EZCORP Reports Second Quarter Fiscal 2024 Results

EZCORP, Inc.

Record Q2 Revenues Driving Strong Earnings Growth

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 CALL
EZCORP 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: Investor_Relations@ezcorp.com
Phone: (512) 314-2220

EZCORP, Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
	Three Months Ended March 31,								Six Months Ended March 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 Ended March 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	)
Investment in unconsolidated affiliate		(850	)			(2,133	)
Investment in other investments		(15,000	)			(15,000	)
Dividends from unconsolidated affiliates		1,745				—
Net cash used in investing activities		(18,242	)			(40,649	)
Financing activities:
Taxes paid related to net share settlement of equity awards		(3,253	)			(1,149	)
Proceeds from issuance of debt		—				230,000
Debt issuance cost		—				(7,458	)
Cash paid on extinguishment of debt		—				(1,951	)
Payments on debt		—				(178,488	)
Purchase and retirement of treasury stock		(6,010	)			(10,978	)
Payments of finance leases		(276	)			—
Net cash (used in) provided by financing activities		(9,539	)			29,976
Effect of exchange rate changes on cash and cash equivalents and restricted cash		(43	)			1,056
Net increase in cash, cash equivalents and restricted cash		8,724				37,210
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	$	237,692			$	251,579

                                                                                                                                

EZCORP, Inc. OPERATING SEGMENT RESULTS
	Three Months Ended March 31, 2024 (Unaudited)
(in thousands)	U.S. Pawn				Latin America Pawn				Other Investments				Total Segments				Corporate Items				Consolidated
Revenues:
Merchandise sales	$	114,849			$	49,838			$	—			$	164,687			$	—			$	164,687
Jewelry scrapping sales		12,686				1,028				—				13,714				—				13,714
Pawn service charges		80,010				27,153				—				107,163				—				107,163
Other revenues		29				15				31				75				—				75
Total revenues		207,574				78,034				31				285,639				—				285,639
Merchandise cost of goods sold		72,798				33,461				—				106,259				—				106,259
Jewelry scrapping cost of goods sold		10,794				994				—				11,788				—				11,788
Gross profit		123,982				43,579				31				167,592				—				167,592
Segment and corporate expenses (income):
Store expenses		80,840				33,742				—				114,582				—				114,582
General and administrative		—				—				—				—				18,266				18,266
Depreciation and amortization		2,516				2,392				—				4,908				3,311				8,219
(Gain) loss on sale or disposal of assets and other		(30	)			(66	)			—				(96	)			99				3
Other income		—				—				—				—				(765	)			(765	)
Interest expense		—				—				—				—				3,402				3,402
Interest income		—				(608	)			(633	)			(1,241	)			(1,641	)			(2,882	)
Equity in net income of unconsolidated affiliates		—				—				(1,719	)			(1,719	)			—				(1,719	)
Other expense (income)		—				1				14				15				(180	)			(165	)
Segment contribution	$	40,656			$	8,118			$	2,369			$	51,143
Income (loss) before income taxes													$	51,143			$	(22,492	)		$	28,651

        

	Three Months Ended March 31, 2023 (Unaudited)
(in thousands)	U.S. Pawn				Latin America Pawn				Other Investments				Total Segments				Corporate Items				Consolidated
Revenues:
Merchandise sales	$	108,740			$	43,767			$	—			$	152,507			$	—			$	152,507
Jewelry scrapping sales		9,814				3,011				—				12,825				—				12,825
Pawn service charges		69,945				23,085				—				93,030				—				93,030
Other revenues		32				19				10				61				—				61
Total revenues		188,531				69,882				10				258,423				—				258,423
Merchandise cost of goods sold		67,643				29,696				—				97,339				—				97,339
Jewelry scrapping cost of goods sold		8,550				3,352				—				11,902				—				11,902
Gross profit		112,338				36,834				10				149,182				—				149,182
Segment and corporate expenses (income):
Store expenses		71,946				29,323				—				101,269				—				101,269
General and administrative		—				—				—				—				15,609				15,609
Depreciation and amortization		2,560				2,332				—				4,892				3,071				7,963
Loss (gain) on sale or disposal of assets		81				(8	)			—				73				—				73
Other income		—				(2,465	)			—				(2,465	)			—				(2,465	)
Interest expense		—				—				—				—				3,390				3,390
Interest income		(1	)			(298	)			—				(299	)			(1,599	)			(1,898	)
Equity in net loss of unconsolidated affiliates		—				—				32,501				32,501				—				32,501
Other (income) expense		—				(46	)			6				(40	)			120				80
Segment contribution (loss)	$	37,752			$	7,996			$	(32,497	)		$	13,251
Income (loss) before income taxes													$	13,251			$	(20,591	)		$	(7,340	)

