AUSTIN, Texas, Nov. 6 /PRNewswire-FirstCall/ -- EZCORP, Inc. announced today results for its fourth fiscal quarter and 2008 fiscal year, which ended September 30, 2008.
For the quarter ended September 30, 2008, EZCORP's net income increased 44% to $16,031,000 ($0.37 per share) compared to $11,155,000 ($0.26 per share) for the quarter ended September 30, 2007. Total revenues for the quarter increased 19% to $123,402,000 while operating income improved 13% to $18,950,000.
Included in the results for the quarter are the impact of Hurricane Ike and the benefit of taking a previously under utilized foreign tax credit. On September 13th, the Company closed 154 stores in the hurricane threat area, with most of these closed on September 12th in advance of the hurricane. During the month, the Company lost 1,042 store days due to the hurricane and the resulting power outages. The Company estimates this adversely impacted pretax income approximately $2.5 million ($0.04 tax affected earnings per share).
During the quarter, the Company recognized the benefit of a previously under utilized foreign tax credit related to its investment in Albemarle and Bond Holdings Plc. This resulted in a reduction to income tax expense, not related to the quarter, of approximately $3.1 million ($0.07 per share). Of the $3.1 million tax expense reduction, approximately $2.4 million ($0.06 per share) pertained to the larger credit available on Albemarle and Bond's earnings prior to the Company's 2008 fiscal year.
For the twelve months ended September 30, 2008, net income increased 38% to $52,429,000 ($1.21 per share) compared to $37,874,000 ($0.88 per share) for the prior year twelve month period. Total revenues grew 23% to $457,403,000 while operating income increased 34% to $74,619,000.
Excluding the adverse impact of Hurricane Ike and the benefit of the foreign tax credit related to Albemarle and Bond's earnings in prior periods, the Company's fully diluted earnings per share for the fourth fiscal quarter and 2008 fiscal year would have been $0.34 and $1.19 per share.
Commenting on these results, President and Chief Executive Officer, Joe Rotunda, stated, "Our fourth fiscal 2008 quarter was our twenty-fifth consecutive quarter of year over year earnings growth. While the unfavorable impact of Hurricane Ike and the favorable impact of the foreign tax credit utilization resulted in a net favorable impact on our quarter's results, we still achieved our earnings expectation for the quarter excluding these two unusual items. Our pawn operations in the U.S. and Mexico drove our excellent results for the quarter."
Rotunda continued, "We have completed our due diligence and are moving ahead with our eleven store Pawn Plus acquisition and the acquisition of Value Financial Services. We expect to close on the Pawn Plus transaction later this month and close on the Value Financial Services acquisition in the latter half of December. We believe both of these acquisitions will be excellent additions to our store portfolio."
Rotunda concluded, "For our first fiscal quarter and 2009 fiscal year, we expect earnings per share, excluding the two pending acquisitions, to be approximately $0.35 and $1.45. Assuming a late November closing on the Las Vegas acquisition and a late December closing on the Value Financial Services transaction, the acquisitions will have a nominal earnings per share impact on our first fiscal quarter and an approximate $0.08 to $0.09 per share benefit on our fiscal year results."
"In addition to completing these two acquisitions, we plan to open 30 to 35 EZMONEY locations in the U.S. and 30 to 35 Empeno Facil locations in Mexico. In Canada we will continue to monitor the regulatory process in each province and enter provinces that adopt acceptable payday loan regulations."
EZCORP is primarily a lender or provider of credit services to individuals who do not have cash resources or access to credit to meet their short-term cash needs. In 294 U.S. EZPAWN and 38 Mexico Empeno Facil locations open on September 30, 2008, the Company offers non-recourse loans collateralized by tangible personal property, commonly known as pawn loans. At these locations, the Company also sells merchandise, primarily collateral forfeited from its pawn lending operations, to consumers looking for good value. In 477 EZMONEY locations and 71 EZPAWN locations open on September 30, 2008, the Company offers short-term non-collateralized loans, often referred to as payday loans, or fee based credit services to customers seeking loans.
This announcement contains certain forward-looking statements regarding the Company's expected performance for future periods including, but not limited to, new store expansion, anticipated benefits of acquisitions and expected future earnings. Actual results for these periods may materially differ from these statements. Such forward-looking statements involve risks and uncertainties such as changing market conditions in the overall economy and the industry, consumer demand for the Company's services and merchandise, changes in the regulatory environment, and other factors periodically discussed in the Company's annual, quarterly and other reports filed with the Securities and Exchange Commission.
