Austin, Texas (November 15, 2023) — EZCORP, Inc. (NASDAQ: EZPW), a leading provider of pawn transactions in the United States and Latin America, today announced results for its fourth quarter and full year ended September 30, 2023.

Unless otherwise noted, all amounts in this release are in conformity with U.S. generally accepted accounting principles (“GAAP”) and comparisons shown are to the same period in the prior year.

•Pawn loans outstanding (PLO) up 17% to $245.8 million.

•Total revenue increased 16% for the quarter and 18% for the full year, while gross profit1 increased 16% for the quarter and 15% for the full year.

•Merchandise sales gross margin remains within our targeted range at 36% for both the quarter and full year.

•Net income for the quarter was $10.3 million, an increase of $2.9 million. Net income for the year was $38.5 million, a decrease of $11.7 million. The majority of the decrease was driven by our $26.3 million (after tax) share of the one-time, non-cash goodwill impairment and other discrete adjustments recognized by Cash Converters International, which we primarily recorded in our second quarter.

•Diluted earnings per share was $0.15 for the quarter, up from $0.11 and for the year was $0.53 down from $0.70. On an adjusted basis1, diluted earnings per share for the quarter was $0.23, compared to $0.15, and for the year was $0.92, compared to $0.75.

•Return on earning assets (ROEA) remains strong at 157% for the quarter and 161% for the full year.

Lachie Given, Chief Executive Officer, stated, “Due to our team's relentless focus on superior execution and operational excellence, we achieved another quarter of outstanding financial results. PLO, revenues, and merchandise sales all reached new records for the fourth quarter and for the year.

“We added 21 stores during the quarter, further expanding our store footprint. Two of the new stores were acquired in the U.S. and 19 were opened in Latin America. Ten of those were opened in Mexico, taking our store count there to 549; seven were in Guatemala, expanding our market leadership there to 117 stores; and the remaining 2, in Honduras. In October, we invested an additional $15 million into Simple Management Group through Founders LLC, as they acquired another 22 stores in Panama and Costa Rica. This business now operates 95 pawn stores in the US, Caribbean and Central America and continues to develop a significant industry presence.

“Our EZ+ Rewards loyalty program continues to grow rapidly, with 3.8 million members globally, a 15% increase over the previous quarter, and a 100% increase over prior year. The strategies we have implemented to win and retain customers and drive customer engagement have been extremely successful, and are important in achieving our strong store metrics.

“We embarked on our next three-year strategic plan in October, advancing our commitment to ‘People, Pawn and Passion,’ underpinned by a fundamental focus on operating excellence in every store every day. We will continue to invest in our people and technology to expand our customer base and their experiences with us, while ensuring that we employ the most passionate, productive, and tenured team in the industry. We offer a unique and essential service to address our customers' short-term cash needs and provide a wide variety of pre-owned goods for our expanding customer base of environmentally and cost-conscious consumers.

“We maintain a robust acquisition pipeline and our objective is to significantly grow our store footprint in an exciting global industry. We have a strong balance sheet and the liquidity to execute on that strategy.

“The EZCORP team worked hard on behalf of all stakeholders to deliver the prior three-year plan. The business has grown substantially and its operating and financial performance improved materially in that time. I am very excited about the future as we continue to drive value for all shareholders.”

•Diluted earnings per share was $0.15 for the fourth quarter, up from $0.11. On an adjusted basis, diluted earnings per share was $0.23, up from $0.15. The primary difference between GAAP and adjusted financial results is attributable to impairments of $6.9 million (after tax), unrelated to operations. For the full year, diluted earnings per share was $0.53, compared to $0.70. On an adjusted basis, diluted earnings per share for the year was $0.92, compared to $0.75. The primary difference between GAAP and adjusted financial results is attributable to our share of the one-time, non-cash goodwill impairment recognized by Cash Converters International, which we recorded in our second quarter.

•For the fourth quarter, income before taxes decreased to $13.1 million from $13.2 million, and adjusted EBITDA increased 26% to $31.2 million. For the full year, income before taxes decreased to $51.6 million from $67.7 million and adjusted EBITDA increased 14% to $129.3 million.

•PLO increased 17% to $245.8 million, up $35.8 million. On a same-store basis2, PLO increased 14% due to improved operational performance and continued strong pawn demand.

