AUSTIN, Texas, Jan. 31, 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 first quarter ended December 31, 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. FIRST QUARTER HIGHLIGHTS Net income increased to $28.5 million, an increase of $11.7 milli ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 0-19424 EZCORP, INC. (Exact name of registrant as specified in its charter) | Delaware | | 74-2540145 | | --- | --- | --- | | ( ...

Ezcorp (EZPW) closed the most recent trading day at $8.78, moving +1.5% from the previous trading session. This change outpaced the S&P 500's 0.76% gain on the day. Elsewhere, the Dow saw an upswing of 0.59%, while the tech-heavy Nasdaq appreciated by 1.12%.Coming into today, shares of the consumer financial services company had lost 1.03% in the past month. In that same time, the Finance sector lost 2.01%, while the S&P 500 gained 2.5%.Market participants will be closely following the financial results of ...

FY23 - U.S. Race & Ethnicity Underrepresented Minority White Global Employees Global Management 11 ($ millions) All figures adjusted for discrete items and constant currency. See Appendix for reconciliations. FINANCIAL RESULTS – U.S. PAWN | --- | --- | --- | --- | --- | --- | --- | --- | |-------|-------------------------------------------------------------------------------------------------------------------|-------------|------------------------|-------|-------------|-------------------------------|----- ...

[PART I](index=3&type=section&id=PART%20I) This section covers EZCORP's business, strategy, operations, human capital, ESG, growth, competition, and regulations [ITEM 1. BUSINESS](index=3&type=section&id=ITEM%201.%20BUSINESS) EZCORP is a leading pawn service provider in the U.S. and Latin America, focused on core business strength, efficiency, and growth - EZCORP operates **1,231 locations**: 529 in the U.S., 549 in Mexico, and 153 across Guatemala, El Salvador, and Honduras[12](index=12&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk) - The company's strategy is built on three pillars: Strengthen the Core, Cost Efficiency and Simplification, and Innovate and Grow, supported by four foundational capabilities: Team Members, IT and Data Modernization, Risk Management, and ESG[13](index=13&type=chunk) Sources of Gross Profit (Fiscal 2023) | Source | Percentage of Gross Profit | | :---------------------- | :------------------------- | | Pawn Service Charges | 63% | | Merchandise Sales GP | 36% | | Jewelry Scrapping GP | 1% | [Purpose, Vision and Strategy](index=4&type=section&id=Purpose%2C%20Vision%20and%20Strategy) EZCORP's strategy focuses on operational excellence, cost efficiency, and innovation for customer needs - The company's purpose is to serve customers' short-term cash and pre-owned retail needs, helping them to live and enjoy their lives[11](index=11&type=chunk) - Key strategic pillars include 'Strengthen the Core' (operational excellence), 'Cost Efficiency and Simplification,' and 'Innovate and Grow' (broaden customer engagement)[13](index=13&type=chunk) - Foundational capabilities for strategy execution are Team Members, IT and Data Modernization, Risk Management and Building a Culture of Compliance, and Environment, Social and Governance (ESG)[13](index=13&type=chunk) [Overview of Our Business](index=4&type=section&id=Overview%20of%20Our%20Business) EZCORP operates 1,231 pawn stores in the U.S. and Latin America, offering cash advances and merchandise - As of September 30, 2023, EZCORP operated **1,231 locations**: 529 U.S. pawn stores, 549 Mexico pawn stores, and 153 pawn stores in Guatemala, El Salvador, and Honduras[12](index=12&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk) - The company owns **43.7% of Cash Converters International Limited**, a publicly traded company with over 600 stores across 14 countries, involved in franchising, store operations, and personal/vehicle finance[17](index=17&type=chunk) - EZCORP also holds a preferred interest in Founders One, LLC, which has majority ownership in Simple Management Group, Inc. (SMG), operating 95 pawn stores in the U.S., Caribbean, and Central America[17](index=17&type=chunk) [Segment and Geographic Information](index=7&type=section&id=Segment%20and%20Geographic%20Information) EZCORP manages four segments: U.S. Pawn, Latin America Pawn, Cash Converters, and Other Investments - Reportable segments include U.S. Pawn, Latin America Pawn (Mexico, Guatemala, El Salvador, Honduras), Cash Converters (equity interest), and Other Investments (RDC, Founders)[18](index=18&type=chunk) Company-owned Stores by Segment (as of September 30) | Segment | 2023 | 2022 | 2021 | | :-------------- | :---- | :---- | :---- | | U.S. Pawn | 529 | 515 | 516 | | Latin America | 702 | 660 | 632 | | Consolidated | 1,231 | 1,175 | 1,148 | [Pawn Activities](index=8&type=section&id=Pawn%20Activities) EZCORP's core business is cash advances against collateral, earning pawn service charges, influenced by valuation and sales - Pawn service charges (PSC) accounted for approximately **37% of total revenues** and **63% of gross profit** in fiscal 2023[20](index=20&type=chunk) - As of September 30, 2023, the closing Pawn Loans Outstanding (PLO) balance was **$245.8 million**[20](index=20&type=chunk) Average Monthly PSC Rates and Transaction Amounts by Region (Fiscal 2023) | Region | PSC Rate (per month) | Average Transaction Amount | | :---------- | :------------------- | :------------------------- | | U.S. | 13% - 25% | $160 - $180 | | Mexico | 15% - 21% | $60 - $80 (1,100-1,500 MXN)| | GPMX | 12% - 18% | $110 - $130 | [Operations and Risk Management](index=8&type=section&id=Operations%20and%20Risk%20Management) The company supports store teams and manages risk via asset protection, compliance, and internal audit - Risk management structure includes asset protection, compliance, and internal audit departments to monitor inventory, lending, and regulatory adherence[27](index=27&type=chunk) - Full physical inventory audits are performed at least annually per store, with more frequent checks in higher-risk locations. Daily counts are conducted for jewelry and firearms[27](index=27&type=chunk) [Human Capital Management](index=10&type=section&id=Human%20Capital%20Management) EZCORP employs over 7,500 team members globally, focusing on engagement, talent management, and development - The 2023 Global Employee Engagement Survey achieved a **91% participation rate** and an **84% engagement score**, **9 points above the global benchmark**[29](index=29&type=chunk) - Top strengths identified were Career, Customer Focus, and Continuous Improvement, with focus areas for improvement including Team, Valued Teammate, and Work-Life Balance[30](index=30&type=chunk) - The company employs over **7,500 Team Members**: **3,400+ in the U.S.