Ezcorp, Inc. · NASDAQ:EZPW
Ezcorp — Q4 FY2020 Earnings Presentation
27 slides from Ezcorp's earnings presentation, Dec 15, 2020
Slide 1: Fourth Quarter and Full-Year Fiscal 2020 Earnings
Fourth Quarter and Full-Year Fiscal 2020 Earnings December 15, 2020
Slide 2: Preliminary Statements
Preliminary Statements Forward Looking Statements This document contains certain forward-looking statements. 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, that address activit
Slide 3: Company Overview
Company Overview Formed in 1989, EZCORP has grown into a leading provider of pawn loans in the United States and Latin America. We also sell merchandise through a broad network of retail locations. We are dedicated to building shareholder value by satisfying the short-term cash needs of our customer
Slide 4: Management Actions in the Current Environment
Management Actions in the Current Environment Resilient through the crisis Team Members Customers Financial Focus on Team Member Balance Sheet Strength & Retention & Well Being Consistent Service Cost Optimization ◦ Remain focused on the health ◦ Pawn shops remain an ◦ Strong balance sheet with and
Slide 5: 2020 Q4 Key Financial Themes
2020 Q4 Key Financial Themes Positioning EZCORP for Positive Operating Leverage as Demand for Pawn Loans Returns • Implemented strategic initiatives which will result in $12M+ of annual savings, the majority in Administrative expenses Expense Reductions • Achieved $14M of annualized cost savings rel
Slide 6: The Path Forward To Strengthen And Grow The Core
The Path Forward To Strengthen And Grow The Core As we continue to be our customers’ first and best choice for their short-term cash needs 6
Slide 7: Cost Reduction and Simplification
1 Cost Reduction and Simplification Continuous Process, To Be Updated Quarterly Immediate Cost Simplification & Corporate & Store Reductions Standardization Process Automation Q4FY20 FY21 FY21 & FY22 • Reduction in corporate cost • Simplification (or centralization) • Identify and automate corporate
Slide 8: Strengthen the Core
2 Strengthen the Core Strategic focus on operating disciplines and modernization of critical IT systems Continuous Optimization Modernize IT • Leveraging POS investment to improve product • POS rollout across core markets well progressed, pricing intelligence, improving team member with El Salvador
Slide 9: Innovate and Grow
3 Innovate and Grow Broaden customer engagement to service more customers, more frequently • Repositioning Lana as a digital pawn channel • Integrated Lana team into the core EZCORP family to reduce cost and increase throughput • FY21 Lana development focused on pawn features Lana ◦ Loan extensions
Slide 10: Timing impacts on future growth
Timing impacts on future growth • During normal periods, there is greater timing consistency between improvements in New Loans Made (NLM), PLO, PSC, Inventory and Sales. During times of significant short-term change in assets, there is a lag in the change in revenue. • As NLM improves, there is a ti
Slide 11: Financial Results - Consolidated
Financial Results - Consolidated • PLO balance of $133.7M down 33% Y/Y largely related to the impact of stimulus payments depressing pawn loan demand and headwinds from COVID-19 • Merchandise sales up 1% Y/Y for the quarter, but up 11% for the year ◦ F4Q20 flat same store sales ◦ Merchandise sales g
Slide 12: Financial Results – U.S. Pawn
Financial Results – U.S. Pawn • PLO down 32% Y/Y reflecting COVID-19 related headwinds • PSC down 32% driven by lower average PLO for the quarter partially offset by Y/Y improvement in PLO yield • Merchandise sales decreased 4% Y/Y for the quarter ◦ F4Q20 same store sales decline of 3% ◦ Annualized
Slide 13: Financial Results – Latin America Pawn
Financial Results – Latin America Pawn • PLO down 34% to $27m largely reflecting ongoing COVID-19 headwinds • PSC down 33% Y/Y driven by lower average PLO for the quarter and a modestly lower yield due primarily to COVID-19 store closures in GPMX • Merchandise sales were up 13% for the quarter, refl
Slide 14: Appendix
Appendix EZCORP
Slide 15: Macro Headwinds Pressure EBITDA/EPS: EZCORP GAAP Results
