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Second Quarter Fiscal 2017 Conference Call May 4, 2017
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Page 1: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

Second Quarter Fiscal 2017 Conference Call

May 4, 2017

Page 2: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

Preliminary Statements

2

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 activities or results that the company plans, expects,

believes, projects, estimates or anticipates will, should or may occur in the future 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 and 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.

Other Information

This information should be read in conjunction with, and not in lieu of, the company’s annual,

quarterly and other reports filed with the Securities and Exchange Commission. Those reports contain

important information about the company’s business and performance, including financial

statements prepared in accordance with U.S. generally accepted accounting principles, as well as a

description of the important risk factors that may materially and adversely affect our business,

financial condition or results of operations.

All market comparisons are based on available information from similar publicly traded companies.

Page 3: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

Second Quarter FY17

Key Messages – Momentum Builds!

3

Amounts in this slide are adjusted for restructuring and restatement charges, other discrete items and constant currency. Mexico Pawn excludes closed buy/sell businesses.

See “EZCORP GAAP Results” and “GAAP to non-GAAP Reconciliation.”

Comparisons in this presentation are Q2FY17 relative to same period in prior year.

*Calculated in constant currency. Mexico PLO balance both increased and decreased over the same period on a GAAP basis.

**Q2 is low point of the year in PLO due to loan pay downs from federal tax refunds.

1 Strong profit growth

• Earnings Per Share from continuing operations up 200% to $0.15; growth in five consecutive quarters

• EBITDA up 9% to $23.1m from $21.3m

Strengthened balance

sheet and liquidity 2

Track record of PLO growth

• Track record of positive Same Store PLO growth:– Six consecutive quarters in U.S.– Eleven consecutive double-digit quarters in Mexico*

• Market leading U.S. PLO of $243k per store in Q2**3Investing in customer experience driving future profitable growth

• Commenced rollout of upgraded POS in Q2, expect deployment to

be completed this calendar year

• Store refresh program commences in 2HFY17

• Deployment of upgraded labor scheduling & timekeeping system

began in Q2 4

• Cash balance up 68% to $120m plus $50m undrawncredit facility

• Receiving regular payments on promissory notes created as a result of Grupo Finmart sale in September 2016. Collected $15.1m in 1HFY17 and expect to collect a total of $45.9m in FY17

Page 4: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

4

Reduction in net interest expense due

to notes receivable income from Grupo

Finmart sale

EZCORP GAAP Results

Earnings Per Share Up 200% to $0.15

Five consecutive quarters of YOY profit

growth

Continued focus and investment in

customer experience and cost

management driving EPS up 200%

Continued focus and investment in

customer-facing team. Expect 2HFY17

operations expense similar to 2HFY16

Corporate expense reduction of 15%,

on track to $50m corporate expense in

FY18

Q2 Net Revenue up 1% as 4% increase

in PSC revenue was offset by softer sales

due to tax refund delays

*Net income attributable to EZCORP from Continuing Operations

Page 5: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

5

*Adjusted for restructuring and restatement charges, other discrete items and constant currency. Mexico Pawn excludes closed buy/sell businesses. GAAP financials are included in the “GAAP to Non-GAAP Reconciliation.”

Corporate expense reduction of 15%;