**, **3,300+ in Mexico**, and **800+ in Central America**[31](index=31&type=chunk) [Diversity and Inclusion](index=10&type=section&id=Diversity%20and%20Inclusion) EZCORP is committed to diversity and inclusion, reflected in an 83% belonging score and affinity group sponsorships - **83% of participants** in the 2023 Global Employee Engagement Survey responded positively to feeling a sense of belonging at EZCORP[38](index=38&type=chunk) - Diversity and Inclusion strategy focuses on Commitment and Accountability, Workplace Inclusion, Diverse Workforce, and sponsoring affinity groups like Women's Empowerment, Black Empowerment, and HOLA[40](index=40&type=chunk) [Total Rewards](index=13&type=section&id=Total%20Rewards) Compensation programs align pay with performance, balancing short-term and long-term incentives - Compensation programs offer competitive wages and incentive plans, with annual gender and racial/ethnic pay equity analysis in the U.S.[44](index=44&type=chunk) - Executive compensation is evaluated by an independent consulting firm and benchmarked against a peer group, aligning long-term equity compensation with shareholder interests[44](index=44&type=chunk) [Management and Oversight](index=13&type=section&id=Management%20and%20Oversight) The People and Compensation Committee oversees executive compensation and organizational development - The People and Compensation Committee oversees executive compensation and organizational development, ensuring alignment with long-term company success[45](index=45&type=chunk) - All Executive Officers have at least one objective related to People, focusing on Employee Engagement Scores, Voluntary Attrition, and Inclusion[46](index=46&type=chunk) [Environmental, Social and Governance (ESG)](index=13&type=section&id=Environmental%2C%20Social%20and%20Governance%20(ESG)) EZCORP integrates ESG through its circular economy, serving underserved consumers, and strong governance - The business model inherently supports a 'circular economy' by recycling pre-owned merchandise (**5.4 million items sold in fiscal 2023**) and gold/diamonds, reducing waste and demand for new manufacturing[48](index=48&type=chunk)[54](index=54&type=chunk) - Social responsibility includes providing essential, transparent, and regulated financial services (average pawn transactions **~$180 or less**) to unbanked/underserved consumers without credit checks or legal obligation to repay[54](index=54&type=chunk) - Despite being a 'Controlled Company' under Nasdaq rules, EZCORP maintains governance standards with a majority of independent directors on its Board and all standing committees (Audit, People and Compensation, Nominating) comprised solely of independent directors[54](index=54&type=chunk) [Growth and Expansion](index=17&type=section&id=Growth%20and%20Expansion) EZCORP expands its store network through new openings and acquisitions, particularly in Latin America - During fiscal 2023, EZCORP opened **44 de novo stores in Latin America** (23 in Mexico, 19 in Guatemala, 2 in Honduras)[57](index=57&type=chunk) - Latin America now accounts for **702 stores**, or **57% of the company's total pawn stores**, and represented **25% of consolidated gross profit** in fiscal 2023[57](index=57&type=chunk) [Seasonality and Quarterly Results](index=17&type=section&id=Seasonality%20and%20Quarterly%20Results) The company experiences seasonality, with U.S. pawn service charges highest in Q4 and merchandise sales peaking in Q1/Q2 - U.S. Pawn Service Charges (PSC) are highest in Q4 (July-September) and lowest in Q3 (April-June) after tax refund season[58](index=58&type=chunk) - U.S. merchandise sales peak in Q1 and Q2 (October-March) due to holidays, Valentine's Day, and tax refunds[58](index=58&type=chunk) - Consolidated profit before tax is generally highest in Q1 (October-December) and lowest in Q3 (April-June)[58](index=58&type=chunk) [Competition](index=17&type=section&id=Competition) EZCORP faces significant competition in fragmented markets, leveraging customer service and loyalty - EZCORP competes with other pawn stores, credit service organizations, banks, credit unions, consumer finance companies, and various retail/e-commerce stores[59](index=59&type=chunk)[60](index=60&type=chunk) - Competitive advantages include quality customer service, convenience, store location, customer-friendly environment, and the EZ+ Rewards loyalty program (**3.8 million members globally**)[59](index=59&type=chunk)[64](index=64&type=chunk) - EZCORP is the **second largest pawn operator in the U.S. and Mexico**, and the **largest in Guatemala**, operating in fragmented markets[61](index=61&type=chunk)[63](index=63&type=chunk) [Trademarks and Trade Names](index=19&type=section&id=Trademarks%20and%20Trade%20Names) The company operates pawn stores under various registered trademarks and trade names across the U.S. and Latin America - U.S. pawn stores operate primarily under 'EZPAWN' or 'Value Pawn & Jewelry'[65](index=65&type=chunk) - Mexico pawn stores use 'EMPEÑO FÁCIL' and 'Cash Apoyo Efectivo', while Guatemala, El Salvador, and Honduras stores operate as 'GuatePrenda' and 'MaxiEfectivo'[65](index=65&type=chunk) [Regulation](index=19&type=section&id=Regulation) EZCORP's operations are subject to extensive federal, state, and local regulations - Pawn stores are regulated by state and local authorities, imposing licensing, PSC rate limits, maximum loan amounts, and pawn terms (e.g., **30-90 days in U.S.**, **30 days in Mexico/GPMX**)[67](index=67&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) - U.S. operations are subject to federal laws like Gramm-Leach-Bliley Act (privacy/data security), Fair Credit Reporting Act, USA PATRIOT Act (anti-money laundering), and Military Lending Act (**36% APR limit for military personnel**)[70](index=70&type=chunk)[77](index=77&type=chunk) - Mexico operations are regulated by PROFECO (consumer protection), anti-money laundering laws (reporting vulnerable activities, cash restrictions), and state/local permits[74](index=74&type=chunk)[75](index=75&type=chunk)[80](index=80&type=chunk) [Available Information](index=23&type=section&id=Available%20Information) EZCORP files reports with the SEC, available on www.sec.gov and its investor relations website - Company filings (10-K, 10-Q, 8-K) are available on the SEC website (www.sec.gov) and EZCORP's Investor Relations section (www.ezcorp.com)[84](index=84&type=chunk)[85](index=85&type=chunk) [ITEM 1A. RISK FACTORS](index=24&type=section&id=ITEM%201A.