UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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
The Securities Exchange Act of 1934
Date
of Report (Date of Earliest Event Reported):
July 24, 2007
July 24, 2007
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 (I.R.S. Employer Identification No.) |
||
| 1901 CAPITAL PARKWAY AUSTIN, TEXAS (Address of principal executive offices) |
78746 (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
This information set forth under “Item 2.02. Results Of Operations And Financial Condition,”
including the Exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of
the Securities and Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the
liabilities of that section, nor shall it be deemed incorporated by reference in any filing under
the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in
such filing.
On July 24, 2007, EZCORP, Inc. issued a press release announcing its results of operations and
financial condition for the quarter ended June 30, 2007. A copy of the press release is attached
hereto as Exhibit 99.1.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
| 99.1 | Press release dated July 24, 2007, issued by EZCORP, Inc. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
EZCORP, INC.
(Registrant)
(Registrant)
| Date: July 24, 2007 | By: | /s/ Daniel N. Tonissen | ||
| (Signature) | ||||
| Senior Vice President, Chief Financial Officer,
and Director |
||||
EXHIBIT INDEX
| 99.1 | Press release dated July 24, 2007, issued by EZCORP, Inc. |
EXHIBIT 99.1
EZCORP ANNOUNCES THIRD FISCAL QUARTER RESULTS
AUSTIN, Texas (July 24, 2007) ¾ EZCORP, Inc. (Nasdaq: EZPW) announced today results for its
third fiscal quarter and nine month period, which ended June 30,
2007. For the quarter ended June 30, 2007, EZCORP’s net income increased 21% to $6,762,000 ($0.16 per
share) compared to $5,608,000 ($0.13 per share) for the quarter ended June 30, 2006. Total
revenues for the quarter increased 18% to $86,993,000 while operating income improved 16% to
$9,307,000.
For the nine months ended June 30, 2007, net income increased 33% to $26,719,000 ($0.62 per share)
compared to $20,091,000 ($0.48 per share) for the prior year nine month period. Total revenues
grew 17% to $268,323,000 while operating income increased 30% to $38,810,000.
Commenting on these results, President and Chief Executive Officer, Joe Rotunda, stated, “We are
pleased to report, once again, that our growth in earnings reflected a solid contribution from all
segments of our business. Pawn net revenues grew 7% led by a 13% increase in pawn service charges.
Same store pawn loan balances for the quarter increased 11% over the prior year. Our signature
loan contribution, fees less bad debt, increased 37% over the prior year quarter as a result of a
52% increase in signature loan fees offset by higher relative levels of bad debt. As a result of
the higher levels of bad debt, we fine tuned our underwriting, primarily with new customers, and
saw significant improvement late in the quarter.”
Rotunda continued, “On June 18th we completed the acquisition of Jumping Jack Cash’s
Colorado locations. Since we closed late in the quarter, these stores had
a nominal impact on the quarter’s results. We expect these stores to contribute $0.04 to $0.05 per
share over a full year, with most of that benefit coming in the seasonally strong December and
March quarters.”
Rotunda concluded, “We expect our fourth fiscal 2007 quarter’s earnings to be approximately $0.26
per share compared to $0.21 for the fiscal 2006 fourth quarter. You may recall that our fiscal
2006 fourth quarter included a net benefit of approximately $0.01 per share from three nonrecurring
items. This fourth quarter guidance and our nine month results will bring our guidance for our
2007 fiscal year to approximately $0.88 per share compared to fiscal 2006’s $0.69 per share. Based
on new EZMONEY locations in the pipeline, we expect to open approximately 45 EZMONEY stores during
the fourth quarter for approximately 100 net new EZMONEY locations this fiscal year. In May we
opened our third EZPAWN location in Mexico and we expect to open our fourth location in the
September quarter.”
