominated primarily in Mexican pesos and other Latin American currencies. As GPMX was not acquired until fiscal 2018, such results included on a constant currency basis reflect the actual exchange rates in effect during the current quarter without adjustment. We believe that presentation of constant currency results is meaningful and useful in understanding the activities and business metrics of our Latin America Pawn operations and reflect an additional way of viewing aspects of our business that, when viewed with GAAP results, provide a 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 Mexican peso to U.S. dollar exchange rate as of December 31, 2017 and 2016 was 19.7 to 1 and 20.7 to 1, respectively. The approximate average Mexican peso to U.S. dollar exchange rate for the three months ended December 31, 2017 and 2016 was 19.0 to 1 and 19.8 to 1, respectively.
Our statement of operations constant currency results reflect the monthly exchange rate fluctuations and so are not directly calculable from the above rates. Constant currency results, where presented, also exclude the foreign currency gain or loss. We have experienced a prolonged weakening of the Mexican peso to the U.S. dollar and may continue to experience further weakening in future reporting periods, which may adversely impact our future operating results when stated on a GAAP basis.




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, 2017.
Miscellaneous Non-GAAP Financial Measures
 
U.S. Dollar Amount
 
Percentage Change YOY
 
 
 
 
 
(in millions)
 
 
Latin America Pawn same store PLO
$
16.2

 
16
%
Currency exchange rate fluctuations
(0.7
)
 
 
Constant currency Latin America Pawn same store PLO
$
15.5

 
11
%
 
 
 
 
Consolidated revenue (three months ended December 31, 2017)
$
204.5

 
6
%
Currency exchange rate fluctuations (three months ended December 31, 2017)
(1.5
)
 
 
Constant currency consolidated revenue (three months ended December 31, 2017)
$
203.0

 
5
%
 
 
 
 
Consolidated net revenue (three months ended December 31, 2017)
$
122.4

 
9
%
Currency exchange rate fluctuations
(0.8
)
 
 
Constant currency consolidated net revenue (three months ended December 31, 2017)
$
121.6

 
9
%
 
 
 
 
Consolidated PSC revenue (three months ended December 31, 2017)
$
76.4

 
11
%
Currency exchange rate fluctuations
(0.5
)
 
 
Constant currency consolidated PSC revenue (three months ended December 31, 2017)
$
75.9

 
10
%
 
 
 
 
Consolidated merchandise sales (three months ended December 31, 2017)
$
113.6

 
2
%
Currency exchange rate fluctuations
(0.9
)
 
 
Constant currency consolidated merchandise sales (three months ended December 31, 2017)
$
112.7

 
1
%
 
 
 
 
Consolidated operations expenses (three months ended December 31, 2017)
$
83.6

 
8
%
Currency exchange rate fluctuations (three months ended December 31, 2017)
(0.4
)
 
 
Constant currency consolidated operations expenses (three months ended December 31, 2017)
$
83.2

 
6
%
 
 
 
 
Latin America Pawn PLO
$
31.0

 
120
%
Currency exchange rate fluctuations
(1.7
)
 
 
Constant currency Latin America Pawn PLO
$
30.2

 
114
%
 
 
 
 
Latin America Pawn PSC revenue (three months ended December 31, 2017)
$
16.7

 
109
%
Currency exchange rate fluctuations (three months ended December 31, 2017)
(0.5
)
 
 
Constant currency Latin America Pawn PSC revenue (three months ended December 31, 2017)
$
16.2

 
103
%
 
 
 
 
Latin America Pawn merchandise sales (three months ended December 31, 2017)
$
22.1

 
33
%
Currency exchange rate fluctuations (three months ended December 31, 2017)
(0.9
)
 
 
Constant currency Latin America Pawn merchandise sales (three months ended December 31, 2017)
$
21.2

 
27
%
 
 
 
 
Latin America Pawn same store merchandise sales (three months ended December 31, 2017)
$
18.0

 
9
%
Currency exchange rate fluctuations (three months ended December 31, 2017)
(0.7
)
 
 
Constant currency Latin America Pawn same store merchandise sales (three months ended December 31, 2017)
$
17.3

 
4
%
 
 
 
 
Latin America Pawn segment profit before tax (three months ended December 31, 2017)
$
9.0

 
114
%
Currency exchange rate fluctuations (three months ended December 31, 2017)
(0.3
)
 
 
Constant currency Latin America Pawn segment profit before tax (three months ended December 31, 2017)
$
8.7

 
106
%