|
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|
|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
74-2540145
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
|
2500 Bee Cave Road, Bldg One, Suite 200, Rollingwood, Texas
|
78746
|
(Address of principal executive offices)
|
(Zip Code)
|
|
|
|
Large accelerated filer
|
¨
|
Accelerated filer
|
x
|
Non-accelerated filer
|
¨
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(Do not check if a smaller reporting company)
|
|
|
|
Smaller reporting company
|
¨
|
|
|
Emerging growth company
|
¨
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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EZCORP, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
|
|||||||||||
|
June 30,
2017 |
|
June 30,
2016 |
|
September 30,
2016 |
||||||
|
|
|
|
|
|
||||||
|
(Unaudited)
|
|
|
||||||||
Assets:
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
113,729
|
|
|
$
|
29,380
|
|
|
$
|
65,737
|
|
Pawn loans
|
168,262
|
|
|
160,269
|
|
|
167,329
|
|
|||
Pawn service charges receivable, net
|
30,585
|
|
|
29,643
|
|
|
31,062
|
|
|||
Inventory, net
|
135,053
|
|
|
130,368
|
|
|
140,224
|
|
|||
Notes receivable, net
|
22,024
|
|
|
—
|
|
|
41,946
|
|
|||
Current assets held for sale
|
—
|
|
|
157,554
|
|
|
—
|
|
|||
Prepaid expenses and other current assets
|
31,993
|
|
|
26,577
|
|
|
35,845
|
|
|||
Total current assets
|
501,646
|
|
|
533,791
|
|
|
482,143
|
|
|||
Investment in unconsolidated affiliate
|
41,725
|
|
|
56,843
|
|
|
37,128
|
|
|||
Property and equipment, net
|
53,022
|
|
|
61,201
|
|
|
58,455
|
|
|||
Goodwill
|
254,469
|
|
|
254,273
|
|
|
253,976
|
|
|||
Intangible assets, net
|
32,551
|
|
|
30,569
|
|
|
30,681
|
|
|||
Non-current notes receivable, net
|
41,253
|
|
|
—
|
|
|
41,119
|
|
|||
Deferred tax asset, net
|
36,506
|
|
|
34,170
|
|
|
35,303
|
|
|||
Other assets, net
|
9,145
|
|
|
18,950
|
|
|
44,439
|
|
|||
Total assets
|
$
|
970,317
|
|
|
$
|
989,797
|
|
|
$
|
983,244
|
|
|
|
|
|
|
|
||||||
Liabilities, temporary equity and equity:
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Accounts payable, accrued expenses and other current liabilities
|
$
|
64,830
|
|
|
$
|
63,242
|
|
|
$
|
84,285
|
|
Current liabilities held for sale
|
—
|
|
|
130,261
|
|
|
—
|
|
|||
Customer layaway deposits
|
11,091
|
|
|
11,201
|
|
|
10,693
|
|
|||
Total current liabilities
|
75,921
|
|
|
204,704
|
|
|
94,978
|
|
|||
Long-term debt, net
|
260,414
|
|
|
211,421
|
|
|
283,611
|
|
|||
Other long-term liabilities
|
9,680
|
|
|
9,548
|
|
|
10,450
|
|
|||
Total liabilities
|
346,015
|
|
|
425,673
|
|
|
389,039
|
|
|||
Commitments and contingencies (Note 7)
|
|
|
|
|
|
|
|
|
|||
Temporary equity:
|
|
|
|
|
|
||||||
Redeemable noncontrolling interest
|
—
|
|
|
(2,378
|
)
|
|
—
|
|
|||
Total temporary equity
|
—
|
|
|
(2,378
|
)
|
|
—
|
|
|||
Stockholders’ equity:
|
|
|
|
|
|
||||||
Class A Non-voting Common Stock, par value $.01 per share; shares authorized: 100 million; issued and outstanding: 51,326,582 as of June 30, 2017; 51,019,332 as of June 30, 2016; and 51,129,144 as of September 30, 2016
|
513
|
|
|
510
|
|
|
511
|
|
|||
Class B Voting Common Stock, convertible, par value $.01 per share; shares authorized: 3 million; issued and outstanding: 2,970,171
|
30
|
|
|
30
|
|
|
30
|
|
|||
Additional paid-in capital
|
322,559
|
|
|
316,565
|
|
|
318,723
|
|
|||
Retained earnings
|
340,256
|
|
|
316,577
|
|
|
319,808
|
|
|||
Accumulated other comprehensive loss
|
(37,921
|
)
|
|
(66,974
|
)
|
|
(44,089
|
)
|
|||
EZCORP, Inc. stockholders’ equity
|
625,437
|
|
|
566,708
|
|
|
594,983
|
|
|||
Noncontrolling interest
|
(1,135
|
)
|
|
(206
|
)
|
|
(778
|
)
|
|||
Total equity
|
624,302
|
|
|
566,502
|
|
|
594,205
|
|
|||
Total liabilities, temporary equity and equity
|
$
|
970,317
|
|
|
$
|
989,797
|
|
|
$
|
983,244
|
|
EZCORP, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||||||||||
|
Three Months Ended June 30,
|
|
Nine Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(Unaudited)
|
||||||||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Merchandise sales
|
$
|
97,921
|
|
|
$
|
94,014
|
|
|
$
|
319,672
|
|
|
$
|
311,941
|
|
Jewelry scrapping sales
|
17,641
|
|
|
11,230
|
|
|
37,658
|
|
|
33,631
|
|
||||
Pawn service charges
|
65,878
|
|
|
62,473
|
|
|
201,983
|
|
|
193,197
|
|
||||
Other revenues
|
2,193
|
|
|
2,433
|
|
|
6,572
|
|
|
7,151
|
|
||||
Total revenues
|
183,633
|
|
|
170,150
|
|
|
565,885
|
|
|
545,920
|
|
||||
Merchandise cost of goods sold
|
62,615
|
|
|
60,140
|
|
|
204,840
|
|
|
194,731
|
|
||||
Jewelry scrapping cost of goods sold
|
15,010
|
|
|
9,110
|
|
|
32,195
|
|
|
28,271
|
|
||||
Other cost of revenues
|
453
|
|
|
506
|
|
|
1,433
|
|
|
1,549
|
|
||||
Net revenues
|
105,555
|
|
|
100,394
|
|
|
327,417
|
|
|
321,369
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Operations
|
74,246
|
|
|
73,172
|
|
|
226,352
|
|
|
221,446
|
|
||||
Administrative
|
14,095
|
|
|
14,481
|
|
|
41,305
|
|
|
50,085
|
|
||||
Depreciation and amortization
|
5,843
|
|
|
6,274
|
|
|
18,246
|
|
|
20,422
|
|
||||
Loss (gain) on sale or disposal of assets
|
17
|
|
|
(41
|
)
|
|
11
|
|
|
641
|
|
||||
Restructuring
|
—
|
|
|
—
|
|
|
—
|
|
|
1,910
|
|
||||
Total operating expenses
|
94,201
|
|
|
93,886
|
|
|
285,914
|
|
|
294,504
|
|
||||
Operating income
|
11,354
|
|
|
6,508
|
|
|
41,503
|
|
|
26,865
|
|
||||
Interest expense
|
5,654
|
|
|
3,936
|
|
|
16,847
|
|
|
12,014
|
|
||||
Interest income
|
(2,053
|
)
|
|
(50
|
)
|
|
(6,909
|
)
|
|
(66
|
)
|
||||
Equity in net income of unconsolidated affiliate
|
(1,047
|
)
|
|
(1,694
|
)
|
|
(3,768
|
)
|
|
(5,626
|
)
|
||||
Other (income) expense
|
(99
|
)
|
|
500
|
|
|
(294
|
)
|
|
815
|
|
||||
Income from continuing operations before income taxes
|
8,899
|
|
|
3,816
|
|
|
35,627
|
|
|
19,728
|
|
||||
Income tax expense
|
3,432
|
|
|
1,038
|
|
|
13,663
|
|
|
11,224
|
|
||||
Income from continuing operations, net of tax
|
5,467
|
|
|
2,778
|
|
|
21,964
|
|
|
8,504
|
|
||||
Loss from discontinued operations, net of tax
|
(265
|
)
|
|
(9,133
|
)
|
|
(1,868
|
)
|
|
(99,068
|
)
|
||||
Net income (loss)
|
5,202
|
|
|
(6,355
|
)
|
|
20,096
|
|
|
(90,564
|
)
|
||||
Net loss attributable to noncontrolling interest
|
(58
|
)
|
|
(666
|
)
|
|
(352
|
)
|
|
(6,589
|
)
|
||||
Net income (loss) attributable to EZCORP, Inc.
|
$
|
5,260
|
|
|
$
|
(5,689
|
)
|
|
$
|
20,448
|
|
|
$
|
(83,975
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share attributable to EZCORP, Inc. — continuing operations
|
$
|
0.10
|
|
|
$
|
0.05
|
|
|
$
|
0.41
|
|
|
$
|
0.16
|
|
Diluted earnings per share attributable to EZCORP, Inc. — continuing operations
|
$
|
0.10
|
|
|
$
|
0.05
|
|
|
$
|
0.41
|
|
|
$
|
0.16
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average basic shares outstanding
|
54,295
|
|
|
53,980
|
|
|
54,247
|
|
|
54,574
|
|
||||
Weighted-average diluted shares outstanding
|
54,367
|
|
|
54,192
|
|
|
54,310
|
|
|
54,690
|
|
EZCORP, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|||||||||||||||
|
Three Months Ended June 30,
|
|
Nine Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(Unaudited)
|
||||||||||||||
|
(in thousands)
|
||||||||||||||
Net income (loss)
|
$
|
5,202
|
|
|
$
|
(6,355
|
)
|
|
$
|
20,096
|
|
|
$
|
(90,564
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation gain (loss), net of income tax (expense) benefit for our investment in unconsolidated affiliate of ($820) and ($290) for the three and nine months ended June 30, 2017 respectively, and ($845) and $969 for the three and nine months ended June 30, 2016, respectively
|
4,608
|
|
|
(685
|
)
|
|
6,163
|
|
|
(12,181
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
||||
Other comprehensive income (loss), net of tax
|
4,608
|
|
|
(685
|
)
|
|
6,163
|
|
|
(12,159
|
)
|
||||
Comprehensive income (loss)
|
9,810
|
|
|
(7,040
|
)
|
|
26,259
|
|
|
(102,723
|
)
|
||||
Comprehensive loss attributable to noncontrolling interest
|
(73
|
)
|
|
(577
|
)
|
|
(357
|
)
|
|
(6,870
|
)
|
||||
Comprehensive income (loss) attributable to EZCORP, Inc.
|
$
|
9,883
|
|
|
$
|
(6,463
|
)
|
|
$
|
26,616
|
|
|
$
|
(95,853
|
)
|
EZCORP, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive Loss
|
|
EZCORP, Inc.
