Austin, Texas (January 31, 2024) — EZCORP, Inc. (NASDAQ: EZPW), a leading provider of pawn transactions in the United States and Latin America, today announced results for its first quarter ended December 31, 2023.

•Net income increased to $28.5 million, an increase of $11.7 million, or 70%. On an adjusted basis1, net income increased $6.6 million or 30%.

•Diluted earnings per share of $0.36, up from $0.25. On an adjusted basis, diluted earnings per share of $0.36, compared to $0.28.

•Total revenues and gross profit increased 13%.

•Merchandise sales gross margin remains within our targeted range at 36%.

•Pawn loans outstanding (PLO) up 16% to $243.3 million.

•Return on earning assets (ROEA) remains strong at 165%.

Lachie Given, Chief Executive Officer, stated, “We began fiscal 2024 with another outstanding quarter. Our PLO was the highest on record in our first quarter, and total revenues were the highest for any quarter in our history. The challenging macro-economic backdrop continues to drive increased demand for our two core products, which are satisfying the short term cash needs of our customers and selling pre-owned and recycled goods.

“We remain committed to market-leading customer service in the neighborhoods in which we serve. We continue to invest in our team members, technology, process efficiencies and automation, to provide fast, convenient and respectful cash solutions and affordable pre-owned and recycled jewelry and general merchandise to cost-conscious and environmentally concerned consumers. This consistent service to our customers and investment in our teams and technology continue to produce outstanding operating and financial results for our shareholders.

“During the first quarter, we also acquired one store in Texas and opened five de novo stores in Latin America. In Guatemala, we added 3 stores, expanding our market leadership there with a total of 120 stores, and in Mexico, we added 2 stores. We now have a total of 1,237 stores across the organization and over 7,700 team members. Our strong balance sheet and cash liquidity enable us to capitalize upon potential growth opportunities in a disciplined way.                                                                                                                                                                                                                                                                                                                                                                                                                                                                

“MaxPawn, the luxury pawnbroking business we acquired in December 2022, had a strong 2023 holiday season. While still a small part of the business, MaxPawn and the luxury category as a whole represent an exciting component of our future.

“We now have 4.2 million EZ+ Rewards members across all geographies, an increase of 75% over the first quarter of 2023 and 11% over last quarter. We are focused on driving increased engagement with this large customer set as we seek to increase market share and share of wallet in all of the neighborhoods in which we serve.

“We are committed to doing everything we can to retain and incentivize our passionate, engaged and productive team members because it is their operational excellence and superior customer service that drive our financial results and ultimately enhance value for all shareholders. We are proud to have also been recognized during the quarter by Newsweek as one of America’s Greatest Workplaces for Diversity 2024.

“Thank you to all EZCORP team members for an exceptional quarter of operating and financial results to commence the 2024 fiscal year.” concluded Given.

•Diluted earnings per share of $0.36, up from $0.25. On an adjusted basis, diluted earnings per share of $0.36, up from $0.28.

•Income before taxes was $37.7 million, up from $24.5 million, and adjusted EBITDA increased 21% to $46.4 million.

•PLO increased 16% to $243.3 million, up $33.4 million. On a same-store basis2, PLO increased 14% due to improved operational performance and continued strong pawn demand.

•Total revenues and gross profit increased 13%, reflecting improved pawn service charge (PSC) revenues, merchandise sales and merchandise sales gross profit.

•PSC increased 15% as a result of higher average PLO.

•Merchandise sales gross margin remains within our target range at 36%. Aged general merchandise was 1.3% of total general merchandise inventory.

•Net inventory increased 6%, as expected with the growth in PLO. Inventory turnover increased to 3.0x, from 2.8x.

•Store expenses increased 10%, primarily due to increased labor in-line with store activity, higher store count and rent. On a same-store basis, store expenses increased 7%.

•General and administrative expenses increased 7%, primarily due to annual salary increases and an increase in costs related to the implementation of Workday.

•Cash and cash equivalents at the end of the quarter was $218.5 million, up 5% year-over-year. The increase was primarily due to cash inflows provided by operating activities offset by the increase in PLO and inventory, strategic investments, share repurchases, and the acquisition of new stores.

U.S. Pawn

•PLO ended the quarter at $190.8 million, up 14% or 13% on a same store basis.

•Total revenues was up 12% and gross profit increased 10%, reflecting increased PSC and higher merchandise sales.

•PSC increased 14% as a result of higher average PLO.

•Merchandise sales increased 6% and gross margin decreased to 37% from 38%. Aged general merchandise was 1.1% of total general merchandise inventory.

•Net inventory increased 8%, as expected with the growth in PLO. Inventory turnover increased to 2.7x from 2.6x.

•Store expenses increased 5%, primarily due to wage inflationary pressures, higher store count and, to a lesser extent, rent.

•Segment contribution increased 21% to $47.5 million.

•Segment store count increased by 1 store during the quarter due to an acquisition.

Latin America Pawn

•PLO improved to $52.5 million, up 22% (11% on constant currency basis). On a same store basis, PLO increased 19% (8% on a constant currency basis).

•Total revenues was up 19% (9% on constant currency basis) and gross profit increased 22% (11% on a constant currency basis), reflecting increased PSC, higher merchandise sales and improved merchandise sales gross profit.

•PSC increased 18% (8% on a constant currency basis) as a result of higher average PLO.

•Merchandise sales gross margin increased from 30% to 32%. Aged general merchandise was 1.6% of total merchandise inventory.

•Net inventory remained flat (decreased 11% on a constant currency basis) due to PLO growth, offset by increased inventory turnover at 3.8x, up from 3.3x.

•Store expenses increased 21% (10% on a constant currency basis), primarily due to increases in minimum wage and headcount, higher store count and, to a lesser extent, rent. Same-store expenses increased 16% (6% on a constant currency basis).

