AUSTIN, Texas, May 01, 2024 (GLOBE NEWSWIRE) --  EZCORP, Inc. (NASDAQ:EZPW), a leading provider of pawn transactions in the United States and Latin America, today announced results for its second quarter ended March 31, 2024. 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. SECOND QUARTER HIGHLIGHTS Net income of $21.5 million, up from a net loss of $6.8 million. In the prior-year we recorded our share of the one-time, non-cash goodwill impairment and discrete adjustments recognized by Cash Converters International of $25.6 million. On an adjusted basis1, net income increased $3.6 million or 21%. Diluted earnings per share of $0.29, up from diluted loss per share of $0.12. On an adjusted basis, diluted earnings per share of $0.28, compared to $0.23. Total revenues increased 11%, and gross profit increased 12%. Merchandise sales gross margin remains within our targeted range at 35%. Pawn loans outstanding (PLO) up 14% to $235.8 million. Return on earning assets (ROEA) remains strong at 165%. CEO COMMENTARY AND OUTLOOK Lachie Given, Chief Executive Officer, stated, "We achieved record second quarter revenue and PLO, driven by strong consumer demand and excellent customer service. The challenging macro-economic environment continues to fuel robust customer demand for short-term cash and pre-owned and recycled goods. "During the second quarter, we opened nine de novo stores in Latin America and acquired six stores in the U.S. We also consolidated six stores, five in Latin America and one in the U.S., which netted an additional nine stores. We now have a total of 1,246 stores across the organization and over 7,800 team members. Our strong balance sheet allows us to continue to build scale, both organically and by acquiring new stores. In addition, we continue to return capital to our shareholders, having repurchased $3.0 million worth of EZCORP shares during the quarter. "We have 4.6 million EZ+ Rewards members, an increase of 61% over the second quarter of 2023 and 10% over last quarter. Online payments continue to gain traction with customers, and we collected $21.8 million in the U.S., up 72%, and have expanded online payments to our stores in Mexico. These initiatives to increase customer loyalty and engagement and provide a more convenient customer experience are an integral part of our growth in the local neighborhoods in which we operate. "Thank you to our exceptional EZCORP team members for delivering another outstanding quarter of excellent operating and financial results for our shareholders. We will continue to invest in our team and our stores, focusing on recruitment and retention, while also investing in technology and other initiatives to enhance the customer experience. This focus and investment continues to enhance value for all of our shareholders," concluded Given. CONSOLIDATED RESULTS Three Months Ended March 31 As Reported   Adjusted1 in millions, except per share amounts   2024     2023       2024     2023                 Total revenues $ 285.6   $ 258.4     $ 280.2   $ 258.4 Gross profit $ 167.6   $ 149.2     $ 164.6   $ 149.2 Income (loss) before tax $ 28.7   $ (7.3 )   $ 27.6   $ 24.3 Net income (loss) $ 21.5   $ (6.8 )   $ 20.7   $ 17.1 Diluted earnings (loss) per share $ 0.29   $ (0.12 )   $ 0.28   $ 0.23 EBITDA (non-GAAP measure) $ 37.4     $ 2.1     $ 36.2   $ 33.8 Diluted earnings per share of $0.29, up from diluted loss per share of $0.12. On an adjusted basis, diluted earnings per share of $0.28, up from $0.23. The primary difference between GAAP and Adjusted financial results is attributable to our share of the previously announced prior year one-time, non-cash goodwill impairment recognized by Cash Converters International. Income before taxes was $28.7 million, up from loss before taxes of $7.3 million, and adjusted EBITDA increased 7% to $36.2 million. PLO increased 14% to $235.8 million, up $29.7 million. On a same-store basis2, PLO increased 12% due to improved operational performance and continued strong pawn demand. Total revenues increased 11%, and gross profit increased 12%, 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 35%. Aged general merchandise was 2.3% of total general merchandise inventory. Net inventory increased 9%, as expected with the growth in PLO. Inventory turnover increased to 2.9x, from 2.8x. Store expenses increased 13%, primarily due to increased labor, in-line with store activity, higher store count and, to a lesser extent, expenses related to our loyalty program. On a same-store basis, store expenses increased 11%. General and administrative expenses increased 17%, primarily due to labor driven by incentive compensation related to an increase in share price and, to a lesser extent, costs related to the implementation of Workday. Cash and cash equivalents at the end of the quarter was $229.1 million, down 6% year-over-year. The decrease was due to the increase in PLO and