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): December 5, 2019 (December 2, 2019)
_______________________________________________
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
_______________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |||
Class A Non-voting Common Stock, par value $.01 per share | EZPW | NASDAQ Stock Market | (NASDAQ Global Select Market) | ||
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:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
☐ | 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 | ☐ | ||
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 December 5, 2019, EZCORP, Inc. issued a press release announcing its results of operations and financial condition for the quarter and year ended September 30, 2019. A copy of that press release is attached as Exhibit 99.1.
In addition to the financial information prepared in conformity with accounting principles generally accepted in the United States ("GAAP"), we provide certain other non-GAAP financial information on a constant currency ("constant currency") and adjusted basis. We use constant currency results to evaluate our Latin America Pawn operations, which are denominated primarily in Mexican pesos and other Latin American currencies. We believe that presentation of constant currency and adjusted results is meaningful and useful in understanding the activities and business metrics of our 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 primarily to evaluate and compare operating results across accounting periods.
Additionally, we provide free cash flow which represents net cash provided by operating activities less net funding of loan originations and maintenance capital expenditures which is commonly used by investors as an additional measure of cash generated by business operations that may be used to repay scheduled debt maturities and debt service or, following payment of such debt obligations and other non-discretionary items, may be available to invest in future growth through new business development activities or acquisitions, among other things. These metrics can also be used to evaluate our ability to generate cash flow from business operations and the impact that this cash flow has on our liquidity. However, free cash flow has limitations as an analytical tool and should not be considered in isolation or as a substitute for cash flow from operating activities or other income statement data prepared in accordance with GAAP.
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 fiscal 2019 earnings conference call (to be held on December 5, 2019) will be posted in the Investor Relations section of the company’s website at www.ezcorp.com.
The information set forth, or referred to, in this Item 7.01 shall not be deemed "filed" for purposes 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 into any registration statement or other filing made by EZCORP under the Securities Act of 1933 or the Securities Exchange Act of 1934, unless such subsequent filing specifically references this Item 7.01 of this Report.
Item 8.01 — Other Events
On December 2, 2019, the Company’s Board of Directors authorized a share repurchase program for up to $60 million of the Company’s publicly traded Class A Non-Voting Common Stock over the next three years. Under the stock repurchase program, the Company is authorized to repurchase shares from time to time at management’s discretion through open market purchases, privately-negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 of the Securities Exchange Act of 1934 (the “Exchange Act”).
The Board also authorized the Company to enter into written trading plans under Rule 10b5-1 of the Exchange Act. Adopting a trading plan that satisfies the conditions of Rule 10b5-1 allows a company to repurchase its shares at times when it might otherwise be prevented from doing so due to self-imposed trading blackout periods or pursuant to insider trading laws. Under any Rule 10b5-1 trading plan, the Company’s third-party broker, subject to Securities and Exchange Commission regulations regarding certain price, market, volume and timing constraints, would have authority to purchase the Company’s common stock in accordance with the terms of the plan. The Company may from time to time enter into Rule 10b5-1 trading plans to facilitate the repurchase of its common stock pursuant to its share repurchase program.
The Company cannot predict when or if it will repurchase any shares of common stock as such stock repurchase program will depend on a number of factors, including stock price, trading volume, general market conditions, legal and regulatory
requirements, general business conditions, the level of cash flows, and corporate considerations determined by management and the Board, such as liquidity and capital needs and the availability of attractive alternative investment opportunities. Information regarding share repurchases will be available in the Company’s periodic reports on Forms 10-Q and 10-K filed with the Securities and Exchange Commission as required by the applicable rules of the Exchange Act.
This report contains forward-looking information, as that term is defined under the Exchange Act, including information regarding purchases by the Company of its outstanding shares of Class A Non-Voting Common Stock. By their nature, forward-looking information and statements are subject to risks, uncertainties and contingencies, including changes in price and volume and the volatility of the Company’s common stock; adverse developments affecting either or both of prices and trading of exchange-traded securities, including securities listed on the Nasdaq Stock Market; and unexpected or otherwise unplanned or alternative requirements with respect to the capital investments of the Company.
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: | December 5, 2019 | By: | /s/ Daniel M. Chism | ||||
Daniel M. Chism | |||||||
Chief Financial Officer | |||||||
EZCORP Reports Fourth Quarter Fiscal Year 2019 Results
--Announces Three-Year, $60 Million Share Repurchase Authorization--
Austin, Texas (December 5, 2019) — EZCORP, Inc. (NASDAQ: EZPW) today announced results for its fourth quarter and fiscal year ended September 30, 2019 and the authorization of a share repurchase program.
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
• | In December 2019, the Board of Directors authorized a stock repurchase program for up to $60 million of our Class A Non-Voting common shares over the next three years. |
• | Total revenues for the quarter were up 4% to $214.3 million. The improvement was driven by continued growth in key pawn operating metrics including pawn loans outstanding (PLO), pawn service charges (PSC) and merchandise sales. |
• | For the quarter, income from continuing operations before tax was $0.4 million and diluted loss per share was $0.01, representing a $0.01 per share improvement over the prior-year quarter. These results include costs related to certain growth investments, acquisition due diligence and other discrete items. Excluding those items and adjusting for constant currency1, adjusted1 income from continuing operations before tax was $13.0 million and adjusted diluted earnings per share was $0.19 versus $18.5 million and $0.22, respectively, in the year-ago quarter. Full year diluted earnings per share were $0.05 compared to $0.66 in the prior year; adjusted diluted earnings per share improved to $0.90 from $0.86 in the prior year. As previously discussed, PSC and related profits were negatively impacted by point-of-sale system performance issues in the third quarter and a 24-hour system outage in July. |
• | Enhanced inventory management efforts yielded a significant reduction in aged general merchandise, from 8% of total general merchandise at September 30, 2018 to 6% at September 30, 2019. |
• | Net cash from operating activities nearly doubled to $38.5 million in the quarter from $19.7 million in the prior-year quarter. For the year, net cash from operating activities increased 16% to $103.5 million from $89.0 million in fiscal 2018. |
• | Cash and cash equivalents ended the current quarter at $157.6 million ($162.4 million including restricted cash). During the quarter, the company collected $12.2 million under the Alpha Credit / Grupo Finmart notes. |
CEO COMMENTARY AND OUTLOOK
Chief Executive Officer Stuart Grimshaw commented, "We saw a continued expansion of our store count, grew total revenues, grew PLO to a record fiscal year-end balance of $199 million ($201 million on a constant currency basis) and increased free cash flow in both the fourth quarter and the full fiscal year. We achieved these results despite fourth quarter headwinds, including newly introduced social welfare programs in Mexico reducing customers’ current need for pawn loans, technology system issues resolved by mid-July, and other investments and non-recurring costs. There have been several key developments since the June quarter.