Macro Headwinds Pressure EBITDA/EPS EZCORP GAAP Results Q4 % YTD % F4Q20 net revenue down, primarily $ Millions FY20 FY19 B/(W) FY20 FY19 B/(W) driven by lower PLO/PSC reflecting Pawn Loans Outstanding $ 131.3 $ 199.1 (34)% ongoing COVID-19 impacts. Gross profit also down due to a slight Total Rev
Slide 16: Macro Headwinds Pressure EBITDA/EPS: EZCORP Adjusted Results
Macro Headwinds Pressure EBITDA/EPS EZCORP Adjusted Results Q4 % YTD % $ Millions FY20 FY19 B/(W) FY20 FY19 B/(W) Pawn Loans Outstanding $ 133.7 $ 199.1 (33)% F4Q20 net revenue down, primarily driven by lower Total Revenue $ 170.9 $ 214.3 (20)% $ 832.9 $ 850.7 (2)% PLO/PSC reflecting ongoing COVID
Slide 17: Definition of Terms
Definition of Terms Latin America, including Mexico, Central America and South America Second generation point-of-sale system Same store loan growth (stores open the entirety of Compound annual growth rate General merchandise (non-jewelry) Par value of debt less cash and cash equivalents 5 Net debt
Slide 18: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation 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 financial information that is adjusted to exclude the impact of restructuring and restateme
Slide 19: GAAP to Non-GAAP Reconciliation Q4 – Consolidated
GAAP to Non-GAAP Reconciliation Q4 – Consolidated* Constant Adjusted Item Adjusted Currency Constant Item Adjusted Base Adjustments Base Impact Currency Base Adjustments Base $ Millions FY20 FY20 FY20 FY20 FY20 FY19 FY19 FY19 Revenues 166.9 — 166.9 4.0 170.9 214.3 — 214.3 PSC Revenue 55.2 — 55.2 1.1
Slide 20: GAAP to Non-GAAP Reconciliation Q4 – U.S. Pawn
GAAP to Non-GAAP Reconciliation Q4 – U.S. Pawn* Constant Adjusted Item Adjusted Currency Constant Item Adjusted Base Adjustments Base Impact Currency Base Adjustments Base $ Millions FY20 FY20 FY20 FY20 FY20 FY19 FY19 FY19 Revenues 124.9 — 124.9 — 124.9 161.6 — 161.6 PSC Revenue 43.2 — 43.2 — 43.2 6
Slide 21: GAAP to Non-GAAP Reconciliation Q4 – Latin America Pawn
GAAP to Non-GAAP Reconciliation Q4 – Latin America Pawn* Constant Adjusted Item Adjusted Currency Constant Item Adjusted Base Adjustments Base Impact Currency Base Adjustments Base $ Millions FY20 FY20 FY20 FY20 FY20 FY19 FY19 FY19 Revenues 41.7 — 41.7 4.0 45.7 51.3 — 51.3 PSC Revenue 12.0 — 12.0 1.
Slide 22: GAAP to Non-GAAP Reconciliation YTD – Continuing Operations
GAAP to Non-GAAP Reconciliation YTD – Continuing Operations* Constant Adjusted Item Adjusted Currency Constant Item Adjusted Base Adjustments Base Impact Currency Base Adjustments Base $ Millions FY20 FY20 FY20 FY20 FY20 FY19 FY19 FY19 Revenues 822.8 — 822.9 10.0 832.9 847.2 3.4 850.7 PSC Revenue 27
Slide 23: GAAP to Non-GAAP Reconciliation YTD – U.S. Pawn
GAAP to Non-GAAP Reconciliation YTD – U.S. Pawn* Constant Adjusted Item Adjusted Currency Constant Item Adjusted Base Adjustments Base Impact Currency Base Adjustments Base $ Millions FY20 FY20 FY20 FY20 FY20 FY19 FY19 FY19 Revenues 638.8 — 638.8 — 638.8 650.4 — 650.4 PSC Revenue 210.1 — 210.1 — 210
Slide 24: GAAP to Non-GAAP Reconciliation YTD – Latin America Pawn
GAAP to Non-GAAP Reconciliation YTD – Latin America Pawn* Constant Adjusted Item Adjusted Currency Constant Item Adjusted Base Adjustments Base Impact Currency Base Adjustments Base $ Millions FY20 FY20 FY20 FY20 FY20 FY19 FY19 FY19 Revenues 180.1 — 180.1 10.0 190.1 191.2 3.5 194.6 PSC Revenue 62.6
Slide 25: Consolidated Growth FY18-FY20 Reconciliation
Consolidated Growth FY18-FY20 Reconciliation* FY18 FY18 FY18 FY18 FY18 FY19 FY19 FY19 FY19 FY19 $ Millions Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Continuing Ops PBT 19.7 17.5 15.5 2.9 55.5 (4.7) 5.0 3.1 0.3 3.7 Add Back Net Interest 1.6 1.6 3.0 4.6 10.8 5.5 5.5 6.7 4.0 21.6 Add Back Depreciatio
Slide 26: Pawn Businesses FY18-FY20 Reconciliation
Pawn Businesses FY18-FY20 Reconciliation* FY18 FY18 FY18 FY18 FY18 FY19 FY19 FY19 FY19 FY19 FY20 FY20 FY20 FY20 FY20 $ Millions Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY U.S. Pawn PBT 27.8 28.2 21.3 25.5 102.7 27.4 28.4 23.6 22.2 101.7 28.6 20.4 16.5 7.7 73.1 Add Back Net Interest — — — 0.1 0.1 —
Slide 27: Constant Currency
Constant Currency In addition to the financial information prepared in conformity with accounting principles generally accepted in the United States ("GAAP"), we provide certain other non-GAAP financial information on a constant currency basis ("constant currency"). We use constant currency results