on track to $50m corporate expense in

FY18

Reduction in net interest expense due

to notes receivable income from Grupo

Finmart sale

Continued focus and investment in

customer experience and cost

management driving profit up 19%

Focus on meeting customers’ need for

cash delivered both PLO and Net

Revenue growth

Consolidated merchandise margin of

36%, in our target range of 35-38%

EZCORP Continuing Operations Adjusted Results*

Continued Focus and Investment in Customer Experience

Driving Profit Growth

Page 6: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

Purchases+

Forfeitures

Serving and Satisfying Customers’ Need for Cash

Fuels Continued Same Store PLO Growth

6

+ -= =

INCOME STATEMENT

Pawn Service Charges Total

Up 5% to $60m

Sales Up 1%

Sales Gross Profit Total Down 5%

to $36m

Merchandise Margin 37%

ASSETSSAME STORE UP 5%

GROSS PROFITSAME STORE

DOWN 5%Inventory

Total Up 10%

to $120m

NET REVENUEUp 1% to $96m

• Continued growth in PLO, up 2%; Same Store PLO up 2%

• Average PLO per store improved 3% to $243k

• PLO monthly yield consistent at 14%

• Inventory aged over one year increased to 12% from 10%

TOTAL EXPENSESUp 2% to $66m

PROFIT BEFORE TAXFlat at $30m

• Pawn service charges up 5%

• Merchandise margin of 37%, in our target range of 35% to 38%

• Inventory turns of 2.2 compared to 2.4

• Return on Earnings Assets of 147% compared to 152%

U.S. Pawn Q2FY17*

Pawn Loans Outstanding

Total Up 2%

to $125m

SAME STORE UP

2%

QualityStore

Manager

SAME STORE UP 11%

* Adjusted for restructuring charges and other discrete items. See “EZCORP GAAP Results” and “GAAP to Non-GAAP Reconciliation.” Sales Gross Profit includes Merchandise and Scrap Gross Profit.

Delay in tax refunds adversely impacted consumers’ disposable income and our sales volume

Initiatives underway to improve Net Revenue and profitability in the long term, including upgrading POS and product & customer data analytics

Expect operating expense in 2HFY17 to be similar to 2HFY16

Six consecutive quarters of positive Same Store PLO growth

Page 7: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

Six Consecutive Quarters of Market Leading

U.S. Same Store PLO Growth

7

U.S. Pawn

EZCORP Strategic

Plan Announcement

• Six consecutive quarters of positive U.S. Pawn same

store PLO growth YOY led the market each quarter

• Market leading U.S. PLO of $243k per store in Q2

(Q2 is low point of the year in PLO due to loan pay

downs from federal tax refunds)

• Merchandise margin of 37%, in our target range of 35% to

38%

• Inventory aged over one year increased to 12% from 10%

Positive same store PLO and merchandise margin after strategic plan

announcement in July 2015

Strategic Plan

Announcement

Page 8: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

Market Leading U.S. Same Store PLO Growth

8

(10)

(8)

(6)

(4)

(2)

0

2

4

6

8

10

March Qtr 2016 March Qtr 2017

• EZCORP continued focus on and investment in satisfying

customers’ need for cash whenever they need it is driving

market leading same store PLO growth. PLO is the most

influential driver to long-term revenue and profit growth

• EZCORP’s six consecutive quarters of positive U.S. Pawn

same store PLO growth YOY led the market each quarter

• Market leading U.S. PLO of $243k per store in Q2

(Q2 is low point of the year in PLO due to loan pay downs

from federal tax refunds)

YOY Growth

U.S. Pawn

Two-Year Stacked Same Store PLO Change*

* Weighted average based on available information from each company’s public filings

EZCORP+9%

FirstCash-8%

+2%

+7%

-8%

0% in March Qtr 2016 YOY

Page 9: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

Strong Compounded PLO Growth Increases

Drives Profitable Growth

9

+ -= =

INCOME STATEMENT

Pawn Service Charges Total

Up 12% to $8m

Sales Up 13%

Sales Gross ProfitTotal Up 15%

to $6m

Merchandise Margin 32%

ASSETS

SAME STORE

UP 10%

Purchases+

Forfeitures

Pawn Loans Outstanding

Total Up 11% to $19m

InventoryTotal

Up 7% to $19m

SAME STORE UP 10%

NET REVENUEUp 13% to $14m

TOTAL EXPENSES

Up 8% to $10m3

-------------------------Up 14% to $10.5m4

PROFIT BEFORE TAX2

Up 25% to $4m3

-------------------------Up 11% to $3.5m4

• Continued growth in PLO, up 11%; Same Store PLO up 10%

• PLO monthly yield consistent at 16%

• Pawn service charges up 12%

• Merchandise margin consistent at 32%

• Inventory turns consistent at 2.6

• Return on earning assets 154% compared to 156%

Mexico Pawn Q2FY171

1 Adjusted for restructuring charges, other discrete items and constant currency. Excludes closed Mexico buy/sell business.