You are invited to listen to a conference call discussing these results on November 6, 2008 at 3:30 pm Central Time. The conference call can be accessed over the Internet or replayed at your convenience at the following address. http://www.videonewswire.com/event.asp?id=52866
EZCORP, Inc. Highlights of Consolidated Statements of Operations (Unaudited) (in thousands, except per share data) Three Months Ended September 30, 2008 2007 1 Revenues: 2 Merchandise sales $34,926 $33,101 3 Jewelry scrapping sales 27,162 18,198 4 Pawn service charges 26,860 22,055 5 Signature loan fees 33,561 30,215 6 Other 893 323 7 Total revenues 123,402 103,892 8 Cost of goods sold: 9 Cost of merchandise sales 20,490 19,598 10 Cost of jewelry scrapping sales 17,180 12,791 11 Total cost of goods sold 37,670 32,389 12 Net revenues 85,732 71,503 13 14 Operations expense 40,235 34,515 15 Signature loan bad debt 12,303 9,422 16 Administrative expense 10,917 8,221 17 Depreciation and amortization 3,327 2,618 18 Operating income 18,950 16,727 19 20 Interest income (118) (155) 21 Interest expense 192 67 22 Equity in net income of unconsolidated affiliate (1,180) (760) 23 Loss on sale/disposal of assets 412 59 24 Other (3) - 25 Income before income taxes 19,647 17,516 26 Income tax expense 3,616 6,361 27 Net income $16,031 $11,155 28 29 Net income per share, diluted $0.37 $0.26 30 31 Weighted average shares, diluted 43,468 43,215 EZCORP, Inc. Highlights of Consolidated Statements of Operations (Unaudited) (in thousands, except per share data) Year Ended September 30, 2008 2007 1 Revenues: 2 Merchandise sales $155,828 $141,094 3 Jewelry scrapping sales 76,732 51,893 4 Pawn service charges 94,244 73,551 5 Signature loan fees 128,478 104,347 6 Other 2,121 1,330 7 Total revenues 457,403 372,215 8 Cost of goods sold: 9 Cost of merchandise sales 92,612 83,501 10 Cost of jewelry scrapping sales 46,790 34,506 11 Total cost of goods sold 139,402 118,007 12 Net revenues 318,001 254,208 13 14 Operations expense 153,420 128,602 15 Signature loan bad debt 37,150 28,508 16 Administrative expense 40,458 31,749 17 Depreciation and amortization 12,354 9,812 18 Operating income 74,619 55,537 19 20 Interest income (477) (1,654) 21 Interest expense 420 281 22 Equity in net income of unconsolidated affiliate (4,342) (2,945) 23 (Gain) / loss on sale/disposal of assets 939 (72) 24 Other 8 - 25 Income before income taxes 78,071 59,927 26 Income tax expense 25,642 22,053 27 Net income $52,429 $37,874 28 29 Net income per share, diluted $1.21 $0.88 30 31 Weighted average shares, diluted 43,327 43,230 EZCORP, Inc. Highlights of Consolidated Balance Sheets (Unaudited) (in thousands, except per share data and store counts) As of September 30, 2008 2007 1 Assets: 2 Current assets: 3 Cash and cash equivalents $27,444 $22,533 4 Pawn loans 75,936 60,742 5 Payday loans, net 7,124 4,814 6 Pawn service charges receivable, net 12,755 10,113 7 Signature loan fees receivable, net 5,406 5,992 8 Inventory, net 43,209 37,942 9 Deferred tax asset 10,926 8,964 10 Prepaid expenses and other assets 9,116 6,146 11 Total current assets 191,916 157,246 12 13 Investment in unconsolidated affiliate 38,439 35,746 14 Property and equipment, net 40,079 33,806 15 Deferred tax asset, non-current 8,139 4,765 16 Goodwill 24,376 16,211 17 Other assets, net 5,771 3,412 18 Total assets $308,720 $251,186 19 Liabilities and stockholders' equity: 20 Current liabilities: 21 Accounts payable and other accrued expenses $29,425 $25,592 22 Customer layaway deposits 2,327 1,988 23 Federal income taxes payable 246 4,795 24 Total current liabilities 