•In the fourth quarter, total revenues and gross profit increased 16%, reflecting improved pawn service charge (PSC) revenue, merchandise sales and merchandise sales gross profit. Similarly for the full year, total revenues increased 18% and gross profit increased 15%.

•PSC increased 19% in the fourth quarter and 20% for the full year as a result of higher average PLO and yields.

•Merchandise sales gross margin remains within our target range at 36%. Aged general merchandise was 1.3% of total general merchandise inventory. This is a 30 bps improvement over the third quarter. For the full year, merchandise sales gross profit margin was 36%, compared to 38%.

•Net inventory increased 10%, as expected with the growth in PLO. Inventory turnover increased to 2.7x for the quarter, from 2.6x and was flat at 2.8x for the year.

•For the fourth quarter, store expenses increased 17% (14% on a same-store basis2), primarily due to increased labor in-line with store activity, higher store count and, to a lesser extent, expenses related to our loyalty program. For the full year, store expenses increased 17% (15% on a same-store basis2), primarily due to increased labor in-line with store activity, higher store count and, to a lesser extent, expenses related to our loyalty program.

•General and administrative expenses increased 4% in the fourth quarter, primarily due to an increase in costs related to insurance, our Workday implementation and incentive compensation. For the full year, general and administrative expenses increased 5%, primarily due to an increase in costs related to incentive compensation, insurance and our Workday implementation, partially offset by the litigation accrual charge of $2.0 million recorded in prior period.

•Cash and cash equivalents at the end of the quarter was $220.6 million, up 7% year-over-year. The increase was primarily due to cash inflows provided by operating activities and the net cash proceeds associated with the convertible debt refinancing offset by the increase in PLO and inventory, the acquisition of new stores, strategic investments and share repurchases.

U.S. Pawn

•PLO continued to increase, ending the year at $190.6 million, up 17% or 13% on a same store basis due to improved customer service and increased pawn demand.

•In the fourth quarter, total revenue was up 12% and gross profit increased 13%, primarily due to increased PSC. For the full year, total revenues increased 16% and gross profit increased 12%, primarily due to increased PSC.

•PSC increased 17% in the fourth quarter and increased 19% for the full year as a result of higher average PLO and yields.

•During the fourth quarter, merchandise sales gross margin decreased to 38% from 40%, within our target range. Aged general merchandise was 0.9% of total general merchandise inventory which is a 10 bps improvement over the third quarter. For the full year, merchandise sales gross profit margin decreased 300 bps to 38%, reflecting a return to normalized margins.

•Net inventory increased 12%, as expected with the growth in PLO. Inventory turnover decreased to 2.4x from 2.5x in the quarter and was flat at 2.6x for the full year.

•In the fourth quarter, store expenses increased 11% (9% on a same store basis), primarily due to increased labor in-line with store activity, higher store count and, to a lesser extent, expenses related to our loyalty program. Similarly for the full year, store expenses increased 12% (10% on a same store basis).

•Segment contribution increased 20% to $37.2 million in the fourth quarter and increased 14% to $146.5 million for the full year.

•Segment store count increased by 14 due to the acquisition of 12 stores, the addition of 3 de novo stores and the consolidation of 1 store during the full year.

Latin America Pawn

•PLO improved to $55.1 million, up 19% (7% on constant currency basis). On a same store basis, PLO increased 16% (4% on a constant currency basis) as consumer demand increased, reflecting recoveries from the third quarter.

•In the fourth quarter, total revenue was up 28% (13% on constant currency basis) and gross profit increased 24% (10% on a constant currency basis), primarily due to increased PSC, higher merchandise sales and improved gross profit. For the full year, total revenues were up 26% (16% on a constant currency basis), while gross profit increased by 25% (16% on a constant currency basis).

•PSC increased in the fourth quarter to $26.5 million, up 23% (9% on a constant currency basis) as a result of higher average PLO and yields. Similarly for the full year, PSC increased 22% (13% on a constant currency basis).

•Merchandise sales gross margin decreased in the fourth quarter from 31% to 30%, and for the full year it increased 100 bps to 31%. Aged general merchandise was 2.0% of total merchandise inventory which is a 40 bps improvement over the third quarter.

•Net inventory increased 2% (decreased 9% on a constant currency basis), driven by strong inventory turnover at 3.6x, up from 3.1x for the quarter. For the full year inventory turnover was 3.4x, down from 3.5x.