EZCORP is primarily a lender or provider of credit services to individuals who do not have cash
resources or access to credit to meet their short-term cash needs. The Company offers non-recourse
loans collateralized by tangible personal property, commonly known as pawn loans, in 295 U.S. and
three Mexico EZPAWN locations open at June 30, 2007. At these locations, the Company also sells
merchandise, primarily collateral forfeited from its pawn lending operations, to consumers looking
for good value. In 390 EZMONEY locations and 80 EZPAWN locations open at June 30, 2007, the
Company offers short-term non-collateralized loans, often referred to as payday loans, or fee based
credit services to customers seeking loans.
This announcement contains certain forward-looking statements regarding the Company’s expected
performance for future periods including, but not limited to, new store expansion and expected
future earnings. Actual results for these periods may materially differ from these statements.
Such forward-looking statements involve risks and uncertainties such as changing market conditions
in the overall economy and the industry, consumer demand for the Company’s services and
merchandise, changes in the regulatory environment, and other factors periodically discussed in 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 July 24, 2007 at 3:30pm Central Time. The conference call can be accessed over the Internet or replayed at your convenience at the following address.
You are invited to listen to a conference call discussing these results on July 24, 2007 at 3:30pm 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=40904
For additional information, contact Dan Tonissen at (512) 314-2289.
EZCORP, Inc.
Highlights of Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
Highlights of Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
| Three Months Ended June 30, | ||||||||
| 2007 | 2006 | |||||||
Revenues: |
||||||||
Merchandise sales |
$ | 30,607 | $ | 29,612 | ||||
Jewelry scrapping sales |
12,069 | 11,028 | ||||||
Pawn service charges |
16,978 | 15,021 | ||||||
Signature loan fees |
27,024 | 17,821 | ||||||
Other |
315 | 304 | ||||||
Total revenues |
86,993 | 73,786 | ||||||
Cost of goods sold: |
||||||||
Cost of merchandise sales |
17,745 | 16,868 | ||||||
Cost of jewelry scrapping sales |
7,676 | 6,830 | ||||||
Total cost of goods sold |
25,421 | 23,698 | ||||||
Net revenues |
61,572 | 50,088 | ||||||
Operations expense |
31,595 | 27,544 | ||||||
Signature loan bad debt |
10,142 | 5,531 | ||||||
Administrative expense |
8,033 | 6,830 | ||||||
Depreciation and amortization |
2,495 | 2,143 | ||||||
Operating income |
9,307 | 8,040 | ||||||
Interest income |
(618 | ) | (193 | ) | ||||
Interest expense |
67 | 43 | ||||||
Equity in net income of unconsolidated affiliate |
(720 | ) | (557 | ) | ||||
Gain on sale/disposal of assets |
(155 | ) | (70 | ) | ||||
Income before income taxes |
10,733 | 8,817 | ||||||
Income tax expense |
3,971 | 3,209 | ||||||
Net income |
$ | 6,762 | $ | 5,608 | ||||
Net income per share, diluted |
$ | 0.16 | $ | 0.13 | ||||
Weighted average shares, diluted |
43,482 | 42,557 | ||||||
EZCORP, Inc.
Highlights of Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
Highlights of Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
| Nine Months Ended June 30, | ||||||||
| 2007 | 2006 | |||||||
Revenues: |
||||||||
Merchandise sales |
$ | 107,993 | $ | 104,304 | ||||
Jewelry scrapping sales |
33,695 | 26,294 | ||||||
Pawn service charges |
51,496 | 46,988 | ||||||
Signature loan fees |
74,132 | 49,949 | ||||||
Other |
1,007 | 962 | ||||||
Total revenues |
268,323 | 228,497 | ||||||
Cost of goods sold: |
||||||||
Cost of merchandise sales |
63,903 | 60,415 | ||||||
Cost of jewelry scrapping sales |
21,715 | 17,281 | ||||||
Total cost of goods sold |
85,618 | 77,696 | ||||||
Net revenues |
182,705 | 150,801 | ||||||
Operations expense |
94,087 | 82,095 | ||||||
Signature loan bad debt |
19,086 | 12,062 | ||||||
Administrative expense |
23,528 | 20,347 | ||||||
Depreciation and amortization |
7,194 | 6,402 | ||||||
Operating income |
38,810 | 29,895 | ||||||
Interest income |
(1,499 | ) | (283 | ) | ||||
Interest expense |
214 | 396 | ||||||
Equity in net income of unconsolidated affiliate |
(2,185 | ) | (1,745 | ) | ||||
Gain on sale/disposal of assets |
(131 | ) | (62 | ) | ||||
Income before income taxes |
42,411 | 31,589 | ||||||
Income tax expense |
15,692 | 11,498 | ||||||
Net income |
$ | 26,719 | $ | 20,091 | ||||
Net income per share, diluted |
$ | 0.62 | $ | 0.48 | ||||
Weighted average shares, diluted |
43,393 | 41,923 | ||||||
EZCORP, Inc.
