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EZCORP Announces Third Quarter Fiscal 2017 Results

AUSTIN, Texas, July 31, 2017 (GLOBE NEWSWIRE) -- EZCORP, Inc. (NASDAQ:EZPW), a leading provider of pawn loans in the United States and Mexico, today announced results for its third quarter ended June 30, 2017.

All amounts in this release are from EZCORP continuing operations and in conformity with U.S. generally accepted accounting principles ("GAAP") unless otherwise noted. Comparisons shown in this release are to the same period in the prior year unless otherwise noted.

HIGHLIGHTS FOR THIRD QUARTER FISCAL 2017

The company produced its sixth consecutive quarter of year-over-year (YOY) earnings and profit growth with earnings per share up 100% to $0.10 and income from continuing operations before income taxes up 133% to $8.9 million.

Market leading same store pawn loans outstanding (PLO), the most influential driver of revenue and profitability, up 4% in the U.S. and 16% in Mexico. The same store PLO increase in Mexico was 13% when calculated on a constant currency basis1.

Unrestricted cash balance at the end of the quarter was up 287% YOY to $113.7 million. Shortly after the end of the quarter, the company also completed its $143.8 million offering of convertible senior notes due 2024, further strengthening its balance sheet and liquidity, as well as paying off its higher rate secured term debt and retiring a portion of its cash convertible senior notes due 2019.

CEO COMMENTARY AND OUTLOOK

Stuart Grimshaw, EZCORP's Chief Executive Officer, said: “We are delighted with our results this quarter. We doubled our earnings from continuing operations, reflecting our continued focus on meeting the needs of our customers and enhancing their experience as well as leveraging our expense structure. That focus continues to produce market leading same store PLO growth in the U.S. and Mexico, which is the main driver of future profitability.

“The quarter’s results reflect the continued, disciplined execution of our three year strategic plan announced in 2015. We delivered significant earnings growth in both the U.S. and Mexico this quarter, highlighting the value of that continued focus. We further strengthened our balance sheet and liquidity position through strong operating results and the convertible bond issuance just after the quarter-end. While we continue to focus on and invest in our core pawn business, this strong cash position enhances our ability to consider attractive acquisitions.

“We are confident that our current strategic initiatives - including store refurbishment and other investments in customer experience; product and customer analytics; team member training, coaching and mentoring; and storefront expansion - will continue to provide a robust platform for further profitable growth."

CONSOLIDATED RESULTS

Three Months Ended June 30, 2017

  • Same store pawn loans outstanding (PLO) was up 4% in U.S. and 16% in Mexico (up 13% in Mexico on a constant currency basis).

  • Total revenue increased 8% to $183.6 million. On a constant currency basis, total revenue was up 8% to $184.4 million.

  • Net revenue improved 5% to $105.6 million (up 6% to $106.0 million on a constant currency basis), due largely to a 5% increase in pawn service charge (PSC) revenue and a 4% increase in merchandise sales (PSC revenue up 6% and merchandise sales up 5% on a constant currency basis).

  • The merchandise sales gross margin was consistent with the prior-year quarter at 36%, and was within our target range of 35-38%.

  • Operations expenses increased 1% to $74.2 million (up 2% to $74.5 million on a constant currency basis) due to investment in customer facing labor and higher benefit claims.

  • Corporate expenses decreased 3% to $14.1 million. The company remains on track to reduce corporate expenses to no more than $50 million in FY18.

  • This was the sixth consecutive quarter of YOY earnings per share increase, with earnings per share from continuing operations up 100% to $0.10.

  • Shortly after the end of the quarter, the company completed its offering of convertible senior notes due 2024 with a 2.875% coupon. This unsecured convertible note issuance strengthens the balance sheet and liquidity, and locks in an attractive fixed interest rate for a seven-year term. The proceeds were used to retire all remaining obligations under a secured credit facility which had a far higher cost of funds, retire $35 million of existing cash convertible senior notes due 2019, and for additional capital to potentially add to our earnings capacity as the company considers attractive acquisition opportunities.

Nine Months Ended June 30, 2017

  • Total revenue increased 4% to $565.9 million. On a constant currency basis, total revenue was up 5% to $574.4 million.