	Six Months Ended March 31, 2024 (Unaudited)
(in thousands)	U.S. Pawn				Latin America Pawn				Other Investments				Total Segments				Corporate Items				Consolidated
Revenues:
Merchandise sales	$	240,362			$	103,728			$	—			$	344,090			$	—			$	344,090
Jewelry scrapping sales		25,501				2,295				—				27,796				—				27,796
Pawn service charges		159,083				54,529				—				213,612				—				213,612
Other revenues		66				31				35				132				—				132
Total revenues		425,012				160,583				35				585,630				—				585,630
Merchandise cost of goods sold		151,507				69,962				—				221,469				—				221,469
Jewelry scrapping cost of goods sold		22,078				1,918				—				23,996				—				23,996
Gross profit		251,427				88,703				35				340,165				—				340,165
Segment and corporate expenses (income):
Store expenses		158,095				67,042				—				225,137				—				225,137
General and administrative		—				—				—				—				34,809				34,809
Depreciation and amortization		5,140				4,731				—				9,871				6,913				16,784
(Gain) loss on sale or disposal of assets and other		(4	)			(262	)			—				(266	)			97				(169	)
Other income		—				—				—				—				(765	)			(765	)
Interest expense		—				—				—				—				6,842				6,842
Interest income		—				(1,028	)			(1,206	)			(2,234	)			(3,287	)			(5,521	)
Equity in net loss of unconsolidated affiliates		—				—				(2,872	)			(2,872	)			—				(2,872	)
Other (income) expense		—				(47	)			15				(32	)			(404	)			(436	)
Segment contribution		88,196				18,267			$	4,098			$	110,561
Income (loss) before income taxes													$	110,561			$	(44,205	)		$	66,356

	Six Months Ended March 31, 2023 (Unaudited)
(in thousands)	U.S. Pawn				Latin America Pawn				Other Investments				Total Segments				Corporate Items				Consolidated
Revenues:
Merchandise sales	$	227,054			$	89,240			$	—			$	316,294			$	—			$	316,294
Jewelry scrapping sales		16,990				3,719				—				20,709				—				20,709
Pawn service charges		139,255				46,368				—				185,623				—				185,623
Other revenues		57				35				32				124				—				124
Total revenues		383,356				139,362				32				522,750				—				522,750
Merchandise cost of goods sold		140,899				61,317				—				202,216				—				202,216
Jewelry scrapping cost of goods sold		14,766				4,089				—				18,855				—				18,855
Gross profit		227,691				73,956				32				301,679				—				301,679
Segment and corporate expenses (income):
Store expenses		145,250				56,822				—				202,072				—				202,072
General and administrative		—				(3	)			—				(3	)			31,088				31,085
Depreciation and amortization		5,315				4,547				—				9,862				6,089				15,951
Loss (gain) on sale or disposal of assets		84				(27	)			—				57				—				57
Other income		—				(2,465	)			—				(2,465	)			—				(2,465	)
Interest expense		—				—				—				—				9,580				9,580
Interest income		(1	)			(467	)			—				(468	)			(2,094	)			(2,562	)
Equity in net loss of unconsolidated affiliates		—				—				30,917				30,917				—				30,917
Other expense (income)		—				24				10				34				(188	)			(154	)
Segment contribution (loss)	$	77,043			$	15,525			$	(30,895	)		$	61,673
Income (loss) before income taxes													$	61,673			$	(44,475	)		$	17,198

EZCORP, Inc.
STORE COUNT ACTIVITY
(Unaudited)

	Three Months Ended March 31, 2024
	U.S. Pawn			Latin America Pawn			Consolidated
As of December 31, 2023	530			707			1,237
New locations opened	—			9			9
Locations acquired	6			—			6
Locations combined or closed	(1	)		(5	)		(6	)
As of March 31, 2024	535			711			1,246

	Three Months Ended March 31, 2023
	U.S. Pawn		Latin America Pawn		Consolidated
As of December 31, 2022	525		661		1,186
New locations opened	2		11		13
As of March 31, 2023	527		672		1,199

	Six Months Ended March 31, 2024
	U.S. Pawn			Latin America Pawn			Consolidated
As of September 30, 2023	529			702			1,231
New locations opened	—			14			14
Locations acquired	7			—			7
Locations combined or closed	(1	)		(5	)		(6	)
As of March 31, 2024	535			711			1,246

	Six Months Ended March 31, 2023
	U.S. Pawn		Latin America Pawn			Consolidated
As of September 30, 2022	515		660			1,175
New locations opened	2		13			15
Locations acquired	10		—			10
Locations combined or closed	—		(1	)		(1	)
As of March 31, 2023	527		672			1,199

Non-GAAP Financial Information (Unaudited)

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.

Readers should consider the information in addition to, but not instead of or superior to, our financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.