See “EZCORP GAAP Results” and “GAAP to Non-GAAP Reconciliation.”

2 Calculated in constant currency. Mexico PLO balance both increased and decreased over the same period on a GAAP basis.

3 Excluding $0.5m looting expense impact

4 Including $0.5m looting expense impact

Sales Gross Profit includes Merchandise and Scrap Gross Profit.

QualityStore

Manager

SAME STORE UP 5%

GROSS PROFITSAME STORE

UP 12%

Eleven consecutive double-digit quarters of PLO growth in Mexico2

Looting of 12 stores in January reduced revenue through stolen pawn loan collateral and inventory effecting PSC and sales in addition to $0.5m in expenses

Added two de novo stores in Q2FY17, and expect to add 10 total de novo stores in FY17

Page 10: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

Eleven Consecutive Quarters of Double-Digit Same Store

PLO Growth*

10

Mexico Pawn

EZCORP Strategic

Plan Announcement

• Eleven consecutive quarters of Mexico Pawn

double-digit same store PLO growth YOY*

• Strong compounded growth in same store PLO, up 10%

in Q2FY17, up 28% in Q2FY16, and up 15% in Q2FY15

• Looting of 12 stores in January reduced revenue

through stolen pawn loan security and inventory

affecting PSC and sales in addition to $0.5m in

expenses

Strong compounded growth in same store PLO and higher merchandise margin

after strategic plan announcement in July 2015

Strategic Plan

Announcement

• Merchandise margin consistent at 32% in

Q2FY17

• Higher merchandise margin after strategic

plan announcement in July 2015

10% same store PLO growth

in Q2FY17 on top of +28%

and +15% in Q2FY16 and

Q2FY15, respectively

*Calculated in constant currency. Mexico PLO balance both increased and decreased over the same period on a GAAP basis.

Page 11: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

11

• Strong compounded growth in EZCORP same store PLO,

up 10% in Q2FY17 and up 28% in Q2FY16

• EZCORP’s focus on customer experience led to eleven

consecutive quarters of Mexico Pawn double-digit same

store PLO growth YOY**

• PLO is the most influential driver to long-term revenue

and profit growth

Mexico Pawn

*Based on available information from each company’s public filings

**Calculated in constant currency. Mexico PLO balance both increased and decreased over the same period on a GAAP basis.

Strong Compounded PLO Increases

Drives Profitable Growth

0

5

10

15

20

25

30

35

40

March Qtr 2016 March Qtr 2017

EZCORP+38%

FirstCash+16%

+10%

+28%

+11%

+5%

YOY Growth

Two-Year Stacked Same Store PLO Change*

Page 12: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

2.8

3.23.4

3.5

2.5

Q2FY16 3QFY16 4QFY16 1QFY17 2QFY17

Net Debt / Adjusted EBITDA Ratio (LTM)

12Amounts on this slide excludes the impact of cash and debt of Grupo Finmart in FY16.NM = Not Meaningful

Cash balance up 68% to $120m plus $50m undrawn

credit facility

Strengthening balance sheet and liquidity supports

continued investment in customer experience and

expansion to drive increased profit

Strengthening Balance Sheet and Liquidity

Earnings growth improving Net Debt / Adjusted

EBITDA ratio

Receiving regular payments on promissory notes

created as a result of Grupo Finmart sale in

September 2016

Q2

$ Millions FY17 FY16 $∆ %∆

Unrestricted Cash 120.1 71.3 48.8 68%

Restricted Cash 7.1 5.0 2.1 42%

Total Cash 127.2 76.3 50.9 67%

Notes Receivable From Sale of Grupo Finmart 75.1 0.0 75.1 NM

Page 13: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

Received $15m of $90m Grupo Sale Receivable

13

Slide is notes receivable that are secured by loan portfolio as of 3/31/17.Amounts above are in U.S. dollars and based on exchange rates in effect historically or as of March 31, 2017 for all future amounts.