  • Net revenue was up 2% to $327.4 million (up 3% to $331.9 million on a constant currency basis), as a 5% increase in PSC revenue was offset by a lower merchandise sales gross margin (PSC revenue up 6% on a constant currency basis).

  • The merchandise sales gross margin was 200bps lower at 36%, within our target range of 35-38%.

  • Operations expenses increased 2% to $226.4 million (up 4% to $229.4 million on a constant currency basis).

  • Corporate expenses decreased 18% to $41.3 million, in line with the company's continued focus to control corporate expenses.

  • Earnings per share from continuing operations increased 156% to $0.41.

  • The company continues to receive regular payments on the promissory notes it received in connection with the sale of Grupo Finmart in September 2016. It has collected $23.3 million in principal on those notes during the current fiscal year, and expects to collect an additional $24.4 million during the remainder of the fiscal year (for a total of $47.7 million in FY17), $24.4 million in FY18 and $18.3 million in FY19. In July 2017, the company received $6.1 million including early payment of $5.2 million.

1In addition to the financial information prepared in conformity with U.S. generally accepted accounting principles (“GAAP”), we provide certain financial information on a “constant currency” basis, which excludes the impact of foreign currency exchange rate fluctuations. For additional information about the constant currency calculations, as well as a reconciliation of the constant currency financial measures to the comparable GAAP financial measures, see “Non-GAAP Financial Information” at the end of this release.

OPERATING METRICS

U.S. Pawn Segment

Three Months Ended June 30, 2017

  • This was the seventh consecutive quarter of YOY same store PLO growth, up 3% this quarter in total and 4% on a same store basis, to $148.8 million.

  • PSC increased 4% in total and 5% on a same store basis to $56.8 million.

  • Merchandise sales increased 4% in total and on a same store basis. The merchandise sales gross margin of 37% was consistent with the prior-year quarter and within our target range of 35-38%.

  • Inventory aged over one year improved to 11% from 12% in Q2FY17.

  • Operations expenses increased 1% to $63.6 million.

  • The segment contribution was up 18% to $23.8 million.

  • Initiatives are underway to continue improving net revenue and profitability in the long-term, including investments in upgrading our point of sale system and enhancing product and customer data analytics, as well as enhancing our customer experience with a store refurbishment program.

Nine Months Ended June 30, 2017

  • PSC increased 5% in total and 4% on a same store basis to $177.5 million.

  • Merchandise sales increased 2% in total and 3% on a same store basis. The merchandise sales gross margin of 37% is within our target range of 35-38%.

  • Operations expenses increased 4% to $194.5 million, due to investment in customer facing labor and higher benefit claims.

  • Segment profit was up 3% to $80.7 million.

Mexico Pawn Segment

Three Months Ended June 30, 2017

  • PLO increased 19% to $19.4 million (up 16% to $18.9 million on a constant currency basis).

  • PSC increased 13% to $9.1 million (up 16% to $9.4 million on a constant currency basis).

  • Merchandise sales increased 7% in total and 5% on a same store basis (up 10% in total and 7% in same stores on a constant currency basis). The 33% merchandise sales gross margin was consistent with the prior-year quarter.

  • Inventory aged over one year of 6% was consistent with Q2FY17.

  • Net revenue was up 12% with a smaller 2% increase in operations expenses, yielding a 100% increase in segment contribution (segment contribution was up 104% to $5.5 million on a constant currency basis).

Nine Months Ended June 30, 2017

  • PSC increased 4% to $24.5 million (up 15% to $27.2 million on a constant currency basis).

  • Merchandise sales increased 3% in total and 2% on a same store basis (up 15% in total and 13% in same stores on a constant currency basis). Merchandise margin was 32%, 100bps lower than the prior-year nine-months.

  • Net revenue increased 3% and operations expenses were 9% lower, yielding a 107% increase in segment profit to $12.9 million (up 127% to $14.1 million on a constant currency basis).

CONFERENCE CALL

EZCORP will host a conference call on Tuesday, August 1, 2017, at 7:30am Central Time to discuss third quarter results. Analysts and institutional investors may participate on the conference call by dialing (877) 201-0168, Conference ID: 57788640, international dialing (647) 788-4901. 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 call.

