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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2023 or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                         
Commission File No. 0-19424
ezcorplogob21.jpg
EZCORP, INC.
(Exact name of registrant as specified in its charter)
Delaware74-2540145
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
2500 Bee Cave RoadBldg OneSuite 200RollingwoodTX78746
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (512) 314-3400
Securities registered pursuant to Section 12(b) of the Act
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Non-voting Common Stock, par value $.01 per shareEZPWNASDAQ Stock Market
(NASDAQ Global Select Market)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐ 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  ☒
The only class of voting securities of the registrant issued and outstanding is the Class B Voting Common Stock, par value $.01 per share, all of which is owned by an affiliate of the registrant. There is no trading market for the Class B Voting Common Stock.
As of January 24, 2024, 52,183,780 shares of the registrant’s Class A Non-voting Common Stock (“Class A Common Stock”), par value $.01 per share, and 2,970,171 shares of the registrant’s Class B Voting Common Stock, par value $.01 per share, were outstanding.


EZCORP, Inc.
INDEX TO FORM 10-Q


PART I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EZCORP, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

(in thousands, except share and per share amounts)
December 31,
2023
December 31,
2022
September 30,
2023
Assets:
Current assets:
Cash and cash equivalents$218,516 $207,658 $220,595 
Restricted cash8,470 8,359 8,373 
Pawn loans243,252 209,855 245,766 
Pawn service charges receivable, net40,002 34,921 38,885 
Inventory, net164,927 156,064 166,477 
Prepaid expenses and other current assets44,001 45,559 39,623 
Total current assets719,168 662,416 719,719 
Investments in unconsolidated affiliates10,125 37,789 10,987 
Other investments51,220 39,220 36,220 
Property and equipment, net68,998 55,612 68,096 
Right-of-use assets, net231,103 229,991 234,388 
Goodwill303,799 297,361 302,372 
Intangible assets, net56,977 58,029 58,216 
Notes receivable, net 1,224  
Deferred tax asset, net25,984 12,428 25,702 
Other assets, net13,819 8,245 12,011 
Total assets $1,481,193 $1,402,315 $1,467,711 
Liabilities and equity:
Current liabilities:
Current maturities of long-term debt, net $34,307 $ $34,265 
Accounts payable, accrued expenses and other current liabilities69,386 69,930 81,605 
Customer layaway deposits18,324 16,276 18,920 
Operating lease liabilities, current57,980 52,799 57,182 
Total current liabilities179,997 139,005 191,972 
Long-term debt, net326,223 358,984 325,847 
Deferred tax liability, net372  435 
Operating lease liabilities188,475 188,730 193,187 
Other long-term liabilities11,243 10,261 10,502 
Total liabilities706,310 696,980 721,943 
Commitments and contingencies (Note 9)
Stockholders’ equity:
Class A Non-voting Common Stock, par value $0.01 per share; shares authorized: 100 million; issued and outstanding: 52,272,594 as of December 31, 2023; 52,877,930 as of December 31, 2022; and 51,869,569 as of September 30, 2023
523 529 519 
Class B Voting Common Stock, convertible, par value $0.01 per share; shares authorized: 3 million; issued and outstanding: 2,970,171
30 30 30 
Additional paid-in capital343,870 343,012 346,181 
Retained earnings457,929 414,929 431,140 
Accumulated other comprehensive loss(27,469)(53,165)(32,102)
Total equity774,883 705,335 745,768 
Total liabilities and equity$1,481,193 $1,402,315 $1,467,711 

See accompanying notes to unaudited condensed consolidated financial statements
1

EZCORP, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

Three Months Ended
December 31,
(in thousands, except per share amount)20232022
Revenues:
Merchandise sales$179,403 $163,787 
Jewelry scrapping sales14,082 7,884 
Pawn service charges106,449 92,593 
Other revenues57 63 
Total revenues299,991 264,327 
Merchandise cost of goods sold115,210 104,877 
Jewelry scrapping cost of goods sold12,208 6,953 
Gross profit172,573 152,497 
Operating expenses:
Store expenses110,555 100,803 
General and administrative16,543 15,476 
Depreciation and amortization8,565 7,988 
Gain on sale or disposal of assets and other(172)(16)
Total operating expenses135,491 124,251 
Operating income37,082 28,246 
Interest expense3,440 6,190 
Interest income(2,639)(664)
Equity in net income of unconsolidated affiliates(1,153)(1,584)
Other income(271)(234)
 Income before income taxes37,705 24,538 
Income tax expense9,235 7,760 
Net income $28,470 $16,778 
Basic earnings per share $0.52 $0.30 
Diluted earnings per share $0.36 $0.25 
Weighted-average basic shares outstanding55,076 56,308 
Weighted-average diluted shares outstanding86,812 83,779 
See accompanying notes to unaudited condensed consolidated financial statements
2

EZCORP, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

Three Months Ended
December 31,
(in thousands)20232022
Net income $28,470 $16,778 
Other comprehensive income:
Foreign currency translation adjustment, net of income tax benefit for our investment in unconsolidated affiliate of $57 and $396 for the three months ended December 31, 2023, and 2022, respectively
4,633 2,504 
Comprehensive income $33,103 $19,282 
See accompanying notes to unaudited condensed consolidated financial statements
3

EZCORP, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
 Common StockAdditional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive Loss
Total Stockholders’ Equity
(in thousands)SharesPar Value
Balances as of September 30, 202354,840 $549 $346,181 $431,140 $(32,102)$745,768 
Stock compensation— — 2,264 — — 2,264 
Release of restricted stock, net of shares withheld for taxes758 8 — — — 8 
Taxes paid related to net share settlement of equity awards— — (3,253)— — (3,253)
Foreign currency translation gain— — — — 4,633 4,633 
Purchase and retirement of treasury stock(355)(4)(1,322)(1,681)— (3,007)
Net income— — — 28,470 — 28,470 
Balances as of December 31, 202355,243 $553 $343,870 $457,929 $(27,469)$774,883 
 Common StockAdditional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive Loss
Total Stockholders’ Equity
(in thousands)SharesPar Value
Balances as of September 30, 202256,425 $564 $345,330 $402,006 $(55,669)$692,231 
Stock compensation— — 1,886 — — 1,886 
Transfer of equity consideration for acquisition10 — 99 — — 99 
Release of restricted stock, net of shares withheld for taxes235 2 — — — 2 
Taxes paid related to net share settlement of equity awards— — (1,138)— — (1,138)
Foreign currency translation gain— — — — 2,504 2,504 
Purchase and retirement of treasury stock(822)(7)(3,165)(3,855)— (7,027)
Net income— — — 16,778 — 16,778 
Balances as of December 31, 202255,848 $559 $343,012 $414,929 $(53,165)$705,335 