Stockholders’
Equity
|
|||||||||||||
|
Shares
|
|
Par Value
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
(Unaudited, except balances as of September 30, 2015)
|
|||||||||||||||||||||
|
(in thousands)
|
|||||||||||||||||||||
Balances as of September 30, 2015
|
53,696
|
|
|
$
|
537
|
|
|
$
|
310,038
|
|
|
$
|
400,552
|
|
|
$
|
(55,096
|
)
|
|
$
|
656,031
|
|
Stock compensation
|
—
|
|
|
—
|
|
|
7,012
|
|
|
—
|
|
|
—
|
|
|
7,012
|
|
|||||
Release of restricted stock
|
294
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Excess tax deficiency from stock compensation
|
—
|
|
|
—
|
|
|
(336
|
)
|
|
—
|
|
|
—
|
|
|
(336
|
)
|
|||||
Taxes paid related to net share settlement of equity awards
|
—
|
|
|
—
|
|
|
(149
|
)
|
|
—
|
|
|
—
|
|
|
(149
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
21
|
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,899
|
)
|
|
(11,899
|
)
|
|||||
Net loss attributable to EZCORP, Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
(83,975
|
)
|
|
—
|
|
|
(83,975
|
)
|
|||||
Balances as of June 30, 2016
|
53,990
|
|
|
$
|
540
|
|
|
$
|
316,565
|
|
|
$
|
316,577
|
|
|
$
|
(66,974
|
)
|
|
$
|
566,708
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive Loss
|
|
EZCORP, Inc.
Stockholders’
Equity
|
|||||||||||||
|
Shares
|
|
Par Value
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
(Unaudited, except balances as of September 30, 2016)
|
|||||||||||||||||||||
|
(in thousands)
|
|||||||||||||||||||||
Balances as of September 30, 2016
|
54,099
|
|
|
$
|
541
|
|
|
$
|
318,723
|
|
|
$
|
319,808
|
|
|
$
|
(44,089
|
)
|
|
$
|
594,983
|
|
Stock compensation
|
—
|
|
|
—
|
|
|
5,126
|
|
|
—
|
|
|
—
|
|
|
5,126
|
|
|||||
Release of restricted stock
|
198
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Taxes paid related to net share settlement of equity awards
|
—
|
|
|
—
|
|
|
(767
|
)
|
|
—
|
|
|
—
|
|
|
(767
|
)
|
|||||
Reclassification of Cash Convertible Notes Warrants to liabilities
|
—
|
|
|
—
|
|
|
(523
|
)
|
|
—
|
|
|
—
|
|
|
(523
|
)
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,168
|
|
|
6,168
|
|
|||||
Net income attributable to EZCORP, Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
20,448
|
|
|
—
|
|
|
20,448
|
|
|||||
Balances as of June 30, 2017
|
54,297
|
|
|
$
|
543
|
|
|
$
|
322,559
|
|
|
$
|
340,256
|
|
|
$
|
(37,921
|
)
|
|
$
|
625,437
|
|
EZCORP, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||
|
Nine Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
|
(Unaudited)
|
||||||
|
(in thousands)
|
||||||
Operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
20,096
|
|
|
$
|
(90,564
|
)
|
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
|
|
|
|
||||
Depreciation and amortization
|
18,246
|
|
|
21,432
|
|
||
Amortization of debt discount and deferred financing costs
|
8,595
|
|
|
8,864
|
|
||
Amortization of prepaid commissions
|
—
|
|
|
10,684
|
|
||
Accretion of notes receivable discount
|
(2,898
|
)
|
|
—
|
|
||
Consumer loan loss provision
|
1,434
|
|
|
24,157
|
|
||
Deferred income taxes
|
(871
|
)
|
|
(14,234
|
)
|
||
Impairment of goodwill
|
—
|
|
|
73,244
|
|
||
Other adjustments
|
(48
|
)
|
|
(2,002
|
)
|
||
Loss on sale or disposal of assets
|
11
|
|
|
641
|
|
||
Stock compensation
|
5,145
|
|
|
3,206
|
|
||
Income from investment in unconsolidated affiliate
|
(3,768
|
)
|
|
(5,626
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Service charges and fees receivable
|
604
|
|
|
8,363
|
|
||
Inventory
|
1,470
|
|
|
(1,349
|
)
|
||
Prepaid expenses, other current assets and other assets
|
1,261
|
|
|
(4,983
|
)
|
||
Accounts payable, accrued expenses and other liabilities
|
(29,464
|
)
|
|
(20,497
|
)
|
||
Customer layaway deposits
|
288
|
|
|
781
|
|
||
Income taxes receivable and payable, current, net of excess tax benefit from stock compensation
|
9,873
|
|
|
51,990
|
|
||
Payments of restructuring charges
|
—
|
|
|
(8,367
|
)
|
||
Dividends from unconsolidated affiliate
|
—
|
|
|
2,197
|
|
||
Net cash provided by operating activities
|
29,974
|
|
|
57,937
|
|
||
Investing activities:
|
|
|
|
||||
Loans made
|
(472,676
|
)
|
|
(497,255
|
)
|
||
Loans repaid
|
288,833
|
|
|
324,478
|
|
||
Recovery of pawn loan principal through sale of forfeited collateral
|
187,819
|
|
|
173,710
|
|
||
Additions to property and equipment
|
(9,340
|
)
|
|
(6,470
|
)
|
||
Acquisitions, net of cash acquired
|
—
|
|
|
(6,000
|
)
|
||
Principal collections on notes receivable
|
23,336
|
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
17,972
|
|
|
(11,537
|
)
|
||
Financing activities:
|
|
|
|
||||
Taxes paid related to net share settlement of equity awards
|
(767
|
)
|
|
—
|
|
||
Payout of deferred consideration
|
—
|
|
|
(14,875
|
)
|
||
Repurchase of redeemable common stock issued due to acquisitions
|
—
|
|
|
(11,750
|
)
|
||
Proceeds from settlement of forward currency contracts
|
—
|
|
|
3,557
|
|
||
Change in restricted cash
|
—
|
|
|
2,710
|
|
||
Proceeds from borrowings, net of issuance costs
|
—
|
|
|
16,442
|
|
||
Payments on borrowings
|
—
|
|
|
(63,994
|
)
|
||
Net cash used in financing activities
|
(767
|
)
|
|
(67,910
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
813
|
|
|
(6,506
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
47,992
|
|
|
(28,016
|
)
|
||
Cash and cash equivalents at beginning of period
|
65,737
|
|
|
59,124
|
|
||
Cash and cash equivalents at end of period
|
$
|
113,729
|
|
|
$
|
31,108
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
Pawn loans forfeited and transferred to inventory
|
$
|
182,682
|
|
|
$
|
179,394
|
|
Dividend reinvestment acquisition of additional ownership in unconsolidated affiliate
|
1,153
|
|
|
—
|
|
•
|
We early adopted ASU 2016-09, Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting during the quarter ended December 31, 2016. This ASU simplifies several aspects of the accounting for share-based payment transactions, including income tax consequences, calculation of the dilutive impact of awards, classification of awards as either equity or liabilities and classification on the statement of cash
|
•
|
We further adopted ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, ASU 2015-05, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement and ASU 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40) during the quarter ended December 31, 2016. The impacts of adoption for each ASU are as follows:
|
•
|
We early adopted ASU 2015-11 during the quarter ended December 31, 2016 on a prospective basis, and such adoption did not have a material impact on our consolidated financial position, results of operations or cash flows. We now measure our inventories at the lower of cost or net realizable value, where net realizable value is "estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation." Inventory was previously required to be measured at the lower of cost or market value, where the measurement of market value had several potential outcomes.
|
•
|
We adopted ASU 2015-05 during the quarter ended December 31, 2016 on a prospective basis for all arrangements entered into or materially modified after adoption of the ASU, and such adoption did not have a material impact on our consolidated financial position, results of operations or cash flows. We now consider whether cloud computing arrangements include a software license. If a cloud computing arrangement includes a software license, then we account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, we account for the arrangement as a service contract.
|
•
|
We early adopted ASU 2014-15 during the quarter ended December 31, 2016. Upon adoption of the ASU, management has the responsibility to evaluate whether there is substantial doubt about our ability to continue as a going concern for a period of one year after the date that the financial statements are issued (or available to be issued) or to provide related footnote disclosures.
|
•
|
In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments a consensus of the FASB Emerging Issues Task Force. This ASU clarifies what steps are required when assessing whether the economic characteristics and risks of call (put) options are clearly and closely related to the economic characteristics and risks of their debt hosts, which is one of the criteria for bifurcating an embedded derivative. Early adoption is permitted based upon guidance issued within the ASU and we plan to adopt the ASU in our fourth quarter of fiscal 2017. We do not anticipate that the adoption of ASU 2016-06 will have a material effect on our financial position, results of operations or cash flows.
|
•
|
In May 2017, the FASB issued ASU 2017-09, Compensation — Stock Compensation (Topic 718). This ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The provisions of this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted based upon guidance issued within the ASU. A reporting entity should apply the amendment to awards modified after the adoption date on a prospective basis. We do not anticipate that the adoption of ASU 2017-09 will have a material effect on our financial position, results of operations or cash flows.
|
•
|
In January 2017, the FASB issued ASU 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU eliminates Step 2 from the goodwill impairment test which previously required measurement of any goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Under the new standard, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, without exceeding the total amount of goodwill allocated to that reporting unit. The provisions of this ASU are effective for fiscal years beginning after December 15, 2019, and any interim goodwill impairment tests within those fiscal years. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. A reporting entity should apply the amendment on a prospective basis. We currently anticipate adoption of ASU 2017-04 in the fourth quarter of our fiscal 2017 with no anticipated material impact on our consolidated financial position, results of operations or cash flows.
|
•
|
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires companies to generally recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets. The provisions of this ASU are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted based upon guidance issued within the ASU. Although we are in the process of evaluating the impact of adopting ASU 2016-02 on our consolidated financial position, results of operations and cash flows, we anticipate a material impact on our consolidated financial position. Additionally, we are evaluating the disclosure requirements under this ASU and are identifying and preparing to implement changes to our accounting policies, practices and controls to support adoption of the ASU and are evaluating upgrades to our third party software solution concurrently with our adoption. We believe we are following an appropriate timeline to allow for proper recognition, presentation and disclosure upon adoption of the ASU which is effective for our fiscal 2020.
|
•
|
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606) to defer the effective date to December 15, 2017 for annual reporting periods beginning after that date, with early adoption permitted, but not before the original effective date of December 15, 2016. The core principle of ASU 2014-09, and the subsequently issued ASUs modifying or clarifying ASU 2014-09, is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, the guidance provides that an entity should apply the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. The new standard allows for two methods of adoption: (a) full retrospective adoption, meaning the standard is applied to all periods presented, or (b) modified retrospective adoption, meaning the cumulative effect of applying the new standard is recognized as an adjustment to the opening retained earnings balance.
