CCV Cash Converters International

AUSTIN, Texas, April 19, 2012 /PRNewswire/ -- EZCORP, Inc. (Nasdaq: EZPW), a leading provider of instant cash solutions for consumers, today announced results for its second fiscal quarter ended March 31, 2012.  For the quarter, net income was $37.3 million, a 17% increase over the prior year's quarter, and diluted earnings per share were $0.73, a 16% increase over the prior year. During the quarter, the Company completed the acquisition of 60% of Crediamigo, one of the largest and fastest growing providers of payroll deduction loans in Mexico. Since the end of the quarter, the Company has completed the acquisition of 72% of Cash Genie, a leading provider of online loans in the United Kingdom. The Company incurred costs associated with acquisitions of $2.0 million ($0.03 per share) in the quarter.

(Logo:  http://photos.prnewswire.com/prnh/20090713/EZCORPLOGO)

The Company also announced it is revising its fiscal 2012 earnings guidance to a range of $2.85 to $2.95 per share, about 6% lower than the previous guidance. The mid-point of this range represents an increase of 13% over fiscal 2011 earnings per share, non-GAAP, and 19% on a GAAP basis.  This revision in guidance is due to slightly slower than expected growth rates in the U.S. pawn business for both loans and sales (including scrap sales) as a result of customers' using a greater proportion of general merchandise instead of gold to satisfy their immediate cash needs. The effect of this shift will be to slow inventory turns, place downward pressure on margin rates and delay income into next year. The Company expects to continue to grow its same store loan balances and sales in the low-to-mid single digits for the rest of fiscal 2012.

Commenting on the quarter's results, EZCORP's President and Chief Executive Officer, Paul Rothamel, said "While we are very pleased with consolidated net income growth of 17% for the quarter and 15% for the first half, particularly given the strategic transactions we recently closed, we expect earnings growth in the back half of the year to be slightly slower than we originally expected. Nevertheless, the fundamentals of all our cash solutions businesses, including our inventory and loan yields, remain strong and we are filling the pipeline with new stores, new products, and additional talent."

Consolidated Financials – Three months ended March 31, 2012 versus the prior year quarter:

• Net income of $37.3 million, up 17%.
• Diluted earnings per share of $0.73, up 16%.
• Total revenues of $256.3 million, up 20%.
• Net revenues of $161.6 million, up 23%.
• Consolidated operating income of $55.7 million, up 24%.
• Combined loan balances (pawn and consumer loans, including CSO) at quarter end were $219.1 million, up 57%.  Excluding Crediamigo, loan balances were $156.5M, up 12%.
• Cash and cash equivalents at quarter-end were $47.5 million, with debt of $132.4 million. Crediamigo had third party debt outstanding of $94.6 million, all of which is non-recourse to EZCORP.

Key Operating Segment Metrics – Three months ended March 31, 2012 versus the prior year quarter:

• U.S. & Canada:
  • Total revenue was $229.4 million, up 14% in total and 4% on a same store basis.
  • Total sales increased 16% to $134.9 million, with margin improving 90 basis points to 41%.  Same store sales were up 2%.
  • Pawn service charges increased 17% to $50.5 million, up 9% on a same store basis.
  • Consumer loan fees increased 6% to $42.8 million, up 3% on a same store basis.
  • Consumer loan bad debt as a percentage of fees improved 45 bps to 14%.
  • Segment contribution increased 16% to $64.9 million.
  • Pawn loan balance was $108.8 million at quarter end, up 12% in total and 6% on a same store basis.
  • Combined loan balances (pawn and consumer loans, including CSO) at quarter end were $142.9 million, up 9%.
• Latin America :
  • Total revenue was $26.7 million, up 110% in total and 9% on a same store basis.
  • Total sales increased 47% to $13.3 million.  Same store sales were up 4%.
  • Pawn service charges increased 61% to $5.9 million, up 20% on a same store basis.
  • Consumer loan fees were $7.4 million.
  • Consumer loan bad debt as a percentage of fees was 7%.
  • Segment contribution increased to $1.3 million, with an improvement in margin from -1% to 5%.
  • Crediamigo recorded net revenue of $6.9 million and net income attributable to EZCORP of $0.2 million for the two months ended March 31, 2012.