ABOUT EZCORP

EZCORP is a leading provider of pawn loans in the United States and Mexico. We also sell merchandise, primarily collateral forfeited from pawn lending operations and used merchandise purchased from customers. EZCORP is a member of the Russell 2000 Index, S&P SmallCap 600 Index, S&P 1000 Index and Nasdaq Composite Index.

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 or current or future litigation. 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.

EZCORP, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended June 30, Nine Months Ended June 30,
2017 2016 2017 2016
(Unaudited)
(in thousands, except per share amounts)
Revenues:
Merchandise sales$97,921 $94,014 $319,672 $311,941
Jewelry scrapping sales17,641 11,230 37,658 33,631
Pawn service charges65,878 62,473 201,983 193,197
Other revenues2,193 2,433 6,572 7,151
Total revenues183,633 170,150 565,885 545,920
Merchandise cost of goods sold62,615 60,140 204,840 194,731
Jewelry scrapping cost of goods sold15,010 9,110 32,195 28,271
Other cost of revenues453 506 1,433 1,549
Net revenues105,555 100,394 327,417 321,369
Operating expenses:
Operations74,246 73,172 226,352 221,446
Administrative14,095 14,481 41,305 50,085
Depreciation and amortization5,843 6,274 18,246 20,422
Loss (gain) on sale or disposal of assets17 (41) 11 641
Restructuring 1,910
Total operating expenses94,201 93,886 285,914 294,504
Operating income11,354 6,508 41,503 26,865
Interest expense5,654 3,936 16,847 12,014
Interest income(2,053) (50) (6,909) (66)
Equity in net income of unconsolidated affiliate(1,047) (1,694) (3,768) (5,626)
Other (income) expense(99) 500 (294) 815
Income from continuing operations before income taxes8,899 3,816 35,627 19,728
Income tax expense3,432 1,038 13,663 11,224
Income from continuing operations, net of tax5,467 2,778 21,964 8,504
Loss from discontinued operations, net of tax(265) (9,133) (1,868) (99,068)
Net income (loss)5,202 (6,355) 20,096 (90,564)
Net loss attributable to noncontrolling interest(58) (666) (352) (6,589)
Net income (loss) attributable to EZCORP, Inc.$5,260 $(5,689) $20,448 $(83,975)
Basic earnings per share attributable to EZCORP, Inc. — continuing operations$0.10 $0.05 $0.41 $0.16
Diluted earnings per share attributable to EZCORP, Inc. — continuing operations$0.10 $0.05 $0.41 $0.16
Weighted-average basic shares outstanding54,295 53,980 54,247 54,574
Weighted-average diluted shares outstanding54,367 54,192 54,310 54,690
Net income from continuing operations attributable to EZCORP, Inc.$5,525 $2,904 $22,316 $8,954
Net loss from discontinued operations attributable to EZCORP, Inc.(265) (8,593) (1,868) (92,929)
Net income (loss) attributable to EZCORP, Inc.$5,260 $(5,689) $20,448 $(83,975)


EZCORP, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
June 30,
2017
June 30,
2016
September 30,
2016
(Unaudited)
Assets:
Current assets:
Cash and cash equivalents$113,729 $29,380 $65,737
Pawn loans168,262 160,269 167,329
Pawn service charges receivable, net30,585 29,643 31,062
Inventory, net135,053 130,368 140,224
Notes receivable, net22,024 41,946
Current assets held for sale 157,554
Prepaid expenses and other current assets31,993 26,577 35,845
Total current assets501,646 533,791 482,143
Investment in unconsolidated affiliate41,725 56,843 37,128
Property and equipment, net53,022 61,201 58,455
Goodwill254,469 254,273 253,976
Intangible assets, net32,551 30,569 30,681
Non-current notes receivable, net41,253 41,119
Deferred tax asset, net36,506 34,170 35,303
Other assets, net9,145 18,950 44,439
Total assets$970,317 $989,797 $983,244
Liabilities, temporary equity and equity:
Current liabilities:
Accounts payable, accrued expenses and other current liabilities$64,830 $63,242 $84,285
Current liabilities held for sale 130,261
Customer layaway deposits11,091 11,201 10,693
Total current liabilities75,921 204,704 94,978
Long-term debt, net260,414 211,421 283,611
Other long-term liabilities9,680 9,548 10,450
Total liabilities346,015 425,673 389,039
Commitments and contingencies
Temporary equity:
Redeemable noncontrolling interest (2,378)
Total temporary equity (2,378)
Stockholders’ equity:
Class A Non-voting Common Stock, par value $.01 per share; shares authorized: 100 million; issued and outstanding: 51,326,582 as of June 30, 2017; 51,019,332 as of June 30, 2016; and 51,129,144 as of September 30, 2016513 510 511
Class B Voting Common Stock, convertible, par value $.01 per share; shares authorized: 3 million; issued and outstanding: 2,970,17130 30 30
Additional paid-in capital322,559 316,565 318,723
Retained earnings340,256 316,577 319,808
Accumulated other comprehensive loss(37,921) (66,974) (44,089)
EZCORP, Inc. stockholders’ equity625,437 566,708 594,983
Noncontrolling interest(1,135) (206) (778)
Total equity624,302 566,502 594,205
Total liabilities, temporary equity and equity$970,317 $989,797 $983,244