|
|
Three Months Ended June 30,
|
|
Nine Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||
Net income from continuing operations attributable to EZCORP (A)
|
$
|
5,525
|
|
|
$
|
2,904
|
|
|
$
|
22,316
|
|
|
$
|
8,954
|
|
Loss from discontinued operations, net of tax (B)
|
(265
|
)
|
|
(8,593
|
)
|
|
(1,868
|
)
|
|
(92,929
|
)
|
||||
Net income (loss) attributable to EZCORP (C)
|
$
|
5,260
|
|
|
$
|
(5,689
|
)
|
|
$
|
20,448
|
|
|
$
|
(83,975
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average outstanding shares of common stock (D)
|
54,295
|
|
|
53,980
|
|
|
54,247
|
|
|
54,574
|
|
||||
Dilutive effect of restricted stock
|
72
|
|
|
212
|
|
|
63
|
|
|
116
|
|
||||
Weighted-average common stock and common stock equivalents (E)
|
54,367
|
|
|
54,192
|
|
|
54,310
|
|
|
54,690
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per share attributable to EZCORP:
|
|
|
|
|
|
|
|
||||||||
Continuing operations (A / D)
|
$
|
0.10
|
|
|
$
|
0.05
|
|
|
$
|
0.41
|
|
|
$
|
0.16
|
|
Discontinued operations (B / D)
|
—
|
|
|
(0.16
|
)
|
|
(0.03
|
)
|
|
(1.70
|
)
|
||||
Basic earnings (loss) per share (C / D)
|
$
|
0.10
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.38
|
|
|
$
|
(1.54
|
)
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) per share attributable to EZCORP:
|
|
|
|
|
|
|
|
||||||||
Continuing operations (A / E)
|
$
|
0.10
|
|
|
$
|
0.05
|
|
|
$
|
0.41
|
|
|
$
|
0.16
|
|
Discontinued operations (B / E)
|
—
|
|
|
(0.16
|
)
|
|
(0.03
|
)
|
|
(1.70
|
)
|
||||
Diluted earnings (loss) per share (C / E)
|
$
|
0.10
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.38
|
|
|
$
|
(1.54
|
)
|
|
|
|
|
|
|
|
|
||||||||
Potential common shares excluded from the calculation of diluted earnings (loss) per share above:
|
|
|
|
|
|
|
|
||||||||
Restricted stock*
|
2,418
|
|
|
2,109
|
|
|
2,435
|
|
|
1,259
|
|
||||
Warrants**
|
12,138
|
|
|
14,317
|
|
|
12,138
|
|
|
14,317
|
|
||||
Total potential common shares excluded
|
14,556
|
|
|
16,426
|
|
|
14,573
|
|
|
15,576
|
|
*
|
Includes antidilutive share-based awards as well as performance-based and market conditioned share-based awards that are contingently issuable, but for which the condition for issuance has not been met as of the end of the reporting period.
|
**
|
See
Note 5
for discussion of the terms and conditions of these potential common shares and
Note 10
for settlement of a portion of the Cash Convertible Notes Warrants subsequent to June 30, 2017.
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Current assets
|
$
|
158,235
|
|
|
$
|
176,105
|
|
Non-current assets
|
141,218
|
|
|
143,466
|
|
||
Total assets
|
$
|
299,453
|
|
|
$
|
319,571
|
|
|
|
|
|
||||
Current liabilities
|
$
|
70,468
|
|
|
$
|
68,857
|
|
Non-current liabilities
|
48,181
|
|
|
48,263
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Equity attributable to owners of the parent
|
$
|
180,803
|
|
|
$
|
202,450
|
|
Noncontrolling interest
|
1
|
|
|
1
|
|
||
Total liabilities and shareholders’ equity
|
$
|
299,453
|
|
|
$
|
319,571
|
|
*
|
Cash Converters International announced during its fiscal 2016 that certain of its United Kingdom operations would be discontinued, including a historical recasting of such operations as discontinued operations. We have recast the above information pertaining to the half year ended December 31, 2015 to reflect this historical recasting.
|
Financial Assets (Liabilities)
|
|
Balance Sheet Location
|
|
June 30, 2017
|
|
June 30, 2016
|
|
September 30, 2016
|
||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
(in thousands)
|
||||||||||
Guarantee asset — Level 3
|
|
Prepaid expenses and other current assets
|
|
$
|
298
|
|
|
$
|
—
|
|
|
$
|
1,209
|
|
Guarantee liability — Level 3
|
|
Accounts payable, accrued expenses and other current liabilities
|
|
(310
|
)
|
|
—
|
|
|
(1,258
|
)
|
|||
Cash Convertible Notes Hedges — Level 2
|
|
Other assets, net
|
|
5,900
|
|
|
16,200
|
|
|
37,692
|
|
|||
Cash Convertible Notes Embedded Derivative — Level 2
|
|
Long-term debt, net
|
|
(5,900
|
)
|
|
(16,200
|
)
|
|
(37,692
|
)
|
|||
Cash Convertible Notes Warrants — Level 3
|
|
Accounts payable, accrued expenses and other current liabilities
|
|
(523
|
)
|
|
—
|
|
|
—
|
|
|
|
Carrying Value
|
|
Estimated Fair Value
|
||||||||||||||||
|
|
June 30, 2017
|
|
June 30, 2017
|
|
Fair Value Measurement Using
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Notes receivable, net
|
|
$
|
63,277
|
|
|
$
|
65,570
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
65,570
|
|
Investment in unconsolidated affiliate
|
|
41,725
|
|
|
37,306
|
|
|
37,306
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash Convertible Notes
|
|
$
|
206,279
|
|
|
$
|
218,500
|
|
|
$
|
—
|
|
|
$
|
218,500
|
|
|
$
|
—
|
|
Term Loan Facility
|
|
48,235
|
|
|
48,159
|
|
|
—
|
|
|
—
|
|
|
48,159
|
|
|
|
Carrying Value
|
|
Estimated Fair Value
|
||||||||||||||||
|
|
June 30, 2016
|
|
June 30, 2016
|
|
Fair Value Measurement Using
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment in unconsolidated affiliate
|
|
$
|
56,843
|
|
|
$
|
49,149
|
|
|
$
|
49,149
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash Convertible Notes
|
|
$
|
195,221
|
|
|
$
|
190,762
|
|
|
$
|
—
|
|
|
$
|
190,762
|
|
|
$
|
—
|
|
|
|
Carrying Value
|
|
Estimated Fair Value
|
||||||||||||||||
|
|
September 30, 2016
|
|
September 30, 2016
|
|
Fair Value Measurement Using
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Notes receivable, net
|
|
$
|
83,065
|
|
|
$
|
83,065
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
83,065
|
|
Investment in unconsolidated affiliate
|
|
37,128
|
|
|
37,128
|
|
|
37,128
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash Convertible Notes
|
|
$
|
197,954
|
|
|
$
|
227,332
|
|
|
$
|
—
|
|
|
$
|
227,332
|
|
|
$
|
—
|
|
Term Loan Facility
|
|
47,965
|
|
|
48,688
|
|
|
—
|
|
|
—
|
|
|
48,688
|
|
|
|
|
|
June 30, 2017
|
|
September 30, 2016
|
||||||||||||
Instrument
|
|
Balance Sheet Location
|
|
Asset (Liability) Recorded in Consolidated Balance Sheet
|
|
Maximum Exposure to Loss
|
|
Asset (Liability) Recorded in Consolidated Balance Sheet
|
|
Maximum Exposure to Loss
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
||||||||||||||
Notes receivable
|
|
Notes receivable, net (including discount of $3.8 million and $6.7 million as of June 30, 2017 and September 30, 2016, respectively)
|
|
$
|
63,277
|
|
|
$
|
63,277
|
|
|
$
|
83,065
|
|
|
$
|
83,065
|
|
Guarantee asset
|
|
Prepaid expenses and other current assets
|
|
298
|
|
|
—
|
|
|
1,209
|
|
|
—
|
|
||||
Guarantee liability*
|
|
Accounts payable, accrued expenses and other current liabilities
|
|
(310
|
)
|
|
—
|
|
|
(1,258
|
)
|
|
—
|
|
*
|
Maximum exposure to loss under the guarantee liability was
$6.2 million
and
$25.3 million
as of
June 30, 2017
and
September 30, 2016
, respectively. However such amount is included within the maximum exposure to loss for the notes receivable above, as the guarantee liability is a guarantee by us of Grupo Finmart’s repayment of our notes receivable owed by Grupo Finmart. See discussion of repayment subsequent to June 30, 2017 in
Note 10
.
|
|
June 30, 2017
|
|
June 30, 2016
|
|
September 30, 2016
|
||||||||||||||||||||||||||||||
|
Gross Amount
|
|
Debt Discount and Issuance Costs
|
|
Carrying Amount
|
|
Gross Amount
|
|
Debt Discount and Issuance Costs
|
|
Carrying Amount
|
|
Gross Amount
|
|
Debt Discount and Issuance Costs
|
|
Carrying Amount
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||||||
2.125% Cash convertible senior notes due 2019
|
$
|
230,000
|
|
|
$
|
(23,721
|
)
|
|
$
|
206,279
|
|
|
$
|
230,000
|
|
|
$
|
(34,779
|
)
|
|
$
|
195,221
|
|
|
$
|
230,000
|
|
|
$
|
(32,046
|
)
|
|
$
|
197,954
|
|
Cash convertible senior notes due 2019 embedded derivative
|
5,900
|
|
|
—
|
|
|
5,900
|
|
|
16,200
|
|
|
—
|
|
|
16,200
|
|
|
37,692
|
|
|
—
|
|
|
37,692
|
|
|||||||||
Term loan facility
|
50,000
|
|
|
(1,765
|
)
|
|
48,235
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,000
|
|
|
(2,035
|
)
|
|
47,965
|
|
|||||||||
|
$
|
285,900
|
|
|
$
|
(25,486
|
)
|
|
$
|
260,414
|
|
|
$
|
246,200
|
|
|
$
|
(34,779
|
)
|
|
$
|
211,421
|
|
|
$
|
317,692
|
|
|
$
|
(34,081
|
)
|
|
$
|
283,611
|
|
|
Principal Payment Schedule
|
||||||||||||||||||
|
Total
|
|
Less Than 1 Year
|
|
1 - 3 Years
|
|
3 - 5 Years
|
|
More Than 5 Years
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
2.125% Cash convertible senior notes due 2019 (a) (b)
|
$
|
230,000
|
|
|
$
|
—
|
|
|
$
|
230,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Term loan facility (b)
|
50,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,000
|
|
|||||
|
$
|
280,000
|
|
|
$
|
—
|
|
|
$
|
230,000
|
|
|
$
|
—
|
|
|
$
|
50,000
|
|
(a)
|
Excludes the potential impact of the embedded derivative.