See accompanying notes to unaudited condensed consolidated financial statements
4

EZCORP, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
Three Months Ended
December 31,
(in thousands)20232022
Operating activities:
Net income $28,470 $16,778 
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization8,565 7,988 
Amortization of debt discount and deferred financing costs417 378 
Non-cash lease expense14,744 13,596 
Deferred income taxes345 656 
Other adjustments(857)(91)
Provision for inventory reserve(156)532 
Stock compensation expense2,264 1,886 
Equity in net income from investment in unconsolidated affiliates(1,153)(1,584)
Net loss on extinguishment of debt 3,545 
Changes in operating assets and liabilities, net of business acquisitions:
Pawn service charges receivable(1,000)(691)
Inventory2,066 (1,881)
Prepaid expenses, other current assets and other assets(5,823)(2,280)
Accounts payable, accrued expenses and other liabilities(33,991)(34,761)
Customer layaway deposits(719)(752)
Income taxes8,309 6,574 
Dividends from unconsolidated affiliates 1,775 
Net cash provided by operating activities21,481 11,668 
Investing activities:
Loans made(216,978)(189,074)
Loans repaid123,021 109,125 
Recovery of pawn loan principal through sale of forfeited collateral98,209 88,030 
Capital expenditures, net(7,184)(7,182)
Acquisitions, net of cash acquired(677)(12,884)
Issuance of notes receivable (15,500)
Investment in unconsolidated affiliate (2,133)
Investment in other investments(15,000)(15,000)
Dividends from unconsolidated affiliates1,745  
Net cash used in investing activities(16,864)(44,618)
Financing activities:
Taxes paid related to net share settlement of equity awards(3,253)(1,138)
Proceeds from issuance of debt 230,000 
Debt issuance cost (7,403)
Cash paid on extinguishment of debt (1,951)
Payments on debt (178,488)
Purchase and retirement of treasury stock(3,007)(7,027)
Payments of finance leases(132) 
Net cash (used in) provided by financing activities (6,392)33,993 
Effect of exchange rate changes on cash and cash equivalents and restricted cash(207)605 
Net (decrease) increase in cash, cash equivalents and restricted cash(1,982)1,648 
Cash and cash equivalents and restricted cash at beginning of period228,968 214,369 
Cash and cash equivalents and restricted cash at end of period$226,986 $216,017 
See accompanying notes to unaudited condensed consolidated financial statements
5


Notes to Condensed Consolidated Financial Statements
(Unaudited)
NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business
EZCORP, Inc. (collectively with its subsidiaries, the “Company,” “we,” “us,” or “our”) is a provider of pawn loans in the United States (“U.S.”) and Latin America. Pawn loans are non-recourse loans collateralized by tangible property. We also sell merchandise, primarily collateral forfeited from pawn lending operations and pre-owned merchandise purchased from customers.
Basis of Presentation
The accompanying interim unaudited condensed consolidated financial statements (“Condensed Consolidated Financial Statements”) have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
These Condensed Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the year ended September 30, 2023, filed with the Securities and Exchange Commission (“SEC”) on November 15, 2023 (“2023 Annual Report”).
In the opinion of management, the accompanying Condensed Consolidated Financial Statements include all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation. Financial results for the three-month period ended December 31, 2023, are not necessarily indicative of results that may be expected for the fiscal year ending September 30, 2024 or any other period due, in part, to seasonal variations. There have been no changes that have had a material impact in significant accounting policies as described in our 2023 Annual Report.
Principles of Consolidation
The accompanying Condensed Consolidated Financial Statements include the accounts of EZCORP, Inc. and its wholly-owned subsidiaries. We use the equity method of accounting for entities in which we have a 50% or less investment and exercise significant influence. We account for equity investments for which we do not have significant influence and without readily determinable fair values at cost with adjustments for observable changes in price in orderly transactions for identical or similar investments of the same issuer or impairments. All inter-company accounts and transactions have been eliminated in consolidation.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions include the determination of inventory reserves, expected credit losses, useful lives of long-lived and intangible assets, valuation of share-based compensation, valuation of equity investments, valuation of deferred tax assets and liabilities, loss contingencies related to litigation and discount rates used for operating leases. We base our estimates on historical experience, observable trends and various other assumptions we believe are reasonable. Actual results may differ materially from these estimates under different assumptions or conditions.
Merchandise Sales Revenue Recognition
Customer layaway deposits are recorded as liabilities when a customer provides a deposit for merchandise. Customer layaway deposits are generally refundable upon cancellation. Our customer layaway deposits balance as of December 31, 2023, 2022 and September 30, 2023 was $18.3 million, $16.3 million and $18.9 million, respectively, and are generally recognized as revenue within a one-year period.
Investments
We account for our investment in Rich Data Corporation (“RDC”) in accordance with Accounting Standards Codification (“ASC”) 321, Investments — Equity Securities, and we have elected to use the measurement alternative to measure this investment at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any. As of December 31, 2023 and September 30, 2023, the carrying value of our investment in RDC was $6.2 million.
Refer to Note 5: Strategic Investments for details on our investment in Founders One, LLC (“Founders”).
6