%20RISK%20FACTORS) EZCORP faces company-specific and general risks, including regulatory changes, market perception, gold value, and political instability - Key company-specific risks include adverse regulatory changes, negative public characterizations of the pawn industry, and business concentration in Texas (**45% of U.S. stores**) and Florida (**17% of U.S. stores**)[87](index=87&type=chunk)[88](index=88&type=chunk)[90](index=90&type=chunk) - Fluctuations in gold values, pawn loan balances, sales margins, and redemption rates can materially impact operating results[91](index=91&type=chunk)[92](index=92&type=chunk) - General risks include political/social instability and economic volatility in Latin America, foreign currency exchange rate fluctuations, litigation, and data security breaches[119](index=119&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk)[129](index=129&type=chunk) [Company Specific Risks](index=24&type=section&id=Company%20Specific%20Risks) Company-specific risks include regulatory changes, negative public perception, geographic concentration, gold value, and single owner control - Failure to comply with laws and regulations or negative public perception of the pawn industry could adversely affect operations and financial performance[87](index=87&type=chunk)[88](index=88&type=chunk) - Over **62% of U.S. pawn stores** are in Texas (**45%**) and Florida (**17%**), making the company susceptible to legislative or regulatory changes in these states[90](index=90&type=chunk) - A significant decrease in gold values or transaction volumes could materially impact earnings, as gold jewelry is a large portion of collateral and inventory[91](index=91&type=chunk) - The beneficial owner of all Class B Voting Common Stock (Phillip E. Cohen) controls the outcome of all matters requiring stockholder vote, potentially influencing the value of publicly traded non-voting stock[96](index=96&type=chunk) - The company's **43.7% investment in Cash Converters** is subject to law or regulatory changes (e.g., Australia's Financial Sector Reform Bill 2022 led to a **$32.4 million goodwill impairment charge in fiscal 2023**)[103](index=103&type=chunk)[104](index=104&type=chunk) [General Risks](index=31&type=section&id=General%20Risks) General risks include public health issues, Latin American instability, foreign currency, litigation, and cybersecurity - Public health issues (e.g., COVID-19) can limit product/service supply, reduce store traffic, or affect demand[118](index=118&type=chunk) - Operations in Latin America are exposed to risks from political instability, economic volatility, violence, and uncertain application of laws, which could restrict operations or growth[119](index=119&type=chunk) - Significant weakening of foreign currencies (Mexican peso, Guatemalan quetzal, Honduran lempira, Australian dollar) could result in lower U.S. dollar assets and earnings[121](index=121&type=chunk) - Breaches in data security or cyber-attacks could harm business operations, lead to reputational damage, and incur increased costs[129](index=129&type=chunk) [ITEM 1B. UNRESOLVED STAFF COMMENTS](index=34&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) There are no unresolved staff comments to report [ITEM 2. PROPERTIES](index=35&type=section&id=ITEM%202.%20PROPERTIES) EZCORP leases all its 1,231 pawn store locations and corporate offices, concentrated in Texas and Florida - All pawn store locations are leased, typically in freestanding buildings or retail strip centers[133](index=133&type=chunk) - As of September 30, 2023, the company had **1,231 stores**: **529 in the U.S.** (**45% in Texas**, **17% in Florida**), **549 in Mexico**, **117 in Guatemala**, **18 in El Salvador**, and **18 in Honduras**[136](index=136&type=chunk) - U.S. leases generally have initial terms of **3-10 years** with **3-5 year renewal options**, while Latin America leases are typically **3-5 years**[134](index=134&type=chunk) [ITEM 3. LEGAL PROCEEDINGS](index=35&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) EZCORP is involved in various legal and regulatory proceedings, expecting no material adverse effect - The company is subject to various claims, disputes, lawsuits, investigations, and legal/regulatory proceedings[421](index=421&type=chunk) - Contingencies are accrued when a liability is probable and estimable, but outcomes are inherently unpredictable[421](index=421&type=chunk) - Management believes no current legal matter will have a material adverse effect on financial condition, results of operations, or liquidity[421](index=421&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=35&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to EZCORP, Inc [PART II](index=36&type=section&id=PART%20II) This section covers EZCORP's common equity market, stockholder matters, share repurchases, financial condition, operations, and market risk [ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES](index=36&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) EZCORP's Class A Non-Voting Common Stock trades on NASDAQ, with Class B held by one stockholder, and share repurchases occur - Class A Non-Voting Common Stock (EZPW) is traded on NASDAQ, with **71 stockholders of record** as of November 1, 2023[141](index=141&type=chunk) - Class B Voting Common Stock has no trading market and is held by one stockholder[141](index=141&type=chunk) Class A Common Stock Performance (September 30, 2018 = $100) | Index | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | | :------------------------ | :------ | :------ | :------ | :------ | :------ | :------ | | EZCORP, INC. | $100.00 | $60.37 | $47.01 | $70.75 | $72.06 | $77.10 | | NASDAQ Composite Index | $100.00 | $99.42 | $138.79 | $179.57 | $131.43 | $164.29 | | NASDAQ Other Finance Index| $100.00 | $111.30 | $116.51 | $141.80 | $97.71 | $118.76 | Share Repurchase Activity (Quarter Ended September 30, 2023) | Period | Shares Purchased | Average Price Per Share | | :------------------------------------ | :--------------- | :---------------------- | | July 1, 2023 through July 31, 2023 | 113,182 | $8.83 | | August 1, 2023 through August 31, 2023| 109,845 | $8.81 | | September 1, 2023 through Sep 30, 2023| 128,372 | $8.04 | | **Quarter ended September 30, 2023** | **351,399** | **$8.54** | [Market Information](index=36&type=section&id=Market%20Information) EZCORP's Class A Non-Voting Common Stock trades on NASDAQ, with Class B privately held - Class A Non-Voting Common Stock (EZPW) is traded on the NASDAQ Stock Market[141](index=141&type=chunk) - As of November 1, 2023, there were approximately **71 stockholders of record** for Class A Common Stock[141](index=141&type=chunk) - Class B Voting Common Stock is held by one stockholder and has no trading market[141](index=141&type=chunk) [Stock Performance Graph](index=36&type=section&id=Stock%20Performance%20Graph) The stock performance graph compares EZCORP's Class A Common Stock returns against NASDAQ indices Cumulative Total Stockholder Returns (September 30, 2018 = $100) | Index | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | | :------------------------ | :------ | :------ | :------ | :------ | :------ | :------ | | EZCORP, INC. | $100.00 | $60.37 | $47.01 | $70.75 | $72.06 | $77.10 | | NASDAQ Composite Index | $100.00 | $99.42 | $138.79 | $179.57 | $131.43 | $164.29 | | NASDAQ Other Finance Index| $100.00 | $111.30 | $116.51 | $141.80 | $97.71 | $118.76 | [Share Repurchase Activity](index=37&type=section&id=Share%20Repurchase%20Activity) EZCORP repurchased 351,399 Class A shares for $3.0 million in Q3 2023 as part of a $50 million program Share Repurchase Activity (Quarter Ended September 30, 2023) | Period | Shares Purchased | Average Price Per Share | | :------------------------------------ | :--------------- | :---------------------- | | July 1, 2023 through July 31, 2023 | 113,182 | $8.83 | | August 1, 2023 through August 31, 2023| 109,845 | $8.81 | | September 1, 2023 through Sep 30, 2023| 128,372 | $8.04 | | **Quarter ended September 30, 2023** | **351,399** | **$8.54** | - A share repurchase program for up to **$50 million** of Class A Non-Voting common shares was approved on May 3, 2022, over a three-year period[147](index=147&type=chunk) - As of September 30, 2023, approximately **$36.0 million** remained available under the repurchase program[147](index=147&type=chunk) [ITEM 6. [RESERVED]](index=37&type=section&id=ITEM%206.