•In the fourth quarter, store expenses increased 34% (18% on a constant currency basis), primarily due to increases in minimum wage and headcount, higher store count and, to a lesser extent, expenses related to our loyalty program and rent. Same-store expenses increased $7.2 million or 30% (14% on a constant currency basis). For similar reasons, full year store expenses increased 31% (20% on a constant currency basis). Same-store expenses increased 26% (15% on a constant currency basis).

•For the fourth quarter, segment contribution decreased to $6.4 million, down 4% (13% on a constant currency basis). For the full year, segment contribution was up 32% to $31.7 million (24% on a constant currency basis). On an adjusted basis, segment contribution for the fourth quarter was down 12% to $5.9 million. On an adjusted basis, segment contribution for the full year was up 7% to $25.5 million, with the primary adjustment being the reversal of contingent consideration liability in connection with a previously completed acquisition.

•Segment store count increased by 42 due to the addition of 44 de novo stores and the consolidation of 2 stores during the full year.

EZCORP’s Annual Report on Form 10-K for the year ended September 30, 2023 has been filed with the Securities and Exchange Commission. The report is available in the Investor Relations section of the Company’s website at http://investors.ezcorp.com. EZCORP shareholders may obtain a paper copy of the report, free of charge, by sending a request to the investor relations contact below.

EZCORP will host a conference call on Thursday, November 16, 2023, at 8:00 am Central Time to discuss Fourth Quarter Fiscal 2023 results. Analysts and institutional investors may participate on the conference call by registering online at: https://register.vevent.com/register/BI9b68b07fa36145dba75f47155a87dcab. Once registered you will receive the dial-in details with a unique PIN to join the call. The conference call will be webcast simultaneously to the public through this link: http://investors.ezcorp.com. A replay of the conference call will be available online at http://investors.ezcorp.com shortly after the end of the call. 

Formed in 1989, EZCORP has grown into a leading provider of pawn transactions in the United States and Latin America. We also sell merchandise, primarily collateral forfeited from pawn lending operations and pre-owned and recycled merchandise purchased from customers. We are dedicated to satisfying the short-term cash needs of consumers who are both cash and credit constrained, focusing on an industry-leading customer experience. EZCORP is traded on NASDAQ under the symbol EZPW and is a member of the S&P 1000 Index and Nasdaq Composite Index. 

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This announcement contains certain forward-looking statements regarding the company’s strategy, initiatives and expected performance. These statements are based on the Company’s current expectations as to the outcome and timing of future events. All statements, other than statements of historical facts, including all statements regarding the company's strategy, initiatives and future performance, that address activities or results that the company plans, expects, believes, projects, estimates or anticipates, will, should or may occur in the future, including future financial or operating results, are forward-looking statements. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of uncertainties and other factors, including operating risks, liquidity risks, legislative or regulatory developments, market factors, current or future litigation and risks associated with the COVID-19 pandemic. For a discussion of these and other factors affecting the Company’s business and prospects, see the Company’s annual, quarterly and other reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

Email: Investor_Relations@ezcorp.com

Phone: (512) 314-2220

(Unaudited)

			Twelve Months Ended September 30,
(in thousands)			2023						2022
Operating activities:
Net income			$	38,463					$	50,160
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization			32,131						32,140
Amortization of debt discount and deferred financing costs			1,561						1,433
Non-cash lease expense			56,937						52,201
Deferred income taxes			(12,802)						4,945
Impairment of other assets			4,343						—
Other adjustments			(2,890)						2,511
Provision for inventory reserve			603						(2,253)
Stock compensation expense			9,539						5,053
Equity in net loss (income) from investment in unconsolidated affiliates			28,459						(1,779)
Net loss on extinguishment of debt			3,545						—
Changes in operating assets and liabilities, net of business acquisitions:
Service charges and fees receivable			(4,204)						(4,572)
Inventory			(4,810)						(15,341)
Prepaid expenses, other current assets and other assets			(1,814)						3,238
Accounts payable, accrued expenses and other liabilities			(61,522)						(65,141)
Customer layaway deposits			1,376						3,359
Income taxes			12,919						(2,785)
Dividends from unconsolidated affiliates			—						3,366
Net cash provided by operating activities			101,834						66,535
Investing activities:
Loans made			(821,725)						(740,057)
Loans repaid			458,854						410,523
Recovery of pawn loan principal through sale of forfeited collateral			336,349						274,423
Capital expenditures, net			(40,446)						(31,895)
Acquisitions, net of cash acquired			(14,874)						(1,850)
Issuance of notes receivable			(15,500)						(1,000)
Investment in unconsolidated affiliate			(2,133)						(6,927)
Investment in other investments			(15,000)						(16,500)
Dividends from unconsolidated affiliates			3,589						—
Net cash used in investing activities			(110,886)						(113,283)
Financing activities:
Taxes paid related to net share settlement of equity awards			(1,148)						(792)
Proceeds from borrowings			230,000						—
Debt issuance cost			(7,458)						—
Cash paid on extinguishment of debt			(1,951)						—
Payments on assumed debt and other borrowings			(178,488)						—
Purchase and retirement of treasury stock			(16,988)						(2,040)
Payments of finance leases			(275)						—
Net cash provided by (used in) financing activities			23,692						(2,832)
Effect of exchange rate changes on cash and cash equivalents and restricted cash			(41)						325
Net increase (decrease) in cash, cash equivalents and restricted cash			14,599						(49,255)
Cash and cash equivalents and restricted cash at beginning of period			214,369						263,624
Cash and cash equivalents and restricted cash at end of period			$	228,968					$	214,369