Recently Issued Accounting Pronouncements
In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-06, Disclosure Improvements - Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative (“ASU 2023-06”). ASU 2023-06 will impact various disclosure areas, including the statement of cash flows, accounting changes and error corrections, earnings per share, debt, equity, derivatives, and transfers of financial assets. The amendments in this ASU 2023-06 will be effective on the date the related disclosures are removed from Regulation S-X or Regulation S-K by the SEC, and will no longer be effective if the SEC has not removed the applicable disclosure requirement by June 30, 2027. Early adoption is prohibited. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires disclosure of significant segment expenses regularly provided to the chief operating decision maker (“CODM”) included within segment operating profit or loss. Additionally, the ASU requires a description of how the CODM utilizes segment operating profit or loss to assess segment performance. The requirements of this ASU 2023-07 are effective for the Company for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted, and retrospective application is required for all periods presented. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires disclosure of specific categories and disaggregation of information in the rate reconciliation table. The ASU also requires disclosure of disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations. The requirements of this ASU 2023-09 are effective for the Company for fiscal years beginning after December 15, 2024. Early adoption is permitted, and the amendments should be applied on a prospective basis. Retrospective application is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.
NOTE 2: GOODWILL
The following table summarizes the changes in the carrying amount of goodwill by segment and in total:
 
Three Months Ended December 31, 2023
(in thousands)U.S. PawnLatin America PawnConsolidated
Balances as of September 30, 2023
$255,942 $46,430 $302,372 
Acquisitions (a)
416  416 
Effect of foreign currency translation changes 1,011 1,011 
Balances as of December 31, 2023$256,358 $47,441 $303,799 
(a) Amount represents goodwill recognized in connection with an immaterial acquisition within the U.S. Pawn segment and we have therefore omitted certain disclosures.
 
Three Months Ended December 31, 2022
(in thousands)U.S. PawnLatin America PawnConsolidated
Balances as of September 30, 2022
$245,503 $41,325 $286,828 
Acquisitions (b)
9,413  9,413 
Effect of foreign currency translation changes 1,120 1,120 
Balances as of December 31, 2022
$254,916 $42,445 $297,361 
(b) Amount represents goodwill recognized in connection with acquisitions within the U.S. Pawn segment that were immaterial, individually and in the aggregate, and we have therefore omitted certain disclosures.
7

NOTE 3: EARNINGS PER SHARE
The following table reconciles the number of common shares used to compute basic and diluted earnings per share attributable to EZCORP Inc., shareholders:
Three Months Ended
December 31,
(in thousands, except per share amounts)20232022
Basic earnings per common share:
Net income - basic $28,470 $16,778 
Weighted shares outstanding - basic55,076 56,308
Basic earnings per common share $0.52 $0.30 
Diluted earnings per common share:
Net income - basic$28,470 $16,778 
Add: Convertible Notes interest expense, net of tax*2,659 4,540 
Net income - diluted $31,129 $21,318 
Weighted shares outstanding - basic55,076 56,308 
Equity-based compensation awards - effect of dilution**1,318 1,118 
Convertible Notes - effect of dilution***30,418 26,353 
Weighted shares outstanding - diluted86,812 83,779 
Diluted earnings per common share$0.36 $0.25 
Potential common shares excluded from the calculation of diluted earnings per common share above:
Restricted stock****1,581 1,552 
*    The three months ended December 31,2022 includes $3.5 million loss on extinguishment of debt recorded to “Interest expense” in the Company’s condensed consolidated statement of operations. See Note 7: Debt for additional information.
**    Includes time-based share-based awards and performance based awards for which targets for fiscal year tranches have been achieved and vesting is subject only to achievement of service conditions.
***    See Note 7: Debt for conversion price and initial conversion rate of the 2024 Convertible Notes, 2025 Convertible Notes, and 2029 Convertible Notes.
****    Includes antidilutive share-based awards as well as performance-based share-based awards that are contingently issuable, but for which the condition for issuance has not been met as of the end of the reporting period.
8

NOTE 4: LEASES
We determine if a contract contains a lease at inception. Our lease portfolio consists primarily of operating leases for pawn store locations and corporate offices with lease terms ranging from three to ten years and finance leases for vehicles with lease terms ranging from two to five years.
The table below presents balances of our lease assets and liabilities and their balance sheet locations for both operating and financing leases:
(in thousands)Balance Sheet LocationDecember 31, 2023December 31, 2022
September 30, 2023
Lease assets:
Operating lease right-of-use assetsRight-of-use assets, net$231,103 $229,991 $234,388 
Financing lease assetsOther assets2,124 563 2,178 
Total lease assets$233,227 $230,554 $236,566 
Lease liabilities:
Current:
Operating lease liabilitiesOperating lease liabilities, current$57,980 $52,799 $57,182 
Financing lease liabilitiesAccounts payable, accrued expenses and other current liabilities572 121 530 
Total current lease liabilities$58,552 $52,920 $57,712 
Non-current:
Operating lease liabilitiesOperating lease liabilities$188,475 $188,730 $193,187 
Financing lease liabilitiesOther long-term liabilities1,644 447 1,715 
Total non-current lease liabilities$190,119 $189,177 $194,902 
Total lease liabilities$248,671 $242,097 $252,614 
The table below provides major components of our lease costs:
Three Months Ended
December 31,
(in thousands)20232022
Operating lease cost:
Operating lease cost *$19,066 $17,495 
Variable lease cost4,215 3,852 
Total operating lease cost$23,281 $21,347 
Financing lease cost:
Amortization of financing lease assets$151 $19 
Interest on financing lease liabilities65 11 
Total financing lease cost$216 $30 
Total lease cost$23,497 $21,377 

* Includes a reduction for sublease rental income of $1.1 million and $0.8 million for the three months ended December 31, 2023 and 2022, respectively.
Lease expense is recognized on a straight-line basis over the lease term with variable lease expense recognized in the period in which the costs are incurred. The components of lease expense are included in “Store” and “General and Administrative” expense, based on the underlying lease use. Cash paid for operating leases was $20.3 million and $21.4 million for the three months ended December 31, 2023 and 2022, respectively. Cash paid for principal and interest on finance leases was $0.1 million and $0.1 million, respectively, for the three months ended December 31, 2023. There was no cash paid for principal and interest on finance leases during the three months ended December 31, 2022.
9