%20%5BRESERVED%5D) This item is reserved and contains no information [ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=38&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section analyzes EZCORP's financial condition and operations for fiscal 2023, highlighting increased revenues and decreased net income Summary Financial Data (Fiscal 2023 vs. 2022) | Metric | Fiscal 2023 ($ thousands) | Fiscal 2022 ($ thousands) | Change (%) | | :---------------------------------------- | :------------------------ | :------------------------ | :--------- | | Gross profit | $609,838 | $528,147 | 15% | | Total operating expenses | $517,688 | $453,225 | 14% | | Total non-operating expenses | $40,517 | $7,209 | 462% | | Income before income taxes | $51,633 | $67,713 | (24)% | | Net income | $38,463 | $50,160 | (23)% | | Pawn loans outstanding (PLO) | $245,766 | $210,009 | 17% | | Inventory, net | $166,477 | $151,615 | 10% | - Total revenues increased by **$162.8 million (18%)** and gross profit increased by **15%** in fiscal 2023, driven by higher pawn service charges (PSC) and merchandise sales[155](index=155&type=chunk)[156](index=156&type=chunk) - Net income decreased by **23%** in fiscal 2023, primarily due to a **462% increase in total non-operating expenses**, largely attributable to a net loss from Cash Converters' non-cash goodwill impairment charge and higher interest expense[154](index=154&type=chunk)[158](index=158&type=chunk) [Results of Operations](index=38&type=section&id=Results%20of%20Operations) EZCORP's fiscal 2023 results show an 18% revenue increase and 15% gross profit increase, but a 23% net income decrease - Total revenues increased **$162.8 million (18%)** and gross profit increased **15%** in fiscal 2023, driven by improved pawn service charge (PSC) revenue and merchandise sales[155](index=155&type=chunk) - Net income decreased **$11.7 million (23%)** in fiscal 2023, primarily due to a **$33.3 million (462%) increase in total non-operating expenses**, including a net loss from Cash Converters' non-cash goodwill impairment charge and higher interest expense[154](index=154&type=chunk)[158](index=158&type=chunk) - Pawn loans outstanding (PLO) increased **$35.8 million (17%) to $245.8 million**, reflecting improved operational performance and strong pawn demand[155](index=155&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) EZCORP's cash increased to $220.6 million, with operating activities providing $101.8 million and financing activities providing $23.7 million - Cash and cash equivalents increased to **$220.6 million** at September 30, 2023, from **$206.0 million** in 2022[184](index=184&type=chunk) Summary of Cash Flows (Fiscal 2023 vs. 2022) | Cash Flow Activity | Fiscal 2023 ($ thousands) | Fiscal 2022 ($ thousands) | Change (%) | | :---------------------------------- | :------------------------ | :------------------------ | :--------- | | Operating activities | $101,834 | $66,535 | 53% | | Investing activities | $(110,886) | $(113,283) | (2)% | | Financing activities | $23,692 | $(2,832) | * | | Net increase (decrease) in cash | $14,599 | $(49,255) | 130% | - Financing activities were significantly impacted by the issuance of **$230.0 million in 2029 Convertible Notes**, partially offset by the extinguishment of **$109.4 million of 2024 notes** and **$69.1 million of 2025 notes**[188](index=188&type=chunk)[190](index=190&type=chunk) Contractual Obligations (as of September 30, 2023, $ thousands) | Obligation | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | | :------------------------------ | :-------- | :--------------- | :-------- | :-------- | :---------------- | | Debt obligations | $367,762 | $34,389 | $103,373 | $— | $230,000 | | Interest on long-term debt | $58,535 | $11,822 | $18,682 | $17,250 | $10,781 | | Lease obligations | $310,275 | $76,290 | $124,035 | $69,358 | $40,592 | | **Total** | **$736,572**| **$122,501** | **$246,090**| **$86,608** | **$281,373** | [Critical Accounting Estimates](index=48&type=section&id=Critical%20Accounting%20Estimates) EZCORP's financial statements rely on critical accounting estimates for revenue, inventory, goodwill, and income taxes - Pawn service charges are recognized using the effective interest method, with collectibility estimates based on redemption rates and loan amounts due[203](index=203&type=chunk) - Inventory is valued at the lower of cost or net realizable value, with reserves for obsolete or slow-moving items, particularly jewelry influenced by gold prices[204](index=204&type=chunk) - Goodwill and indefinite-lived intangible assets are tested for impairment annually, or more frequently if triggering events occur, using qualitative and quantitative assessments (income approach based on future cash flows)[205](index=205&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk) - Income tax estimates involve assessing the realizability of deferred tax assets and determining uncertain tax positions, which require significant judgment[209](index=209&type=chunk)[211](index=211&type=chunk) [Cautionary Statement Regarding Risks and Uncertainties That May Affect Future Results](index=52&type=section&id=Cautionary%20Statement%20Regarding%20Risks%20and%20Uncertainties%20That%20May%20Affect%20Future%20Results) This section warns that forward-looking statements are subject to risks detailed in Item 1A - The report contains forward-looking statements reflecting future plans, estimates, beliefs, and expected performance, which may differ materially from actual results due to risks and uncertainties[10](index=10&type=chunk)[212](index=212&type=chunk) - Key risks include changes in laws and regulations, negative characterizations of the pawn industry, business concentration in Texas and Florida, and fluctuations in gold prices or volumes[212](index=212&type=chunk) - Other risks encompass the ability to grow store count, indemnification obligations, controlled ownership structure, firearms business liabilities, competition, IT system reliability, and foreign currency exchange rate changes[212](index=212&type=chunk) [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=54&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) EZCORP is exposed to market risks from gold values and foreign currency exchange rates - Market risk exposure is primarily linked to gold values and foreign currency