•Segment contribution increased 35% (27% on a constant currency basis). On an adjusted basis, segment contribution was up 24% to $9.6 million.

•Segment store count increased by 5 de novo stores opened during the quarter.

EZCORP’s Quarterly Report on Form 10-Q for the quarter ended December 31, 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 will host a conference call on Thursday, February 1, 2024, at 8:00 am Central Time to discuss First Quarter Fiscal 2024 results. Analysts and institutional investors may participate on the conference call by registering online at: https://edge.media-server.com/mmc/p/iic4zjrc/. 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 pre-owned and recycled merchandise, primarily collateral forfeited from pawn lending operations and 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. 

Follow us on social media:

Facebook EZPAWN Official https://www.facebook.com/EZPAWN/

EZCORP Instagram Official https://www.instagram.com/ezcorp_official/

EZPAWN Instagram Official https://www.instagram.com/ezpawnofficial/

EZCORP LinkedIn https://www.linkedin.com/company/ezcorp/

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)

			Three Months Ended December 31,
(in thousands)			2023						2022
Operating activities:
Net income			$	28,470					$	16,778
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization			8,565						7,988
Amortization of debt discount and deferred financing costs			417						378
Non-cash lease expense			14,744						13,596
Deferred income taxes			345						656
Other adjustments			(857)						(91)
Provision for inventory reserve			(156)						532
Stock compensation expense			2,264						1,886
Equity in net income from investment in unconsolidated affiliates			(1,153)						(1,584)
Net loss on extinguishment of debt			—						3,545
Changes in operating assets and liabilities, net of business acquisitions:
Pawn service charges receivable			(1,000)						(691)
Inventory			2,066						(1,881)
Prepaid expenses, other current assets and other assets			(5,823)						(2,280)
Accounts payable, accrued expenses and other liabilities			(33,991)						(34,761)
Customer layaway deposits			(719)						(752)
Income taxes			8,309						6,574
Dividends from unconsolidated affiliates			—						1,775
Net cash provided by operating activities			21,481						11,668
Investing activities:
Loans made			(216,978)						(189,074)
Loans repaid			123,021						109,125
Recovery of pawn loan principal through sale of forfeited collateral			98,209						88,030
Capital expenditures, net			(7,184)						(7,182)
Acquisitions, net of cash acquired			(677)						(12,884)
Issuance of notes receivable			—						(15,500)
Investment in unconsolidated affiliate			—						(2,133)
Investment in other investments			(15,000)						(15,000)
Dividends from unconsolidated affiliates			1,745						—
Net cash used in investing activities			(16,864)						(44,618)
Financing activities:
Taxes paid related to net share settlement of equity awards			(3,253)						(1,138)
Proceeds from issuance of debt			—						230,000
Debt issuance cost			—						(7,403)
Cash paid on extinguishment of debt			—						(1,951)
Payments on debt			—						(178,488)
Purchase and retirement of treasury stock			(3,007)						(7,027)
Payments of finance leases			(132)						—
Net cash (used in) provided by financing activities			(6,392)						33,993
Effect of exchange rate changes on cash and cash equivalents and restricted cash			(207)						605
Net (decrease) increase in cash, cash equivalents and restricted cash			(1,982)						1,648
Cash and cash equivalents and restricted cash at beginning of period			228,968						214,369
Cash and cash equivalents and restricted cash at end of period			$	226,986					$	216,017

                                                                

In addition to the financial information prepared in conformity with accounting U.S. generally accepted accounting principles (“GAAP”), we provide certain other non-GAAP financial information on a constant currency (“constant currency”) and adjusted basis. We use constant currency results to evaluate our Latin America Pawn operations, which are denominated primarily in Mexican pesos, Guatemalan quetzales and other Latin American currencies. We believe that presentation of constant currency and adjusted results is meaningful and useful in understanding the activities and business metrics of our operations and reflect an additional way of viewing aspects of our business that, when viewed with GAAP results, provide a more complete understanding of factors and trends affecting our business. We provide non-GAAP financial information for informational purposes and to enhance understanding of our GAAP consolidated financial statements. We use this non-GAAP financial information primarily to evaluate and compare operating results across accounting periods.

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 months ended December 31, 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 December 31, 2023
(in millions)			U.S. Dollar Amount						Percentage Change YOY
Consolidated revenues			$	300.0					13		%
Currency exchange rate fluctuations			(7.1)
Constant currency consolidated revenues			$	292.9					11		%
Consolidated gross profit			$	172.6					13		%
Currency exchange rate fluctuations			(3.8)
Constant currency consolidated gross profit			$	168.8					11		%
Consolidated net inventory			$	164.9					6		%
Currency exchange rate fluctuations			(4.0)
Constant currency consolidated net inventory			$	160.9					3		%
Latin America Pawn gross profit			$	45.1					22		%
Currency exchange rate fluctuations			(3.8)
Constant currency Latin America Pawn gross profit			$	41.3					11		%
Latin America Pawn PLO			$	52.5					22		%
Currency exchange rate fluctuations			(4.9)
Constant currency Latin America Pawn PLO			$	47.6					11		%
Latin America Pawn PSC revenues			$	27.4					18		%
Currency exchange rate fluctuations			(2.2)
Constant currency Latin America Pawn PSC revenues			$	25.2					8		%
Latin America Pawn merchandise sales			$	53.9					19		%
Currency exchange rate fluctuations			(4.8)
Constant currency Latin America Pawn merchandise sales			$	49.1					8		%
Latin America Pawn segment profit before tax			$	10.1					35		%
Currency exchange rate fluctuations			(0.7)
Constant currency Latin America Pawn segment profit before tax			$	9.4					26		%