|
(b)
|
See discussion of repayments subsequent to June 30, 2017 in
Note 10
.
|
•
|
Claims against the current and former Board members for breach of fiduciary duties and waste of corporate assets in connection with the Board’s decision to enter into advisory services agreements with Madison Park from October 2004 to June 2014 (Counts I and II, respectively);
|
•
|
Claims against Mr. Cohen and MS Pawn Limited Partnership for aiding and abetting the breaches of fiduciary duties relating to the advisory services agreements with Madison Park (Count III); and
|
•
|
Claims against Mr. Cohen and Madison Park for unjust enrichment for payments under the advisory services agreements (Count IV).
|
|
Three Months Ended June 30, 2017
|
||||||||||||||||||||||
|
U.S. Pawn
|
|
Mexico Pawn
|
|
Other
International
|
|
Total Segments
|
|
Corporate Items
|
|
Consolidated
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Merchandise sales
|
$
|
82,714
|
|
|
$
|
15,207
|
|
|
$
|
—
|
|
|
$
|
97,921
|
|
|
$
|
—
|
|
|
$
|
97,921
|
|
Jewelry scrapping sales
|
17,257
|
|
|
384
|
|
|
—
|
|
|
17,641
|
|
|
—
|
|
|
17,641
|
|
||||||
Pawn service charges
|
56,774
|
|
|
9,104
|
|
|
—
|
|
|
65,878
|
|
|
—
|
|
|
65,878
|
|
||||||
Other revenues
|
50
|
|
|
179
|
|
|
1,964
|
|
|
2,193
|
|
|
—
|
|
|
2,193
|
|
||||||
Total revenues
|
156,795
|
|
|
24,874
|
|
|
1,964
|
|
|
183,633
|
|
|
—
|
|
|
183,633
|
|
||||||
Merchandise cost of goods sold
|
52,488
|
|
|
10,127
|
|
|
—
|
|
|
62,615
|
|
|
—
|
|
|
62,615
|
|
||||||
Jewelry scrapping cost of goods sold
|
14,674
|
|
|
336
|
|
|
—
|
|
|
15,010
|
|
|
—
|
|
|
15,010
|
|
||||||
Other cost of revenues
|
—
|
|
|
—
|
|
|
453
|
|
|
453
|
|
|
—
|
|
|
453
|
|
||||||
Net revenues
|
89,633
|
|
|
14,411
|
|
|
1,511
|
|
|
105,555
|
|
|
—
|
|
|
105,555
|
|
||||||
Segment and corporate expenses (income):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operations
|
63,593
|
|
|
8,898
|
|
|
1,755
|
|
|
74,246
|
|
|
—
|
|
|
74,246
|
|
||||||
Administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,095
|
|
|
14,095
|
|
||||||
Depreciation and amortization
|
2,210
|
|
|
619
|
|
|
44
|
|
|
2,873
|
|
|
2,970
|
|
|
5,843
|
|
||||||
Loss (gain) on sale or disposal of assets
|
20
|
|
|
(3
|
)
|
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
||||||
Interest expense
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
5,652
|
|
|
5,654
|
|
||||||
Interest income
|
—
|
|
|
(480
|
)
|
|
—
|
|
|
(480
|
)
|
|
(1,573
|
)
|
|
(2,053
|
)
|
||||||
Equity in net income of unconsolidated affiliate
|
—
|
|
|
—
|
|
|
(1,047
|
)
|
|
(1,047
|
)
|
|
—
|
|
|
(1,047
|
)
|
||||||
Other income
|
(5
|
)
|
|
(24
|
)
|
|
(68
|
)
|
|
(97
|
)
|
|
(2
|
)
|
|
(99
|
)
|
||||||
Segment contribution
|
$
|
23,815
|
|
|
$
|
5,399
|
|
|
$
|
827
|
|
|
$
|
30,041
|
|
|
|
|
|
||||
Income from continuing operations before income taxes
|
|
|
|
|
|
|
$
|
30,041
|
|
|
$
|
(21,142
|
)
|
|
$
|
8,899
|
|
|
Three Months Ended June 30, 2016
|
||||||||||||||||||||||
|
U.S. Pawn
|
|
Mexico Pawn
|
|
Other
International
|
|
Total Segments
|
|
Corporate Items
|
|
Consolidated
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Merchandise sales
|
$
|
79,826
|
|
|
$
|
14,187
|
|
|
$
|
1
|
|
|
$
|
94,014
|
|
|
$
|
—
|
|
|
$
|
94,014
|
|
Jewelry scrapping sales
|
10,918
|
|
|
312
|
|
|
—
|
|
|
11,230
|
|
|
—
|
|
|
11,230
|
|
||||||
Pawn service charges
|
54,395
|
|
|
8,078
|
|
|
—
|
|
|
62,473
|
|
|
—
|
|
|
62,473
|
|
||||||
Other revenues
|
39
|
|
|
157
|
|
|
2,237
|
|
|
2,433
|
|
|
—
|
|
|
2,433
|
|
||||||
Total revenues
|
145,178
|
|
|
22,734
|
|
|
2,238
|
|
|
170,150
|
|
|
—
|
|
|
170,150
|
|
||||||
Merchandise cost of goods sold
|
50,586
|
|
|
9,554
|
|
|
—
|
|
|
60,140
|
|
|
—
|
|
|
60,140
|
|
||||||
Jewelry scrapping cost of goods sold
|
8,845
|
|
|
265
|
|
|
—
|
|
|
9,110
|
|
|
—
|
|
|
9,110
|
|
||||||
Other cost of revenues
|
—
|
|
|
—
|
|
|
506
|
|
|
506
|
|
|
—
|
|
|
506
|
|
||||||
Net revenues
|
85,747
|
|
|
12,915
|
|
|
1,732
|
|
|
100,394
|
|
|
—
|
|
|
100,394
|
|
||||||
Segment and corporate expenses (income):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operations
|
62,733
|
|
|
8,744
|
|
|
1,695
|
|
|
73,172
|
|
|
—
|
|
|
73,172
|
|
||||||
Administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,481
|
|
|
14,481
|
|
||||||
Depreciation and amortization
|
2,888
|
|
|
720
|
|
|
56
|
|
|
3,664
|
|
|
2,610
|
|
|
6,274
|
|
||||||
Loss on sale or disposal of assets
|
(51
|
)
|
|
(13
|
)
|
|
—
|
|
|
(64
|
)
|
|
23
|
|
|
(41
|
)
|
||||||
Interest expense
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
|
3,911
|
|
|
3,936
|
|
||||||
Interest income
|
(1
|
)
|
|
(23
|
)
|
|
—
|
|
|
(24
|
)
|
|
(26
|
)
|
|
(50
|
)
|
||||||
Equity in net income of unconsolidated affiliate
|
—
|
|
|
—
|
|
|
(1,694
|
)
|
|
(1,694
|
)
|
|
—
|
|
|
(1,694
|
)
|
||||||
Other expense (income)
|
—
|
|
|
759
|
|
|
—
|
|
|
759
|
|
|
(259
|
)
|
|
500
|
|
||||||
Segment contribution
|
$
|
20,178
|
|
|
$
|
2,703
|
|
|
$
|
1,675
|
|
|
$
|
24,556
|
|
|
|
|
|
||||
Income from continuing operations before income taxes
|
|
|
|
|
|
|
$
|
24,556
|
|
|
$
|
(20,740
|
)
|
|
$
|
3,816
|
|
|
Nine Months Ended June 30, 2017
|
||||||||||||||||||||||
|
U.S. Pawn
|
|
Mexico Pawn
|
|
Other
International
|
|
Total Segments
|
|
Corporate Items
|
|
Consolidated
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Merchandise sales
|
$
|
273,125
|
|
|
$
|
46,547
|
|
|
$
|
—
|
|
|
$
|
319,672
|
|
|
$
|
—
|
|
|
$
|
319,672
|
|
Jewelry scrapping sales
|
35,158
|
|
|
2,500
|
|
|
—
|
|
|
37,658
|
|
|
—
|
|
|
37,658
|
|
||||||
Pawn service charges
|
177,480
|
|
|
24,503
|
|
|
—
|
|
|
201,983
|
|
|
—
|
|
|
201,983
|
|
||||||
Other revenues
|
157
|
|
|
457
|
|
|
5,958
|
|
|
6,572
|
|
|
—
|
|
|
6,572
|
|
||||||
Total revenues
|
485,920
|
|
|
74,007
|
|
|
5,958
|
|
|
565,885
|
|
|
—
|
|
|
565,885
|
|
||||||
Merchandise cost of goods sold
|
173,235
|
|
|
31,605
|
|
|
—
|
|
|
204,840
|
|
|
—
|
|
|
204,840
|
|
||||||
Jewelry scrapping cost of goods sold
|
30,114
|
|
|
2,081
|
|
|
—
|
|
|
32,195
|
|
|
—
|
|
|
32,195
|
|
||||||
Other cost of revenues
|
—
|
|
|
—
|
|
|
1,433
|
|
|
1,433
|
|
|
—
|
|
|
1,433
|
|
||||||
Net revenues
|
282,571
|
|
|
40,321
|
|
|
4,525
|
|
|
327,417
|
|
|
—
|
|
|
327,417
|
|
||||||
Segment and corporate expenses (income):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operations
|
194,499
|
|
|
26,439
|
|
|
5,414
|
|
|
226,352
|
|
|
—
|
|
|
226,352
|
|
||||||
Administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41,305
|
|
|
41,305
|
|
||||||
Depreciation and amortization
|
7,487
|
|
|
1,910
|
|
|
144
|
|
|
9,541
|
|
|
8,705
|
|
|
18,246
|
|
||||||
Loss (gain) on sale or disposal of assets
|
(54
|
)
|
|
65
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
||||||
Interest expense
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|
16,840
|
|
|
16,847
|
|
||||||
Interest income
|
—
|
|
|
(889
|
)
|
|
—
|
|
|
(889
|
)
|
|
(6,020
|
)
|
|
(6,909
|
)
|
||||||
Equity in net income of unconsolidated affiliate
|
—
|
|
|
—
|
|
|
(3,768
|
)
|
|
(3,768
|
)
|
|
—
|
|
|
(3,768
|
)
|
||||||
Other income
|
(14
|
)
|
|
(61
|
)
|
|
(28
|
)
|
|
(103
|
)
|
|
(191
|
)
|
|
(294
|
)
|
||||||
Segment contribution
|
$
|
80,653
|
|
|
$
|
12,850
|
|
|
$
|
2,763
|
|
|
$
|
96,266
|
|
|
|
|
|
||||
Income from continuing operations before income taxes
|
|
|
|
|
|
|
$
|
96,266
|
|