exchange rates[216](index=216&type=chunk) - Changes in gold values directly affect pawn lending, jewelry sales, and jewelry cost of goods sold, though the exact impact is hard to estimate[217](index=217&type=chunk) - Foreign currency translation adjustments for Cash Converters (Australian dollar) resulted in a **$4.4 million increase to stockholders' equity**, while Latin America (Mexican peso, Guatemalan quetzal) contributed a **$20.9 million increase** in fiscal 2023[219](index=219&type=chunk)[220](index=220&type=chunk) [Market Risk Disclosures](index=54&type=section&id=Market%20Risk%20Disclosures) EZCORP's market risks are driven by gold value fluctuations and foreign currency exchange rates - Earnings and financial position are affected by changes in gold values, impacting pawn lending, jewelry sales, and cost of goods sold[217](index=217&type=chunk) - Foreign exchange rate fluctuations, particularly for the Mexican peso and Australian dollar, impact assets, investments, and earnings[218](index=218&type=chunk)[219](index=219&type=chunk)[220](index=220&type=chunk) - The Mexican peso strengthened approximately **16% against the U.S. dollar** in fiscal 2023, resulting in a **$20.9 million increase to stockholders' equity** from Latin America operations[220](index=220&type=chunk) [ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](index=55&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section presents EZCORP's audited consolidated financial statements and detailed notes - The section includes audited consolidated financial statements: Balance Sheets, Statements of Operations, Comprehensive Income, Stockholders' Equity, and Cash Flows for the fiscal years ended September 30, 2023, 2022, and 2021[224](index=224&type=chunk) - BDO USA, P.C. provided an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of September 30, 2023[226](index=226&type=chunk)[227](index=227&type=chunk) - The company adopted ASU 2020-06 (Accounting for Convertible Instruments) on October 1, 2021, which simplified accounting for convertible debt by no longer separating liability and equity components[228](index=228&type=chunk)[285](index=285&type=chunk) [Index to Consolidated Financial Statements](index=55&type=section&id=Index%20to%20Consolidated%20Financial%20Statements) This index provides a roadmap to all consolidated financial statements and accompanying notes - The index provides a comprehensive list of consolidated financial statements and notes, including the Report of Independent Registered Public Accounting Firm, Balance Sheets, Statements of Operations, Comprehensive Income, Stockholders' Equity, Cash Flows, and various detailed notes[224](index=224&type=chunk) [Report of Independent Registered Public Accounting Firm](index=56&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) BDO USA, P.C. issued an unqualified opinion on EZCORP's financial statements and internal controls - BDO USA, P.C. provided an unqualified opinion on the consolidated financial statements for the period ended September 30, 2023, and on the effectiveness of internal control over financial reporting[226](index=226&type=chunk)[227](index=227&type=chunk) - The company changed its accounting method for convertible debt as of October 1, 2021, due to the adoption of ASU 2020-06[228](index=228&type=chunk) - A critical audit matter was the accounting for the 2029 Convertible Notes, requiring complex evaluation of embedded conversion, redemption, and other features[233](index=233&type=chunk)[235](index=235&type=chunk) [Consolidated Balance Sheets](index=59&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheets show EZCORP's financial position, with total assets and equity increasing Consolidated Balance Sheet Highlights (as of September 30, $ thousands) | Metric | 2023 | 2022 | | :-------------------------- | :---------- | :---------- | | Total assets | $1,467,711 | $1,347,878 | | Total liabilities | $721,943 | $655,647 | | Total equity | $745,768 | $692,231 | | Cash and cash equivalents | $220,595 | $206,028 | | Pawn loans | $245,766 | $210,009 | | Inventory, net | $166,477 | $151,615 | | Long-term debt, net | $325,847 | $312,903 | - Total assets increased by **$119.8 million (8.9%)** from 2022 to 2023[239](index=239&type=chunk) - Total liabilities increased by **$66.3 million (10.1%)** and total equity increased by **$53.5 million (7.7%)** from 2022 to 2023[239](index=239&type=chunk) [Consolidated Statements of Operations](index=60&type=section&id=Consolidated%20Statements%20of%20Operations) The Consolidated Statements of Operations show EZCORP's financial performance, with revenues increasing but net income decreasing Consolidated Statements of Operations Highlights (Fiscal Year Ended September 30, $ thousands) | Metric | 2023 | 2022 | 2021 | | :---------------------------------------- | :---------- | :---------- | :---------- | | Total revenues | $1,049,041 | $886,225 | $729,551 | | Gross profit | $609,838 | $528,147 | $449,485 | | Total operating expenses | $517,688 | $453,225 | $418,316 | | Operating income | $92,150 | $74,922 | $31,169 | | Income before income taxes | $51,633 | $67,713 | $16,062 | | Net income | $38,463 | $50,160 | $8,612 | | Basic earnings per share | $0.69 | $0.89 | $0.15 | | Diluted earnings per share | $0.53 | $0.70 | $0.15 | - Total revenues increased by **$162.8 million (18.4%)** from 2022 to 2023[241](index=241&type=chunk) - Net income decreased by **$11.7 million (23.3%)** from 2022 to 2023[241](index=241&type=chunk) [Consolidated Statements of Comprehensive Income](index=61&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income increased to $62.0 million in 2023, driven by a significant foreign currency translation gain Consolidated Statements of Comprehensive Income Highlights (Fiscal Year Ended September 30, $ thousands) | Metric | 2023 | 2022 | 2021 | | :-------------------------------------- | :-------- | :-------- | :------- | | Net income | $38,463 | $50,160 | $8,612 | | Foreign currency translation adjustment | $23,567 | $2,746 | $9,653 | | Comprehensive income | $62,030 | $52,906 | $18,265 | - Comprehensive income increased by **$9.1 million (17.2%)** from 2022 to 2023[243](index=243&type=chunk) - Foreign currency translation adjustment, net of income tax expense, was a gain of **$23.6 million** in 2023, significantly higher than **$2.7 million** in 2022[243](index=243&type=chunk) [Consolidated Statements of Stockholders' Equity](index=62&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) Total equity increased to $745.8 million in 2023, driven by net income and foreign currency gains Consolidated Stockholders' Equity Highlights (as of September 30, $ thousands) | Metric | 2023 | 2022 | 2021 | | :-------------------------------------- | :-------- | :-------- | :-------- | | Total Equity | $745,768 | $692,231 | $672,238 | | Retained earnings | $431,140 | $402,006 | $326,781 | | Accumulated other comprehensive loss | $(32,102) | $(55,669) | $(58,415) | | Class A Non-Voting Common Stock (shares)| 51,869,569| 