Ezcorp, Inc. · NASDAQ:EZPW
Ezcorp — Q4 2019 Earnings Presentation
28 slides from Ezcorp's earnings presentation, Dec 5, 2019
Slide 1: Growth Through Superior Customer Experience
Growth Through Superior Customer Experience Fourth Quarter and Full-Year Fiscal 2019 Earnings December 5, 2019
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: Agenda
Agenda I. Successful Track Record II. Strong Long-Term EBITDA Growth III. Strong Free Cash Flow IV. Strategic Initiatives Progress Report V. F4Q19 Highlights VI. Financial Highlights A. Consolidated B. US Pawn C. Latin America Pawn VII. Liquidity, Free Cash Flow & Capital Management VIII. Appendix 3
Slide 4: Successful Track Record of Current Management Team
Successful Track Record of Current Management Team $60m Share Repurchase Program Enabled by Strong Free Cash Flow • $112m free cash flow and collection on notes receivable in fiscal 2019; CAGR from 2016-2019 of 33% • Share repurchase authorization • Three-year program authorizing the repurchase of u
Slide 5: Successful Execution of Business Strategy Drives Strong Long Term EBITDA Growth
Successful Execution of Business Strategy Drives Strong Long Term EBITDA Growth Compound PLO Growth, Acquisitions, Store Openings and Expense Control Driving EBITDA Growth EBITDA Consolidated Long-Term Growth Build Growth Platform Fix & Simplify F15 F19 EBITDA / Net 12% 20% Revenue Amounts in this s
Slide 6: Strong Free Cash Flow
Strong Free Cash Flow DRIVERS UPDATES • $38.5m of cash flow from operations in F4Q19; $103.5m in F2019 Operating Cash Flow/ • Initial $6m of deferred compensation fee received from Alpha Credit Notes Receivable in September 2019; remaining $8m due in F2020 FY161 FY17 FY18 FY19 Net Cash From Operatin
Slide 7: Strategic Initiatives Progress Report
Strategic Initiatives Progress Report INITIATIVES RECENT ACCOMPLISHMENTS1 • Long-term PLO growth reflecting customer-centric approach Best at Serving • Same Store PLO growth flat, as US growth offset by LatAm downtick Customers’ Need for Cash • Same store sales up 2% in US and up 8% in LatAm • Opene
Slide 8: F4Q19 Highlights
F4Q19 Highlights KEY THEMES QUARTERLY HIGHLIGHTS • Total revenue up 5% Ongoing • Pawn service charges (PSC) up 2% Business Execution • Merchandise sales up 3% • Scrap sales up 37% • Pawn Loans Outstanding (PLO) growth of 1% to $201m • Same-store loan growth (SSLG) about flat year-over-year Steady •
Slide 9: Long-Term EBITDA Growth/Margins
Long-Term EBITDA Growth/Margins Recent De Novo Store Openings Expected to Drive EBITDA Growth Long-Term Growth Consistent EBITDA Growth Market 17% CAGR (F2016-F2019) 1% CAGR (F2016-F2019) 36% CAGR (F2016-F2019) 9 EBITDA figures adjusted for discrete items. See Appendix for reconciliations.
Slide 10: Financial Highlights – F4Q19 Consolidated
Financial Highlights – F4Q19 Consolidated • Record high year-end PLO balance of $201m; up 1% YOY • PSC up 2% to $83.4m reflecting a higher average PLO balance for the quarter and strong yield • Merchandise sales grew 3% • Same store sales growth (SSSG) of 2% • Total inventory increase of 8% inclusiv
Slide 11: Financial Highlights – US Pawn
Financial Highlights – US Pawn • Year-end PLO/store of $307k (GAAP) highest since 2011; up 1% Y/Y • PSC up 1% to $63.7m on a higher average PLO balance for the quarter • Merchandise sales flat Y/Y • SSSG also flat • Merchandise margin declined reflecting a reduction in aged inventory • Aged GM inven
Slide 12: Financial Highlights – Latin America Pawn
Financial Highlights – Latin America Pawn • PLO down 1% to $43.2m • Same Store PLO growth of (3%) largely reflecting recently introduced social programs in Mexico and May-July system issues resolved in mid-July. • PSC up 3% to $19.7m • Merchandise sales grew 11% • SSSG of 8% • Inventory up 21% as ac
Slide 13: Appendix
Appendix EZCORP
Slide 14: Profit Impacted By Discrete Items and Discretionary Growth Investments
Profit Impacted By Discrete Items and Discretionary Growth Investments EZCORP GAAP Results Q4 %∆ FY %∆ $ Millions FY19 FY18 B/(W) FY19 FY18 B/(W) Pawn Loans Outstanding $199.1 $198.5 Flat Total Revenue $214.3 $206.0 4% $847.2 $812.2 4% Revenue growth impacted by $4.6m transaction tax adjustment in L