$90.2m USD of Notes Receivable plus interest created as a result of Grupo Finmart sale in September 2016

Collected $15.1m in1HFY17 and expect to collect an additional $30.8m in 2HFY17, for a total of $45.9m in FY17, $26.1m in FY18, and $18.2m in FY19

Since the end of the second quarter, received $5.2 million, which is part of the

$30.8 million to be collected in 2HFY17

$15.1 $15.1

$30.8

$26.1

$18.2

$75.1

$0

$20

$40

$60

$80

$100

FY17 FY18 FY19 Total

U.S

. $M

IL

Notes Receivable

Cash Received

As of March 31, 2017

$45.9

$90.2

% of Notes Secured Remaining Balance 31% 7% 0% 15%

Cash Interest Income $4.3 $1.9 $0.8 $7.0

Page 14: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

14

Drivers to Long-Term Growth

Investing in Pawn Fundamentals

Updating and evolving incentive program,

coupled with training, coaching & mentoring

of field team,to improve customer

engagement and sustained results

Disciplinedstore acquisitions and

de novo store openings, drive profitable growth

through efficient utilization of capital on

productive assets

Targeted investments in market leadership to meet our

customers’ need for cash

Product & customer data analytics and feedbackimproves understanding of customer behaviors

and product pricing to drive higher profitability

Strengthening balance sheet and

liquidity position

Process analysis and

improvements will deliver greater consistency and improved productivity

Technology upgrades, including deployment of

upgraded POS, will deliver improved

customer and Team Member experience and

increase productivity

Store refurbishment program commences in 2HFY17 to improve customer and team member

experience, and merchandise capacity

and flexibility

Optimizing loan values and merchandise pricingto sustain PSC, sales gross profit and sales margins

within target range of 35-38%

Page 15: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

15

• Initiatives to improve customer experience and deliver profitable growth:

– Deployment of upgraded POS

– Further investment in product and customer analytics

• Continuous measurement of customer experience and feedback relative to

competitors driving higher revenue and profitability

Market Leadership in

PLO Growth

Disciplined Growth &

Strong Performance

Attractive Industry

Dynamics

• Continue to assess acquisition opportunities in U.S. and Mexico against strict

investment criteria:– Further Mexico expansion with ~10 de novo stores planned in FY17;

added two de novo stores in Q2FY17

• Cash balance at March 31, 2017 up 68% YOY to $120.1m, plus $50m undrawn credit

facility

EZCORP Strengths

Successful Focus on

Customer Leadership

• Six consecutive quarters of market leading U.S. Pawn Same Store PLO growth YOY

• Eleven consecutive quarters of Mexico Pawn double-digit Same Store PLO growth YOY*

• Five consecutive quarters of YOY profit before tax growth

• Solid demand for pawn services across economic cycles

• Fully collateralized loan portfolio

• Large and highly fragmented consumer market in U.S. and Mexico

• Stable pawn regulatory environment

*Calculated in constant currency. Mexico PLO balance both increased and decreased over the same period on a GAAP basis.

Page 16: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

16

Additional Information

Page 17: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

Company Overview

* Continuing operations excluding closed Mexico buy/sell business

17

U.S. Pawn

84%

Other

1%

Mexico

Pawn

15%

EZCORP Revenue by Type

EZCORP is a leading provider of pawn loans in the

United States and Mexico. At our pawn stores we

also sell merchandise, primarily collateral forfeited

from pawn lending operations and used

merchandise purchased from customers.