|
$
|
(60,639
|
)
|
|
$
|
35,627
|
|
|
Nine Months Ended June 30, 2016
|
||||||||||||||||||||||
|
U.S. Pawn
|
|
Mexico Pawn
|
|
Other
International
|
|
Total Segments
|
|
Corporate Items
|
|
Consolidated
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Merchandise sales
|
$
|
266,560
|
|
|
$
|
45,376
|
|
|
$
|
5
|
|
|
$
|
311,941
|
|
|
$
|
—
|
|
|
$
|
311,941
|
|
Jewelry scrapping sales
|
32,117
|
|
|
1,493
|
|
|
21
|
|
|
33,631
|
|
|
—
|
|
|
33,631
|
|
||||||
Pawn service charges
|
169,630
|
|
|
23,567
|
|
|
—
|
|
|
193,197
|
|
|
—
|
|
|
193,197
|
|
||||||
Other revenues
|
281
|
|
|
231
|
|
|
6,639
|
|
|
7,151
|
|
|
—
|
|
|
7,151
|
|
||||||
Total revenues
|
468,588
|
|
|
70,667
|
|
|
6,665
|
|
|
545,920
|
|
|
—
|
|
|
545,920
|
|
||||||
Merchandise cost of goods sold
|
164,288
|
|
|
30,442
|
|
|
1
|
|
|
194,731
|
|
|
—
|
|
|
194,731
|
|
||||||
Jewelry scrapping cost of goods sold
|
27,033
|
|
|
1,222
|
|
|
16
|
|
|
28,271
|
|
|
—
|
|
|
28,271
|
|
||||||
Other cost of revenues
|
—
|
|
|
—
|
|
|
1,549
|
|
|
1,549
|
|
|
—
|
|
|
1,549
|
|
||||||
Net revenues
|
277,267
|
|
|
39,003
|
|
|
5,099
|
|
|
321,369
|
|
|
—
|
|
|
321,369
|
|
||||||
Segment and corporate expenses (income):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operations
|
187,518
|
|
|
28,961
|
|
|
4,967
|
|
|
221,446
|
|
|
—
|
|
|
221,446
|
|
||||||
Administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,085
|
|
|
50,085
|
|
||||||
Depreciation and amortization
|
9,489
|
|
|
2,285
|
|
|
163
|
|
|
11,937
|
|
|
8,485
|
|
|
20,422
|
|
||||||
Loss on sale or disposal of assets
|
502
|
|
|
116
|
|
|
—
|
|
|
618
|
|
|
23
|
|
|
641
|
|
||||||
Restructuring
|
982
|
|
|
543
|
|
|
202
|
|
|
1,727
|
|
|
183
|
|
|
1,910
|
|
||||||
Interest expense
|
125
|
|
|
103
|
|
|
—
|
|
|
228
|
|
|
11,786
|
|
|
12,014
|
|
||||||
Interest income
|
(2
|
)
|
|
(23
|
)
|
|
—
|
|
|
(25
|
)
|
|
(41
|
)
|
|
(66
|
)
|
||||||
Equity in net income of unconsolidated affiliate
|
—
|
|
|
—
|
|
|
(5,626
|
)
|
|
(5,626
|
)
|
|
—
|
|
|
(5,626
|
)
|
||||||
Other expense
|
—
|
|
|
808
|
|
|
3
|
|
|
811
|
|
|
4
|
|
|
815
|
|
||||||
Segment contribution
|
$
|
78,653
|
|
|
$
|
6,210
|
|
|
$
|
5,390
|
|
|
$
|
90,253
|
|
|
|
|
|
||||
Income from continuing operations before income taxes
|
|
|
|
|
|
|
$
|
90,253
|
|
|
$
|
(70,525
|
)
|
|
$
|
19,728
|
|
|
June 30, 2017
|
|
June 30, 2016
|
|
September 30, 2016
|
||||||
|
|
|
|
|
|
||||||
|
(in thousands)
|
||||||||||
Gross pawn service charges receivable
|
$
|
41,533
|
|
|
$
|
39,688
|
|
|
$
|
41,458
|
|
Allowance for uncollectible pawn service charges receivable
|
(10,948
|
)
|
|
(10,045
|
)
|
|
(10,396
|
)
|
|||
Pawn service charges receivable, net
|
$
|
30,585
|
|
|
$
|
29,643
|
|
|
$
|
31,062
|
|
|
|
|
|
|
|
||||||
Gross inventory
|
$
|
141,510
|
|
|
$
|
135,807
|
|
|
$
|
146,367
|
|
Inventory reserves
|
(6,457
|
)
|
|
(5,439
|
)
|
|
(6,143
|
)
|
|||
Inventory, net
|
$
|
135,053
|
|
|
$
|
130,368
|
|
|
$
|
140,224
|
|
|
|
|
|
|
|
||||||
Property and equipment, gross
|
$
|
215,823
|
|
|
$
|
210,005
|
|
|
$
|
210,309
|
|
Accumulated depreciation
|
(162,801
|
)
|
|
(148,804
|
)
|
|
(151,854
|
)
|
|||
Property and equipment, net
|
$
|
53,022
|
|
|
$
|
61,201
|
|
|
$
|
58,455
|
|
|
Three Months Ended June 30, 2016
|
|
Nine Months Ended June 30, 2016
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Revenues
|
$
|
11,761
|
|
|
$
|
36,345
|
|
Consumer loan bad debt
|
(6,201
|
)
|
|
(26,444
|
)
|
||
Operations expense
|
(9,489
|
)
|
|
(100,347
|
)
|
||
Interest expense, net
|
(3,943
|
)
|
|
(13,255
|
)
|
||
Depreciation, amortization and other expenses
|
(4,597
|
)
|
|
(6,234
|
)
|
||
Loss from discontinued operations before income taxes of Grupo Finmart
|
(12,469
|
)
|
|
(109,935
|
)
|
||
Income tax benefit
|
2,746
|
|
|
11,609
|
|
||
Income (loss) from discontinued operations, net of tax of operations discontinued prior to the adoption of ASU 2014-08*
|
590
|
|
|
(742
|
)
|
||
Loss from discontinued operations, net of tax
|
$
|
(9,133
|
)
|
|
$
|
(99,068
|
)
|
|
|
|
|
||||
Loss from discontinued operations, net of tax of Grupo Finmart
|
$
|
(9,723
|
)
|
|
$
|
(98,326
|
)
|
Loss from discontinued operations, net of tax of Grupo Finmart attributable to noncontrolling interest
|
540
|
|
|
6,140
|
|
||
Loss from discontinued operations, net of tax of Grupo Finmart attributable to EZCORP, Inc.
|
$
|
(9,183
|
)
|
|
$
|
(92,186
|
)
|
*
|
Includes revenues of
$2.1 million
for the three and nine months ended
June 30, 2016
.
|
Cash and cash equivalents
|
$
|
1,728
|
|
Consumer loans and non-current consumer loans, net
|
71,409
|
|
|
Consumer loan fees and interest receivable, net
|
11,390
|
|
|
Goodwill, intangible assets and property and equipment, net
|
10,285
|
|
|
Prepaid expenses, other current assets, deferred tax assets and other assets, net
|
62,742
|
|
|
Total assets classified as held for sale
|
$
|
157,554
|
|
|
|
||
Current maturities of long-term debt
|
$
|
80,248
|
|
Accounts payable, accrued expenses and other current liabilities
|
13,732
|
|
|
Long-term debt, less current maturities, net and other long-term liabilities
|
36,281
|
|
|
Total liabilities classified as held for sale
|
$
|
130,261
|
|
•
|
Market Leading Customer Satisfaction;
|
•
|
Exceptional Staff Engagement;
|
•
|
Attractive Shareholder Returns; and
|
•
|
Most Efficient Provider of Cash.
|
|
Three Months Ended June 30, 2017
|
||||||||||
|
Company-owned Stores
|
||||||||||
|
U.S. Pawn
|
|
Mexico Pawn
|
|
Other International
|
|
Consolidated
|
||||
|
|
|
|
|
|
|
|
||||
As of March 31, 2017
|
517
|
|
|
240
|
|
|
27
|
|
|
784
|
|
New locations opened
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
Locations sold, combined or closed
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
As of June 30, 2017
|
515
|
|
|
244
|
|
|
27
|
|
|
786
|
|
|
Three Months Ended June 30, 2016
|
||||||||||
|
Company-owned Stores
|
||||||||||
|
U.S. Pawn
|
|
Mexico Pawn
|
|
Other International
|
|
Consolidated
|
||||
|
|
|
|
|
|
|
|
||||
As of March 31, 2016
|
522
|
|
|
237
|
|
|
27
|
|
|
786
|
|
New locations opened
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
As of June 30, 2016
|
522
|
|
|
238
|
|
|
27
|
|
|
787
|
|
|
Nine Months Ended June 30, 2017
|
||||||||||
|
Company-owned Stores
|
||||||||||
|
U.S. Pawn
|
|
Mexico Pawn
|
|
Other International
|
|
Consolidated
|
||||
|
|
|
|
|
|
|
|
||||
As of September 30, 2016
|
520
|
|
|
239
|
|
|
27
|
|
|
786
|
|
New locations opened
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
Locations sold, combined or closed
|
(5
|
)
|
|
(1
|
)
|
|
—
|
|
|
(6
|
)
|
As of June 30, 2017
|
515
|
|
|
244
|
|
|
27
|
|
|
786
|
|
|
Nine Months Ended June 30, 2016
|
|||||||||||||
|
Company-owned Stores
|
|
|
|||||||||||
|
U.S. Pawn
|
|
Mexico Pawn
|
|
Other International
|
|
Consolidated
|
|
Franchises
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||
As of September 30, 2015
|
522
|
|
|
237
|
|
*
|
27
|
|
|
786
|
|
|
1
|
|
New locations opened
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
Locations acquired
|
6
|
|
|
1
|
|
|
—
|
|
|
7
|
|
|
—
|
|
Locations sold, combined or closed
|
(6
|
)
|
|
(1
|
)
|
|
—
|
|
|
(7
|
)
|
|
(1
|
)
|
As of June 30, 2016
|
522
|
|
|
238
|
|
|
27
|
|
|
787
|
|
|
—
|
|
*
|
Includes five buy/sell stores which were converted to Mexico Pawn stores during the three months ended March 31, 2016.