“First, the Board of Directors approved a three-year share repurchase authorization for up to $60 million that enables us to return capital to shareholders and buy back publicly traded Class A shares at what we believe to be attractive valuations. Second, we completed the rollout of our new point-of-sale system to all stores in the U.S. and Mexico in October, which will further optimize lending decisions, with related improvements over time in yields, pawn service charges, merchandise sales gross profits and margins. Third, we recently implemented several initiatives, including re-aligning field management to increase senior management’s interaction at store level, consolidation of certain administrative functions and other expense control measures to increasingly leverage our scale, driving an increase in the return on earning assets through improved productivity and operating efficiencies. Some of these initiatives will involve incremental expense in the short-term to drive greater sustainable efficiencies. Fourth, our differentiated digital engagement strategy designed to broaden customer acquisition and service levels, enhance retention and drive revenue enhancements remains on track for initial introduction during the first
quarter of fiscal 2020 under the name Lana. The introduction will be in Texas and Florida, our two largest markets in the U.S., with incremental expansion planned throughout fiscal 2020. Finally, strong free cash flow and the strength of our balance sheet, with $162 million cash and no substantial debt due until 2024, provides us with the financial flexibility to continue to fund new store openings, capitalize on M&A opportunities as they arise, and invest in the business to drive sustainable growth. As part of that investment, we plan to accelerate new store openings in Latin America in fiscal 2020 to approximately 40 new stores, up from 22 new stores in fiscal 2019. While this will create some short-term earnings drag, new stores in Latin America represent one of our best opportunities for long-term returns on invested capital.”
SHARE REPURCHASE PROGRAM
The Board of Directors has authorized a stock repurchase program that will allow the Company to repurchase up to $60 million of our Class A Non-Voting common shares over the next three years. This decision reflects the strength of our balance sheet, the Board’s confidence in our continued ability to generate significant cash flows and our commitment to driving long-term shareholder value through efficient capital deployment. Execution of the program will be responsive to fluctuating market conditions and valuations, liquidity needs and the expected return on investment compared to other opportunities.
Under the stock repurchase program, the Company may purchase Class A Non-voting common stock from time to time at management’s discretion in accordance with applicable securities laws, including through open market transactions, block or privately negotiated transactions, or any combination thereof. In addition, the Company may purchase shares pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934.
The amount and timing of purchases will be dependent on a variety of factors, including stock price, trading volume, general market conditions, legal and regulatory requirements, general business conditions, the level of cash flows, and corporate considerations determined by management and the Board, such as liquidity and capital needs and the availability of attractive alternative investment opportunities. The Board of Directors has reserved the right to modify, suspend or terminate the program at any time.
CONSOLIDATED RESULTS
Three Months Ended September 30
in thousands, except per share amounts
As Reported | Adjusted1 | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Total Revenues | $ | 214,339 | $ | 205,976 | $ | 215,391 | $ | 205,976 | |||||||
Net Revenues | $ | 120,856 | $ | 124,463 | $ | 121,677 | $ | 124,463 | |||||||
Income from Continuing Operations, Before Tax | $ | 437 | $ | 2,872 | $ | 13,012 | $ | 18,469 | |||||||
Net Income from Continuing Operations | $ | (592 | ) | $ | (807 | ) | $ | 10,437 | $ | 12,899 | |||||
Diluted Earnings Per Share from Continuing Operations | $ | (0.01 | ) | $ | (0.02 | ) | $ | 0.19 | $ | 0.22 | |||||
Adjusted EBITDA1 | $ | 12,096 | $ | 14,677 | $ | 22,293 | $ | 26,734 | |||||||
• | Total revenues grew 4% on a GAAP basis and 5% on a constant currency basis, contributing to the increase in cash generation. PSC was up 1% to $83.1 million reflecting a 2% increase in the average monthly PLO balance for the fourth quarter combined with a slight improvement in yields. Consolidated merchandise sales gross profit declined 10% to $34.9 million, with a 2% increase in merchandise sales more than offset by higher cost of goods sold. Adjusted merchandise sales gross profit declined 9% to $35.3 million and sales margins decreased 411 basis points to 33%, reflecting the effective liquidation of aged general merchandise. The net impact of these factors was a 3% reduction in net revenues to $120.9 million on a GAAP basis and a 2% reduction to $121.7 million on an adjusted basis. Although the aged inventory liquidation impacted margins, it contributed to the overall increase in cash generation. For the full year, free cash flow1 increased 32% to $77.9 million. Cash receipts on the AlphaCredit notes receivable provided an additional $34.1 million for the year. |
• | Consolidated operations expenses rose 3% in the quarter to $88.8 million. Total pawn store count increased 3%, consisting of a net 31 stores acquired or opened since the end of the prior-year quarter (27 new and acquired stores in Latin America and seven acquired stores in the U.S., net of three store closures in the U.S.). |
• | Administrative expense increased $2.9 million to $16.9 million in the quarter principally as a result of a $2.7 million strategic investment in the development of the Lana (previously "Evergreen") customer-centric digital platform and $1.7 million in acquisition due diligence costs. |
• | Net interest expense decreased $0.6 million, driven by the June 2019 repayment of our $195.0 million cash convertible senior notes, offset by lower interest income on the declining balance of notes receivable from AlphaCredit as principal collections are received monthly. The first $6 million installment of the $14 million deferred compensation fee on the notes receivable was received in September 2019 with the remaining $8 million due in fiscal 2020. Interest income in the period does not reflect the majority of that cash receipt, as it has been recognized under GAAP over the life of the loans. |
SEGMENT RESULTS
U.S. Pawn
