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EZCORP Announces Fiscal 2008 Second Quarter Results
AUSTIN, Texas, April 24 /PRNewswire-FirstCall/ -- EZCORP, Inc. NASDAQ: EZPW announced today results for its fiscal second quarter and six-month period, which ended March 31, 2008. EZCORP's net income for the quarter ended March 31, 2008 increased 28% to $13,016,000 ($0.30 per share) compared to $10,196,000 ($0.23 per share) for the quarter ended March 31, 2007. Total revenues for the quarter increased 27% over the prior year period to $113,625,000 with signature loan revenues (payday loan and credit service fees) up 33%, pawn service charges up 32% and total sales (merchandise and jewelry scrapping) up 23%. In our U.S. EZPAWN operations, store level operating income improved 40% to $22,008,000; and, in our EZMONEY operations store level operating income improved 3% to $9,918,000. Our 26 store EZPAWN Mexico operations contributed $815,000 compared to a slight loss in the prior year period. After administrative expense and depreciation and amortization, consolidated operating income for the quarter improved 33% to $19,793,000 (26% of net revenue) compared to $14,880,000 (25% of net revenue) for the prior year quarter. EZCORP's net income for the six-month period ended March 31 2008 increased 28% to $25,571,000 ($0.59 per share) compared to $19,957,000 ($0.46 per share) for the prior year six-month period. Operating income for the six-months improved 33% to $39,085,000 (25% of net revenues) compared to $29,503,000 (24% of net revenues) for the prior year six-month period. Commenting on these results, President and Chief Executive Officer, Joe Rotunda, stated, "Our second quarter was another strong quarter for us, exceeding our earnings guidance and increasing our earnings per share by 30% over the prior year. This is our twenty-third consecutive quarter of year over year earnings growth. Our pawn operation was particularly robust while our payday loan operation was challenged with bad debt. To varying degrees and in different directions, I believe both segments are impacted by the stress our customers are feeling in this economic environment." Rotunda continued, "We believe each of our business segments can contribute to our growth. In our pawn operation, same store, store level operating income growth of 33% was complemented with $1.1 million from our Jumping Jack Cash acquisition. Our EZMONEY operation continues with de novo growth in the U.S. and we have the prospect of expanding into Canada. We believe our Mexico pawn operation, which is in its infancy, represents a substantial growth opportunity." Rotunda concluded, "We are increasing our earnings per share guidance for our 2008 fiscal year to $1.14. We expect earnings per share for our June quarter to be approximately $0.21 and our September quarter to be approximately $0.34. We are lowering our expected EZMONEY store openings from 100 this fiscal year to between 70 and 80, as we have become more cautious in this economic environment. We are increasing the number of Mexico pawn locations we expect to open this fiscal year to a range of ten to twelve from our earlier estimate of seven to ten." 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. In 294 U.S. EZPAWN and 26 Mexico Empano Facil locations open on March 31, 2008, 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. In 462 EZMONEY locations and 73 EZPAWN locations open on March 31, 2008, 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, anticipated benefits of acquisitions and investments 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 April 24, 2008 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=47316
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)
Three Months Ended March 31,
2008 2007
1 Revenues:
2 Merchandise sales $44,675 $39,507
3 Jewelry scrapping sales 16,655 10,525
4 Pawn service charges 21,785 16,556
5 Signature loan fees 30,166 22,713
6 Other 344 342
7 Total revenues 113,625 89,643
8 Cost of goods sold:
9 Cost of merchandise sales 27,165 23,576
10 Cost of jewelry scrapping sales 9,566 6,798
11 Total cost of goods sold 36,731 30,374
12 Net revenues 76,894 59,269
13
14 Operations expense 37,521 31,104
15 Signature loan bad debt 6,632 2,916
16 Administrative expense 9,829 7,968
17 Depreciation and amortization 3,119 2,401
18 Operating income 19,793 14,880
19
20 Interest income (137) (567)
21 Interest expense 75 83
22 Equity in net income of
unconsolidated affiliate (1,118) (820)
23 Loss on sale/disposal of assets 81 -
24 Income before income taxes 20,892 16,184
25 Income tax expense 7,876 5,988
26 Net income $13,016 $10,196
27
28 Net income per share, diluted $0.30 $0.23
29
30 Weighted average shares, diluted 43,228 43,445
EZCORP, Inc.
Highlights of Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
Six Months Ended March 31,
2008 2007
1 Revenues:
2 Merchandise sales $85,174 $77,386
3 Jewelry scrapping sales 31,663 21,626
4 Pawn service charges 44,693 34,518
5 Signature loan fees 63,694 47,108
6 Other 707 692
7 Total revenues 225,931 181,330
8 Cost of goods sold:
9 Cost of merchandise sales 51,416 46,158
10 Cost of jewelry scrapping sales 18,856 14,039
11 Total cost of goods sold 70,272 60,197
12 Net revenues 155,659 121,133
13
14 Operations expense 74,592 62,492
15 Signature loan bad debt 16,302 8,944
16 Administrative expense 19,734 15,495
17 Depreciation and amortization 5,946 4,699
18 Operating income 39,085 29,503
19
20 Interest income (194) (881)
21 Interest expense 156 147
22 Equity in net income of
unconsolidated affiliate (2,165) (1,465)
23 Gain on sale/disposal of assets 243 24
24 Income before income taxes 41,045 31,678
25 Income tax expense 15,474 11,721
26 Net income $25,571 $19,957
27
28 Net income per share, diluted $0.59 $0.46
29
30 Weighted average shares, diluted 43,241 43,347
EZCORP, Inc.