|
|
Three Months Ended June 30,
|
|
Change
|
||||||
|
2017
|
|
2016
|
|
|||||
|
|
|
|
|
|
||||
|
(in thousands)
|
|
|
||||||
Net revenues:
|
|
|
|
|
|
||||
Pawn service charges
|
$
|
56,774
|
|
|
$
|
54,395
|
|
|
4%
|
|
|
|
|
|
|
||||
Merchandise sales
|
82,714
|
|
|
79,826
|
|
|
4%
|
||
Merchandise sales gross profit
|
30,226
|
|
|
29,240
|
|
|
3%
|
||
Gross margin on merchandise sales
|
37
|
%
|
|
37
|
%
|
|
—
|
||
|
|
|
|
|
|
||||
Jewelry scrapping sales
|
17,257
|
|
|
10,918
|
|
|
58%
|
||
Jewelry scrapping sales gross profit
|
2,583
|
|
|
2,073
|
|
|
25%
|
||
Gross margin on jewelry scrapping sales
|
15
|
%
|
|
19
|
%
|
|
(400)bps
|
||
|
|
|
|
|
|
||||
Other revenues
|
50
|
|
|
39
|
|
|
28%
|
||
Net revenues
|
89,633
|
|
|
85,747
|
|
|
5%
|
||
|
|
|
|
|
|
||||
Segment operating expenses:
|
|
|
|
|
|
||||
Operations
|
63,593
|
|
|
62,733
|
|
|
1%
|
||
Depreciation and amortization
|
2,210
|
|
|
2,888
|
|
|
(23)%
|
||
Segment operating contribution
|
23,830
|
|
|
20,126
|
|
|
18%
|
||
|
|
|
|
|
|
||||
Other segment expenses (income)
|
15
|
|
|
(52
|
)
|
|
*
|
||
Segment contribution
|
$
|
23,815
|
|
|
$
|
20,178
|
|
|
18%
|
|
|
|
|
|
|
||||
Other data:
|
|
|
|
|
|
||||
Net earning assets — continuing operations (a)
|
$
|
264,042
|
|
|
$
|
257,396
|
|
|
3%
|
Inventory turnover — general merchandise (b)
|
2.3
|
|
|
2.5
|
|
|
(8)%
|
||
Inventory turnover — jewelry (b)
|
1.1
|
|
|
1.1
|
|
|
—%
|
||
Average monthly ending pawn loan balance per store (c)
|
$
|
273
|
|
|
$
|
262
|
|
|
4%
|
Monthly average yield on pawn loans outstanding
|
14
|
%
|
|
14
|
%
|
|
—
|
||
Pawn loan redemption rate (d)
|
85
|
%
|
|
85
|
%
|
|
—
|
*
|
Represents an increase or decrease that is not meaningful.
|
(a)
|
Balance includes pawn loans and inventory.
|
(b)
|
Calculation of inventory turnover excludes the effects of scrapping.
|
(c)
|
Balance is calculated based upon the average of the monthly ending balance averages during the applicable period.
|
(d)
|
Our pawn loan redemption rate represents the percentage of loans made that are repaid, renewed or extended at a point in time as opposed to the life of the loan.
|
|
Change in Net Revenue
|
||||||||||
|
Pawn Service Charges
|
|
Merchandise Sales Gross Profit
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
|
(in millions)
|
||||||||||
Same stores
|
$
|
2.6
|
|
|
$
|
1.2
|
|
|
$
|
3.8
|
|
New stores and other
|
(0.2
|
)
|
|
(0.2
|
)
|
|
(0.4
|
)
|
|||
Total
|
$
|
2.4
|
|
|
$
|
1.0
|
|
|
$
|
3.4
|
|
Change in jewelry scrapping sales gross profit and other revenues
|
|
|
|
|
0.5
|
|
|||||
Total change in net revenue
|
|
|
|
|
$
|
3.9
|
|
|
Three Months Ended June 30,
|
||||||||||||||
|
2017 (GAAP)
|
|
2016 (GAAP)
|
|
Change (GAAP)
|
|
2017 (Constant Currency)
|
|
Change (Constant Currency)
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
(in USD thousands)
|
|
|
|
(in USD thousands)
|
|
|
||||||||
Net revenues:
|
|
|
|
|
|
|
|
|
|
||||||
Pawn service charges
|
$
|
9,104
|
|
|
$
|
8,078
|
|
|
13%
|
|
$
|
9,363
|
|
|
16%
|
|
|
|
|
|
|
|
|
|
|
||||||
Merchandise sales
|
15,207
|
|
|
14,187
|
|
|
7%
|
|
15,627
|
|
|
10%
|
|||
Merchandise sales gross profit
|
5,080
|
|
|
4,633
|
|
|
10%
|
|
5,220
|
|
|
13%
|
|||
Gross margin on merchandise sales
|
33
|
%
|
|
33
|
%
|
|
—
|
|
33
|
%
|
|
—
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
Jewelry scrapping sales
|
384
|
|
|
312
|
|
|
23%
|
|
397
|
|
|
27%
|
|||
Jewelry scrapping sales gross profit
|
48
|
|
|
47
|
|
|
2%
|
|
50
|
|
|
6%
|
|||
Gross margin on jewelry scrapping sales
|
13
|
%
|
|
15
|
%
|
|
(200)bps
|
|
13
|
%
|
|
(200)bps
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
Other revenues
|
179
|
|
|
157
|
|
|
14%
|
|
181
|
|
|
15%
|
|||
Net revenues
|
14,411
|
|
|
12,915
|
|
|
12%
|
|
14,814
|
|
|
15%
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
Segment operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||
Operations
|
8,898
|
|
|
8,744
|
|
|
2%
|
|
9,152
|
|
|
5%
|
|||
Depreciation and amortization
|
619
|
|
|
720
|
|
|
(14)%
|
|
638
|
|
|
(11)%
|
|||
Segment operating contribution
|
4,894
|
|
|
3,451
|
|
|
42%
|
|
5,024
|
|
|
46%
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
Other segment (income) expenses (a)
|
(505
|
)
|
|
748
|
|
|
*
|
|
(499
|
)
|
|
*
|
|||
Segment contribution
|
$
|
5,399
|
|
|
$
|
2,703
|
|
|
100%
|
|
$
|
5,523
|
|
|
104%
|
|
|
|
|
|
|
|
|
|
|
||||||
Other data:
|
|
|
|
|
|
|
|
|
|
||||||
Net earning assets — continuing operations (b)
|
$
|
39,246
|
|
|
$
|
33,214
|
|
|
18%
|
|
$
|
38,131
|
|
|
15%
|
Inventory turnover (c)
|
2.3
|
|
|
2.3
|
|
|
—%
|
|
2.3
|
|
|
—%
|
|||
Average monthly ending pawn loan balance per store (d)
|
$
|
78
|
|
|
$
|
71
|
|
|
10%
|
|
$
|
80
|
|
|
13%
|
Monthly average yield on pawn loans outstanding
|
16
|
%
|
|
16
|
%
|
|
—
|
|
16
|
%
|
|
—
|
|||
Pawn loan redemption rate (e)
|
78
|
%
|
|
77
|
%
|
|
100bps
|
|
78
|
%
|
|
100bps
|
*
|
Represents an increase or decrease that is not meaningful.
|
(a)
|
The three months ended June 30, 2017 constant currency balance excludes nominal net foreign currency transaction gains resulting from movement in exchange rates. The three months ended June 30, 2016 includes $0.8 million net foreign currency transaction losses that are included in the above results.
|
(b)
|
Balance includes pawn loans and inventory.
|
(c)
|
Calculation of inventory turnover excludes the effects of scrapping.
|
(d)
|
Balance is calculated based upon the average of the monthly ending balance averages during the applicable period.
|
(e)
|
Our pawn loan redemption rate represents the percentage of loans made that are repaid, renewed or extended at a point in time as opposed to the life of the loan.
|
|
Change in Net Revenue
|
||||||||||
|
Pawn Service Charges
|
|
Merchandise Sales Gross Profit
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
|
(in millions)
|
||||||||||
Same stores
|
$
|
0.9
|
|
|
$
|
0.3
|
|
|
$
|
1.2
|
|
New stores and other
|
0.1
|
|
|
0.2
|
|
|
0.3
|
|
|||
Total
|
$
|
1.0
|
|
|
$
|
0.5
|
|
|
$
|
1.5
|
|
Change in jewelry scrapping sales gross profit and other revenues
|
|
|
|
|
—
|
|
|||||
Total change in net revenue
|
|
|
|
|
$
|
1.5
|
|
|
Change in Net Revenue (Constant Currency)
|
||||||||||
|
Pawn Service Charges
|
|
Merchandise Sales Gross Profit
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
|
(in millions)
|
||||||||||
Same stores
|
$
|
1.1
|
|
|
$
|
0.4
|
|
|
$
|
1.5
|
|
New stores and other
|
0.2
|
|
|
0.2
|
|
|
0.4
|
|
|||
Total
|
$
|
1.3
|
|
|
$
|
0.6
|
|
|
$
|
1.9
|
|
Change in jewelry scrapping sales gross profit and other revenues
|
|
|
|
|
—
|
|
|||||
Total change in net revenue
|
|
|
|
|
$
|
1.9
|
|
|
Three Months Ended June 30,
|
|
Percentage Change
|
||||||
|
2017
|
|
2016
|
|
|||||
|
|
|
|
|
|
||||
|
(in thousands)
|
|
|
||||||
Net revenues:
|
|
|
|
|
|
||||
Consumer loan fees, interest and other
|
$
|
1,964
|
|
|
$
|
2,237
|
|
|
(12)%
|
Consumer loan bad debt
|
(453
|
)
|
|
(506
|
)
|
|
(10)%
|
||
Other revenues, net
|
—
|
|
|
1
|
|
|
(100)%
|
||
Net revenues
|
1,511
|
|
|
1,732
|
|
|
(13)%
|
||
|
|
|
|
|
|
||||
Segment operating expenses (income):
|
|
|
|
|
|
||||
Operating expenses
|
1,799
|
|
|
1,751
|
|
|
3%
|
||
Equity in net income of unconsolidated affiliate
|
(1,047
|
)
|
|
(1,694
|
)
|
|
(38)%
|
||
Segment operating contribution
|
759
|
|
|
1,675
|
|
|
(55)%
|
||
|
|
|
|
|
|
||||
Other segment income
|
(68
|
)
|
|
—
|
|
|
*
|
||
Segment contribution
|
$
|
827
|
|
|
$
|
1,675
|
|
|
(51)%
|
*
|
Represents an increase or decrease that is not meaningful.