The weighted-average term and discount rates for leases are as follows:
Three Months Ended
December 31,
20232022
Weighted-average remaining lease term (years):
Operating leases4.865.21
Financing leases3.424.03
Weighted-average discount rate:
Operating leases8.53 %8.36 %
Financing leases11.14 %11.14 %

As of December 31, 2023, maturities of lease liabilities under ASC 842 by fiscal year were as follows:
(in thousands)Operating LeasesFinancing Leases
Remaining 2024$57,570 $597 
Fiscal 2025
69,671 790 
Fiscal 2026
58,523 790 
Fiscal 2027
44,089 486 
Fiscal 2028
28,904 8 
Thereafter42,810  
Total lease liabilities$301,567 $2,671 
Less: portion representing imputed interest55,112 455 
Total net lease liabilities$246,455 $2,216 
Less: current portion57,980 572 
Total long term net lease liabilities$188,475 $1,644 
We recorded $9.3 million and $20.5 million in non-cash additions to our operating right-of-use assets and lease liabilities for the three months ended December 31, 2023 and 2022, respectively. We recorded $0.1 million and $0.4 million in non-cash finance lease additions for the three months ended December 31, 2023 and 2022, respectively.
10

NOTE 5: STRATEGIC INVESTMENTS
Cash Converters International Limited
As of December 31, 2023, we owned 273,939,157 shares, or approximately 43.7%, of Cash Converters. We acquired our original investment (representing approximately 30% of the outstanding shares) in November 2009 and have increased our ownership through the acquisition of additional shares periodically since that time.
We received cash dividends from Cash Converters of $1.7 million and $1.8 million, during the three months ended December 31, 2023 and 2022, respectively.
The following tables present summary financial information for Cash Converters most recently reported results at June 30, 2023 after translation to U.S. dollars:
 June 30,
(in thousands)20232022
Current assets$189,563 $158,987 
Non-current assets103,595 170,798 
Total assets$293,158 $329,785 
Current liabilities$97,630 $59,256 
Non-current liabilities58,777 53,045 
Shareholders’ equity136,751 217,484 
Total liabilities and shareholders’ equity$293,158 $329,785 

 
Full-Year Ended June 30,
(in thousands)20232022
Gross revenues$203,608 $178,215 
Gross profit$125,709 $116,106 
Net (loss) profit$(65,351)$8,099 
During the three months ended December 31, 2023 and 2022, we recorded our share of income of $1.2 million and $1.6 million, respectively, from Cash Converters, included in “Equity in net income of unconsolidated affiliates” in the condensed consolidated statements of operations.
See Note 6: Fair Value Measurements for the fair value and carrying value of our investment in Cash Converters.
Founders One, LLC
In October 2021, we invested $15.0 million in exchange for a non-redeemable voting participating preferred equity interest in Founders One, LLC (“Founders”), a then newly-formed entity with one other member.
On December 2, 2022, we contributed an additional $15.0 million to Founders associated with our preferred interest. In addition, we loaned $15.0 million to Founders in exchange for a Demand Promissory Note secured by the common interest in Founders held by the other member.
In October 2023, we contributed an additional $15.0 million to Founders associated with our preferred interest, bringing our total equity investment in Founders to $45.0 million.
We have an interest in Founders, a variable interest entity, but because the Company is not the primary beneficiary, we do not consolidate Founders. Further, as we are not the appointed manager, we do not have the ability to direct the activities of the investment entity that most significantly impact its economic performance. Consequently, our equity investment in Founders is accounted for utilizing the measurement alternative within ASC 321, Investments — Equity Securities. As of December 31, 2023, our $45.0 million carrying value of the investment and $15.0 million Demand Promissory Note are included in “Other investments” and “Prepaid expenses and other current assets” in our condensed consolidated balance sheets, respectively. As of December 31, 2023, our maximum exposure for losses related to our investment in Founders was our $45.0 million equity investment and $15.0 million Demand Promissory Note plus accrued and unpaid interest.
See Note 6: Fair Value Measurements for the fair value and carrying value of our loan to Founders.
11

NOTE 6: FAIR VALUE MEASUREMENTS
The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:
Level 1 — Quoted market prices in active markets for identical assets or liabilities.
Level 2 — Other observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3 — Unobservable inputs that are not corroborated by market data.
We have elected not to measure at fair value any eligible items for which fair value measurement is optional.
There were no transfers in or out of Level 1, Level 2 or Level 3 for financial assets or liabilities measured at fair value on a recurring basis during the periods presented.
Financial Assets and Liabilities Not Measured at Fair Value
The tables below present our estimates of fair value of financial assets and liabilities that were not measured at fair value:
Carrying ValueEstimated Fair Value
 December 31, 2023December 31, 2023Fair Value Measurement Using
(in thousands)Level 1Level 2Level 3
Financial assets:
Promissory note receivable due April 2024$1,259 $1,259 $ $ $1,259 
Promissory note receivable from Founders17,073 17,073   17,073 
Investments in unconsolidated affiliates10,125 39,528 39,528   
Financial liabilities:
2024 Convertible Notes$34,307 $34,733 $ $34,733 $ 
2025 Convertible Notes102,695 94,173  94,173  
2029 Convertible Notes223,528 236,900  236,900  
Carrying ValueEstimated Fair Value
 December 31, 2022December 31, 2022Fair Value Measurement Using
(in thousands)Level 1Level 2Level 3
Financial assets:
Promissory note receivable due April 2024$1,224 $1,224 $ $ $1,224 
Promissory note receivable from Founders15,100 15,100   15,100 
Investments in unconsolidated affiliates37,789 43,497 43,497   
Financial liabilities:
2024 Convertible Notes$34,143 $35,851 $ $35,851 $ 
2025 Convertible Notes102,192 89,883  89,883  
2029 Convertible Notes222,649 225,975  225,975  
Carrying ValueEstimated Fair Value
 
September 30, 2023
September 30, 2023
Fair Value Measurement Using
(in thousands)Level 1Level 2Level 3
Financial assets:
Promissory note receivable due April 2024$1,251 $1,251 $ $ $1,251 
Promissory note receivable from Founders16,500 16,500   16,500 
Investments in unconsolidated affiliates10,987 35,998 35,998   
Financial liabilities:
2024 Convertible Notes$34,265 $35,765 $ $35,765 $ 
2025 Convertible Notes102,563 96,137  96,137  
2029 Convertible Notes223,284 224,112  224,112  
12