Highlights of Consolidated Balance Sheets (Unaudited)
(in thousands, except per share data and store counts)
Highlights of Consolidated Balance Sheets (Unaudited)
(in thousands, except per share data and store counts)
| As of June 30, | ||||||||
| 2007 | 2006 | |||||||
Assets: |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 31,686 | $ | 22,731 | ||||
Pawn loans |
58,053 | 48,932 | ||||||
Payday loans, net |
4,514 | 1,966 | ||||||
Pawn service charges receivable, net |
8,150 | 7,037 | ||||||
Signature loan fees receivable, net |
5,439 | 3,708 | ||||||
Inventory, net |
33,641 | 32,937 | ||||||
Deferred tax asset |
7,150 | 8,365 | ||||||
Prepaid expenses and other assets |
5,197 | 3,340 | ||||||
Total current assets |
153,830 | 129,016 | ||||||
Investment in unconsolidated affiliate |
21,250 | 17,870 | ||||||
Property and equipment, net |
31,895 | 27,283 | ||||||
Deferred tax asset, non-current |
4,536 | 3,669 | ||||||
Goodwill |
16,205 | 631 | ||||||
Other assets, net |
3,648 | 2,614 | ||||||
Total assets |
$ | 231,364 | $ | 181,083 | ||||
Liabilities and stockholders’ equity: |
||||||||
Current liabilities: |
||||||||
Accounts payable and other accrued expenses |
$ | 21,658 | $ | 18,517 | ||||
Customer layaway deposits |
1,888 | 1,734 | ||||||
Federal income taxes payable |
1,255 | 752 | ||||||
Total current liabilities |
24,801 | 21,003 | ||||||
Deferred gains and other long-term liabilities |
2,977 | 3,339 | ||||||
Total stockholders’ equity |
203,586 | 156,741 | ||||||
Total liabilities and stockholders’ equity |
$ | 231,364 | $ | 181,083 | ||||
Pawn loan balance per ending pawn store |
$ | 195 | $ | 175 | ||||
Inventory per ending pawn store |
$ | 113 | $ | 118 | ||||
Book value per share |
$ | 4.93 | $ | 3.95 | ||||
Tangible book value per share |
$ | 4.47 | $ | 3.88 | ||||
EZPAWN store count — end of period |
298 | 280 | ||||||
EZMoney signature loan store count — end of period |
390 | 288 | ||||||
Shares outstanding — end of period |
41,300 | 39,679 | ||||||
EZCORP, Inc.