                                                                

			Twelve Months Ended September 30, 2022
			U.S. Pawn						Latin America Pawn						Consolidated
As of September 30, 2021			516						632						1,148
New locations opened			—						28						28
Locations acquired			3						—						3
Locations sold, combined or closed			(4)						—						(4)
As of September 30, 2022			515						660						1,175

Constant currency results reported herein are calculated by translating consolidated balance sheet and consolidated statement of operations items denominated in local currency to U.S. dollars using the exchange rate from the prior-year comparable period, as opposed to the current period, in order to exclude the effects of foreign currency rate fluctuations. In addition, we have an equity method investment that is denominated in Australian dollars and is translated into U.S. dollars. We used the end-of-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. The end-of-period and approximate average exchange rates for each applicable currency as compared to U.S. dollars as of and for the three and twelve months ended September 30, 2023 and 2022 were as follows:

Our statement of operations constant currency results reflect the monthly exchange rate fluctuations and so are not directly calculable from the above rates. Constant currency results, where presented, also exclude the foreign currency gain or loss.

			Three Months Ended September 30, 2023												Twelve Months Ended September 30, 2023
(in millions)			U.S. Dollar Amount						Percentage Change YOY						U.S. Dollar Amount						Percentage Change YOY
Consolidated revenue			$	270.5					16		%				$	1,049.0					18		%
Currency exchange rate fluctuations			(9.1)												(22.8)
Constant currency consolidated revenue			$	261.4					12		%				$	1,026.2					16		%
Consolidated gross profit			$	159.4					16		%				$	609.8					15		%
Currency exchange rate fluctuations			(4.8)												(11.8)
Constant currency consolidated gross profit			$	154.6					12		%				$	598.0					13		%
Consolidated net inventory			$	166.5					10		%				$	166.5					10		%
Currency exchange rate fluctuations			(4.2)												(4.2)
Constant currency consolidated net inventory			$	162.3					7		%				$	162.3					7		%
Latin America Pawn gross profit			$	40.9					24		%				$	153.4					25		%
Currency exchange rate fluctuations			(4.8)												(11.8)
Constant currency Latin America Pawn gross profit			$	36.1					10		%				$	141.6					16		%
Latin America Pawn PLO			$	55.1					19		%				$	55.1					19		%
Currency exchange rate fluctuations			(5.4)												(5.4)
Constant currency Latin America Pawn PLO			$	49.7					7		%				$	49.7					7		%
Latin America Pawn PSC revenues			$	26.5					23		%				$	97.9					22		%
Currency exchange rate fluctuations			(3.0)												(7.2)
Constant currency Latin America Pawn PSC revenues			$	23.5					9		%				$	90.7					13		%
Latin America Pawn merchandise sales			$	47.8					28		%				$	182.9					30		%
Currency exchange rate fluctuations			(5.9)												(15.1)
Constant currency Latin America Pawn merchandise sales			$	41.9					12		%				$	167.8					19		%
Latin America Pawn segment profit before tax			$	6.4					(4)		%				$	31.7					32		%
Currency exchange rate fluctuations			(0.6)												(1.5)
Constant currency Latin America Pawn segment profit before tax			$	5.8					(13)		%				$	30.2					25		%