• | Same store PSC rose slightly, with ending PLO per store of $307,000, up 1% on a year-over-year basis. The growth reflected disciplined lending practices and a focus on meeting customers' need for cash. The ending per store average is the highest since 2011. |
• | Merchandise margins remained within our target range but declined 359 basis points year-over-year to 35%, largely reflecting the effective liquidation of aged general merchandise inventory. Scrap sales increased by 32% to $17.5 million on a step up in volumes and higher gold prices, though lower diamond prices pressured related margins. |
• | U.S. Pawn's net revenues decreased 2% to $93.8 million, with a $1.9 million increase in expenses and depreciation. Same store operations expense increased 2%, primarily due to higher labor and benefit costs, including a $1.3 million increase in workers’ compensation costs. The current period included a single large claim and the prior year period reflected a $0.8 million credit. Although the segment’s cash generation increased significantly, the segment contribution decreased 13% to $22.2 million. |
Latin America Pawn
• | Net revenues increased slightly to $26.6 million ($27.1 million on a constant currency basis). |
• | PSC rose 1% to $19.4 million ($19.7 million on a constant currency basis). Ending PLO decreased 4% to $41.6 million (down 1% to $43.1 million on a constant currency basis), with ending PLO per store of $87,000, down 8%. As previously discussed, recent social programs in Mexico involving transfers to low-income individuals have impacted demand for pawn loans. |
• | Merchandise sales increased 9%, to $26.8 million (9% to $27.4 million constant currency), while merchandise margins declined to 25% reflecting an ongoing focus on optimizing inventory and sales gross profits along with reducing aged inventory and increasing free cash flow. |
• | Operations expense totaled $19.5 million compared to $16.7 million in the prior year period reflecting higher store licensing requirements, rent costs, labor-related expenses, and robbery and related security costs. In addition, year-over-year trends were impacted by stores acquired or opened since the prior-year quarter and stores expanded or relocated, for which the revenue improvement is expected to lag the incremental costs. |
• | We added 22 de novo stores and acquired five stores in the year. Ten of the new stores were opened in the fourth quarter. New stores drive attractive long-term profit enhancement and represent one of our highest returns on invested capital but create a short-term drag on earnings as they ramp. Acquired stores are generally less efficient than our existing stores until fully integrated, but typically are accretive in their first full quarter of ownership. |
• | Segment contribution totaled $5.8 million compared to $9.1 million in the prior-year quarter. Adjusted segment contribution totaled $6.5 million versus $9.1 million as a result of new and acquired stores, recently expanded and relocated stores, and the operations expense increase previously described combined with administrative costs to support the growth. |
FORM 10-K
EZCORP’s Annual Report on Form 10-K for fiscal 2019 has been filed with the Securities and Exchange Commission. The report is available in the Investor Relations section of the company’s website at http://investors.ezcorp.com. EZCORP shareholders may obtain a paper copy of the report, free of charge, by sending a request to the investor relations contact below.
CONFERENCE CALL
EZCORP will host a conference call on Thursday, December 5, 2019, at 4:00pm Central Time to discuss fourth quarter and fiscal year-end results. Analysts and institutional investors may participate on the conference call by dialing (877) 201-0168, Conference ID: 3248107, 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 end of the call.
ABOUT EZCORP
Formed in 1989, EZCORP has grown into 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. We are dedicated to satisfying the short-term cash needs of consumers who are both cash and credit constrained, focusing on an industry-leading customer experience. EZCORP is traded on NASDAQ under the symbol EZPW and 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:
Email: Investor_Relations@ezcorp.com
Phone: (512) 314-2220
1”Adjusted” basis, which is a non-GAAP measure, excludes certain items. “Constant currency” basis, which is a non-GAAP measure, excludes the impact of foreign currency exchange rate fluctuations. “Free cash flow,” which is a non-GAAP measure, includes certain adjustments to cash flow from operating activities.
For additional information about these calculations, as well as a reconciliation to the most comparable GAAP financial measures, see “Non-GAAP Financial Information” at the end of this release.
EZCORP, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
Three Months Ended September 30, | Fiscal Year Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(Unaudited) | |||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||
Revenues: | |||||||||||||||
Merchandise sales | $ | 107,191 | $ | 105,102 | $ | 453,375 | $ | 438,372 | |||||||
Jewelry scrapping sales | 22,572 | 16,586 | 60,445 | 60,752 | |||||||||||
Pawn service charges | 83,066 | 81,980 | 327,366 | 304,577 | |||||||||||
Other revenues | 1,510 | 2,308 | 6,043 | 8,455 | |||||||||||
Total revenues | 214,339 | 205,976 | 847,229 | 812,156 | |||||||||||
Merchandise cost of goods sold | 72,325 | 66,335 | 297,508 | 276,618 | |||||||||||
Jewelry scrapping cost of goods sold | 20,287 | 14,754 | 52,935 | 52,290 | |||||||||||
Other cost of revenues | 871 | 424 | 2,338 | 1,697 | |||||||||||
Net revenues | 120,856 | 124,463 | 494,448 | 481,551 | |||||||||||
Operating expenses: | |||||||||||||||
Operations | 88,822 | 86,083 | 350,578 | 334,841 | |||||||||||
Administrative | 16,870 | 13,951 | 63,665 | 53,639 | |||||||||||
Depreciation and amortization | 7,683 | 7,186 | 28,797 | 25,484 | |||||||||||
Loss on sale or disposal of assets and other | 756 | 10 | 4,399 | 463 | |||||||||||
Total operating expenses | 114,131 | 107,230 | 447,439 | 414,427 | |||||||||||
Operating income | 6,725 | 17,233 | 47,009 | 67,124 | |||||||||||
Interest expense | 5,425 | 8,764 | 32,637 | 27,834 | |||||||||||
Interest income | (1,449 | ) | (4,145 | ) | (11,086 | ) | (17,041 | ) | |||||||
Equity in net loss (income) of unconsolidated affiliates | 767 | (2,052 | ) | 135 | (5,529 | ) | |||||||||
Impairment of investment in unconsolidated affiliates | — | 11,712 | 19,725 | 11,712 | |||||||||||
Other expense (income) | 1,545 | 82 | 1,424 | (5,391 | ) | ||||||||||
Income from continuing operations before income taxes | 437 | 2,872 | 4,174 | 55,539 | |||||||||||
Income tax expense | 1,029 | 3,679 | 2,406 | 18,389 | |||||||||||