Operating Segment Results (Unaudited)
(in thousands, except store counts)
Operating Segment Results (Unaudited)
(in thousands, except store counts)
| EZPAWN | EZMONEY | |||||||||||
| Operations | Operations | Consolidated | ||||||||||
Three months ended June 30, 2007: |
||||||||||||
Revenues: |
||||||||||||
Sales |
$ | 42,676 | $ | — | $ | 42,676 | ||||||
Pawn service charges |
16,978 | — | 16,978 | |||||||||
Signature loan fees |
808 | 26,216 | 27,024 | |||||||||
Other |
315 | — | 315 | |||||||||
Total revenues |
60,777 | 26,216 | 86,993 | |||||||||
Cost of goods sold |
25,421 | — | 25,421 | |||||||||
Net revenues |
35,356 | 26,216 | 61,572 | |||||||||
Operating expenses: |
||||||||||||
Operations expense |
21,613 | 9,982 | 31,595 | |||||||||
Signature loan bad debt |
570 | 9,572 | 10,142 | |||||||||
Total direct expenses |
22,183 | 19,554 | 41,737 | |||||||||
Store operating income |
$ | 13,173 | $ | 6,662 | $ | 19,835 | ||||||
EZPAWN store count — end of period |
298 | — | 298 | |||||||||
EZMoney signature loan store count — end of period |
7 | 383 | 390 | |||||||||
Three months ended June 30, 2006: |
||||||||||||
Revenues: |
||||||||||||
Sales |
$ | 40,640 | $ | — | $ | 40,640 | ||||||
Pawn service charges |
15,021 | — | 15,021 | |||||||||
Signature loan fees |
838 | 16,983 | 17,821 | |||||||||
Other |
304 | — | 304 | |||||||||
Total revenues |
56,803 | 16,983 | 73,786 | |||||||||
Cost of goods sold |
23,698 | — | 23,698 | |||||||||
Net revenues |
33,105 | 16,983 | 50,088 | |||||||||
Operating expenses: |
||||||||||||
Operations expense |
20,747 | 6,797 | 27,544 | |||||||||
Signature loan bad debt |
406 | 5,125 | 5,531 | |||||||||
Total direct expenses |
21,153 | 11,922 | 33,075 | |||||||||
Store operating income |
$ | 11,952 | $ | 5,061 | $ | 17,013 | ||||||
EZPAWN store count — end of period |
280 | — | 280 | |||||||||
EZMoney signature loan store count — end of period |
7 | 281 | 288 | |||||||||
EZCORP, Inc.
Operating Segment Results (Unaudited)
(in thousands, except store counts)
Operating Segment Results (Unaudited)
(in thousands, except store counts)
| EZPAWN | EZMONEY | |||||||||||
| Operations | Operations | Consolidated | ||||||||||
Nine Months ended June 30, 2007: |
||||||||||||
Revenues: |
||||||||||||
Sales |
$ | 141,688 | $ | — | $ | 141,688 | ||||||
Pawn service charges |
51,496 | — | 51,496 | |||||||||
Signature loan fees |
2,554 | 71,578 | 74,132 | |||||||||
Other |
1,007 | — | 1,007 | |||||||||
Total revenues |
196,745 | 71,578 | 268,323 | |||||||||
Cost of goods sold |
85,618 | — | 85,618 | |||||||||
Net revenues |
111,127 | 71,578 | 182,705 | |||||||||
Operating expenses: |
||||||||||||
Operations expense |
64,926 | 29,161 | 94,087 | |||||||||
Signature loan bad debt |
1,070 | 18,016 | 19,086 | |||||||||
Total direct expenses |
65,996 | 47,177 | 113,173 | |||||||||
Store operating income |
$ | 45,131 | $ | 24,401 | $ | 69,532 | ||||||
EZPAWN store count — end of period |
298 | — | 298 | |||||||||
EZMoney signature loan store count — end of period |
7 | 383 | 390 | |||||||||
Nine Months ended June 30, 2006: |
||||||||||||
Revenues: |
||||||||||||
Sales |
$ | 130,598 | $ | — | $ | 130,598 | ||||||
Pawn service charges |
46,988 | — | 46,988 | |||||||||
Signature loan fees |
2,237 | 47,712 | 49,949 | |||||||||
Other |
962 | — | 962 | |||||||||
Total revenues |
180,785 | 47,712 | 228,497 | |||||||||
Cost of goods sold |
77,696 | — | 77,696 | |||||||||
Net revenues |
103,089 | 47,712 | 150,801 | |||||||||
Operating expenses: |
||||||||||||
Operations expense |
63,401 | 18,694 | 82,095 | |||||||||
Signature loan bad debt |
920 | 11,142 | 12,062 | |||||||||
Total direct expenses |
64,321 | 29,836 | 94,157 | |||||||||
Store operating income |
$ | 38,768 | $ | 17,876 | $ | 56,644 | ||||||
EZPAWN store count — end of period |
280 | — | 280 | |||||||||
EZMoney signature loan store count — end of period |
7 | 281 | 288 | |||||||||