Based primarily on the short-term nature of cash and cash equivalents, pawn loans, pawn service charges receivable and other liabilities, we estimate that their carrying value approximates fair value. We consider our cash and cash equivalents, including money market accounts, to be measured using Level 1 inputs and our pawn loans, pawn service charges receivable and other liabilities to be measured using Level 3 inputs. Significant increases or decreases in the underlying assumptions used to value pawn loans, pawn service charges receivable, fees and interest receivable and other debt could significantly increase or decrease these fair value estimates.
In March 2019, we received $1.1 million in previously escrowed seller funds as a result of settling certain indemnification claims with the seller of GPMX. In April 2019, we loaned the $1.1 million back to the seller of GPMX in exchange for a promissory note. The note bears interest at the rate of 2.89% per annum and is secured by certain marketable securities owned by the seller and held in a U.S. brokerage account. All principal and accrued interest is due and payable in April 2024. Based primarily on the short-term nature of the note, we estimate that its carrying value approximates fair value as of December 31, 2023. As of December 31, 2023, our $1.3 million carrying value of the promissory note is recorded within “Prepaid expenses and other current assets” in our condensed consolidated balance sheets.
In December 2022, we loaned $15.0 million to Founders in exchange for a Demand Promissory Note secured by the common interest in Founders held by the other member. As of December 31, 2023, the interest rate on the note was 15.00% per annum, and all principal and accrued interest is due on demand. Based primarily on the short-term nature of the note, we estimate that its carrying value approximates fair value as of December 31, 2023.
We use the equity method of accounting to account for our ownership interest in Cash Converters. The inputs used to generate the fair value of the investment in Cash Converters were considered Level 1 inputs. These inputs consist of (a) the quoted stock price on the Australian Stock Exchange multiplied by (b) the number of shares we owned multiplied by (c) the applicable foreign currency exchange rate as of the end of our reporting period. We included no control premium for owning a large percentage of outstanding shares.
We measured the fair value of the 2024, 2025 and 2029 Convertible Notes using quoted price inputs. The notes are not actively traded, and thus the price inputs represent a Level 2 measurement. As the quoted price inputs are highly variable from day to day, the fair value estimates disclosed above could significantly increase or decrease.
NOTE 7: DEBT
The following table presents the Company's debt instruments outstanding:
 December 31, 2023December 31, 2022
September 30, 2023
(in thousands)Gross AmountDebt Issuance CostsCarrying AmountGross AmountDebt Issuance CostsCarrying AmountGross AmountDebt Issuance CostsCarrying Amount
2029 Convertible Notes$230,000 $(6,472)$223,528 $230,000 $(7,351)$222,649 $230,000 $(6,716)$223,284 
2025 Convertible Notes103,373 (678)102,695 103,373 (1,181)102,192 103,373 (810)102,563 
2024 Convertible Notes34,389 (82)34,307 34,389 (246)34,143 34,389 (124)34,265 
Total$367,762 $(7,232)$360,530 $367,762 $(8,778)$358,984 $367,762 $(7,650)$360,112 
Less current portion34,389 (82)34,307    34,389 (124)34,265 
Total long-term debt$333,373 $(7,150)$326,223 $367,762 $(8,778)$358,984 $333,373 $(7,526)$325,847 
The following table presents the Company’s contractual maturities related to the debt instruments as of December 31, 2023:
Schedule of Contractual Maturities
(in thousands)2029 Convertible Notes2025 Convertible Notes2024 Convertible NotesTotal
Remaining 2024$ $ $34,389 $34,389 
Fiscal 2025
 103,373  103,373 
Fiscal 2026
    
Fiscal 2027
    
Fiscal 2028
    
Thereafter230,000   230,000 
Total long-term debt$230,000 $103,373 $34,389 $367,762 
13

The following table presents the Company’s interest expense related to the Convertible Notes for the three months ended December 31, 2023 and 2022:
Three Months Ended
December 31,
(in thousands)20232022
2029 Convertible Notes:
Contractual interest expense$2,156 $431 
Amortization of deferred financing costs244 52 
Total interest expense$2,400 $483 
2025 Convertible Notes:
Contractual interest expense$614 $942 
Amortization of deferred financing costs131 188 
Gain on extinguishment (5,389)
Total interest expense$745 $(4,259)
2024 Convertible Notes:
Contractual interest expense$247 $876 
Amortization of deferred financing costs42 138 
Loss on extinguishment 8,935 
Total interest expense$289 $9,949 
    
3.750% Convertible Senior Notes Due 2029
In December 2022, we issued $230.0 million aggregate principal amount of 3.750% Convertible Senior Notes Due 2029 (the “2029 Convertible Notes”), for which $230.0 million remains outstanding as of December 31, 2023. The 2029 Convertible Notes were issued pursuant to an indenture dated December 12, 2022 (the “2022 Indenture”) by and between the Company and Truist Bank, as trustee. The 2029 Convertible Notes were issued in a private offering under Rule 144A under the Securities Act of 1933. The 2029 Convertible Notes pay interest semi-annually in arrears at a rate of 3.750% per annum on June 15 and December 15 of each year, commencing June 15, 2023, and mature on December 15, 2029 (the “2029 Maturity Date”), unless converted, redeemed or repurchased in accordance with the terms prior to such date. At maturity, the holders of the 2029 Convertible Notes will be entitled to receive cash equal to the principal of the 2029 Convertible Notes plus accrued interest.
The effective interest rate for the three months ended December 31, 2023 was approximately 4.28%. As of December 31, 2023, the remaining unamortized debt issuance costs will be amortized using the effective interest method through the 2029 Maturity Date assuming no early conversion.
The 2029 Convertible Notes are convertible based on an initial conversion rate of 89.0313 shares of Class A Common Stock per $1,000 principal amount (equivalent to an initial conversion price of $11.23 per share). The conversion rate will not be adjusted for any accrued and unpaid interest. The 2029 Convertible Notes contain certain make-whole fundamental change premiums and customary anti-dilution adjustments. Upon conversion, we may settle in cash, shares of Class A Common Stock or any combination thereof, at our election.
Prior to June 15, 2029, the 2029 Convertible Notes will be convertible only under the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ending on March 31, 2023 (and only during such fiscal quarter), if the last reported sale price of our Class A Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price, as defined in the 2022 Indenture, per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our Class A Common Stock and the conversion rate on such trading day; (3) if we call any or all of the 2029 Convertible Notes for redemption, at any time prior to the close of business on the business day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events, as defined in the 2022 Indenture. On or after June 15, 2029 until the close of business on the business day immediately preceding the 2029 Maturity Date, holders of 2029 Convertible Notes may, at their option, convert their 2029 Convertible Notes at any time, regardless of the foregoing circumstances.
14