EZCORP, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended June 30,
2017 2016
(Unaudited)
(in thousands)
Operating activities:
Net income (loss)$20,096 $(90,564)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and amortization18,246 21,432
Amortization of debt discount and deferred financing costs8,595 8,864
Amortization of prepaid commissions 10,684
Accretion of notes receivable discount(2,898)
Consumer loan loss provision1,434 24,157
Deferred income taxes(871) (14,234)
Impairment of goodwill 73,244
Other adjustments(48) (2,002)
(Gain) loss on sale or disposal of assets11 641
Stock compensation5,145 3,206
Income from investment in unconsolidated affiliate(3,768) (5,626)
Changes in operating assets and liabilities:
Service charges and fees receivable604 8,363
Inventory1,470 (1,349)
Prepaid expenses, other current assets and other assets1,261 (4,983)
Accounts payable, accrued expenses and other liabilities(29,464) (20,497)
Customer layaway deposits288 781
Income taxes receivable and payable, current, net of excess tax benefit from stock compensation9,873 51,990
Payments of restructuring charges (8,367)
Dividends from unconsolidated affiliate 2,197
Net cash provided by operating activities29,974 57,937
Investing activities:
Loans made(472,676) (497,255)
Loans repaid288,833 324,478
Recovery of pawn loan principal through sale of forfeited collateral187,819 173,710
Additions to property and equipment(9,340) (6,470)
Acquisitions, net of cash acquired (6,000)
Principal collections on notes receivable23,336
Net cash provided by (used in) investing activities17,972 (11,537)
Financing activities:
Taxes paid related to net share settlement of equity awards(767)
Payout of deferred consideration (14,875)
Repurchase of redeemable common stock issued due to acquisitions (11,750)
Proceeds from settlement of forward currency contracts 3,557
Change in restricted cash 2,710
Proceeds from borrowings, net of issuance costs 16,442
Payments on borrowings (63,994)
Net cash used in financing activities(767) (67,910)
Effect of exchange rate changes on cash and cash equivalents813 (6,506)
Net increase (decrease) in cash and cash equivalents47,992 (28,016)
Cash and cash equivalents at beginning of period65,737 59,124
Cash and cash equivalents at end of period$113,729 $31,108
Non-cash investing and financing activities:
Pawn loans forfeited and transferred to inventory$182,682 $179,394
Dividend reinvestment acquisition of additional ownership in unconsolidated affiliate1,153


EZCORP, Inc.
OPERATING SEGMENT RESULTS (UNAUDITED)
Three Months Ended June 30, 2017
U.S. Pawn Mexico
Pawn
Other
International
Total
Segments
Corporate
Items
Consolidated
(in thousands)
Revenues:
Merchandise sales$82,714 $15,207 $ $97,921 $ $97,921
Jewelry scrapping sales17,257 384 17,641 17,641
Pawn service charges56,774 9,104 65,878 65,878
Other revenues50 179 1,964 2,193 2,193
Total revenues156,795 24,874 1,964 183,633 183,633
Merchandise cost of goods sold52,488 10,127 62,615 62,615
Jewelry scrapping cost of goods sold14,674 336 15,010 15,010
Other cost of revenues 453 453 453
Net revenues89,633 14,411 1,511 105,555 105,555
Segment and corporate expenses (income):
Operations63,593 8,898 1,755 74,246 74,246
Administrative 14,095 14,095
Depreciation and amortization2,210 619 44 2,873 2,970 5,843
Loss (gain) on sale or disposal of assets20 (3) 17 17
Interest expense 2 2 5,652 5,654
Interest income (480) (480) (1,573) (2,053)
Equity in net income of unconsolidated affiliate (1,047) (1,047) (1,047)
Other income(5) (24) (68) (97) (2) (99)
Segment contribution$23,815 $5,399 $827 $30,041
Income from continuing operations before income taxes $30,041 $(21,142) $8,899