(Loss) income from continuing operations, net of tax | (592 | ) | (807 | ) | 1,768 | 37,150 | |||||||||
Loss from discontinued operations, net of tax | (53 | ) | (225 | ) | (457 | ) | (856 | ) | |||||||
Net (loss) income | (645 | ) | (1,032 | ) | 1,311 | 36,294 | |||||||||
Net (loss) income attributable to noncontrolling interest | — | 360 | (1,230 | ) | (988 | ) | |||||||||
Net (loss) income attributable to EZCORP, Inc. | $ | (645 | ) | $ | (1,392 | ) | $ | 2,541 | $ | 37,282 | |||||
Basic earnings per share attributable to EZCORP, Inc. — continuing operations | $ | (0.01 | ) | $ | (0.02 | ) | $ | 0.05 | $ | 0.70 | |||||
Diluted earnings per share attributable to EZCORP, Inc. — continuing operations | $ | (0.01 | ) | $ | (0.02 | ) | $ | 0.05 | $ | 0.66 | |||||
Weighted-average basic shares outstanding | 55,446 | 54,466 | 55,341 | 54,456 | |||||||||||
Weighted-average diluted shares outstanding | 55,446 | 54,466 | 55,984 | 57,896 | |||||||||||
EZCORP, Inc. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) | |||||||
September 30, | |||||||
2019 | 2018 | ||||||
Assets: | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 157,567 | $ | 285,311 | |||
Pawn loans | 199,058 | 198,463 | |||||
Pawn service charges receivable, net | 31,802 | 30,959 | |||||
Inventory, net | 179,355 | 166,997 | |||||
Notes receivable, net | 7,182 | 34,199 | |||||
Prepaid expenses and other current assets | 30,796 | 33,456 | |||||
Total current assets | 605,760 | 749,385 | |||||
Investments in unconsolidated affiliates | 34,516 | 49,500 | |||||
Property and equipment, net | 67,357 | 73,649 | |||||
Goodwill | 300,527 | 299,248 | |||||
Intangible assets, net | 68,044 | 54,923 | |||||
Notes receivable, net | 1,117 | 3,226 | |||||
Deferred tax asset, net | 1,998 | 7,986 | |||||
Other assets | 4,383 | 3,863 | |||||
Total assets | $ | 1,083,702 | $ | 1,241,780 | |||
Liabilities and equity: | |||||||
Current liabilities: | |||||||
Current maturities of long-term debt, net | $ | 214 | $ | 190,181 | |||
Accounts payable, accrued expenses and other current liabilities | 77,957 | 57,958 | |||||
Customer layaway deposits | 12,915 | 11,824 | |||||
Total current liabilities | 91,086 | 259,963 | |||||
Long-term debt, net | 238,380 | 226,702 | |||||
Deferred tax liability, net | 1,985 | 8,817 | |||||
Other long-term liabilities | 7,302 | 6,890 | |||||
Total liabilities | 338,753 | 502,372 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Class A Non-Voting Common Stock, par value $.01 per share; shares authorized: 100 million; issued and outstanding: 52,565,064 as of September 30, 2019 and 51,614,746 as of September 30, 2018 | 526 | 516 | |||||
Class B Voting Common Stock, convertible, par value $.01 per share; shares authorized: 3 million; issued and outstanding: 2,970,171 | 30 | 30 | |||||
Additional paid-in capital | 407,628 | 397,927 | |||||
Retained earnings | 389,163 | 386,622 | |||||
Accumulated other comprehensive loss | (52,398 | ) | (42,356 | ) | |||
EZCORP, Inc. stockholders’ equity | 744,949 | 742,739 | |||||
Noncontrolling interest | — | (3,331 | ) | ||||
Total equity | 744,949 | 739,408 | |||||
Total liabilities and equity | $ | 1,083,702 | $ | 1,241,780 | |||
EZCORP, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
Fiscal Year Ended September 30, | |||||||||||
2019 | 2018 | 2017 | |||||||||
(in thousands) | |||||||||||
Operating activities: | |||||||||||
Net income | $ | 1,311 | $ | 36,294 | $ | 29,760 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 28,797 | 25,484 | 23,661 | ||||||||
Amortization of debt discount and deferred financing costs | 19,759 | 17,595 | 12,303 | ||||||||
Accretion of notes receivable discount and deferred compensation fee | (4,524 | ) | (9,150 | ) | (3,788 | ) | |||||
Deferred income taxes | 1,616 | 7,916 | 6,096 | ||||||||
Other adjustments | 5,776 | 2,607 | 4,566 | ||||||||
Reserve on jewelry scrap receivable | 3,646 | — | — | ||||||||
Stock compensation expense | 9,751 | 10,784 | 5,866 | ||||||||
Loss (income) from investments in unconsolidated affiliates | 135 | (5,529 | ) | (4,916 | ) | ||||||
Impairment of investment in unconsolidated affiliates | 19,725 | 11,712 | — | ||||||||
Changes in operating assets and liabilities, net of business acquisitions: | |||||||||||
Service charges and fees receivable | (732 | ) | (1,788 | ) | (285 | ) | |||||
Inventory | (493 | ) | (1,074 | ) | 721 | ||||||
Prepaid expenses, other current assets and other assets | 5,732 | 477 | 4,225 | ||||||||
Accounts payable, accrued expenses and other liabilities | 22,246 | (3,271 | ) | (30,894 | ) | ||||||
Customer layaway deposits | 1,176 | 709 | 241 | ||||||||
Income taxes, net of excess tax benefit from stock compensation | (10,404 | ) | (3,785 | ) | 3,110 | ||||||
Net cash provided by operating activities | 103,517 | 88,981 | 50,666 | ||||||||
Investing activities: | |||||||||||
Loans made | (737,585 | ) | (707,220 | ) | (646,625 | ) | |||||
Loans repaid | 434,142 | 421,331 | 386,383 | ||||||||
Recovery of pawn loan principal through sale of forfeited collateral | 288,502 | 266,962 | 244,632 | ||||||||
Capital expenditures, net | (38,839 | ) | (40,474 | ) | (25,001 | ) | |||||
Acquisitions, net of cash acquired | (8,116 | ) | (93,165 | ) | (2,250 | ) | |||||
Investment in unconsolidated affiliate | — | (14,036 | ) | — | |||||||
Principal collections on notes receivable | 34,067 | 32,396 | 29,458 | ||||||||
Net cash used in investing activities | (27,829 | ) | (134,206 | ) | (13,403 | ) | |||||
Financing activities: | |||||||||||
Taxes paid related to net share settlement of equity awards | (3,288 | ) | (311 | ) | (767 | ) | |||||
Proceeds from borrowings, net of issuance costs | 1,064 | 171,409 | 139,506 | ||||||||
Payments on borrowings | (196,093 | ) | (3,510 | ) | (85,388 | ) | |||||
Net cash (used in) provided by financing activities | (198,317 | ) | 167,588 | 53,351 | |||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash | (507 | ) | (654 | ) | 724 | ||||||
Net (decrease) increase in cash and cash equivalents and restricted cash | (123,136 | ) | 121,709 | 91,338 | |||||||
Cash and cash equivalents and restricted cash at beginning of period | 285,578 | 163,869 | 72,531 | ||||||||
Cash and cash equivalents and restricted cash at end of period | $ | 162,442 | $ | 285,578 | $ | 163,869 | |||||
Cash paid during the period for: | |||||||||||
Interest | $ | 12,900 | $ | 8,412 | $ | 9,068 | |||||
Income taxes, net | 11,132 | 13,676 | 8,866 | ||||||||
Non-cash investing and financing activities: | |||||||||||
Pawn loans forfeited and transferred to inventory | $ | 301,357 | $ | 274,590 | $ | 257,388 | |||||
Dividend reinvestment acquisition of additional ownership in unconsolidated affiliate | — | — | 1,153 | ||||||||
EZCORP, Inc.