|
|
Three Months Ended June 30,
|
|
Percentage Change
|
||||||
|
2017
|
|
2016
|
|
|||||
|
|
|
|
|
|
||||
|
(in thousands)
|
|
|
||||||
Segment contribution
|
$
|
30,041
|
|
|
$
|
24,556
|
|
|
22%
|
Corporate expenses (income):
|
|
|
|
|
|
||||
Administrative
|
14,095
|
|
|
14,481
|
|
|
(3)%
|
||
Depreciation and amortization
|
2,970
|
|
|
2,610
|
|
|
14%
|
||
Loss on sale or disposal of assets
|
—
|
|
|
23
|
|
|
(100)%
|
||
Interest expense
|
5,652
|
|
|
3,911
|
|
|
45%
|
||
Interest income
|
(1,573
|
)
|
|
(26
|
)
|
|
*
|
||
Other income
|
(2
|
)
|
|
(259
|
)
|
|
(99)%
|
||
Income from continuing operations before income taxes
|
8,899
|
|
|
3,816
|
|
|
133%
|
||
Income tax expense
|
3,432
|
|
|
1,038
|
|
|
231%
|
||
Income from continuing operations, net of tax
|
5,467
|
|
|
2,778
|
|
|
97%
|
||
Loss from discontinued operations, net of tax
|
(265
|
)
|
|
(9,133
|
)
|
|
(97)%
|
||
Net income (loss)
|
5,202
|
|
|
(6,355
|
)
|
|
*
|
||
Net loss attributable to noncontrolling interest
|
(58
|
)
|
|
(666
|
)
|
|
(91)%
|
||
Net income (loss) attributable to EZCORP, Inc.
|
$
|
5,260
|
|
|
$
|
(5,689
|
)
|
|
*
|
*
|
Represents an increase or decrease that is not meaningful.
|
|
Nine Months Ended June 30,
|
|
Change
|
||||||
|
2017
|
|
2016
|
|
|||||
|
|
|
|
|
|
||||
|
(in thousands)
|
|
|
||||||
Net revenues:
|
|
|
|
|
|
||||
Pawn service charges
|
$
|
177,480
|
|
|
$
|
169,630
|
|
|
5%
|
|
|
|
|
|
|
||||
Merchandise sales
|
273,125
|
|
|
266,560
|
|
|
2%
|
||
Merchandise sales gross profit
|
99,890
|
|
|
102,272
|
|
|
(2)%
|
||
Gross margin on merchandise sales
|
37
|
%
|
|
38
|
%
|
|
(100)bps
|
||
|
|
|
|
|
|
||||
Jewelry scrapping sales
|
35,158
|
|
|
32,117
|
|
|
9%
|
||
Jewelry scrapping sales gross profit
|
5,044
|
|
|
5,084
|
|
|
(1)%
|
||
Gross margin on jewelry scrapping sales
|
14
|
%
|
|
16
|
%
|
|
(200)bps
|
||
|
|
|
|
|
|
||||
Other revenues
|
157
|
|
|
281
|
|
|
(44)%
|
||
Net revenues
|
282,571
|
|
|
277,267
|
|
|
2%
|
||
|
|
|
|
|
|
||||
Segment operating expenses:
|
|
|
|
|
|
||||
Operations
|
194,499
|
|
|
187,518
|
|
|
4%
|
||
Depreciation and amortization
|
7,487
|
|
|
9,489
|
|
|
(21)%
|
||
Segment operating contribution
|
80,585
|
|
|
80,260
|
|
|
—%
|
||
|
|
|
|
|
|
||||
Other segment (income) expenses
|
(68
|
)
|
|
1,607
|
|
|
*
|
||
Segment contribution
|
$
|
80,653
|
|
|
$
|
78,653
|
|
|
3%
|
|
|
|
|
|
|
||||
Other data:
|
|
|
|
|
|
||||
Average monthly ending pawn loan balance per store (a)
|
$
|
274
|
|
|
$
|
264
|
|
|
4%
|
Monthly average yield on pawn loans outstanding
|
14
|
%
|
|
14
|
%
|
|
—
|
||
Pawn loan redemption rate (b)
|
84
|
%
|
|
84
|
%
|
|
—
|
*
|
Represents an increase or decrease that is not meaningful.
|
(a)
|
Balance is calculated based upon the average of the monthly ending balance averages during the applicable period.
|
(b)
|
Our pawn loan redemption rate represents the percentage of loans made that are repaid, renewed or extended at a point in time as opposed to the life of the loan.
|
|
Change in Net Revenue
|
||||||||||
|
Pawn Service Charges
|
|
Merchandise Sales Gross Profit
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
|
(in millions)
|
||||||||||
Same stores
|
$
|
7.4
|
|
|
$
|
(2.2
|
)
|
|
$
|
5.2
|
|
New stores and other
|
0.5
|
|
|
(0.2
|
)
|
|
0.3
|
|
|||
Total
|
$
|
7.9
|
|
|
$
|
(2.4
|
)
|
|
$
|
5.5
|
|
Change in jewelry scrapping sales gross profit and other revenues
|
|
|
|
|
(0.2
|
)
|
|||||
Total change in net revenue
|
|
|
|
|
$
|
5.3
|
|
|
Nine Months Ended June 30,
|
||||||||||||||
|
2017 (GAAP)
|
|
2016 (GAAP)
|
|
Change (GAAP)
|
|
2017 (Constant Currency)
|
|
Change (Constant Currency)
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
(in USD thousands)
|
|
|
|
(in USD thousands)
|
|
|
||||||||
Net revenues:
|
|
|
|
|
|
|
|
|
|
||||||
Pawn service charges
|
$
|
24,503
|
|
|
$
|
23,567
|
|
|
4%
|
|
$
|
27,167
|
|
|
15%
|
|
|
|
|
|
|
|
|
|
|
||||||
Merchandise sales
|
46,547
|
|
|
45,376
|
|
|
3%
|
|
52,007
|
|
|
15%
|
|||
Merchandise sales gross profit
|
14,942
|
|
|
14,934
|
|
|
—%
|
|
16,653
|
|
|
12%
|
|||
Gross margin on merchandise sales
|
32
|
%
|
|
33
|
%
|
|
(100)bps
|
|
32
|
%
|
|
(100)bps
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
Jewelry scrapping sales
|
2,500
|
|
|
1,493
|
|
|
67%
|
|
2,825
|
|
|
89%
|
|||
Jewelry scrapping sales gross profit
|
419
|
|
|
271
|
|
|
55%
|
|
474
|
|
|
75%
|
|||
Gross margin on jewelry scrapping sales
|
17
|
%
|
|
18
|
%
|
|
(100)bps
|
|
17
|
%
|
|
(100)bps
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
Other revenues
|
457
|
|
|
231
|
|
|
98%
|
|
504
|
|
|
*
|
|||
Net revenues
|
40,321
|
|
|
39,003
|
|
|
3%
|
|
44,798
|
|
|
15%
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
Segment operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||
Operations
|
26,439
|
|
|
28,961
|
|
|
(9)%
|
|
29,451
|
|
|
2%
|
|||
Depreciation and amortization
|
1,910
|
|
|
2,285
|
|
|
(16)%
|
|
2,131
|
|
|
(7)%
|
|||
Segment operating contribution
|
11,972
|
|
|
7,757
|
|
|
54%
|
|
13,216
|
|
|
70%
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
Other segment (income) expenses (a)
|
(878
|
)
|
|
1,547
|
|
|
*
|
|
(872
|
)
|
|
*
|
|||
Segment contribution
|
$
|
12,850
|
|
|
$
|
6,210
|
|
|
107%
|
|
$
|
14,088
|
|
|
127%
|
|
|
|
|
|
|
|
|
|
|
||||||
Other data:
|
|
|
|
|
|
|
|
|
|
||||||
Average monthly ending pawn loan balance per store (b)
|
$
|
71
|
|
|
$
|
69
|
|
|
3%
|
|
$
|
78
|
|
|
13%
|
Monthly average yield on pawn loans outstanding
|
16
|
%
|
|
16
|
%
|
|
—
|
|
16
|
%
|
|
—
|
|||
Pawn loan redemption rate (c)
|
78
|
%
|
|
78
|
%
|
|
—
|
|
78
|
%
|
|
—
|
*
|
Represents an increase or decrease that is not meaningful.
|
(a)
|
The nine months ended June 30, 2017 constant currency balance excludes $0.1 million net foreign currency transaction gains resulting from movement in exchange rates. The nine months ended June 30, 2016 includes $0.8 million net foreign currency transaction losses that are included in the above results.
|
(b)
|
Balance is calculated based upon the average of the monthly ending balance averages during the applicable period.
|
(c)
|
Our pawn loan redemption rate represents the percentage of loans made that are repaid, renewed or extended at a point in time as opposed to the life of the loan.
|
|
Change in Net Revenue
|
||||||||||
|
Pawn Service Charges
|
|
Merchandise Sales Gross Profit
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
|
(in millions)
|
||||||||||
Same stores
|
$
|
0.6
|
|
|
$
|
(0.1
|
)
|
|
$
|
0.5
|
|
New stores and other
|
0.3
|
|
|
0.1
|
|
|
0.4
|
|
|||
Total
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
0.9
|
|
Change in jewelry scrapping sales gross profit and other revenues
|
|
|
|
|
0.4
|
|
|||||
Total change in net revenue
|
|
|
|
|
$
|
1.3
|
|
|
Change in Net Revenue (Constant Currency)
|
||||||||||
|
Pawn Service Charges
|
|
Merchandise Sales Gross Profit
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
|
(in millions)
|
||||||||||
Same stores
|
$
|
3.1
|
|
|
$
|
1.5
|
|
|
$
|
4.6
|
|
New stores and other
|
0.5
|
|
|
0.2
|
|
|
0.7
|
|
|||
Total
|
$
|
3.6
|
|
|
$
|
1.7
|
|
|
$
|
5.3
|
|
Change in jewelry scrapping sales gross profit and other revenues
|
|
|
|
|
0.5
|
|
|||||
Total change in net revenue
|
|
|
|
|
$
|
5.8
|
|
•
|
A $1.4 million decrease ($0.2 million decrease on a constant currency basis) in labor costs as a result of foreign currency impacts;
|
•
|
A $0.9 million increase in interest income as a result of our notes receivable from the sale of Grupo Finmart, including ordinary accruals of interest in addition to accretion of associated discounts;
|
•
|
A $0.5 million decrease in restructuring charges as we have substantially completed all prior restructuring actions; and
|
•
|
A $0.9 million decrease in foreign currency transaction losses; partially offset by
|
•
|
$0.5 million in losses, net of insurance recoveries, on a GAAP basis associated with looting of 12 stores during our second fiscal quarter.