Slide 15: Solid PLO and Revenue Growth
Solid PLO and Revenue Growth EZCORP Continuing Operations Adjusted Results Q4 %∆ FY %∆ $ Millions FY19 FY18 B/(W) FY19 FY18 B/(W) Focus on customer service continues to drive Pawn Loans Outstanding $200.6 $198.5 1% ongoing PLO growth Total Revenue $215.4 $206.0 5% $855.3 $812.2 5% Solid FY19 revenue
Slide 16: Convertible Senior Notes Potential EPS Dilution
Convertible Senior Notes Potential EPS Dilution The following is provided for purposes of calculating the potentially dilutive shares to be included in accounting for diluted EPS at a hypothetical conversion price of $10.00 on the convertible notes due 2024, and $15.90 on the convertible notes due 2
Slide 17: Definition of Terms
Definition of Terms PLO Pawn loan outstanding PSC Pawn service charges Latin America, including Mexico, Central America and South LatAm America POS2 Second generation point-of-sale system Same store loan growth (stores open the entirety of SSLG comparable periods) Same store sales growth (stores ope
Slide 18: Definition of Terms, Continued
Definition of Terms, Continued pawn service charges X 365 days in period / 12 Monthly PLO Yield = average PLO sales gross profit days in period X 365 Inventory Yield = average net inventory sales gross profit + PSC Return on Earning X 365 = days in period Assets average net inventory + average PLO t
Slide 19: 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 20: GAAP to Non-GAAP Reconciliation Q4 – Continuing Operations
GAAP to Non-GAAP Reconciliation Q4 – Continuing Operations* (A) (B) (C) (G) (D) (H) (E) (I) (F) (J) Footnote * - Includes immaterial presentation reclassifications and rounding Footnote (A) Amount includes $0.3m from natural disaster resulting in store and inventory destruction. Footnote (B) Amount
Slide 21: GAAP to Non-GAAP Reconciliation Q4 – U.S. Pawn
GAAP to Non-GAAP Reconciliation Q4 – U.S. Pawn* (A) (B) Footnote * - Includes immaterial presentation reclassifications and rounding Footnote (A) Amount includes $0.3m from natural disaster resulting in store and inventory destruction. Footnote (B) Amount includes $0.5m asset disposal from store des
Slide 22: GAAP to Non-GAAP Reconciliation Q4 – Latin America Pawn
GAAP to Non-GAAP Reconciliation Q4 – Latin America Pawn* (A) (B) (C) Footnote * - Includes immaterial presentation reclassifications and rounding Footnote (A) Amount includes $0.6m of trade name impairment and minimal gain on FX Footnote (B) Amount includes $0.1m in non-cash interest income regardin
Slide 23: GAAP to Non-GAAP Reconciliation YTD – Continuing Operations
GAAP to Non-GAAP Reconciliation YTD – Continuing Operations* (A) (K) (B) (C) (G) (D) (H) (E), (K) (I) (F), (K) (J) Footnote * - Includes immaterial presentation reclassifications and rounding Footnote (A) Amount includes $1.1m of PSC Revenue for settlement of GPMX PSC-related indemnification claim .
Slide 24: GAAP to Non-GAAP Reconciliation YTD – U.S. Pawn
GAAP to Non-GAAP Reconciliation YTD – U.S. Pawn* (A) (B) (C) Footnote * - Includes immaterial presentation reclassifications and rounding Footnote (A) Amount includes $0.3m from natural disaster resulting in store and inventory destruction. Footnote (A) Amount includes $2.9m asset disposal as a resu
Slide 25: GAAP to Non-GAAP Reconciliation YTD – Latin America Pawn
GAAP to Non-GAAP Reconciliation YTD – Latin America Pawn* (A) (H) (B) (E) (C) (F) (D), (H) (G) Footnote * - Includes immaterial presentation reclassifications and rounding Footnote (A) Amount includes $1.1m of PSC Revenue for settlement of GPMX PSC-related indemnification claim. Footnote (B) Amount
Slide 26: Consolidated Growth FY15-FY19 Reconciliation
Consolidated Growth FY15-FY19 Reconciliation* 26 Footnote * - Includes immaterial presentation reclassifications and rounding - see final page of reconciliations for constant currency assumption
Slide 27: Pawn Businesses FY16-FY19 Reconciliation
Pawn Businesses FY16-FY19 Reconciliation* 27 Footnote * - Includes immaterial presentation reclassifications and rounding - see final page of reconciliations for constant currency assumption
Slide 28: 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