OPERATING SEGMENT RESULTS
(Unaudited and in thousands)
Three Months Ended September 30, 2019 | |||||||||||||||||||||||
U.S. Pawn | Latin America Pawn | Other International | Total Segments | Corporate Items | Consolidated | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Merchandise sales | $ | 80,357 | $ | 26,832 | $ | — | $ | 107,189 | $ | — | $ | 107,189 | |||||||||||
Jewelry scrapping sales | 17,458 | 5,114 | — | 22,572 | — | 22,572 | |||||||||||||||||
Pawn service charges | 63,711 | 19,357 | — | 83,068 | — | 83,068 | |||||||||||||||||
Other revenues | 108 | 45 | 1,357 | 1,510 | — | 1,510 | |||||||||||||||||
Total revenues | 161,634 | 51,348 | 1,357 | 214,339 | — | 214,339 | |||||||||||||||||
Merchandise cost of goods sold | 52,205 | 20,120 | — | 72,325 | — | 72,325 | |||||||||||||||||
Jewelry scrapping cost of goods sold | 15,638 | 4,649 | — | 20,287 | — | 20,287 | |||||||||||||||||
Other cost of revenues | — | — | 871 | 871 | — | 871 | |||||||||||||||||
Net revenues | 93,791 | 26,579 | 486 | 120,856 | — | 120,856 | |||||||||||||||||
Operating expenses (income): | |||||||||||||||||||||||
Operations | 68,119 | 19,496 | 1,207 | 88,822 | — | 88,822 | |||||||||||||||||
Administrative | — | — | — | — | 16,870 | 16,870 | |||||||||||||||||
Depreciation and amortization | 2,928 | 1,724 | 29 | 4,681 | 3,002 | 7,683 | |||||||||||||||||
Loss on sale or disposal of assets and other | 546 | (52 | ) | 260 | 754 | 2 | 756 | ||||||||||||||||
Interest expense | — | 39 | 211 | 250 | 5,175 | 5,425 | |||||||||||||||||
Interest income | — | (375 | ) | — | (375 | ) | (1,074 | ) | (1,449 | ) | |||||||||||||
Equity in net loss of unconsolidated affiliates | — | — | 767 | 767 | — | 767 | |||||||||||||||||
Other expense (income) | — | (30 | ) | 1,605 | 1,575 | (30 | ) | 1,545 | |||||||||||||||
Segment contribution (loss) | $ | 22,198 | $ | 5,777 | $ | (3,593 | ) | $ | 24,382 | ||||||||||||||
Income from continuing operations before income taxes | $ | 24,382 | $ | (23,945 | ) | $ | 437 | ||||||||||||||||
Three Months Ended September 30, 2018 | |||||||||||||||||||||||
U.S. Pawn | Latin America Pawn | Other International | Total Segments | Corporate Items | Consolidated | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Merchandise sales | $ | 80,554 | $ | 24,548 | $ | — | $ | 105,102 | $ | — | $ | 105,102 | |||||||||||
Jewelry scrapping sales | 13,230 | 3,356 | — | 16,586 | — | 16,586 | |||||||||||||||||
Pawn service charges | 62,906 | 19,074 | — | 81,980 | — | 81,980 | |||||||||||||||||
Other revenues | 45 | (503 | ) | 2,766 | 2,308 | — | 2,308 | ||||||||||||||||
Total revenues | 156,735 | 46,475 | 2,766 | 205,976 | — | 205,976 | |||||||||||||||||
Merchandise cost of goods sold | 49,443 | 16,892 | — | 66,335 | — | 66,335 | |||||||||||||||||
Jewelry scrapping cost of goods sold | 11,734 | 3,020 | — | 14,754 | — | 14,754 | |||||||||||||||||
Other cost of revenues | — | — | 424 | 424 | — | 424 | |||||||||||||||||
Net revenues | 95,558 | 26,563 | 2,342 | 124,463 | — | 124,463 | |||||||||||||||||
Operating expenses (income): | |||||||||||||||||||||||
Operations | 66,460 | 16,709 | 2,914 | 86,083 | — | 86,083 | |||||||||||||||||
Administrative | — | — | — | — | 13,951 | 13,951 | |||||||||||||||||
Depreciation and amortization | 3,529 | 1,356 | 42 | 4,927 | 2,259 | 7,186 | |||||||||||||||||
Loss on sale or disposal of assets | 6 | (4 | ) | — | 2 | 8 | 10 | ||||||||||||||||
Interest expense | 71 | 19 | — | 90 | 8,674 | 8,764 | |||||||||||||||||
Interest income | — | (547 | ) | — | (547 | ) | (3,598 | ) | (4,145 | ) | |||||||||||||
Equity in net income of unconsolidated affiliates | — | — | (2,052 | ) | (2,052 | ) | — | (2,052 | ) | ||||||||||||||
Impairment of investment in unconsolidated affiliates | — | — | 11,712 | 11,712 | — | 11,712 | |||||||||||||||||
Other expense (income) | — | (53 | ) | (14 | ) | (67 | ) | 149 | 82 | ||||||||||||||
Segment contribution (loss) | $ | 25,492 | $ | 9,083 | $ | (10,260 | ) | $ | 24,315 | ||||||||||||||
Income from continuing operations before income taxes | $ | 24,315 | $ | (21,443 | ) | $ | 2,872 | ||||||||||||||||
Fiscal Year Ended September 30, 2019 | |||||||||||||||||||||||