|
|
Nine Months Ended June 30,
|
|
Percentage Change
|
||||||
|
2017
|
|
2016
|
|
|||||
|
|
|
|
|
|
||||
|
(in thousands)
|
|
|
||||||
Net revenues:
|
|
|
|
|
|
||||
Consumer loan fees and interest
|
$
|
5,958
|
|
|
$
|
6,639
|
|
|
(10)%
|
Consumer loan bad debt
|
(1,433
|
)
|
|
(1,549
|
)
|
|
(7)%
|
||
Other revenues, net
|
—
|
|
|
9
|
|
|
(100)%
|
||
Net revenues
|
4,525
|
|
|
5,099
|
|
|
(11)%
|
||
|
|
|
|
|
|
||||
Segment operating expenses (income):
|
|
|
|
|
|
||||
Operating expenses
|
5,558
|
|
|
5,130
|
|
|
8%
|
||
Equity in net income of unconsolidated affiliate
|
(3,768
|
)
|
|
(5,626
|
)
|
|
(33)%
|
||
Segment operating contribution
|
2,735
|
|
|
5,595
|
|
|
(51)%
|
||
|
|
|
|
|
|
||||
Other segment (income) expenses
|
(28
|
)
|
|
205
|
|
|
*
|
||
Segment contribution
|
$
|
2,763
|
|
|
$
|
5,390
|
|
|
(49)%
|
*
|
Represents an increase or decrease that is not meaningful.
|
|
Nine Months Ended June 30,
|
|
Percentage Change
|
||||||
|
2017
|
|
2016
|
|
|||||
|
|
|
|
|
|
||||
|
(in thousands)
|
|
|
||||||
Segment contribution
|
$
|
96,266
|
|
|
$
|
90,253
|
|
|
7%
|
Corporate expenses (income):
|
|
|
|
|
|
||||
Administrative
|
41,305
|
|
|
50,085
|
|
|
(18)%
|
||
Depreciation and amortization
|
8,705
|
|
|
8,485
|
|
|
3%
|
||
Loss on sale or disposal of assets
|
—
|
|
|
23
|
|
|
(100)%
|
||
Restructuring
|
—
|
|
|
183
|
|
|
(100)%
|
||
Interest expense
|
16,840
|
|
|
11,786
|
|
|
43%
|
||
Interest income
|
(6,020
|
)
|
|
(41
|
)
|
|
(100)%
|
||
Other (income) expense
|
(191
|
)
|
|
4
|
|
|
*
|
||
Income from continuing operations before income taxes
|
35,627
|
|
|
19,728
|
|
|
81%
|
||
Income tax expense
|
13,663
|
|
|
11,224
|
|
|
22%
|
||
Income from continuing operations, net of tax
|
21,964
|
|
|
8,504
|
|
|
158%
|
||
Loss from discontinued operations, net of tax
|
(1,868
|
)
|
|
(99,068
|
)
|
|
(98)%
|
||
Net income (loss)
|
20,096
|
|
|
(90,564
|
)
|
|
*
|
||
Net loss attributable to noncontrolling interest
|
(352
|
)
|
|
(6,589
|
)
|
|
(95)%
|
||
Net income (loss) attributable to EZCORP, Inc.
|
$
|
20,448
|
|
|
$
|
(83,975
|
)
|
|
*
|
*
|
Represents an increase or decrease that is not meaningful.
|
•
|
A $7.3 million decrease in business and professional fees due to completion of remediation efforts in the prior year; and
|
•
|
A $1.7 million decrease in labor costs including the impact of corporate headcount reductions.
|
|
Nine Months Ended June 30,
|
|
Percentage
Change
|
||||||
|
2017
|
|
2016
|
|
|||||
|
|
|
|
|
|
||||
|
(in thousands)
|
|
|
||||||
Cash flows from operating activities
|
$
|
29,974
|
|
|
$
|
57,937
|
|
|
(48)%
|
Cash flows from investing activities
|
17,972
|
|
|
(11,537
|
)
|
|
*
|
||
Cash flows from financing activities
|
(767
|
)
|
|
(67,910
|
)
|
|
99%
|
||
Effect of exchange rate changes on cash and cash equivalents
|
813
|
|
|
(6,506
|
)
|
|
*
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
47,992
|
|
|
$
|
(28,016
|
)
|
|
*
|
*
|
Represents an increase or decrease that is not meaningful.
|
•
|
Judgments in decision-making can be faulty, and control and process breakdowns can occur because of simple errors or mistakes.
|
•
|
Controls can be circumvented by individuals, acting alone or in collusion with others, or by management override.
|
•
|
The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
|
•
|
Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with associated policies or procedures.
|
•
|
The design of a control system must reflect the fact that resources are constrained, and the benefits of controls must be considered relative to their costs.
|
Exhibit No.
|
|
Description of Exhibit
|
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
101.INS†††
|
|
XBRL Instance Document
|
101.SCH†††
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL†††
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB†††
|
|
XBRL Taxonomy Label Linkbase Document
|
101.DEF†††
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.PRE†††
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
†
|
Filed herewith.
|
††
|
Furnished herewith.
|
†††
|
Filed herewith as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of June 30, 2017, June 30, 2016 and September 30, 2016; (ii) Condensed Consolidated Statements of Operations for the three and nine months ended June 30, 2017 and June 30, 2016; (iii) Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended June 30, 2017 and June 30, 2016; (iv) Condensed Consolidated Statements of Stockholders' Equity for the nine months ended June 30, 2017 and June 30, 2016; (v) Condensed Consolidated Statements of Cash Flows for the nine months ended June 30, 2017 and June 30, 2016; and (vi) Notes to Interim Condensed Consolidated Financial Statements.
|
|
|
|
EZCORP, INC.
|
|
|
|
|
Date:
|
July 31, 2017
|
|
/s/ David McGuire
|
|
|
|
David McGuire,
Deputy Chief Financial Officer and Chief Accounting Officer
(principal accounting officer)
|
CALL OPTION TERMINATION AGREEMENT
dated as of June 29, 2017
|
Between EZCORP, INC. and UBS AG, LONDON BRANCH
|
UBS AG, London Branch
|
|||
By:
|
/s/ Michael O'Donovan
|
||
|
Name: Michael O'Donovan
Title: Authorized Signatory
|
|
|
By:
|
/s/ Brian Badentscher
|
||
|
Name: Brian Badentscher
Title: Authorized Signatory
|
|
|
UBS Securities LLC,
as Agent for UBS AG, London Branch
|
|||
By:
|
/s/ Michael O'Donovan
|
||
|
Name: Michael O'Donovan
Title: Managing Director
|
|
|
By:
|
/s/ Brian Badentscher
|
||
|
Name: Brian Badentscher
Title: Authorized Signatory
|
|
|
EZCORP, Inc.
|
|||
By:
|
/s/ Thomas H. Welch, Jr.
|
||
|
Name: Thomas H. Welch, Jr.
Title: Chief Legal Officer and Secretary
|
|
WARRANT TERMINATION AGREEMENT
dated as of June 29, 2017
|
Between EZCORP, INC. and UBS AG, LONDON BRANCH
|
UBS AG, London Branch
|
|||
By:
|
/s/ Michael O'Donovan
|
||
|
Name: Michael O'Donovan
Title: Authorized Signatory
|
|
|
By:
|
/s/ Brian Badentscher
|
||
|
Name: Brian Badentscher
Title: Authorized Signatory
|
|
|
UBS Securities LLC,
as Agent for UBS AG, London Branch
|
|||
By:
|
/s/ Michael O'Donovan
|
||
|
Name: Michael O'Donovan
Title: Managing Director
|
|
|
By:
|
/s/ Brian Badentscher
|
||
|
Name: Brian Badentscher
Title: Authorized Signatory
|
|
|
EZCORP, Inc.
|
|||
By:
|
/s/ Thomas H. Welch, Jr.
|
||
|
Name: Thomas H. Welch, Jr.
Title: Chief Legal Officer and Secretary
|
|
CALL OPTION TERMINATION AGREEMENT
dated as of June 29, 2017
|
Between EZCORP, INC. and JEFFERIES INTERNATIONAL LIMITED
|
Jefferies International Limited
|
|||
By:
|
/s/ Frank Copplestone
|
||
|
Name: Frank Copplestone
Title: Managing Director
|
|
|
Jefferies LLC,
as Agent
|
|||
By:
|
/s/ John Noonan
|
||
|
Name: John Noonan
Title: Managing Director
|
|
|
EZCORP, Inc.
|
|||
By:
|
/s/ Thomas H. Welch, Jr.
|
||
|
Name: Thomas H. Welch, Jr.
Title: Chief Legal Officer and Secretary
|
|
WARRANT TERMINATION AGREEMENT
dated as of June 29, 2017
|
Between EZCORP, INC. and JEFFERIES INTERNATIONAL LIMITED
|
Jefferies International Limited
|
|||
By:
|
/s/ Frank Copplestone
|
||
|
Name: Frank Copplestone
Title: Managing Director
|
|
|
Jefferies LLC,
as Agent
|
|||
By:
|
/s/ John Noonan
|
||
|
Name: John Noonan
Title: Managing Director
|
|
|
EZCORP, Inc.
|
|||
By:
|
/s/ Thomas H. Welch, Jr.
|
||
|
Name: Thomas H. Welch, Jr.
Title: Chief Legal Officer and Secretary
|
|
CALL OPTION TERMINATION AGREEMENT
dated as of June 29, 2017
|
Between EZCORP, INC. and MORGAN STANLEY & CO. INTERNATIONAL PLC
|
Morgan Stanley & Co. International plc
|
|||
By:
|
/s/ Stefan Ploetscher
|
||
|
Name: Stefan Ploetscher
Title: Executive Director
|
|
|
Morgan Stanley & Co. LLC,
as Agent
|
|||
By:
|
/s/ Sebastian Crapanzano
|
||
|
Name: Sebastian Crapanzano
Title: Managing Director
|
|
|
EZCORP, Inc.
|
|||
By:
|
/s/ Thomas H. Welch, Jr.
|
||
|
Name: Thomas H. Welch, Jr.
Title: Chief Legal Officer and Secretary
|
|
WARRANT TERMINATION AGREEMENT
dated as of June 29, 2017
|
Between EZCORP, INC. and MORGAN STANLEY & CO. INTERNATIONAL PLC
|
Morgan Stanley & Co. International plc
|
|||
By:
|
/s/ Stefan Ploetscher
|
||
|
Name: Stefan Ploetscher
Title: Executive Director
|
|
|
Morgan Stanley & Co. LLC,
as Agent
|
|||
By:
|
/s/ Sebastian Crapanzano
|
||
|
Name: Sebastian Crapanzano
Title: Managing Director
|
|
|
EZCORP, Inc.
|
|||
By:
|
/s/ Thomas H. Welch, Jr.
|
||
|
Name: Thomas H. Welch, Jr.
Title: Chief Legal Officer and Secretary
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of EZCORP, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Stuart I. Grimshaw
|
||
|
Stuart I. Grimshaw
|
||
|
Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of EZCORP, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Daniel M. Chism
|
||
|
Daniel M. Chism
|
||
|
Chief Financial Officer
|
Date:
|
July 31, 2017
|
/s/ Stuart I. Grimshaw
|
|
|
Stuart I. Grimshaw
|
|
|
Chief Executive Officer
|
|
|
|
Date:
|
July 31, 2017
|
/s/ Daniel M. Chism
|
|
|
Daniel M. Chism
|
|
|
Chief Financial Officer
|