We may not redeem the Notes prior to December 21, 2026. At our option, we may redeem for cash all or any portion of the 2029 Convertible Notes on or after December 21, 2026, if the last reported sale price of the Class A Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption. The redemption price will be equal to 100% of the principal amount of the 2029 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of December 31, 2023. As of December 31, 2023, the if-converted value of the 2029 Convertible Notes did not exceed the principal amount.
Note Repurchases
In December 2022, the Company repurchased approximately $109.4 million aggregate principal amount of 2.875% Convertible Senior Notes Due 2024 for approximately $117.5 million plus accrued interest and approximately $69.1 million aggregate principal amount of 2.375% Convertible Senior Notes Due 2025 for approximately $62.9 million plus accrued interest and recognized a $3.5 million loss on extinguishment of debt recorded to “Interest expense” in the Company’s condensed consolidated statement of operations for the three months ended December 31, 2022.
2.375% 2025 Convertible Senior Notes Due 2025
In May 2018, we issued $172.5 million aggregate principal amount of 2.375% Convertible Senior Notes Due 2025 (the “2025 Convertible Notes”), for which $103.4 million remains outstanding as of December 31, 2023. The 2025 Convertible Notes were issued pursuant to an indenture dated May 14, 2018 (the “2018 Indenture”) by and between the Company and Wells Fargo Bank, National Association, as the original trustee. Effective October 1, 2019, Truist (formerly BB&T) assumed the duties and responsibilities as trustee under the 2018 Indenture. The 2025 Convertible Notes were issued in a private offering under Rule 144A under the Securities Act of 1933. The 2025 Convertible Notes pay interest semi-annually in arrears at a rate of 2.375% per annum on May 1 and November 1 of each year, commencing November 1, 2018, and mature on May 1, 2025 (the “2025 Maturity Date”), unless converted, redeemed or repurchased in accordance with the terms prior to such date.
The effective interest rate for the three months ended December 31, 2023 was approximately 2.88% for the 2025 Convertible Notes. As of December 31, 2023, the remaining unamortized debt issuance costs will be amortized using the effective interest method through the 2025 Maturity Date assuming no early conversion.
The 2025 Convertible Notes are convertible based on an initial conversion rate of 62.8931 shares of Class A Common Stock per $1,000 principal amount (equivalent to an initial conversion price of $15.90 per share). The conversion rate will not be adjusted for any accrued and unpaid interest. The 2025 Convertible Notes contain certain make-whole fundamental change premiums and customary anti-dilution adjustments. Upon conversion, we may settle in cash, shares of Class A Common Stock or any combination thereof, at our election.
Prior to November 1, 2024, the 2025 Convertible Notes are convertible only under the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ended on June 30, 2018 (and only during such fiscal quarter), if the last reported sale price of our Class A Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price, as defined in the 2018 Indenture, per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our Class A Common Stock and the conversion rate on such trading day; (3) if we call any or all of the 2025 Convertible Notes for redemption, at any time prior to the close of business on the business day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events, as defined in the 2018 Indenture. On or after November 1, 2024 until the close of business on the business day immediately preceding the 2025 Maturity Date, holders of 2025 Convertible Notes may, at their option, convert their 2025 Convertible Notes at any time, regardless of the foregoing circumstances.
At our option, we may redeem for cash all or any portion of the 2025 Convertible Notes on or after May 1, 2022, if the last reported sale price of the Class A Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption. The redemption price will be equal to 100% of the principal amount of the 2025 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of December 31, 2023. As of December 31, 2023, the if-converted value of the 2025 Convertible Notes did not exceed the principal amount.
15