53,454,885| 56,057,000| - Total equity increased by **$53.5 million (7.7%)** from 2022 to 2023[245](index=245&type=chunk) - The adoption of ASU 2020-06 on October 1, 2021, resulted in a cumulative effect adjustment, reducing additional paid-in capital by **$62.8 million** and increasing retained earnings by **$26.2 million**[245](index=245&type=chunk) [Consolidated Statements of Cash Flows](index=63&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased to $101.8 million in 2023, with financing activities providing $23.7 million Consolidated Statements of Cash Flows Highlights (Fiscal Year Ended September 30, $ thousands) | Cash Flow Activity | 2023 | 2022 | 2021 | | :------------------------------------------------ | :---------- | :---------- | :---------- | | Net cash provided by operating activities | $101,834 | $66,535 | $46,438 | | Net cash used in investing activities | $(110,886) | $(113,283) | $(84,611) | | Net cash provided by (used in) financing activities| $23,692 | $(2,832) | $(16,253) | | Net increase (decrease) in cash | $14,599 | $(49,255) | $(48,929) | | Cash and cash equivalents and restricted cash (end)| $228,968 | $214,369 | $263,624 | - Net cash provided by operating activities increased by **$35.3 million (53%)** in fiscal 2023, primarily due to higher net income (after non-cash adjustments) and working capital changes[186](index=186&type=chunk)[248](index=248&type=chunk) - Financing activities shifted from a net use of **$2.8 million** in 2022 to a net provision of **$23.7 million** in 2023, driven by the issuance of **$230.0 million in 2029 Convertible Notes**[188](index=188&type=chunk)[248](index=248&type=chunk) [NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=64&type=section&id=NOTE%201%3A%20ORGANIZATION%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines EZCORP's business, consolidation principles, and significant accounting policies - EZCORP is a provider of pawn services in the U.S. and Latin America, operating **1,231 locations** as of September 30, 2023[250](index=250&type=chunk)[251](index=251&type=chunk) - Pawn service charges are recognized using the effective interest method, and forfeited collateral becomes inventory at the lower of principal balance or net realizable value[254](index=254&type=chunk)[258](index=258&type=chunk) - The company early adopted ASU 2020-06 on October 1, 2021, eliminating the separation of convertible senior notes into liability and equity components, which decreased interest expense by **$13.9 million in fiscal 2022**[285](index=285&type=chunk)[303](index=303&type=chunk)[305](index=305&type=chunk) [NOTE 2: OTHER CHARGES](index=74&type=section&id=NOTE%202%3A%20OTHER%20CHARGES) This note details charges from fiscal 2020 strategic initiatives, with $2.0 million in accrued charges - Strategic initiatives from fiscal 2020 included workforce reductions, closure of CASHMAX operations, and store closures[308](index=308&type=chunk) - Accrued charges were **$2.0 million** at September 30, 2023, primarily for other costs, down from **$2.2 million** in 2022[310](index=310&type=chunk) - No new charges were recorded for fiscal years ended September 30, 2023, and 2022[310](index=310&type=chunk) [NOTE 3: ACQUISITIONS](index=76&type=section&id=NOTE%203%3A%20ACQUISITIONS) In fiscal 2021, EZCORP acquired Bajio, adding 128 pawn stores in Mexico for $22.3 million - In June 2021, EZCORP acquired PLO del Bajio S. de R.L. de C.V. ('Bajio'), adding **128 'Cash Apoyo Efectivo' pawn stores in Mexico**[311](index=311&type=chunk) - Total consideration for Bajio was **$22.3 million**, consisting of cash and Class A Non-Voting Common Stock[313](index=313&type=chunk) - A contingent consideration liability of **$5.1 million** related to the Bajio acquisition was reduced to zero in fiscal 2023, recorded as 'Other (income) expense'[314](index=314&type=chunk) - Goodwill of **$25.4 million** was recognized, attributed to strategic and synergistic benefits like store base expansion and leveraging pawn expertise[316](index=316&type=chunk)[318](index=318&type=chunk) [NOTE 4: EARNINGS PER SHARE](index=79&type=section&id=NOTE%204%3A%20EARNINGS%20PER%20SHARE) This note reconciles basic and diluted EPS for fiscal 2023, 2022, and 2021, with EPS decreasing Earnings Per Share (Fiscal Year Ended September 30) | Metric | 2023 | 2022 | 2021 | | :------------------------------------ | :------ | :------ | :------ | | Net Income - Basic ($ thousands) | $38,463 | $50,160 | $8,612 | | Weighted shares outstanding - Basic | 55,586 | 56,498 | 55,744 | | Basic earnings per common share | $0.69 | $0.89 | $0.15 | | Net Income - Diluted ($ thousands) | $42,790 | $57,649 | $8,612 | | Weighted Shares Outstanding - Diluted | 80,865 | 82,400 | 55,949 | | Diluted earnings per common share | $0.53 | $0.70 | $0.15 | - Basic EPS decreased by **$0.20 (22.5%)** and diluted EPS decreased by **$0.17 (24.3%)** from fiscal 2022 to fiscal 2023[323](index=323&type=chunk) - The adoption of ASU 2020-06 on October 1, 2021, requires the 'if-converted' method for diluted EPS calculation, adding convertible notes interest expense back to net income[298](index=298&type=chunk)[303](index=303&type=chunk)[323](index=323&type=chunk) [NOTE 5: STRATEGIC INVESTMENTS](index=80&type=section&id=NOTE%205%3A%20STRATEGIC%20INVESTMENTS) EZCORP holds strategic investments in Cash Converters (43.7%) and Founders One, LLC - EZCORP owns **43.7% of Cash Converters International Limited**, accounted for under the equity method with a three-month lag[326](index=326&type=chunk)[266](index=266&type=chunk) - Equity in Cash Converters' net loss was **$28.5 million** in fiscal 2023, including a **$32.4 million share of their non-cash goodwill impairment charge**[327](index=327&type=chunk) - EZCORP invested **$30.0 million** in Founders One, LLC for a non-redeemable voting participating preferred equity interest and loaned **$15.0 million** via a Demand Promissory Note[329](index=329&type=chunk)[330](index=330&type=chunk)[331](index=331&type=chunk) - In October 2023, an additional **$15.0 million** was contributed to Founders, bringing the total equity investment to **$45.0 million**, and the interest rate on the promissory note was increased to **15.00%**[332](index=332&type=chunk)[339](index=339&type=chunk)[431](index=431&type=chunk) [NOTE 6: FAIR VALUE MEASUREMENTS](index=82&type=section&id=NOTE%206%3A%20FAIR%20VALUE%20MEASUREMENTS) This note details fair value measurements of financial assets and liabilities using a three-level hierarchy - Fair value hierarchy categorizes inputs into Level 1 (quoted market prices), Level 2 (observable market-based inputs), and Level 3 (unobservable inputs)[336](index=336&type=chunk) - The fair value of the investment in Cash Converters is a Level 1 input, based on its quoted stock price[335](index=335&type=chunk) - Convertible Notes (2024, 2025, 2029) are measured using Level 2 inputs due to quoted price inputs from less actively traded markets[337](index=337&type=chunk) - The acquisition-related contingent obligation