inventory, strategic investments, share repurchases, and the acquisition of new stores, partially offset by cash inflows provided by operating activities. SEGMENT RESULTS U.S. Pawn PLO ended the quarter at $173.7 million, up 11% or 9% on a same store basis. Total revenue and gross profit was up 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 increased to 3.0% of total general merchandise inventory, primarily driven by luxury handbags in our Max Pawn stores. Net inventory increased 9%, as expected with the growth in PLO. Inventory turnover remained flat at 2.6x. Store expenses increased 12%, primarily due to salaries and benefits as we continue to support our team members as a part of People, Pawn and Passion focus, higher store count and, to a lesser extent, expenses related to our loyalty program. Segment contribution increased 8% to $40.7 million. During the quarter, net store count increased by five due to the acquisition of six stores and the consolidation of one store. Latin America Pawn PLO improved to $62.0 million, up 26% (19% on constant currency basis). On a same store basis, PLO increased 22% (15% on a constant currency basis) due to improved operational performance and continued strong pawn demand. Total revenues was up 12% (4% on constant currency basis), and gross profit increased 18% (10% on a constant currency basis), reflecting increased PSC, higher merchandise sales and improved merchandise sales gross profit. PSC increased 18% (10% on a constant currency basis) as a result of higher average PLO. Merchandise sales gross margin increased to 33% from 32%. Aged general merchandise was 1.4% of total merchandise inventory. Net inventory increased 9% (2% on a constant currency basis). Inventory turnover increased to 3.6x from 3.5x. Store expenses increased 15% (7% on a constant currency basis), primarily due to higher store count. Same-store expenses increased 10% (2% on a constant currency basis). Segment contribution increased 2% (decreased 3% on a constant currency basis). On an adjusted basis, segment contribution was up 38% to $7.7 million, with the primary adjustment being the prior year reversal of contingent consideration liability of $2.5 million in connection with a previously completed acquisition. During the quarter, net store count increased by four due to the opening of nine de novo stores and the consolidation of five stores. FORM 10-Q EZCORP's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 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. CONFERENCE CALLEZCORP will host a conference call on Thursday, May 2, 2024, at 8:00 am Central Time to discuss Second Quarter Fiscal 2024 results. Analysts and institutional investors may participate on the conference call by registering online at: https://register.vevent.com/register/BIc16d26b733bc44b7aecc33d2d530fef4. 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.  ABOUT EZCORP 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/ FORWARD LOOKING STATEMENTS 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. Contact:Email: (512) 314-2220 EZCORP, Inc.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)     Three Months EndedMarch 31,   Six Months EndedMarch 31, (in thousands, except per share amounts)   2024       2023       2024       2023   Revenues:               Merchandise sales $ 164,687     $ 152,507     $ 344,090     $ 316,294   Jewelry scrapping sales   13,714       12,825       27,796       20,709   Pawn service charges   107,163       93,030       213,612       185,623   Other revenues   75       61       132       124   Total revenues   285,639       258,423       585,630       522,750   Merchandise cost of goods sold   106,259       97,339       221,469       202,216   Jewelry scrapping cost of goods sold   11,788       11,902       23,996       18,855   Gross profit   167,592       149,182       340,165       301,679   Operating expenses:               Store expenses   114,582       101,269       225,137       202,072   General and administrative   18,266       15,609       34,809       31,085   Depreciation and amortization   8,219       7,963       16,784       15,951   Loss (gain) on sale or disposal of assets and other   3       73       (169 )     57   Other income   (765 )     (2,465 )     (765 )     (2,465 ) Total operating expenses   140,305       122,449       275,796       246,700   Operating income   27,287       26,733       64,369       54,979   Interest expense   3,402       3,390       6,842       9,580   Interest income   (2,882 )     (1,898 )     (5,521 )     (2,562 ) Equity in net (income) loss of unconsolidated affiliates   (1,719 )     32,501       (2,872 )     30,917   Other (income) expense   (165 )     80       (436 )     (154 ) Income (loss) before income taxes   28,651       (7,340 )     66,356       17,198   Income tax expense (benefit)   7,172       (550 )     16,407       7,210   Net income (loss) $ 21,479     $ (6,790 )   $ 49,949     $ 9,988                   Basic earnings (loss) per share $ 0.39     $ (0.12 )   $ 0.91     $ 0.18   Diluted earnings (loss) per share $ 0.29     $ (0.12 )   $ 0.65     $ 0.11                   Weighted-average basic shares outstanding   55,093       55,648       55,084       55,981   Weighted-average diluted shares outstanding   83,045       55,648       84,948       65,269   EZCORP, Inc.CONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited) (in thousands, except share and per share amounts) March 31,2024   March 31,2023   September 30,2023             Assets:           Current assets:           Cash and cash equivalents $ 229,111     $ 243,128     $ 220,595   Restricted cash   8,581       8,451       8,373   Pawn loans   235,773       206,096       245,766   Pawn service charges receivable, net   38,268       33,116       38,885   Inventory, net   163,429       150,297       166,477   Prepaid expenses and other current assets   47,142       45,564       39,623   Total current assets   722,304       686,652       719,719   Investments in unconsolidated affiliates   13,162       10,681       10,987   Other investments   51,220       39,220       36,220   Property and equipment, net   63,306       59,775       68,096   Right-of-use assets, net   243,752       234,287       234,388   Goodwill   310,658       300,078       302,372   Intangible assets, net   61,714       59,620       58,216   Notes receivable, net   —       1,233       —   Deferred tax asset, net   26,247       19,127       25,702   Other assets, net   15,779       9,859       12,011   Total assets $ 1,508,142     $ 1,420,532     $ 1,467,711               Liabilities and equity:           Current liabilities:           Current maturities of long-term debt, net $ 34,347     $ —     $ 34,265   Accounts payable, accrued expenses and other current liabilities   62,838       72,695     $ 81,605   Customer layaway deposits   20,352       18,761       18,920   Operating lease liabilities, current   55,658       53,921       57,182   Total current liabilities   173,195       145,377       191,972   Long-term debt, net   326,573       359,287       325,847   Deferred tax liability, net   465       368       435   Operating lease liabilities   197,285       191,874       193,187   Other long-term liabilities   10,228       11,038       10,502   Total liabilities   707,746       707,944       721,943   Commitments and contingencies (Note 9)           Stockholders' equity:           Class A Non-voting Common Stock, par value $0.01 per share; shares authorized: 100 million; issued and outstanding : 52,057,309 as of March 31, 2024; 52,561,071 as of March 31, 2023; and 51,869,569 as of September 30, 2023   521       526       519   Class B Voting Common Stock, convertible, par value $0.01 per share; shares authorized: 3 million; issued and outstanding: 2,970,171   30       30       30   Additional paid-in capital   345,174       343,088       346,181   Retained earnings   477,683       405,961       431,140   Accumulated other comprehensive loss   (23,012 )     (37,017 )     (32,102 ) Total equity   800,396       712,588       745,768   Total liabilities and equity $ 1,508,142     $ 1,420,532     $ 1,467,711   EZCORP, Inc.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)   Six Months EndedMarch 31, (in thousands)   2024       2023       Operating activities:       Net income $ 49,949     $ 9,988   Adjustments to reconcile net income to net cash flows from operating activities:       Depreciation and amortization   16,784       15,951   Amortization of debt discount and deferred financing costs   807       736   Non-cash lease expense   29,514       27,546   Deferred income taxes   515       (6,987 ) Other adjustments   (1,429 )     (2,386 ) Provision for inventory reserve   183       280   Stock compensation expense   4,844       3,741   Equity in net (income) loss from investment in unconsolidated affiliates   (2,872 )     30,917   Net loss on extinguishment of debt   —       3,545   Changes in operating assets and liabilities, net of business acquisitions:       Pawn service charges receivable   1,071       1,357   Inventory   1,617       (2,306 ) Prepaid expenses, other current assets and other assets   (8,699 )     (3,639 ) Accounts payable, accrued expenses and other liabilities   (57,531 )     (43,969 ) Customer layaway deposits   886       1,426   Income taxes   909       8,852   Dividends from unconsolidated affiliates   —       1,775   Net cash provided by operating activities   36,548       46,827   Investing activities:       Loans made   (433,194 )     (378,717 ) Loans repaid   262,970       230,604   Recovery of pawn loan principal through sale of forfeited collateral   188,351       171,504   Capital expenditures, net   (13,654 )     (18,439 ) Acquisitions, net of cash acquired   (8,610 )     (12,968 ) Issuance of notes receivable   —       (15,500 )