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 and six months ended March 31, 2024 and 2023 were as follows:

		March 31,				Three Months Ended March 31,				Six Months Ended March 31,
		2024		2023		2024		2023		2024		2023
Mexican peso		16.6		18.1		17.0		18.7		17.3		19.2
Guatemalan quetzal		7.6		7.6		7.6		7.6		7.6		7.6
Honduran lempira		24.4		24.4		24.4		24.3		24.4		24.3
Australian dollar		1.5		1.5		1.5		1.5		1.5		1.5

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.

Miscellaneous Non-GAAP Financial Measures

	Three Months Ended March 31,
(in millions)		2024				2023
Net income (loss)	$	21.5			$	(6.8	)
Interest expense		3.4				3.4
Interest income		(2.9	)			(1.9	)
Income tax expense (benefit)		7.2				(0.6	)
Depreciation and amortization		8.2				8.0
EBITDA	$	37.4			$	2.1

	Total Revenues				Gross Profit				Income Before Tax				Tax Effect				Net Income				Diluted EPS				EBITDA
2024 Q2 Reported	$	285.6			$	167.6			$	28.7			$	7.2			$	21.5			$	0.29			$	37.4
Corporate lease termination		—				—				(0.8	)			(0.2	)			(0.6	)			(0.01	)			(0.8	)
FX Impact		—				—				0.1				—				0.1				—				0.1
Constant Currency and other impact		(5.4	)			(3.0	)			(0.4	)			(0.1	)			(0.3	)			—				(0.5	)
2024 Q2 Adjusted	$	280.2			$	164.6			$	27.6			$	6.9			$	20.7			$	0.28			$	36.2

	Total Revenues			Gross Profit			Income Before Tax				Tax Effect				Net Income				Diluted EPS				EBITDA
2023 Q2 Reported	$	258.4		$	149.2		$	(7.3	)		$	(0.5	)		$	(6.8	)		$	(0.12	)		$	2.1
CCV Impairment and discrete adjustments		—			—			34.0				8.4				25.6				0.29				34.0
Contingent consideration liability		—			—			(2.4	)			(0.7	)			(1.7	)			(0.02	)			(2.4	)
Impact of dilutive instruments*		—			—			—				—				—				0.08				—
2023 Q2 Adjusted	$	258.4		$	149.2		$	24.3			$	7.2			$	17.1			$	0.23			$	33.8

	Three Months Ended March 31, 2024							Six Months Ended March 31, 2024
(in millions)	U.S. Dollar Amount				Percentage Change YOY			U.S. Dollar Amount				Percentage Change YOY
Consolidated revenues	$	285.6			11	%		$	585.6			12	%
Currency exchange rate fluctuations		(5.4	)						(12.6	)
Constant currency consolidated revenues	$	280.2			8	%		$	573.0			10	%
Consolidated gross profit	$	167.6			12	%		$	340.2			13	%
Currency exchange rate fluctuations		(3.0	)						(6.8	)
Constant currency consolidated gross profit	$	164.6			10	%		$	333.4			11	%
Consolidated net inventory	$	163.4			9	%		$	163.4			9	%
Currency exchange rate fluctuations		(2.8	)						(2.8	)
Constant currency consolidated net inventory	$	160.6			7	%		$	160.6			7	%
Latin America Pawn gross profit	$	43.6			18	%		$	88.7			20	%
Currency exchange rate fluctuations		(3.0	)						(6.8	)
Constant currency Latin America Pawn gross profit	$	40.6			10	%		$	81.9			11	%
Latin America Pawn PLO	$	62.0			26	%		$	62.0			26	%
Currency exchange rate fluctuations		(3.7	)						(3.7	)
Constant currency Latin America Pawn PLO	$	58.3			19	%		$	58.3			19	%
Latin America Pawn PSC revenues	$	27.2			18	%		$	54.5			18	%
Currency exchange rate fluctuations		(1.8	)						(3.9	)
Constant currency Latin America Pawn PSC revenues	$	25.4			10	%		$	50.6			9	%
Latin America Pawn merchandise sales	$	49.8			14	%		$	103.7			16	%
Currency exchange rate fluctuations		(3.6	)						(8.5	)
Constant currency Latin America Pawn merchandise sales	$	46.2			6	%		$	95.2			7	%
Latin America Pawn segment profit before tax	$	8.1			2	%		$	18.3			18	%
Currency exchange rate fluctuations		(0.4	)						(1.1	)
Constant currency Latin America Pawn segment profit before tax	$	7.7			(4)        %			$	17.1			10	%

 

Note: Percentages are calculated from the underlying numbers in thousands and, as a result, may not agree to the percentages calculated from numbers in millions.
¹“Adjusted” basis, which is a non-GAAP measure, excludes certain items. “Constant currency” basis, which is a non-GAAP measure, excludes the impact of foreign currency exchange rate fluctuations. For additional information about these calculations, as well as a reconciliation to the most comparable GAAP financial measures, see “Non-GAAP Financial Information” at the end of this release.
²“Same Store” basis, which is a financial measure, includes stores open the entirety of the comparable periods.