U.S. Pawn | Latin America Pawn | Other International | Total Segments | Corporate Items | Consolidated | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Merchandise sales | $ | 355,996 | $ | 97,379 | $ | — | $ | 453,375 | $ | — | $ | 453,375 | |||||||||||
Jewelry scrapping sales | 45,815 | 14,630 | — | 60,445 | — | 60,445 | |||||||||||||||||
Pawn service charges | 248,369 | 78,997 | — | 327,366 | — | 327,366 | |||||||||||||||||
Other revenues | 233 | 179 | 5,631 | 6,043 | — | 6,043 | |||||||||||||||||
Total revenues | 650,413 | 191,185 | 5,631 | 847,229 | — | 847,229 | |||||||||||||||||
Merchandise cost of goods sold | 225,136 | 72,372 | — | 297,508 | — | 297,508 | |||||||||||||||||
Jewelry scrapping cost of goods sold | 39,318 | 13,617 | — | 52,935 | — | 52,935 | |||||||||||||||||
Other cost of revenues | — | — | 2,338 | 2,338 | — | 2,338 | |||||||||||||||||
Net revenues | 385,959 | 105,196 | 3,293 | 494,448 | — | 494,448 | |||||||||||||||||
Operating expenses (income): | |||||||||||||||||||||||
Operations | 269,003 | 74,199 | 7,376 | 350,578 | — | 350,578 | |||||||||||||||||
Administrative | — | — | — | — | 63,665 | 63,665 | |||||||||||||||||
Depreciation and amortization | 11,879 | 6,267 | 219 | 18,365 | 10,432 | 28,797 | |||||||||||||||||
Loss on sale or disposal of assets and other | 3,402 | 691 | 282 | 4,375 | 24 | 4,399 | |||||||||||||||||
Interest expense | — | 1,609 | 491 | 2,100 | 30,537 | 32,637 | |||||||||||||||||
Interest income | — | (1,601 | ) | — | (1,601 | ) | (9,485 | ) | (11,086 | ) | |||||||||||||
Equity in net loss of unconsolidated affiliates | — | — | 135 | 135 | — | 135 | |||||||||||||||||
Impairment of investment in unconsolidated affiliates | — | — | 19,725 | 19,725 | — | 19,725 | |||||||||||||||||
Other expense (income) | — | (93 | ) | 1,895 | 1,802 | (378 | ) | 1,424 | |||||||||||||||
Segment contribution (loss) | $ | 101,675 | $ | 24,124 | $ | (26,830 | ) | $ | 98,969 | ||||||||||||||
Income from continuing operations before income taxes | $ | 98,969 | $ | (94,795 | ) | $ | 4,174 | ||||||||||||||||
Fiscal Year Ended September 30, 2018 | |||||||||||||||||||||||
U.S. Pawn | Latin America Pawn | Other International | Total Segments | Corporate Items | Consolidated | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Merchandise sales | $ | 350,699 | $ | 87,673 | $ | — | $ | 438,372 | $ | — | $ | 438,372 | |||||||||||
Jewelry scrapping sales | 47,745 | 13,007 | — | 60,752 | — | 60,752 | |||||||||||||||||
Pawn service charges | 237,086 | 67,491 | — | 304,577 | — | 304,577 | |||||||||||||||||
Other revenues | 250 | 85 | 8,120 | 8,455 | — | 8,455 | |||||||||||||||||
Total revenues | 635,780 | 168,256 | 8,120 | 812,156 | — | 812,156 | |||||||||||||||||
Merchandise cost of goods sold | 216,408 | 60,210 | — | 276,618 | — | 276,618 | |||||||||||||||||
Jewelry scrapping cost of goods sold | 40,417 | 11,873 | — | 52,290 | — | 52,290 | |||||||||||||||||
Other cost of revenues | — | — | 1,697 | 1,697 | — | 1,697 | |||||||||||||||||
Net revenues | 378,955 | 96,173 | 6,423 | 481,551 | — | 481,551 | |||||||||||||||||
Operating expenses (income): | |||||||||||||||||||||||
Operations | 263,094 | 61,553 | 10,194 | 334,841 | — | 334,841 | |||||||||||||||||
Administrative | — | — | — | — | 53,639 | 53,639 | |||||||||||||||||
Depreciation and amortization | 12,869 | 4,068 | 184 | 17,121 | 8,363 | 25,484 | |||||||||||||||||
Loss on sale or disposal of assets | 203 | 27 | — | 230 | 233 | 463 | |||||||||||||||||
Interest expense | 71 | 25 | — | 96 | 27,738 | 27,834 | |||||||||||||||||
Interest income | — | (2,619 | ) | — | (2,619 | ) | (14,422 | ) | (17,041 | ) | |||||||||||||
Equity in net income of unconsolidated affiliates | — | — | (5,529 | ) | (5,529 | ) | — | (5,529 | ) | ||||||||||||||
Impairment of investment in unconsolidated affiliates | — | — | 11,712 | 11,712 | — | 11,712 | |||||||||||||||||
Other income | (3 | ) | (42 | ) | (132 | ) | (177 | ) | (5,214 | ) | (5,391 | ) | |||||||||||
Segment contribution (loss) | $ | 102,721 | $ | 33,161 | $ | (10,006 | ) | $ | 125,876 | ||||||||||||||
Income from continuing operations before income taxes | $ | 125,876 | $ | (70,337 | ) | $ | 55,539 | ||||||||||||||||
EZCORP, Inc.