KEY STATISTICS

IPO Date 8/27/1991

Headquarters Austin, TX

52 Week Market Capitalization Range (as of 5/2/17)

$249m to $638m

52 Week Share Price Range

(as of 5/2/17)$4.64 to $11.80

52 Week Convertible Debt Bond Price Range (as of 5/2/17)

74 to 100

Adjusted Total Revenue in FY16* $747.9m

Adjusted Profit Before Tax in FY16* $23.1m

Institutional Holdings 88%

Index inclusion:Russell 2000, S&P SmallCap 600, S&P 1000,NASDAQ Composite

PAWN STORE LOCATIONS as of 3/31/17

United States 517

Mexico 240

FINANCIAL SERVICES LOCATIONS as of 3/31/17*

Cash Max in Canada 27

Page 18: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

U.S. Financial Servicesbusiness closed

Renewed Executive Leadership Team including

CEO, CFO, President of Pawn

Track Record of Consistent Execution

18

25 Pawn Stores acquired in FY15

Closed 25 underperforming pawn stores in U.S.

and Mexico in FY15

Sold Grupo Finmart

Investment in field management enabling more coaching & mentoring

6 U.S. pawn stores acquired in Q2FY16

Procurement opportunities identified Store incentive

plans evolving

INITIATIVES TO DRIVE

CONTINUED

PROFITABLE GROWTH

1. POS will deliver improved customer experience and increase productivity

2. Further Investment in product and customer data analytics

3. Store refurbishment program to improve customer experience and merchandise capacity and flexibility

4. Investing in process analysis and improvements

5. Tracking toward annual corporate expense of$50m in FY18

Mexico Buy/Sell business closed

Transformational customer focused

3-year strategic plan released

JULY

2015

New $100 million secured credit facility to support business growth

MARCH

2017

Initiated deployment of upgraded POS

Page 19: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

Pawn 101: Understanding Pawn Growth Drivers

19

+ -= =

INCOME STATEMENTASSETS

Purchases+

ForfeituresNET REVENUE

Pawn Loans Outstanding are secured loans, typically small, and fully collateralized by tangible personal property. No personal recourse to customers or negative credit reporting.

We earn Pawn Service Charge revenue on pawn loans which varies primarily based upon statutory rates by state and loan valuations.

Inventory for retail sales occur through pawn loan forfeitures and purchases of customers’ merchandise. If customer does not repay, renew or extend a loan, the collateral is forfeited to us and becomes inventory available for sale to drive sales gross profit.

Same Store basis is the most effective measure of pawn growth.

TOTAL EXPENSES Profit Before Tax

Key Growth Drivers

Pawn Service Charges

#3

Pawn Loans Outstanding

#2

SalesGross Profit

#5

Pawn Loans Outstanding (PLO) is the most influential driver to revenue and profitability. EZCORP continued focus and investment in satisfying customers’ need for cash whenever they need it is driving PLO growth

Inventory

#4

QualityStore

Manager

#1

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20

Strategic Plan

Announcement

• Continued focus on customer experience led to Same Store PLO

up 2%; Same Store PSC up 5% in Q2

• Six consecutive quarters of market leading Same Store PLO growth

• Delay in tax refunds adversely impacted consumers’ disposable income

and our sales volume

• U.S. merchandise margin of 37%, in our target range of 35-38%

• Inventory aged over one year increased to 12% from 10%

U.S. Pawn*

* Adjusted for restructuring charges and other discrete items. See “EZCORP GAAP Results” and “GAAP to Non-GAAP Reconciliation.”

Serving and Satisfying Customers’ Need for Cash

Fuels Continued Same Store PLO Growth

Strategic Plan

Announcement

Page 21: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

*Adjusted for discrete items and constant currency. Excludes Mexico buy/sell business. See “EZCORP GAAP Results” and “GAAP to Non-GAAP Reconciliation.”**Calculated in constant currency. Mexico PLO balance both increased and decreased over the same period on a GAAP basis. 21

• Continued focus on customer experience led to eleven consecutive quarters of Same Store PLO, up 10% and 28% in Q2FY17 YOY and Q2FY16 YOY, respectively**

• Looting of 12 stores in January reduced revenue through stolen pawn

loan security and inventory affecting PSC and sales in addition to $0.5m in expenses

• Added two de novo stores in Q2FY17, and expect to add 10 total de novo stores in FY17

Mexico Pawn*

Strong Compounded PLO Increases

Drives Profitable Growth

Strategic Plan

Announcement

Profit before tax up 25% and total expenses up 8%, excluding $0.5m expense impact of looting