EZCORP, Inc.
OPERATING SEGMENT RESULTS (UNAUDITED)
Nine Months Ended June 30, 2017
U.S. Pawn Mexico
Pawn
Other
International
Total
Segments
Corporate
Items
Consolidated
(in thousands)
Revenues:
Merchandise sales$273,125 $46,547 $ $319,672 $ $319,672
Jewelry scrapping sales35,158 2,500 37,658 37,658
Pawn service charges177,480 24,503 201,983 201,983
Other revenues157 457 5,958 6,572 6,572
Total revenues485,920 74,007 5,958 565,885 565,885
Merchandise cost of goods sold173,235 31,605 204,840 204,840
Jewelry scrapping cost of goods sold30,114 2,081 32,195 32,195
Other cost of revenues 1,433 1,433 1,433
Net revenues282,571 40,321 4,525 327,417 327,417
Segment and corporate expenses (income):
Operations194,499 26,439 5,414 226,352 226,352
Administrative 41,305 41,305
Depreciation and amortization7,487 1,910 144 9,541 8,705 18,246
Loss (gain) on sale or disposal of assets(54) 65 11 11
Interest expense 7 7 16,840 16,847
Interest income (889) (889) (6,020) (6,909)
Equity in net income of unconsolidated affiliate (3,768) (3,768) (3,768)
Other income(14) (61) (28) (103) (191) (294)
Segment contribution$80,653 $12,850 $2,763 $96,266
Income from continuing operations before income taxes $96,266 $(60,639) $35,627


EZCORP, Inc.
OPERATING SEGMENT RESULTS (UNAUDITED)
Three Months Ended June 30, 2016
U.S. Pawn Mexico
Pawn
Other
International
Total
Segments
Corporate
Items
Consolidated
(in thousands)
Revenues:
Merchandise sales$79,826 $14,187 $1 $94,014 $ $94,014
Jewelry scrapping sales10,918 312 11,230 11,230
Pawn service charges54,395 8,078 62,473 62,473
Other revenues39 157 2,237 2,433 2,433
Total revenues145,178 22,734 2,238 170,150 170,150
Merchandise cost of goods sold50,586 9,554 60,140 60,140
Jewelry scrapping cost of goods sold8,845 265 9,110 9,110
Other cost of revenues 506 506 506
Net revenues85,747 12,915 1,732 100,394 100,394
Segment and corporate expenses (income):
Operations62,733 8,744 1,695 73,172 73,172
Administrative 14,481 14,481
Depreciation and amortization2,888 720 56 3,664 2,610 6,274
Loss on sale or disposal of assets(51) (13) (64) 23 (41)
Interest expense 25 25 3,911 3,936
Interest income(1) (23) (24) (26) (50)
Equity in net income of unconsolidated affiliate (1,694) (1,694) (1,694)
Other expense (income) 759 759 (259) 500
Segment contribution$20,178 $2,703 $1,675 $24,556
Income from continuing operations before income taxes $24,556 $(20,740) $3,816