STORE COUNT ACTIVITY
(Unaudited)
Three Months Ended September 30, 2019 | |||||||||||
U.S. Pawn | Latin America Pawn | Other International | Consolidated | ||||||||
As of June 30, 2019 | 514 | 470 | 22 | 1,006 | |||||||
New locations opened | — | 10 | — | 10 | |||||||
Locations sold, combined or closed | (2 | ) | — | — | (2 | ) | |||||
As of September 30, 2019 | 512 | 480 | 22 | 1,014 | |||||||
Three Months Ended September 30, 2018 | |||||||||||
U.S. Pawn | Latin America Pawn | Other International | Consolidated | ||||||||
As of June 30, 2018 | 510 | 451 | 27 | 988 | |||||||
New locations opened | — | 2 | — | 2 | |||||||
Locations sold, combined or closed | (2 | ) | — | — | (2 | ) | |||||
As of September 30, 2018 | 508 | 453 | 27 | 988 | |||||||
Twelve Months Ended September 30, 2019 | |||||||||||
U.S. Pawn | Latin America Pawn | Other International | Consolidated | ||||||||
As of September 30, 2018 | 508 | 453 | 27 | 988 | |||||||
New locations opened | — | 22 | — | 22 | |||||||
Locations acquired | 7 | 5 | — | 12 | |||||||
Locations sold, combined or closed | (3 | ) | — | (5 | ) | (8 | ) | ||||
As of September 30, 2019 | 512 | 480 | 22 | 1,014 | |||||||
Twelve Months Ended September 30, 2018 | |||||||||||
U.S. Pawn | Latin America Pawn | Other International | Consolidated | ||||||||
As of September 30, 2017 | 513 | 246 | 27 | 786 | |||||||
New locations opened | — | 12 | — | 12 | |||||||
Locations acquired | — | 196 | — | 196 | |||||||
Locations sold, combined or closed | (5 | ) | (1 | ) | — | (6 | ) | ||||
As of September 30, 2018 | 508 | 453 | 27 | 988 | |||||||
Non-GAAP Financial Information (Unaudited)
In addition to the financial information prepared in conformity with accounting principles generally accepted in the United States ("GAAP"), we provide certain other non-GAAP financial information on a constant currency ("constant currency") and adjusted basis. We use constant currency results to evaluate our Latin America Pawn operations, which are denominated primarily in Mexican pesos and other Latin American currencies. We believe that presentation of constant currency and adjusted results is meaningful and useful in understanding the activities and business metrics of our 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 primarily to evaluate and compare operating results across accounting periods.
Additionally, we provide free cash flow which represents net cash provided by operating activities less net funding of loan originations and maintenance capital expenditures which is commonly used by investors as an additional measure of cash generated by business operations that may be used to repay scheduled debt maturities and debt service or, following payment of such debt obligations and other non-discretionary items, may be available to invest in future growth through new business development activities or acquisitions, among other things. These metrics can also be used to evaluate our ability to generate cash flow from business operations and the impact that this cash flow has on our liquidity. However, free cash flow has limitations as an analytical tool and should not be considered in isolation or as a substitute for cash flow from operating activities or other income statement data prepared in accordance with GAAP.
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 local currency 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 and approximate average exchange rates for each applicable currency as compared to U.S. dollars as of and for the three and twelve months ended September 30, 2019 and 2018 were as follows:
September 30, | Three Months Ended September 30, | Twelve Months Ended September 30, | ||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||
Mexican peso | 19.7 | 18.7 | 19.4 | 18.9 | 19.4 | 19.0 | ||||||||||||
Guatemalan quetzal | 7.6 | 7.6 | 7.5 | 7.5 | 7.6 | 7.3 | ||||||||||||
Honduran lempira | 24.2 | 24.0 | 24.1 | 23.8 | 24.1 | 23.5 | ||||||||||||
Peruvian sol | 3.4 | 3.3 | 3.3 | 3.3 | 3.3 | 3.2 | ||||||||||||
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.
Miscellaneous Non-GAAP Financial Measures
2019 Q4 | 2018 Q4 | ||||||
(in millions) | |||||||
Net loss | $ | (0.6 | ) | $ | (0.8 | ) | |
Loss from discontinued operations, net of tax | (0.1 | ) | (0.2 | ) | |||
Interest expense | 5.4 | 8.8 | |||||
Interest income | (1.4 | ) | (4.1 | ) | |||
Income tax expense | 1.0 | 3.7 | |||||
Depreciation and amortization | 7.7 | 7.2 | |||||
Adjusted EBITDA | $ | 12.0 | $ | 14.6 | |||
Consolidated Total Revenues | Consolidated Net Revenues | Consolidated Merch. Sales Gross Profit | Cons. Merch. Sales Gross Profit Margin | |||||||||||
(in millions) | ||||||||||||||
2019 Q4 reported | $ | 214.3 | $ | 120.9 | $ | 34.9 | 32.5 | % | ||||||
Natural disaster inventory destruction impact | — | 0.3 | 0.3 | |||||||||||
Currency exchange rate fluctuations | 1.1 | 0.5 | 0.1 | |||||||||||
2019 Q4 adjusted | $ | 215.4 | $ | 121.7 | $ | 35.3 | 32.8 | % | ||||||
U.S. Pawn | Latin America Pawn | Total | |||||||||
(in millions) | |||||||||||
2019 Q4 reported segment contribution | $ | 22.2 | $ | 5.8 | $ | 28.0 | |||||
Natural disaster inventory and asset destruction impact | 0.9 | — | 0.9 | ||||||||
Trade name impairment | — | 0.6 | 0.6 | ||||||||
