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EZCORP Inc. Reports Operating Results (10-Q)

August 08, 2012 | About:
10qk

10qk

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EZCORP Inc. (EZPW) filed Quarterly Report for the period ended 2012-06-30.

Ezcorp Inc has a market cap of $1.08 billion; its shares were traded at around $23.12 with a P/E ratio of 8 and P/S ratio of 1.2. Ezcorp Inc had an annual average earning growth of 25.7% over the past 10 years. GuruFocus rated Ezcorp Inc the business predictability rank of 4.5-star.

Highlight of Business Operations:

In the current quarter, consolidated total revenues increased 13%, or $25.8 million, to $229.0 million, compared to the prior year quarter. The increase was primarily driven by a 16% increase in pawn service charges, a 38% increase in consumer loan fees, which includes consumer loan fees of $17.8 million and $3.9 million from Crediamigo and Cash Genie, respectively, and an 18% increase in merchandise sales, partially offset by a 17% decrease in jewelry scrapping sales. Net revenues of $145.3 million, increased $22.3 million, or 18%, and store operations increased $9.0 million or 13%. Administrative expenses of $22.7 million increased $8.3 million, $4.9 million of which result from the consolidation of Crediamigo and Cash Genie, neither of which are store-based operations, and therefore, the majority of their cost base is included in administrative expenses. After a $2.7 million increase in depreciation and amortization, a $0.3 million increase in interest, a $1.5 million decrease in income tax expense and the $1.2 million in net income attributable to the noncontrolling interest, net income attributable to EZCORP, Inc. increased 8% to $28.5 million.

Gross profit on jewelry scrapping sales increased $2.0 million, or 4%, from the prior nine-month period to $52.6 million. Jewelry scrapping revenues increased $1.7 million, or 1%, due to an 18% increase in proceeds realized per gram of gold jewelry scrapped mostly offset by a 17% decrease in gold volume. Same store jewelry scrapping sales decreased $11.6 million, or 8%, and new and acquired stores contributed $13.1 million. Jewelry scrapping sales include the sale of approximately $7.8 million of loose diamonds removed from scrap jewelry in the current period and $4.0 million in the prior year period. The increase in cost per gram was mostly offset by the decrease in volume, and as a result scrap cost of goods remained relatively constant at $87.1 million.

Total segment operations expense increased to $231.8 million (36% of revenues) in the current nine-month period from $205.4 million (35% of revenues) in the prior nine-month period. The dollar increase was due to an 11%, or $20.4 million, increase in store operations expenses due to operating costs resulting from new and acquired stores, a 27%, or $3.7 million increase in administrative expenses from the prior year period to $17.8 million mainly due to increased labor, benefits and additional investments made in infrastructure to support our growth, a 23%, or $2.0 million increase in depreciation and amortization from the prior year period to $10.5 million, mainly due to assets placed in service at new and acquired stores, and $0.3 million increase in other expenses.

Gross profit on jewelry scrapping sales increased $0.8 million, or 38%, from the prior nine-month period to $3.0 million. Jewelry scrapping revenues increased 4% to $11.8 million, as the 15% decrease in gold volume was offset by a 17% increase in proceeds realized per gram of gold jewelry scrapped. Same store jewelry scrapping sales decreased $2.4 million, or 21%, and new and acquired stores contributed $2.9 million. Scrap cost of goods decreased $0.4 million or 4.0%, as the the decrease in volume, was partially offset by a 7% increase in cost per gram.

Total operations expense increased to $39.9 million (51% of revenues) in the current nine-month period from $19.6 million (49% of revenues). The dollar increase was due to a 58%, or $8.5 million, increase in store operations expenses due to higher operating costs resulting from the addition of 68 Empeño Fácil stores since the end of the prior nine-month period and $2.8 million related to Crediamigo commissions, a $6.9 million increase in administrative expenses from the prior nine-month period to $10.0 million, mainly due to Crediamigo administrative expenses and other acquisition costs, a $3.2 million increase in depreciation and amortization from the prior nine-month period to $5.3 million, mainly due to depreciation of assets placed in service at new stores and amortization of acquisition related intangible assets, as well as a $1.8 million increase in net interest expense related to Crediamigo s debt.

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