EZCORP, Inc.
OPERATING SEGMENT RESULTS (UNAUDITED)
Nine Months Ended June 30, 2016
U.S. Pawn Mexico
Pawn
Other
International
Total
Segments
Corporate
Items
Consolidated
(in thousands)
Revenues:
Merchandise sales$266,560 $45,376 $5 $311,941 $ $311,941
Jewelry scrapping sales32,117 1,493 21 33,631 33,631
Pawn service charges169,630 23,567 193,197 193,197
Other revenues281 231 6,639 7,151 7,151
Total revenues468,588 70,667 6,665 545,920 545,920
Merchandise cost of goods sold164,288 30,442 1 194,731 194,731
Jewelry scrapping cost of goods sold27,033 1,222 16 28,271 28,271
Other cost of revenues 1,549 1,549 1,549
Net revenues277,267 39,003 5,099 321,369 321,369
Segment and corporate expenses (income):
Operations187,518 28,961 4,967 221,446 221,446
Administrative 50,085 50,085
Depreciation and amortization9,489 2,285 163 11,937 8,485 20,422
Loss on sale or disposal of assets502 116 618 23 641
Restructuring982 543 202 1,727 183 1,910
Interest expense125 103 228 11,786 12,014
Interest income(2) (23) (25) (41) (66)
Equity in net income of unconsolidated affiliate (5,626) (5,626) (5,626)
Other expense 808 3 811 4 815
Segment contribution$78,653 $6,210 $5,390 $90,253
Income from continuing operations before income taxes $90,253 $(70,525) $19,728


EZCORP, Inc.
STORE COUNT ACTIVITY (UNAUDITED)
Three Months Ended June 30, 2017
Company-owned Stores
U.S. Pawn Mexico Pawn Other
International
Consolidated
As of March 31, 2017517 240 27 784
New locations opened 4 4
Locations sold, combined or closed(2) (2)
As of June 30, 2017515 244 27 786


Three Months Ended June 30, 2016
Company-owned Stores
U.S. Pawn Mexico Pawn Other
International
Consolidated
As of March 31, 2016522 237 27 786
New locations opened 1 1
As of June 30, 2016522 238 27 787


Nine Months Ended June 30, 2017
Company-owned Stores
U.S. Pawn Mexico Pawn Other
International
Consolidated
As of September 30, 2016520 239 27 786
New locations opened 6 6
Locations sold, combined or closed(5) (1) (6)
As of June 30, 2017515 244 27 786


Nine Months Ended June 30, 2016
Company-owned Stores
U.S. Pawn Mexico Pawn Other
International
Consolidated Franchises
As of September 30, 2015522 237 27 786 1
New locations opened 1 1
Locations acquired6 1 7
Locations sold, combined or closed(6) (1) (7) (1)
As of June 30, 2016522 238 27 787

Non-GAAP Financial Information (Unaudited)

In addition to the financial information prepared in conformity with generally accepted accounting principles in the United States of America ("GAAP"), we provide certain other non-GAAP financial information on a constant currency basis ("constant currency"). We use constant currency and ongoing segment contribution results to evaluate results of our Mexico Pawn operations, which are denominated in Mexican pesos, and believe that presentation of constant currency results are meaningful and useful in understanding the activities and business metrics of our Mexico Pawn 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 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 Mexican pesos 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. 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 exchange rate as of June 30, 2017 and 2016 was 18.0 to 1 and 18.6 to 1, respectively. The approximate average exchange rate for the three months ended June 30, 2017 and 2016 was 18.6 to 1 and 18.1 to 1, respectively. The approximate average exchange rate for the nine months ended June 30, 2017 and 2016 was 19.6 to 1 and 17.6 to 1, respectively; however, our statement of operations constant currency results reflect the impact of monthly effects of exchange rates and so are not directly calculable from the above rates. Constant currency results, where presented, also exclude the foreign currency gain or loss and the related foreign currency derivative gain or loss impact.

The following information provides reconciliations of certain non-GAAP financial measures presented in this press release to the most directly comparable financial measures calculated and presented in accordance with GAAP as of and for the three and nine months ended June 30, 2017.