for Bajio was remeasured, resulting in a **$5.1 million reduction** in fiscal 2023, with no remaining obligation[339](index=339&type=chunk) [NOTE 7: PROPERTY AND EQUIPMENT](index=83&type=section&id=NOTE%207%3A%20PROPERTY%20AND%20EQUIPMENT) The net book value of property and equipment increased to $68.1 million in 2023 due to additions Property and Equipment, Net (as of September 30, $ thousands) | Classification | 2023 Net Book Value | 2022 Net Book Value | | :-------------------------- | :------------------ | :------------------ | | Land | $4 | $4 | | Buildings and improvements | $36,977 | $27,768 | | Furniture and equipment | $30,948 | $27,928 | | Software | $167 | $274 | | Construction in progress | $— | $751 | | **Total** | **$68,096** | **$56,725** | - Net book value of property and equipment increased by **$11.4 million (20.1%)** from 2022 to 2023[341](index=341&type=chunk) - Depreciation expense for property and equipment was **$22.1 million** in fiscal 2023, up from **$20.4 million** in 2022[342](index=342&type=chunk) [NOTE 8: GOODWILL AND INTANGIBLE ASSETS](index=84&type=section&id=NOTE%208%3A%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) Goodwill increased to $302.4 million in 2023 due to acquisitions and foreign currency changes - Goodwill and indefinite-lived intangible assets are tested for impairment annually on September 30; no impairment charges were recorded in fiscal 2023 or 2022[344](index=344&type=chunk)[345](index=345&type=chunk)[347](index=347&type=chunk) Goodwill Carrying Value by Segment (as of September 30, $ thousands) | Segment | 2023 | 2022 | | :---------------- | :-------- | :-------- | | U.S. Pawn | $255,942 | $245,503 | | Latin America Pawn| $46,430 | $41,325 | | **Consolidated** | **$302,372**| **$286,828**| - Goodwill increased by **$15.5 million** in fiscal 2023, primarily due to acquisitions of **12 pawn stores in the U.S.** (**$10.4 million**) and foreign currency translation changes (**$5.1 million**)[346](index=346&type=chunk) Intangible Assets, Net (as of September 30, $ thousands) | Classification | 2023 | 2022 | | :-------------------------- | :-------- | :-------- | | Non-amortizing intangible assets | $29,328 | $28,126 | | Amortizing intangible assets | $28,860 | $28,546 | | Other | $28 | $147 | | **Intangible assets, net** | **$58,216** | **$56,819** | [NOTE 9: DEBT](index=86&type=section&id=NOTE%209%3A%20DEBT) This note details EZCORP's outstanding debt, including the issuance of $230.0 million in 2029 Convertible Notes Debt Instruments Outstanding (as of September 30, $ thousands) | Debt Instrument | 2023 Gross Amount | 2023 Carrying Amount | 2022 Gross Amount | 2022 Carrying Amount | | :------------------------ | :---------------- | :------------------- | :---------------- | :------------------- | | 2029 Convertible Notes | $230,000 | $223,284 | $— | $— | | 2025 Convertible Notes | $103,373 | $102,563 | $172,500 | $170,328 | | 2024 Convertible Notes | $34,389 | $34,265 | $143,750 | $142,575 | | **Total** | **$367,762** | **$360,112** | **$316,250** | **$312,903** | - In December 2022, EZCORP issued **$230.0 million of 3.750% Convertible Senior Notes Due 2029**[352](index=352&type=chunk) - The company repurchased **$109.4 million of 2024 notes** and **$69.1 million of 2025 notes**, resulting in a **$3.5 million loss on extinguishment of debt**[361](index=361&type=chunk) - The 2024 Convertible Notes, maturing on July 1, 2024, were classified as a current liability as of September 30, 2023[377](index=377&type=chunk) [NOTE 10: COMMON STOCK AND STOCK COMPENSATION](index=93&type=section&id=NOTE%2010%3A%20COMMON%20STOCK%20AND%20STOCK%20COMPENSATION) This note details common stock activities, including share repurchases and equity-based compensation - EZCORP repurchased and retired **1,389,102 shares of Class A Common Stock for $12.0 million** in fiscal 2023 under a **$50 million program**[381](index=381&type=chunk) - An additional **578,703 shares** were repurchased for **$5.0 million** in December 2022, related to the 2029 Convertible Notes offering[382](index=382&type=chunk) - Stock compensation expense was **$9.5 million** in fiscal 2023, up from **$5.1 million** in 2022[402](index=402&type=chunk) - The 2022 LTI Plan grants equity-based awards, primarily restricted stock units, with **80% subject to performance-based vesting** over a three-year period[384](index=384&type=chunk)[387](index=387&type=chunk)[516](index=516&type=chunk) [NOTE 11: INCOME TAXES](index=99&type=section&id=NOTE%2011%3A%20INCOME%20TAXES) Income tax expense decreased by 25% to $13.2 million in 2023 due to lower income Income Before Income Taxes by Geography (Fiscal Year Ended September 30, $ thousands) | Geography | 2023 | 2022 | 2021 | | :---------- | :-------- | :-------- | :------- | | Domestic | $26,209 | $49,937 | $2,320 | | Foreign | $25,424 | $17,776 | $13,742 | | **Total** | **$51,633** | **$67,713** | **$16,062**| Total Income Tax Expense (Fiscal Year Ended September 30, $ thousands) | Component | 2023 | 2022 | 2021 | | :------------------ | :-------- | :-------- | :------- | | Current | $25,972 | $12,608 | $4,167 | | Deferred | $(12,802) | $4,945 | $3,283 | | **Total** | **$13,170** | **$17,553** | **$7,450** | - Income tax expense decreased by **$4.4 million (25%)** in fiscal 2023, primarily due to a **$16.1 million decrease in income before income taxes**, offset by increased tax expense for non-deductible losses on convertible note refinancing[159](index=159&type=chunk)[182](index=182&type=chunk) - The effective tax rate remained at **26%** for both fiscal 2023 and 2022[407](index=407&type=chunk) [NOTE 12: LEASES](index=102&type=section&id=NOTE%2012%3A%20LEASES) Total lease assets increased to $236.6 million and liabilities to $252.6 million in 2023 Lease Assets and Liabilities (as of September 30, $ thousands) | Metric | 2023 | 2022 | | :-------------------------- | :---------- | :---------- | | Total lease assets | $236,566 | $221,586 | | Total lease liabilities | $252,614 | $233,275 | | Operating lease ROU assets | $234,388 | $221,405 | | Operating lease liabilities | $250,369 | $233,090 | Total Lease Cost (Fiscal Year Ended September 30, $ thousands) | Metric | 2023 | 2022 | 2021 | | :---------------------- | :-------- | :-------- | :------- | | Total operating lease cost| $90,401 | $82,643 | $74,980 | | Total financing lease cost| $472 | $4 | $— | | **Total lease cost** | **$90,873** | **$82,647** | **$74,980**| - A **$4.3 million impairment charge** was recorded in fiscal 2023 for the corporate office right-of-use asset due to the termination of a significant sublease[418](index=418&type=chunk) [NOTE 13: CONTINGENCIES](index=104&type=section&id=NOTE%2013%3A%20CONTINGENCIES) EZCORP is involved in various legal and regulatory proceedings, expecting no material adverse effect - The company is subject to various claims, disputes, lawsuits, investigations, and legal/regulatory proceedings[421](index=421&type=chunk) - Contingencies are accrued if a liability is probable and the amount can