EZCORP(US:EZPW)2022-05-07 08:52Financial Data and Key Metrics Changes - Pawn loans outstanding (PLO) increased by 38% year-over-year, reaching the highest level ever for the second quarter [5][21] - EBITDA rose by 61% for the second quarter, totaling $32.1 million [6][21] - Net income increased by 75% year-over-year, amounting to $16.6 million [6][10] Business Line Data and Key Metrics Changes - U.S. pawn operations saw PLO rise by 40%, with PSE up 19% year-over-year [22] - Latin American pawn operations experienced a 31% growth in PLO for the second quarter, with PSE up 29% [24] - Merchandise sales increased by 16% overall, with a 57% rise in Latin America [21][24] Market Data and Key Metrics Changes - The company operates 1,152 stores across the U.S. and Latin America, with a focus on expanding its geographic footprint [7] - The total expenses as a percentage of net revenues decreased from 93% to 82% year-over-year [11] Company Strategy and Development Direction - The company is focused on strengthening its core pawn business while driving operational efficiencies and enhancing return on capital [9] - A share buyback program of up to $50 million has been approved to return cash to shareholders [6][28] - Digital initiatives are aimed at attracting new customers, particularly younger demographics interested in secondhand goods [37] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued increases in PLO levels as the business normalizes post-government stimulus [25] - Inflationary and wage pressures are expected to rise in the second half of the year, impacting costs [26] - The company is excited about returning to pre-COVID levels of profitability with a superior operating model [26] Other Important Information - The company has launched a loyalty program, EZPlus, which has enrolled over 930,000 customers [14] - The company procured over 1.5 million pre-owned items and sold approximately 1.4 million items during the quarter [17] Q&A Session Summary Question: How to balance expense base against inflationary pressures? - Management indicated that while costs will rise in dollar terms, they expect to maintain good performance as a percentage of net revenue [30] Question: Customer behavior changes related to inflation? - Management noted that inflation, changes in customer service, and tax credit impacts are influencing customer behavior [31] Question: Pipeline for acquisitions and overall market conditions? - The acquisition pipeline remains robust in both the U.S. and Latin America, with expectations of declining multiples [32] Question: Underperforming stores and potential closures? - Management conducts regular reviews of underperforming stores but currently sees no candidates for closure [35] Question: Direction of digital initiatives? - Digital initiatives are primarily aimed at attracting new customers and improving service for existing customers [36][37]