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

 

EZCORP, Inc.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation)		0-19424 (Commission File Number)		74-2540145 (IRS Employer Identification No.)

1901 Capital Parkway, Austin, Texas 78746
(Address of principal executive offices) (zip code)

Registrant’s telephone number, including area code: (512) 314-3400

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 2.02 — Results of Operations and Financial Condition

On January 21, 2010, EZCORP, Inc. issued a press release announcing its results of operations and financial condition for the first fiscal quarter ended December 31, 2009 and increasing annual earnings guidance. A copy of that press release is attached as Exhibit 99.1.

The information set forth under this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference in any filing made by EZCORP under the Securities Act of 1933 or the Securities Exchange Act of 1934.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

99.1

Press Release, dated January 21, 2010, announcing EZCORP, Inc.’s results of operations and financial condition for the first fiscal quarter ended December 31, 2009 and increasing annual earnings guidance

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.

     EXHIBIT INDEX

Exhibit
No.		Description of Exhibit
99.1		Press Release, dated January 21, 2010, announcing EZCORP, Inc.’s results of operations and financial condition for the first fiscal quarter ended December 31, 2009 and increasing annual earnings guidance

EXHIBIT 99.1

EZCORP REPORTS 73% EARNINGS GROWTH AND INCREASES ANNUAL GUIDANCE

AUSTIN, Texas (January 21, 2010) — EZCORP, Inc. (Nasdaq: EZPW) announced today results for its first fiscal quarter ended December 31, 2009.

EZCORP’s net income for the quarter ended December 31, 2009 increased 73% to $25.7 million ($0.52 per share) compared to $14.8 million ($0.33 per share) for the quarter ended December 31, 2008. Total revenues for the quarter increased 44% over the prior year period to $184.8 million.

Consolidated operating income improved 77% to $38.9 million (34% of net revenues) from $22.0 million (28% of net revenues) in the prior year quarter. The Company’s U.S. pawn operations contributed $14.5 million of the improvement and the EZMONEY operations contributed $5.4 million of the increase. Operating income from the Empeño Fácil Mexico pawn segment decreased $0.3 million as expenses at new stores outpaced the segment’s 23% net revenue growth, with one third of its stores opened in the last six months. Partially offsetting the increase in store level operating income was higher administrative costs and depreciation and a small loss on disposal of assets.

U.S. pawn acquisitions completed in November and December 2008 contributed net income of approximately $5.8 million and $0.07 per share after taking into account the increase in shares issued in the acquisitions.

Commenting on these results, President and Chief Executive Officer, Joe Rotunda, stated, “This was an outstanding quarter, our 30^th consecutive quarter of year over year earnings growth, and clearly demonstrates our ability to consistently enhance earnings and provide shareholder value. Coupled with this strong financial performance is an expanding world-wide presence with our store growth in Mexico, entry into Canada, and our strategic affiliations with Albemarle & Bond in the United Kingdom and Cash Converters in Australia.”

Rotunda continued, “In all segments of our business, we saw strong loan demand. It appears that our broadened range of loan offerings provides solutions to consumers’ cash needs and are found to be more attractive than other options. With these strong ending loan portfolio balances, we are well positioned for a solid fiscal year.”

Rotunda concluded, “For the March quarter, we expect earnings per share of approximately $0.43, compared to $0.37 for the same period a year ago. For our 2010 fiscal year ending September 30^th, we are raising our earnings guidance to approximately $1.81 per share, compared to $1.42 per share for fiscal 2009. We remain on track to open 40 to 50 Empeño Fácil pawn locations in Mexico and 35 to 45 CASHMAX payday loan stores in Canada, as well as six domestic pawn stores by fiscal year-end.”

ABOUT EZCORP:

EZCORP provides loans or credit services to customers who do not have cash resources or access to credit to meet their short-term cash needs. In its pawnshops, the Company offers non-recourse loans collateralized by tangible personal property, commonly known as pawn loans. At these locations, the Company also sells merchandise, primarily collateral forfeited from its pawn lending operations, to consumers looking for good value. The Company also offers a variety of short-term consumer loans, including payday loans, installment loans and auto title loans, or fee-based credit services to customers seeking loans from unaffiliated lenders.