be reasonably estimated, but outcomes are inherently unpredictable[421](index=421&type=chunk) - Management does not anticipate any particular matter will have a material adverse effect on the company's financial condition, results of operations, or liquidity[421](index=421&type=chunk) [NOTE 14: SEGMENT INFORMATION](index=104&type=section&id=NOTE%2014%3A%20SEGMENT%20INFORMATION) EZCORP manages four reportable segments: U.S. Pawn, Latin America Pawn, Cash Converters, and Other Investments - Reportable segments are U.S. Pawn, Latin America Pawn, Cash Converters (equity interest), and Other Investments (RDC, Founders)[422](index=422&type=chunk) Total Revenues by Segment (Fiscal Year Ended September 30, $ thousands) | Segment | 2023 | 2022 | 2021 | | :---------------- | :---------- | :---------- | :---------- | | U.S. Pawn | $761,921 | $658,762 | $553,581 | | Latin America Pawn| $287,065 | $227,352 | $175,550 | | Other Investments | $55 | $111 | $420 | | **Total revenues**| **$1,049,041**| **$886,225**| **$729,551**| Total Assets by Segment (as of September 30, $ thousands) | Segment | 2023 | 2022 | | :---------------- | :---------- | :---------- | | U.S. Pawn | $984,539 | $872,959 | | Latin America Pawn| $313,164 | $258,702 | | Cash Converters | $10,987 | $37,733 | | Other Investments | $52,720 | $3,601 | | Corporate | $106,301 | $174,883 | | **Total assets** | **$1,467,711**| **$1,347,878**| [NOTE 15: SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION](index=108&type=section&id=NOTE%2015%3A%20SUPPLEMENTAL%20CONSOLIDATED%20FINANCIAL%20INFORMATION) This note provides supplemental details on balance sheet accounts, cash flow, and valuation accounts Supplemental Balance Sheet Information (as of September 30, $ thousands) | Metric | 2023 | 2022 | | :---------------------------------------- | :-------- | :-------- | | Pawn service charges receivable, net | $38,885 | $33,476 | | Inventory, net | $166,477 | $151,615 | | Prepaid expenses and other current assets | $39,623 | $34,694 | | Accounts payable, accrued expenses and other current liabilities | $81,605 | $84,509 | Valuation and Qualifying Accounts (Fiscal Year Ended September 30, $ thousands) | Account | 2023 Balance at End of Period | 2022 Balance at End of Period |

Financial Data and Key Metrics Changes - Pawn loans outstanding reached a record $223.8 million, up 10% for the quarter and 7% on a same-store basis [5][24] - Total Q3 revenue hit a record $249.5 million, up 16% year-over-year, driven by higher PSC and sales volumes across all regions [5][12] - Adjusted EBITDA for the quarter was $27 million, an increase of 8% [12][18] - EBITDA margin decreased to 12% for the last 12 months ending June 2023, down from 13% in the previous year due to inflationary pressures [13] Business Line Data and Key Metrics Changes - U.S. Pawn operations saw PLO rise 12%, driving PSC up 16% year-over-year [18] - Merchandise sales in the U.S. were up 9%, with merchandise sales gross profit increasing by 3% [18] - Latin American Pawn EBITDA improved by 10% to $8.6 million, primarily due to higher gross profit [19] Market Data and Key Metrics Changes - The macroeconomic environment remains challenging, with consumers seeking cash and value for secondhand products [6] - The company operates 1,212 stores in the U.S. and Latin America, having added 13 stores in the quarter [6] Company Strategy and Development Direction - The company is focused on operational excellence and executing its 3-year strategic plan, which has yielded strong financial results [5] - Investment in recruitment, retention, and technology is prioritized to enhance team engagement and customer experience [7][14] - The company aims to improve customer experience and grow its customer base through personalized marketing and enhanced digital platforms [15][22] Management's Comments on Operating Environment and Future Outlook - Management noted that the macroeconomic environment continues to be tough, but they are seeing growth in both store and online customers [32] - The company expects continued growth in PLO and PSC, with record numbers anticipated by the end of Q4 [34][26] - Inflationary pressures are expected to persist, impacting expenses, but the company is focused on driving revenue growth to maintain profitability [48] Other Important Information - The company has a strong and liquid balance sheet, allowing for significant growth in earning assets and share repurchase programs [9] - The EZ+ Loyalty Program has grown to 3.3 million customers, up 14% sequentially [11][22] - The company has launched a reimagined philanthropic strategy to support financial literacy and community well-being [16] Q&A Session Summary Question: Insights on new customer trends and drivers - Management observed strong website activity and growth in new customers due to the challenging macroeconomic environment [32] Question: Expectations for PLO and inventory ratio - Management expects continued growth in PLO, with the inventory ratio remaining around 1.3x to 1.5x [34][36] Question: Discussion on merchandising margin pressures - Management indicated that increased inventory and customer choice are putting pressure on margins, with macroeconomic conditions also affecting pricing [41][42] Question: Views on share price valuation - Management expressed frustration with the current share price, stating it is undervalued relative to the company's strong financial results [46][47] Question: Future expectations for inflationary impacts on expenses - Management anticipates some inflationary pressures will continue into fiscal 2024, particularly in Latin America [48]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 0-19424 EZCORP, INC. (Exact name of registrant as specified in its charter) | Delaware | | 74-2540145 | | --- | --- | --- | | (I.R. ...

EZCORP, Inc. (NASDAQ:EZPW) Q2 2023 Earnings Conference Call May 4, 2023 9:00 AM ET Company Participants Jean Young - Three Part Advisors Lachlan Given - CEO, Director & Chief Strategy, M&A and Funding Officer Timothy Jugmans - CFO Conference Call Participants William Dossett - Oppenheimer Brian McNamara - Canaccord Genuity John Hecht - Jefferies Operator Good morning, ladies and gentlemen. Welcome to the EZCORP Second Quarter Fiscal 2023 Earnings Call. [Operator Instructions]. As a reminder, this call may b ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 0-19424 EZCORP, INC. (Exact name of registrant as specified in its charter) | Delaware | | 74-2540145 | | --- | --- | --- | | (I.R ...

EZCORP, Inc. (NASDAQ:EZPW) Q1 2023 Earnings Conference Call February 2, 2023 9:00 AM ET Company Participants Jean Marie Young - Investor Relations, Freeport's Advisors Lachlan Given - Chief Executive Officer Tim Jugmans - Chief Financial Officer Conference Call Participants Brian Nagel - Oppenheimer John Hecht - Jefferies Brian McNamara - Canaccord Genuity Alexander Villalobos - Jefferies Operator Good morning, ladies and gentlemen. Welcome to the EZCORP First Quarter Fiscal 2023 Earnings Call. At this time ...