2.875% Convertible Senior Notes Due 2024
In July 2017, we issued $143.75 million aggregate principal amount of 2.875% Convertible Senior Notes Due 2024 (the “2024 Convertible Notes”), for which $34.4 million remains outstanding as of December 31, 2023. The 2024 Convertible Notes were issued pursuant to an indenture dated July 5, 2017 (the “2017 Indenture”) by and between the Company and Wells Fargo Bank, National Association, as the original trustee. Effective October 1, 2019, Truist (formerly BB&T) assumed the duties and responsibilities as trustee under the 2017 Indenture. The 2024 Convertible Notes were issued in a private offering under Rule 144A under the Securities Act of 1933. The 2024 Convertible Notes pay interest semi-annually in arrears at a rate of 2.875% per annum on January 1 and July 1 of each year, commencing January 1, 2018, and mature on July 1, 2024 (the “2024 Maturity Date”), unless converted, redeemed or repurchased in accordance with the terms prior to such date. At maturity, the holders of the 2024 Convertible Notes will be entitled to receive cash equal to the principal of the 2024 Convertible Notes plus accrued interest.
The effective interest rate for the three months ended December 31, 2023 was approximately 3.35%. As of December 31, 2023, the remaining unamortized debt issuance costs will be amortized using the effective interest method through the 2024 Maturity Date assuming no early conversion.
The 2024 Convertible Notes are convertible based on an initial conversion rate of 100 shares of Class A Common Stock per $1,000 principal amount (equivalent to an initial conversion price of $10.00 per share). The conversion rate will not be adjusted for any accrued and unpaid interest. The 2024 Convertible Notes contain certain make-whole fundamental change premiums and customary anti-dilution adjustments. Upon conversion, we may settle in cash, shares of Class A Common Stock or any combination thereof, at our election.
Prior to January 1, 2024, the 2024 Convertible Notes would have been convertible only under the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ending on September 30, 2017 (and only during such fiscal quarter), if the last reported sale price of our Class A Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter was greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price, as defined in the 2017 Indenture, per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our Class A Common Stock and the conversion rate on such trading day; (3) if we had called any or all of the 2024 Convertible Notes for redemption, at any time prior to the close of business on the business day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events, as defined in the 2017 Indenture. From January 1, 2024 until the close of business on the business day immediately preceding the 2024 Maturity Date, holders of 2024 Convertible Notes may, at their option, convert their 2024 Convertible Notes at any time, regardless of the foregoing circumstances.
At our option, we may redeem for cash all or any portion of the 2024 Convertible Notes on or after July 6, 2021, if the last reported sale price of the Class A Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption. The redemption price will be equal to 100% of the principal amount of the 2024 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of December 31, 2023. As of December 31, 2023, the if-converted value of the 2024 Convertible Notes did not exceed the principal amount.
NOTE 8: COMMON STOCK AND STOCK COMPENSATION
Common Stock Repurchase Program
On May 3, 2022, the Company’s Board of Directors (the “Board”) authorized the repurchase of up to $50 million of our Class A Common Stock over three years (the “Common Stock Repurchase Program”). Execution of the program will be responsive to fluctuating market conditions and valuations, liquidity needs and the expected return on investment compared to other opportunities.
The amount and timing of purchases will be dependent on a variety of factors, including stock price, trading volume, general market conditions, legal and regulatory requirements, general business conditions, the level of cash flows, and corporate considerations determined by management and the Board, such as liquidity and capital needs and the availability of attractive alternative investment opportunities. The Board of Directors has reserved the right to modify, suspend or terminate the program at any time. As of December 31, 2023, we had repurchased and retired 1,981,927 shares of our Class A Common Stock for $17.0 million under the Common Stock Repurchase Program, of which 354,882 shares were repurchased and retired for $3.0 million during the quarter ended December 31, 2023. During the quarter ended December 31, 2022, 243,062 shares were repurchased and retired for $2.0 million under the Common Stock Repurchase Program. The repurchase amount is allocated between “Additional paid-in capital” and “Retained earnings” in our condensed consolidated balance sheets.
16

Other Common Stock Repurchases
During December 2022, the Company used approximately $5.0 million of the net proceeds from the 2029 Convertible Notes offering to repurchase for cash 578,703 shares of its Class A common stock from purchasers of the notes in privately negotiated transactions. Such transactions were authorized separately from, and not considered a part of, the publicly announced share repurchase program discussed above. The repurchase amount is allocated between “Additional paid-in capital” and “Retained earnings” in our condensed consolidated balance sheets.
Stock Compensation
We maintain a Board-approved incentive plan to retain the services of our valued officers, directors and employees and to incentivize such persons to make contributions to our company and motivate excellent performance (the “Incentive Plan”). Under the Incentive Plan, we grant awards of restricted stock or restricted stock units to employees and non-employee directors. Awards granted to employees are typically subject to performance and service conditions. Awards granted to non-employee directors are time-based awards subject only to service conditions. Awards granted under the Incentive Plan are measured at the grant date fair value with compensation costs associated with the awards recognized over the requisite service period, usually the vesting period, on a straight-line basis.
The following table presents a summary of stock compensation activity:
SharesWeighted
Average
Grant Date
Fair Value
Outstanding as of September 30, 2023
2,555,899 $6.80 
Granted (a)
1,349,752 7.39 
Released (b)
(1,135,138)4.96 
Cancelled(32,566)6.96 
Outstanding as of December 31, 2023
2,737,947 $7.85 
(a) Includes performance adjustment of 353,993 shares awarded above their target grants resulting from the achievement of performance targets established at the grant date.
(b) 377,231 shares were withheld to satisfy related income tax withholding.
NOTE 9: CONTINGENCIES
Currently, and from time to time, we are involved in various claims, disputes, lawsuits, investigations, and legal and regulatory proceedings. We accrue for contingencies if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because these matters are inherently unpredictable and unfavorable developments or resolutions can occur, assessing contingencies requires judgments and is highly subjective about future events, and the amount of resulting loss may differ from these estimates. We do not believe the resolution of any particular matter will have a material adverse effect on our financial condition, results of operations or liquidity.
NOTE 10: SEGMENT INFORMATION
Our operations are primarily managed on a geographical basis and are comprised of three reportable segments. The factors for determining our reportable segments include the manner in which our chief operating decision maker evaluates performance for purposes of allocating resources and assessing performance.
We currently report our segments as follows:
U.S. Pawn — all pawn activities in the United States;
Latin America Pawn — all pawn activities in Mexico and other parts of Latin America; and
Other Investments — primarily our equity interest in the net income of Cash Converters along with our investment in RDC and our investment in and notes receivable from Founders.
There are no inter-segment revenues presented below, and the amounts below were determined in accordance with the same accounting principles used in our condensed consolidated financial statements.
17

The following income (loss) before income taxes tables present revenue for each reportable segment, disaggregated revenue within our reportable segments and Corporate, segment profits and segment contribution.
 