At December 31, 2009, EZCORP operated a total of 920 locations, consisting of 370 U.S. pawnshops, 70 pawnshops in Mexico, 472 U.S. short-term consumer loan stores, and 8 short-term consumer loan stores in Canada. The Company also has significant investments in Albemarle & Bond Holdings PLC (ABM.L), one of the U.K.’s largest pawnbroking businesses with 115 stores, and Cash Converters International Limited (CCV.L and CCV.AUS), which franchises and operates approximately 500 locations worldwide.

This announcement contains certain forward-looking statements regarding the Company’s expected operating and financial performance for future periods, including new store expansion and expected future earnings. These statements are based on the Company’s current expectations. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of uncertainties and other factors, including changing market conditions in the overall economy and the industry, consumer demand for the Company’s services and merchandise, actions of third parties who offer services and products in the Company’s locations and changes in the regulatory environment. For a discussion of these and other factors

affecting the Company’s business and prospects, see the Company’s annual, quarterly and other reports filed with the Securities and Exchange Commission.

You are invited to listen to a conference call discussing these results on January 21, 2010 at 3:30 pm Central Time. The conference call can be accessed over the Internet or replayed at your convenience at the following address.

http://www.videonewswire.com/event.asp?id=65278

For additional information, contact Brad Wolfe at (512) 314-2289.

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

		Three Months Ended
		December 31,								Increase				Percent
		2009				2008				(Decrease)				Change
Revenues:
Merchandise sales		$	62,476			$	44,795			$	17,681				39.5
Jewelry scrapping sales			37,442				19,785				17,657				89.2
Pawn service charges			40,797				26,381				14,416				54.6
Signature loan fees			38,678				36,000				2,678				7.4
Auto title loan fees			3,102				221				2,881				1303.6
Other			2,256				1,433				823				57.4
Total revenues			184,751				128,615				56,136				43.6
Cost of goods sold:
Cost of merchandise sales			39,265				27,166				12,099				44.5
Cost of jewelry scrapping sales			23,305				13,259				10,046				75.8
Total cost of goods sold			62,570				40,425				22,145				54.8
Bad debt:
Signature loan bad debt			8,790				9,484				(694	)			(7.3	)
Auto title loan bad debt			460				7				453				6471.4
Total bad debt			9,250				9,491				(241	)			(2.5	)
Net revenue			112,931				78,699				34,232				43.5
Operations expense			58,181				43,494				14,687				33.8
Administrative expense			12,297				10,411				1,886				18.1
Depreciation and amortization			3,356				3,066				290				9.5
(Gain) / Loss on sale/disposal of assets			211				(284	)			495				(174.3	)
Operating income			38,886				22,012				16,874				76.7
Interest income			(8	)			(126	)			118				(93.7	)
Interest expense			365				165				200				121.2
Equity in net income of unconsolidated affiliates			(1,283	)			(941	)			(342	)			36.3
Other			(15	)			25				(40	)			(160.0	)
Income before income taxes			39,827				22,889				16,938				74.0
Income tax expense			14,120				8,061				6,059				75.2
Net income		$	25,707			$	14,828			$	10,879				73.4
Net income per share, diluted		$	0.52			$	0.33			$	0.19				56.8
Weighted average shares, diluted			49,400				44,692

										Amount or
										Percentage Point (ppt)
OTHER DATA:										Increase (Decrease)
Gross margin on merchandise sales (lines (2-10)/2)			37.2	%			39.4	%			(2.2	)		ppts
Gross margin on jewelry scrapping sales (lines (3-11)/3)			37.8	%			33.0	%			4.8			ppts
Gross margin on total sales (lines ((2+3)-12)/(2+3))			37.4	%			37.4	%			0.0			ppts
Signature loan bad debt as percent of fees (lines 14/5)			22.7	%			26.3	%			(3.6	)		ppts
Auto title loan bad debt as percent of fees (lines 15/6)			14.8	%			3.2	%			11.6			ppts
Annualized inventory turnover			3.7				3.3				0.4
Operating income margin (lines 23/17)			34.4	%			28.0	%			6.4			ppts