Growth Drivers

• U.S. & Canada:
  • Acquired 15 stores during the quarter and opened eight new de novo locations, bringing the total number of Company-owned stores to 970 at quarter end.  In the first half of fiscal 2012, the Company has added 48 stores (40 acquired and eight de novo) in the U.S. and Canada, and is now a leader in 48 markets across the U.S. and Canada.  The Company now offers instant cash solutions in 24 U.S. states and, including franchises, five Canadian provinces.
  • On April 13, completed the acquisition of nine pawn stores in the Minneapolis metropolitan area, where the Company had not previously had a presence.  The Company now operates pawn shops in 19 U.S. states, up six from this time last year.
  • Converted nine CASHMAX stores to the Cash Converters brand.  At quarter end, 35 of the 67 Company-owned stores in Canada operated under the Cash Converters brand, with an additional 12 Cash Converters stores managed by franchisees.
• Latin America:
  • Empeno Facil opened 13 stores during the quarter and 27 for the first half, bringing total store count to 205.  Of these, 153 are full size, full service stores.
  • Empeno Facil opened its first store in Monterrey, Mexico and now operates in 30 of 55 principal metro areas in Mexico and in 17 of 31 Mexican states primarily in the central and southern part of the country.
  • On January 30, 2012, the Company closed its acquisition of a 60% interest in Crediamigo, marking EZCORP's first entry into unsecured lending in Mexico.  Crediamigo offers loans with typical APRs of around 85% and collects interest and principal through payroll deductions. The average loan is approximately $1,200 with a term of 27 months.  Crediamigo has approximately 170 payroll withholding agreements with Mexican employers, primarily government and state agencies, with potential access to over 3 million employees.  At March 31, 2012, Crediamigo's loan portfolio totaled $68.4 million and the company had $94.6 million of third party debt (non-recourse to EZCORP).
• Other International:
  • On April 13, the Company acquired 72% of the shares in Artiste Holding Limited, which provides online loans in the U.K. under the name "Cash Genie."  Cash Genie significantly accelerates EZCORP's online strategy in the U.K., and EZCORP's existing U.K. online lending operations, most of which are outsourced, will be rolled into Cash Genie.  Founded in 2009 and based in Ipswich, England, Cash Genie is one of the top 10 largest online lenders in the U.K.  It currently has back office and collections functions based in the Philippines, and expects to launch online lending in Finland in May.  The company offers unsecured 30-day cash advance loans from $120 to $1,200 with an average loan of $230.  The company has 300,000 customers with almost 70,000 loans outstanding and a net loan balance of $17.6 million at the end of February.

Company Outlook

Commenting on the Company's outlook, Mr. Rothamel stated: "We believe that we are well positioned to continue our very strong growth. The consumer demand for our products in the U.S., Mexico, and Canada, as well as the rest of the world is expanding. The combination of our large and rapidly growing U.S. businesses, accelerated growth in Mexico through Empeno Facil and Crediamigo, our U.K. investments in Cash Genie and Albemarle & Bond, and our Cash Converters investments in Australia, the U.K. and Canada position us well for rapid, diversified growth around the world."

About EZCORP

EZCORP is a leading provider of instant cash solutions for consumers.  Through more than 1,200 company-operated pawn, buy/sell and personal financial services stores in the U.S., Mexico and Canada, we provide a variety of instant cash solutions, including pawn loans, consumer loans, and fee-based credit services to customers seeking loans.  At our pawn and buy/sell stores, we also sell merchandise, primarily collateral forfeited from pawn lending operations and used merchandise purchased from customers.

EZCORP owns controlling interests in Prestaciones Finmart, S.A.P.I. de C.V., SOFOM, E.N.R. (doing business under the name "Crediamigo"), a leading provider of payroll deduction loans in Mexico, and in Artiste Holding Limited (doing business under the name "Cash Genie"), a leading provider of online loans in the U.K.  The company also has significant investments in Albemarle & Bond Holdings PLC (ABM.L), one of the U.K.'s largest pawnbroking businesses with over 170 full-line stores offering pawnbroking, jewelry retailing, gold buying and financial services; and in Cash Converters International Limited (CCV.L and CCV.ASX), which franchises and operates a worldwide network of over 600 stores that provide personal financial services and sell pre-owned merchandise.

Special Note Regarding Forward-Looking Statements

This announcement contains certain forward-looking statements regarding the Company's expected operating and financial performance for future periods, including expected future earnings and growth rates.  These statements are based on the Company's current expectations.  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 changes in the regulatory environment, changing market conditions in the overall economy and the industry, fluctuations in gold prices or the desire of our customers to pawn or sell their gold items, and consumer demand for the Company's services and merchandise.  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.

Use of Non-GAAP Financial Measures

In addition to reporting financial results in accordance with generally accepted accounting principles (GAAP), the Company has provided non-GAAP net income and non-GAAP earnings per share for fiscal 2011.  The only difference between the presented non-GAAP measures and the most closely comparable GAAP measures is the exclusion of a one-time charge related to the retirement of the Company's former Chief Executive Officer and the related tax benefit included in the quarter ended December 31, 2010.  The Company's management uses these non-GAAP financial measures to understand its financial performance from period to period.  Management does not believe that the excluded one-time charge is reflective of underlying operating performance.  The non-GAAP financial measures are not meant to be considered in isolation or as a substitute for the corresponding GAAP measures, but rather are provided to facilitate an enhanced understanding of the Company's actual and expected performance and to enable more meaningful period-to-period comparisons.  A reconciliation of the non-GAAP financial measures to the most closely comparable GAAP financial measures is provided in the accompanying financial schedules.

EZCORP Investor Relations

(512) 314-2220

Investor_Relations@ezcorp.com

www.ezcorp.com