Miscellaneous Non-GAAP Financial Measures

U.S. Dollar
Amount
Percentage
Change YOY
(in millions)
Mexico Pawn same store PLO$19.0 16%
Currency exchange rate fluctuations(0.6)
Constant currency Mexico Pawn same store PLO$18.4 13%
Consolidated revenue (three months ended June 30, 2017)$183.6 8%
Currency exchange rate fluctuations (three months ended June 30, 2017)0.8
Constant currency consolidated revenue (three months ended June 30, 2017)$184.4 8%
Consolidated net revenue (three months ended June 30, 2017)$105.6 5%
Currency exchange rate fluctuations0.4
Constant currency consolidated net revenue (three months ended June 30, 2017)$106.0 6%
Consolidated PSC revenue (three months ended June 30, 2017)$65.9 5%
Currency exchange rate fluctuations0.2
Constant currency consolidated PSC revenue (three months ended June 30, 2017)$66.1 6%
Consolidated merchandise sales (three months ended June 30, 2017)$97.9 4%
Currency exchange rate fluctuations0.4
Constant currency consolidated merchandise sales (three months ended June 30, 2017)$98.3 5%
Consolidated operations expenses (three months ended June 30, 2017)$74.2 1%
Currency exchange rate fluctuations (three months ended June 30, 2017)0.3
Constant currency consolidated operations expenses (three months ended June 30, 2017)$74.5 2%
Consolidated revenue (nine months ended June 30, 2017)$565.9 4%
Currency exchange rate fluctuations (nine months ended June 30, 2017)8.5
Constant currency consolidated revenue (nine months ended June 30, 2017)$574.4 5%
Consolidated net revenue (nine months ended June 30, 2017)$327.4 2%
Currency exchange rate fluctuations4.5
Constant currency consolidated net revenue (nine months ended June 30, 2017)$331.9 3%
Consolidated PSC revenue (nine months ended June 30, 2017)$202.0 5%
Currency exchange rate fluctuations2.6
Constant currency consolidated PSC revenue (nine months ended June 30, 2017)$204.6 6%
Consolidated operations expenses (nine months ended June 30, 2017)$226.4 2%
Currency exchange rate fluctuations (nine months ended June 30, 2017)3.0
Constant currency consolidated operations expenses (nine months ended June 30, 2017)$229.4 4%
Mexico Pawn PLO$19.4 19%
Currency exchange rate fluctuations(0.5)
Constant currency Mexico Pawn PLO$18.9 16%
Mexico Pawn PSC revenue (three months ended June 30, 2017)$9.1 13%
Currency exchange rate fluctuations (three months ended June 30, 2017)0.3
Constant currency Mexico Pawn PSC revenue (three months ended June 30, 2017)$9.4 16%
Mexico Pawn merchandise sales (three months ended June 30, 2017)$15.2 7%
Currency exchange rate fluctuations (three months ended June 30, 2017)0.4
Constant currency Mexico Pawn merchandise sales (three months ended June 30, 2017)$15.6 10%
Mexico Pawn same store merchandise sales (three months ended June 30, 2017)$14.8 5%
Currency exchange rate fluctuations (three months ended June 30, 2017)0.4
Constant currency Mexico Pawn same store merchandise sales (three months ended June 30, 2017)$15.2 7%
Mexico Pawn segment profit before tax (three months ended June 30, 2017)$5.4 100%
Currency exchange rate fluctuations (three months ended June 30, 2017)0.1
Constant currency Mexico Pawn segment profit before tax (three months ended June 30, 2017)$5.5 104%
Mexico Pawn PSC revenue (nine months ended June 30, 2017)$24.5 4%
Currency exchange rate fluctuations (nine months ended June 30, 2017)2.7
Constant currency Mexico Pawn PSC revenue (nine months ended June 30, 2017)$27.2 15%
Mexico Pawn merchandise sales (nine months ended June 30, 2017)$46.5 3%
Currency exchange rate fluctuations (nine months ended June 30, 2017)5.5
Constant currency Mexico Pawn merchandise sales (nine months ended June 30, 2017)$52.0 15%
Mexico Pawn same store merchandise sales (nine months ended June 30, 2017)$45.2 2%
Currency exchange rate fluctuations (nine months ended June 30, 2017)5.3
Constant currency Mexico Pawn same store merchandise sales(nine months ended June 30, 2017)$50.5 13%
Mexico Pawn segment profit before tax (nine months ended June 30, 2017)$12.9 107%
Currency exchange rate fluctuations (nine months ended June 30, 2017)1.2
Constant currency Mexico Pawn segment profit before tax (nine months ended June 30, 2017)$14.1 127%


Contact: Jeff Christensen Vice President, Investor Relations Email: jeff_christensen@ezcorp.com Phone: (512) 437-3545

Source:EZCORP, Inc.