31,998 32,375 25 26 Deferred gains and other long- term liabilities 3,672 2,886 27 Total stockholders' equity 273,050 215,925 28 Total liabilities and stockholders' equity $308,720 $251,186 29 30 Pawn loan balance per ending pawn store $229 $204 31 Inventory per ending pawn store $130 $127 32 Book value per share $6.58 $5.23 33 Tangible book value per share $5.89 $4.77 34 Pawn store count - end of period 332 298 35 Signature loan store count - end of period 477 433 36 Shares outstanding - end of period 41,525 41,306 EZCORP, Inc. Operating Segment Results (Unaudited) (in thousands, except store counts) EZPAWN United Empeno States Facil EZMONEY Three months ended Operations Operations Operations Consolidated September 30, 2008: 1 Revenues: 2 Sales $59,997 $2,091 $- $62,088 3 Pawn service charges 25,342 1,518 - 26,860 4 Signature loan fees 651 - 32,910 33,561 5 Other 892 1 - 893 6 Total revenues 86,882 3,610 32,910 123,402 7 8 Cost of goods sold 36,289 1,381 - 37,670 9 Net revenues 50,593 2,229 32,910 85,732 10 11 Operating expenses: 12 Operations expense 25,273 1,287 13,675 40,235 13 Signature loan bad debt 367 - 11,936 12,303 14 Total direct expenses 25,640 1,287 25,611 52,538 15 Store operating income $24,953 $942 $7,299 $33,194 16 17 Pawn store count - end of period 294 38 - 332 18 Signature loan store count - end of period 6 - 471 477 19 20 Three months ended September 30, 2007: 21 Revenues: 22 Sales $51,212 $87 $- $51,299 23 Pawn service charges 22,007 48 - 22,055 24 Signature loan fees 828 - 29,387 30,215 25 Other 322 1 - 323 26 Total revenues 74,369 136 29,387 103,892 27 28 Cost of goods sold 32,341 48 - 32,389 29 Net revenues 42,028 88 29,387 71,503 30 31 Operating expenses: 32 Operations expense 22,510 161 11,844 34,515 33 Signature loan bad debt 347 - 9,075 9,422 34 Total direct expenses 22,857 161 20,919 43,937 35 Store operating income $19,171 $(73) $8,468 $27,566 36 37 Pawn store count - end of period 294 4 - 98 38 Signature loan store count - end of period 6 - 427 433 EZCORP, Inc. Operating Segment Results (Unaudited) (in thousands, except store counts) EZPAWN United Empeno States Facil EZMONEY Year ended September 30, Operations Operations Operations Consolidated 2008: 1 Revenues: 2 Sales $225,747 $6,813 $- $232,560 3 Pawn service charges 89,431 4,813 - 94,244 4 Signature loan fees 2,782 - 125,696 128,478 5 Other 2,116 5 - 2,121 6 Total revenues 320,076 11,631 125,696 457,403 7 8 Cost of goods sold 135,142 4,260 - 139,402 9 Net revenues 184,934 7,371 125,696 318,001 10 11 Operating expenses: 12 Operations expense 96,674 4,066 52,680 153,420 13 Signature loan bad debt 1,108 - 36,042 37,150 14 Total direct expenses 97,782 4,066 88,722 190,570 15 Store operating income $87,152 $3,305 $36,974 $127,431 16 17 Pawn store count - end of period 294 38 - 332 18 Signature loan store count - end of period b 6 - 471 477 19 20 Year ended September 30, 2007: 21 Revenues: 22 Sales $192,832 $155 $- $192,987 23 Pawn service charges 73,471 80 - 73,551 24 Signature loan fees 3,314 - 101,033 104,347 25 Other 1,328 2 - 1,330 26 Total revenues 270,945 237 101,033 372,215 27 28 Cost of goods sold 117,923 84 - 118,007 29 Net revenues 153,022 153 101,033 254,208 30 31 Operating expenses: 32 Operations expense 87,151 404 41,047 128,602 33 Signature loan bad debt 1,390 - 27,118 28,508 34 Total direct expenses 88,541 404 68,165 157,110 35 Store operating income $64,481 $(251) $32,868 $97,098 36 37 Pawn store count - end of period 294 4 - 298 38 Signature loan store count - end of period 6 - 427 433 For additional information, contact Dan Tonissen at (512) 314-2289.