Currency exchange rate fluctuations | — | 0.1 | 0.1 | ||||||||
2019 Q4 adjusted segment contribution | $ | 23.1 | $ | 6.5 | $ | 29.6 | |||||
2019 | 2018 | ||||||
(in millions) | |||||||
Net cash from operating activities | $ | 103.5 | $ | 89.0 | |||
Net funding of loan growth | (14.9 | ) | (18.9 | ) | |||
Maintenance capital expenditures | (10.7 | ) | (11.0 | ) | |||
Free cash flow | $ | 77.9 | $ | 59.1 | |||
Income from Continuing Operations, Before Tax | Tax Effect | Net Income from Continuing Operations | Adjusted EBITDA | Continuing Operations Diluted EPS | |||||||||||||||
(in millions) | |||||||||||||||||||
2019 Q4 reported | $ | 0.4 | $ | (1.0 | ) | $ | (0.6 | ) | $ | 12.0 | $ | (0.01 | ) | ||||||
Natural disaster inventory and asset destruction impact | 0.8 | (0.1 | ) | 0.7 | 0.8 | 0.01 | |||||||||||||
Trade name impairment | 0.6 | (0.1 | ) | 0.5 | 0.6 | 0.01 | |||||||||||||
Acquisition due diligence costs | 1.7 | (0.2 | ) | 1.5 | 1.7 | 0.03 | |||||||||||||
Board of director search fees | 0.3 | — | 0.3 | 0.3 | 0.01 | ||||||||||||||
Discrete Cash Converters International Limited items | 2.0 | (0.3 | ) | 1.7 | 2.0 | 0.03 | |||||||||||||
Write-off of RDC call option | 1.9 | (0.2 | ) | 1.7 | 1.9 | 0.03 | |||||||||||||
Currency exchange rate fluctuations | 0.2 | (0.1 | ) | 0.1 | 0.2 | — | |||||||||||||
Non-cash net interest expense | 2.4 | (0.3 | ) | 2.1 | — | 0.04 | |||||||||||||
Discretionary strategic investment in digital platform | 2.7 | (0.3 | ) | 2.4 | 2.8 | 0.04 | |||||||||||||
2019 Q4 adjusted | $ | 13.0 | $ | (2.6 | ) | $ | 10.4 | $ | 22.3 | $ | 0.19 | ||||||||
Continuing Operations Diluted EPS | |||
2019 reported | $ | 0.05 | |
Natural disaster inventory and asset destruction impact, net of tax impact | 0.01 | ||
Trade name impairment, net of tax impact | 0.01 | ||
Acquisition due diligence costs, net of tax impact | 0.03 | ||
Board of director search fees, net of tax impact | 0.01 | ||
Discrete Cash Converters International Limited items, net of tax impact | 0.03 | ||
Write-off of RDC call option, net of tax impact | 0.03 | ||
Non-cash net interest expense, net of tax impact | 0.21 | ||
Discretionary strategic investment in digital platform, net of tax impact | 0.12 | ||
Discrete transaction tax adjustment, net of tax impact | 0.08 | ||
Non-recurring income tax benefit | (0.03 | ) | |
Impairment on CCV investment, net of tax impact | 0.26 | ||
Adjustment for Republic Metals Corporation reserve, net of tax impact | 0.05 | ||
Settlement of GPMX PSC-related indemnification claim, net of tax impact | (0.01 | ) | |
Charge-off of aged assets and other, net of tax impact | 0.01 | ||
Impact on CCV earnings from litigation settlement, net of tax impact | 0.04 | ||
2019 adjusted | $ | 0.90 | |
Income from Continuing Operations, Before Tax | Tax Effect | Net Income from Continuing Operations | Adjusted EBITDA | Continuing Operations Diluted EPS | |||||||||||||||
(in millions) | |||||||||||||||||||
2018 Q4 reported | $ | 2.9 | $ | (3.7 | ) | $ | (0.8 | ) | $ | 14.6 | $ | (0.02 | ) | ||||||
Impairment of investment | 11.7 | (1.5 | ) | 10.2 | 11.7 | 0.18 | |||||||||||||
Acquisition expenses | 0.2 | — | 0.2 | 0.2 | — | ||||||||||||||
Currency exchange rate fluctuations | 0.2 | (0.2 | ) | — | 0.2 | — | |||||||||||||
Non-cash net interest expense | 3.5 | (0.2 | ) | 3.3 | — | 0.06 | |||||||||||||
2018 Q4 adjusted | $ | 18.5 | $ | (5.6 | ) | $ | 12.9 | $ | 26.7 | $ | 0.22 | ||||||||
Continuing Operations Diluted EPS | |||
2018 reported | $ | 0.66 | |
Impairment of investment, net of tax impact | 0.16 | ||
Acquisition expenses, net of tax impact | 0.01 | ||
Litigation settlement, net of tax impact | (0.06 | ) | |
Non-cash net interest expense, net of tax impact | 0.09 | ||
2018 adjusted | $ | 0.86 | |
U.S. Dollar Amount | Percentage Change YOY | |||||
(in millions) | ||||||
Consolidated PLO | $ | 199.1 | — | % | ||
Currency exchange rate fluctuations | 1.5 | |||||
Constant currency consolidated PLO | $ | 200.6 | 1 | % | ||
Latin America Pawn PLO | $ | 41.6 | (4 | )% | ||
Currency exchange rate fluctuations | 1.5 | |||||
Constant currency Latin America Pawn PLO | $ | 43.1 | (1 | )% | ||
Latin America Pawn net revenue (three months ended September 30, 2019) | $ | 26.6 | — | % | ||
Currency exchange rate fluctuations | 0.5 | |||||
Constant currency Latin America Pawn net revenue (three months ended September 30, 2019) | $ | 27.1 | 2 | % | ||
Latin America Pawn PSC revenues (three months ended September 30, 2019) | $ | 19.4 | 1 | % | ||
Currency exchange rate fluctuations | 0.3 | |||||
Constant currency Latin America Pawn PSC revenues (three months ended September 30, 2019) | $ | 19.7 | 3 | % | ||
Latin America Pawn merchandise sales (three months ended September 30, 2019) | $ | 26.8 | 9 | % | ||
Currency exchange rate fluctuations | 0.6 | |||||
Constant currency Latin America Pawn merchandise sales (three months ended September 30, 2019) | $ | 27.4 | 10 | % | ||
Latin America Pawn segment profit before tax (three months ended September 30, 2019) | $ | 5.8 | (36 | )% | ||
Currency exchange rate fluctuations | 0.1 | |||||
Constant currency Latin America Pawn segment profit before tax (three months ended September 30, 2019) | $ | 5.9 | (35 | )% | ||