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

		December 31,
		2009				2008
Assets:
Current assets:
Cash and cash equivalents		$	17,032			$	41,595
Pawn loans			103,446				93,789
Signature loans, net			8,934				8,246
Auto title loans, net			2,110				1,174
Pawn service charges receivable, net			19,662				16,888
Signature loan fees receivable, net			6,044				5,968
Auto title loan finance charges receivable, net			827				92
Inventory, net			63,515				64,563
Deferred tax asset			15,671				15,773
Prepaid expenses and other assets			20,654				12,284
Total current assets			257,895				260,372
Investment in unconsolidated affiliates			90,455				37,873
Property and equipment, net			52,378				46,674
Deferred tax asset, non-current			5,011				7,754
Goodwill			101,134				98,300
Other assets, net			19,931				18,693
Total assets		$	526,804			$	469,666
Liabilities and stockholders’ equity:
Current liabilities:
Current maturities of long-term debt		$	10,000			$	10,000
Accounts payable and other accrued expenses			39,692				48,534
Customer layaway deposits			2,697				2,879
Federal income taxes payable			6,480				3,186
Total current liabilities			58,869				64,599
Long-term debt, less current maturities			22,500				30,337
Deferred gains and other long-term liabilities			2,840				3,566
Total stockholders’ equity			442,595				371,164
Total liabilities and stockholders’ equity		$	526,804			$	469,666
Pawn loan balance per ending pawn store		$	235			$	228
Inventory per ending pawn store		$	144			$	157
Book value per share		$	9.08			$	7.67
Tangible book value per share		$	6.68			$	5.28
Pawn store count — end of period			440				412
Signature loan store count — end of period			480				477
Shares outstanding — end of period			48,732				48,417

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

		U.S. Pawn				Empeño				EZMONEY
		Operations				Fácil				Operations				Consolidated
Three months ended December 31, 2009:
Revenues:
Sales		$	96,034			$	3,872			$	12			$	99,918
Pawn service charges			38,941				1,856				—				40,797
Signature loan fees			553				—				38,125				38,678
Auto title loan fees			475				—				2,627				3,102
Other			2,167				89				—				2,256
Total revenues			138,170				5,817				40,764				184,751
Cost of goods sold			59,730				2,833				7				62,570
Signature loan bad debt			186				—				8,604				8,790
Auto title loan bad debt			70				—				390				460
Net revenues			78,184				2,984				31,763				112,931
Operations expense			40,199				2,164				15,818				58,181
Store level operating income		$	37,985			$	820			$	15,945			$	54,750
Gross margin on total sales (lines (2-9)/2)			37.8	%			26.8	%			41.7	%			37.4	%
Annualized inventory turnover			3.7				3.9				N/A				3.7
Signature loan bad debt as percent of fees (lines 10/4)			33.6	%			N/A				22.6	%			22.7	%
Auto title loan bad debt as percent of fees (lines 11/5)			14.7	%			N/A				14.8	%			14.8	%
Operating income margin (lines 15/12)			48.6	%			27.5	%			50.2	%			48.5	%
Pawn store count — end of period			370				70				—				440
Signature loan store count — end of period			6				—				474				480
Three months ended December 31, 2008:
Revenues:
Sales		$	62,167			$	2,413			$	—			$	64,580
Pawn service charges			24,884				1,497				—				26,381
Signature loan fees			686				—				35,314				36,000
Auto title loan fees			210				—				11				221
Other			1,433				—				—				1,433
Total revenues			89,380				3,910				35,325				128,615
Cost of goods sold			38,938				1,487				—				40,425
Signature loan bad debt			236				—				9,248				9,484
Auto title loan bad debt			6				—				1				7
Net revenues			50,200				2,423				26,076				78,699
Operations expense			26,678				1,284				15,532				43,494
Store level operating income		$	23,522			$	1,139			$	10,544			$	35,205
Gross margin on total sales (lines (28-35)/28)			37.4	%			38.4	%			N/A				37.4	%
Annualized inventory turnover			3.4				2.2				N/A				3.3
Signature loan bad debt as percent of fees (lines 36/30)			34.4	%			N/A				26.2	%			26.3	%
Auto title loan bad debt as percent of fees (lines 37/31)			2.9	%			N/A				9.1	%			3.2	%
Operating income margin (lines 41/38)			46.9	%			47.0	%			40.4	%			44.7	%
Pawn store count — end of period			371				41				—				412
Signature loan store count — end of period			6				—				471				477