Highlights of Consolidated Balance Sheets (Unaudited)
(in thousands, except per share data and store counts)
As of March 31,
2008 2007
1 Assets:
2 Current assets:
3 Cash and cash equivalents $35,551 $61,605
4 Pawn loans 56,701 43,109
5 Payday loans, net 5,290 3,314
6 Pawn service charges receivable, net 8,983 6,986
7 Signature loan fees receivable, net 4,781 4,334
8 Inventory, net 35,999 28,649
9 Deferred tax asset 9,006 7,150
10 Prepaid expenses and other assets 7,281 5,373
11 Total current assets 163,592 160,520
12
13 Investment in unconsolidated affiliate 36,904 20,955
14 Property and equipment, net 38,413 30,967
15 Deferred tax asset, non-current 5,346 4,249
16 Goodwill 24,422 768
17 Other assets, net 5,350 2,952
18 Total assets $274,027 $220,411
19 Liabilities and stockholders' equity:
20 Current liabilities:
21 Accounts payable and other accrued
expenses $22,202 $18,594
22 Customer layaway deposits 2,456 2,168
23 Federal income taxes payable 2,363 1,104
24 Total current liabilities 27,021 21,866
25
26 Deferred gains and other long-term
liabilities 3,003 3,067
27 Total stockholders' equity 244,003 195,478
28 Total liabilities and stockholders'
equity $274,027 $220,411
29
30 Pawn loan balance per ending pawn store $177 $153
31 Inventory per ending pawn store $112 $102
32 Book value per share $5.89 $4.74
33 Tangible book value per share $5.20 $4.67
34 EZPAWN store count - end of period 320 282
35 EZMONEY signature loan store count -
end of period 462 369
36 Shares outstanding - end of period 41,398 41,248
EZCORP, Inc.
Operating Segment Results (Unaudited)
(in thousands, except store counts)
EZPAWN
United EZPAWN
States Mexico EZMONEY
Oper- Oper- Oper- Consoli-
Three months ended March 31, 2008: ations ations ations dated
1 Revenues:
2 Sales $59,747 $1,583 $- $61,330
3 Pawn service charges 20,720 1,065 - 21,785
4 Signature loan fees 672 - 29,494 30,166
5 Other 341 3 - 344
6 Total revenues 81,480 2,651 29,494 113,625
7
8 Cost of goods sold 35,784 947 - 36,731
9 Net revenues 45,696 1,704 29,494 76,894
10
11 Operating expenses:
12 Operations expense 23,521 889 13,111 37,521
13 Signature loan bad debt 167 - 6,465 6,632
14 Total direct expenses 23,688 889 19,576 44,153
15 Store operating income $22,008 $815 $9,918 $32,741
16
17 EZPAWN store count - end of
period 294 26 - 320
18 EZMONEY signature loan store
count - end of period 6 - 456 462
19
20 Three months ended March 31, 2007:
21 Revenues:
22 Sales $50,019 $13 $- $50,032
23 Pawn service charges 16,548 8 - 16,556
24 Signature loan fees 792 - 21,921 22,713
25 Other 342 - - 342
26 Total revenues 67,701 21 21,921 89,643
27
28 Cost of goods sold 30,367 7 - 30,374
29 Net revenues 37,334 14 21,921 59,269
30
31 Operating expenses:
32 Operations expense 21,501 58 9,545 31,104
33 Signature loan bad debt 148 - 2,768 2,916
34 Total direct expenses 21,649 58 12,313 34,020
35 Store operating income $15,685 $(44) $9,608 $25,249
36
37 EZPAWN store count - end of
period 280 2 - 282
38 EZMONEY signature loan store
count - end of period 6 - 363 369
EZCORP, Inc.
Operating Segment Results (Unaudited)
(in thousands, except store counts)
EZPAWN
United EZPAWN
States Mexico EZMONEY
Oper- Oper- Oper- Consoli-
Six months ended March 31, 2008: ations ations ations dated
1 Revenues:
2 Sales $113,948 $2,889 $- $116,837
3 Pawn service charges 42,710 1,983 - 44,693
4 Signature loan fees 1,481 - 62,213 63,694
5 Other 703 4 - 707
6 Total revenues 158,842 4,876 62,213 225,931
7
8 Cost of goods sold 68,552 1,720 - 70,272
9 Net revenues 90,290 3,156 62,213 155,659
10
11 Operating expenses:
12 Operations expense 47,029 1,721 25,842 74,592
13 Signature loan bad debt 539 - 15,763 16,302
14 Total direct expenses 47,568 1,721 41,605 90,894
15 Store operating income $42,722 $1,435 $20,608 $64,765
16
17 EZPAWN store count - end of
period 294 26 - 320
18 EZMONEY signature loan store
count - end of period 6 - 456 462
19
20 Six months ended March 31, 2007:
21 Revenues:
22 Sales $98,998 $14 $- $99,012
23 Pawn service charges 34,508 10 - 34,518
24 Signature loan fees 1,704 - 45,404 47,108
25 Other 692 - - 692
26 Total revenues 135,902 24 45,404 181,330
27
28 Cost of goods sold 60,188 9 - 60,197
29 Net revenues 75,714 15 45,404 121,133
30
31 Operating expenses:
32 Operations expense 43,166 120 19,206 62,492
33 Signature loan bad debt 484 - 8,460 8,944
34 Total direct expenses 43,650 120 27,666 71,436
35 Store operating income $32,064 $(105) $17,738 $49,697
36
37 EZPAWN store count - end of
period 280 2 - 282
38 EZMONEY signature loan store
count - end of period 6 - 363 369
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