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Total revenues were $252.6 million compared to $263.0 million for the same period last year
EZCORP, Inc. (Nasdaq:EZPW), a provider of cash solutions for consumers, today announced financial results for the fiscal first quarter ended December 31, 2014.
Total revenues were $252.6 million compared to $263.0 million for the same period last year. Net income from continuing operations attributable to EZCORP was $14.2 million or $0.26 per share as compared to $26.1 million or $0.48 per share in the same period a year earlier.
Mark Kuchenrither, EZCORP’s President and Chief Executive Officer, stated, “Our team delivered a creditable performance in challenging trading conditions, with our Latin America operating segment delivering a strong performance. We continue to make progress on our operational excellence and growth initiatives with sound reductions in both administrative and operations expenses; the opening of 10 de novo locations (5 U.S. Pawn and 5 U.S. Financial Services); and the signing of a definitive agreement to acquire 12 pawn stores in the United States.”
“We recognize that as a financial services company, there has to be a continual focus on improving the quality of our balance sheet which is the key to improving profitability, and positioning the company for long-term growth,” continued Mr. Kuchenrither. “We have focused on growing a quality loan portfolio and increasing the velocity of inventory disposition by reducing our aged inventory. While sales unit numbers were up by 7% in the U.S., the focus on disposition activities led to a 1% growth in retail sales revenue with lower gross margins. U.S. pawn service charges were steady year-over-year despite strengthening economic conditions and lower gasoline prices. Scrap volumes were down 29% due to decreased gold inflow from both direct purchasing and lower collateral forfeitures. Empeño Fácil, our Mexico pawn business, outperformed expectations with pawn service charges up 12% in total, and 19% on a constant currency basis. Our U.S. financial services business, which has recently seen pressure from new lending ordinances in both Houston and El Paso, continues to diversify from both a product mix and geographic perspective. Our Latin America financial services operation, Grupo Finmart, experienced strong increases in new loan originations, which grew 37% on a constant-currency basis, and also had an improved bad debt experience.”
The strengthening of the U.S. dollar put pressure on year-over-year comparables on both income statement and balance sheet items, mostly with respect to our Latin America segment and the Mexican peso. The average foreign exchange rate on the Mexican peso was 13.9 in the first quarter of fiscal 2015 versus 13.0 in the comparable period a year earlier, and the month-end foreign exchange rate on the peso was 14.7 at December 31, 2014 versus 13.1 a year earlier.
Net revenues were down by $13.5 million over the same quarter in the previous year but a tight focus on efficiencies led to a 35% reduction in administrative expenses, from $15.7 million to $10.1 million. Operations expenses were down 1% to $103.7 million compared to $105.0 million for the same period in the prior year. Total operating expenses decreased by 5% when excluding the impact of a one-time $6.3 million gain on the sale of assets in the prior year’s quarter, which had the effect of reducing operating expenses in the prior year quarter.
Interest expense was $9.0 million versus $4.5 million in the same quarter last year. Of the $4.5 million increase, $2.5 million (including a $2.3 million increase in non-cash interest) was as a result of the convertible bonds, which we issued in June 2014, and $1.9 million was related to Grupo Finmart due to increased borrowings.