Strategic Plan

Announcement

Page 22: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

22

Definition of Terms:

PLO Yield =

pawn service chargesdays in periodaverage PLO

X 365

Inventory Yield =

Sales Gross Profitdays in period

average net inventory

X 365

Return on Earning Assets

Sales Gross Profit + PSCdays in period

average net inventory + average PLO

X 365

Inventory Turnover =

total cost of salesdays in period

average net inventory

X 365

=

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23

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 restatement charges and other discreet items and to reflect the results of our Mexico Pawn operations on a constant currency basis. We believe that presentation of the non-GAAP financial information is meaningful and useful in evaluating and comparing our operating results across accounting periods and understanding the operating and financial performance of our business. We believe that the non-GAAP financial information reflects an additional way of viewing aspects of our business that, when viewed with our GAAP results, provides 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.

You should consider the non-GAAP information in addition to, but not instead of or superior to, our results prepared in accordance with GAAP. Non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of that information for comparative purposes.

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24

GAAP to Non-GAAP Reconciliation Q2 – Continuing Operations*

Footnote * - Includes immaterial presentation reclassifications and rounding

Footnote (A) Amount includes $0.2m Loss on FX

Footnote (B) Amount includes $0.1m of discrete adjustments in Corporate

Footnote (C) Amount includes $0.1m Loss on FX

*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 March 31, 2017 and 2016 was 18.7 to 1 and 17.3 to 1, respectively. The approximate average exchange rate for the three months ended March 31, 2017

and 2016 was 20.4 to 1 and 18.0 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.

(B)

(A) (C)

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25

GAAP to Non-GAAP Reconciliation Q2 – U.S. Pawn*

Footnote * - Includes immaterial presentation reclassifications and rounding

Footnote (A) Amount includes $0.1m restructuring expense

(A)

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26

GAAP to Non-GAAP Reconciliation Q2 – Mexico Pawn*

Footnote * - Includes immaterial presentation reclassifications and rounding

*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 March 31, 2017 and 2016 was 18.7 to 1 and 17.3 to 1, respectively. The approximate average exchange rate for the three months ended March 31, 2017

and 2016 was 20.4 to 1 and 18.0 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.

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27

GAAP to Non-GAAP Reconciliation YTD – Continuing Operations*

Footnote * - Includes immaterial presentation reclassifications and rounding

Footnote (A) Amount includes $0.2m Gain on FX

Footnote (B) Amount includes $3.9m of discrete adjustments in Corporate ($4.2m Grupo Restatement and -$0.3m discrete adjustments)

Footnote (C) Amount includes $1.4m loss on restructuring related expenses (U.S. Pawn $1.0m, Corporate $0.2m, Other International $0.2m) and $0.1m Loss on FX

*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 March 31, 2017 and 2016 was 18.7 to 1 and 17.3 to 1, respectively. The approximate average exchange rate for the six months ended March 31, 2017

and 2016 was 20.1 to 1 and 17.4 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.

(B)

(A) (C)

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28

GAAP to Non-GAAP Reconciliation YTD – U.S. Pawn*

Footnote * - Includes immaterial presentation reclassifications and rounding

Footnote (A) Amount includes $1.0m restructuring expense

(A)

Page 29: Second Quarter Fiscal 2017 Conference Call May 4, 2017€¦ · experience driving future profitable growth •Commenced rollout of upgraded POS in Q2, ... March Qtr 2016 March Qtr

29

GAAP to Non-GAAP Reconciliation YTD – Mexico Pawn*

Footnote * - Includes immaterial presentation reclassifications and rounding

*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 March 31, 2017 and 2016 was 18.7 to 1 and 17.3 to 1, respectively. The approximate average exchange rate for the six months ended March 31, 2017

and 2016 was 20.1 to 1 and 17.4 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.

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30

Net Debt/Adjusted EBITDA Reconciliation*

Footnote * - Includes immaterial presentation reclassifications and rounding


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