Three Months Ended December 31, 2023
(in thousands)U.S. PawnLatin America PawnOther InvestmentsTotal SegmentsCorporate ItemsConsolidated
Revenues:
Merchandise sales$125,513 $53,890 $ $179,403 $ $179,403 
Jewelry scrapping sales12,815 1,267  14,082  14,082 
Pawn service charges79,073 27,376  106,449  106,449 
Other revenues37 16 4 57  57 
Total revenues217,438 82,549 4 299,991  299,991 
Merchandise cost of goods sold78,709 36,501  115,210  115,210 
Jewelry scrapping cost of goods sold11,284 924  12,208  12,208 
Gross profit127,445 45,124 4 172,573  172,573 
Segment and corporate expenses (income):
Store expenses77,255 33,300  110,555  110,555 
General and administrative    16,543 16,543 
Depreciation and amortization2,624 2,339  4,963 3,602 8,565 
Loss (gain) on sale or disposal of assets and other26 (196) (170)(2)(172)
Interest expense    3,440 3,440 
Interest income (420)(573)(993)(1,646)(2,639)
Equity in net income of unconsolidated affiliates  (1,153)(1,153) (1,153)
Other (income) expense (48)1 (47)(224)(271)
Segment contribution$47,540 $10,149 $1,729 $59,418 
Income (loss) before income taxes$59,418 $(21,713)$37,705 

 
Three Months Ended December 31, 2022
(in thousands)U.S. PawnLatin America PawnOther InvestmentsTotal SegmentsCorporate ItemsConsolidated
Revenues:
Merchandise sales$118,314 $45,473 $ $163,787 $ $163,787 
Jewelry scrapping sales7,176 708  7,884  7,884 
Pawn service charges69,310 23,283  92,593  92,593 
Other revenues25 16 22 63  63 
Total revenues194,825 69,480 22 264,327  264,327 
Merchandise cost of goods sold73,256 31,621  104,877  104,877 
Jewelry scrapping cost of goods sold6,216 737  6,953  6,953 
Gross profit115,353 37,122 22 152,497  152,497 
Segment and corporate expenses (income):
Store expenses73,304 27,499  100,803  100,803 
General and administrative (3) (3)15,479 15,476 
Depreciation and amortization2,755 2,215  4,970 3,018 7,988 
Loss (gain) on sale or disposal of assets and other3 (19) (16) (16)
Interest expense    6,190 6,190 
Interest income (169) (169)(495)(664)
Equity in net income of unconsolidated affiliates  (1,584)(1,584) (1,584)
Other expense (income) 70 4 74 (308)(234)
Segment contribution $39,291 $7,529 $1,602 $48,422 
Income (loss) before income taxes$48,422 $(23,884)$24,538 
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The following table presents separately identified segment assets:
(in thousands)U.S. PawnLatin America Pawn
Other
Investments (a)
Corporate ItemsTotal
As of December 31, 2023
Pawn loans$190,766 $52,486 $ $ $243,252 
Pawn service charges receivable, net35,707 4,295   40,002 
Inventory, net127,008 37,919   164,927 
Total assets1,004,075 323,209 78,419 75,490 1,481,193 
As of December 31, 2022
Pawn loans$166,886 $42,969 $ $ $209,855 
Pawn service charges receivable, net31,064 3,857   34,921 
Inventory, net117,994 38,070   156,064 
Total assets900,211 272,153 77,009 152,942 1,402,315 
As of September 30, 2023
Pawn loans$190,624 $55,142 $ $ $245,766 
Pawn service charges receivable, net34,318 4,567   38,885 
Inventory, net128,901 37,576   166,477 
Total assets984,539 313,164 63,707 106,301 1,467,711 
(a) Segment assets as of September 30, 2023 have been recast to conform to current year presentation as CCV no longer meets the 10 percent threshold to be considered its own segment.
19

NOTE 11: SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION
The following table provides supplemental information on net amounts included in our condensed consolidated balance sheets:
(in thousands)December 31, 2023December 31, 2022
September 30, 2023
Gross pawn service charges receivable$50,919 $44,397 $50,881 
Allowance for uncollectible pawn service charges receivable(10,917)(9,476)(11,996)
Pawn service charges receivable, net$40,002 $34,921 $38,885 
Gross inventory$167,660 $159,286 $169,138 
Inventory reserves(2,733)(3,222)(2,661)
Inventory, net$164,927 $156,064 $166,477 
Prepaid expenses and other$6,868 $11,581 $4,106 
Accounts receivable, notes receivable and other34,032 22,730 30,548 
Income taxes prepaid and receivable3,101 11,248 4,969 
Prepaid expenses and other current assets$44,001 $45,559 $39,623 
Property and equipment, gross$352,291 $312,502 $345,461 
Accumulated depreciation(283,293)(256,890)(277,365)
Property and equipment, net$68,998 $55,612 $68,096 
Accounts payable$18,200 $20,220 $23,022 
Accrued payroll7,682 4,952 11,472 
Incentive accrual6,859 6,010 18,544 
Other payroll related expenses7,849 10,911 5,262 
Accrued sales and VAT taxes6,089 8,086 5,565 
Accrued income taxes payable9,068 2,562 2,628 
Other current liabilities13,639 17,189 15,112 
Accounts payable, accrued expenses and other current liabilities$69,386 $69,930 $81,605 
            
The following table provides supplemental disclosure of condensed consolidated statements of cash flows information:
 
Three Months Ended
December 31,
(in thousands)20232022
Supplemental disclosure of cash flow information
Cash and cash equivalents at beginning of period$220,595 $206,028 
Restricted cash at beginning of period8,373 8,341 
Total cash and cash equivalents and restricted cash at beginning of period$228,968 $214,369 
Cash and cash equivalents at end of period$218,516 $207,658 
Restricted cash at end of period8,470 8,359 
Total cash and cash equivalents and restricted cash at end of period$226,986 $216,017 
Non-cash investing and financing activities:
Pawn loans forfeited and transferred to inventory$96,472 $84,851 
Transfer of equity consideration for acquisition 99 
Acquisition earn-out contingency 2,000 
Accrued acquisition consideration37 1,250 
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to inform the reader about matters affecting the financial condition and results of operations of EZCORP, Inc. and its subsidiaries (collectively, “we,” “us”, “our”, “EZCORP” or the “Company”). The following discussion should be read together with our condensed consolidated financial statements and related notes included elsewhere within this report. This discussion contains forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements. See “Part I, Item 1A — Risk Factors of our Annual Report on Form 10-K for the year ended September 30, 2023, as supplemented by the information set forth in “Part I, Item 3 — Quantitative and Qualitative Disclosures about Market Risk” and “Part II, Item 1A — Risk Factors” of this Report, for a discussion of certain risks, uncertainties and assumptions associated with these statements.
Business Overview
EZCORP is a Delaware corporation headquartered in Austin, Texas. We are a leading provider of pawn services in the United States and Latin America. Pawn loans are nonrecourse loans collateralized by personal property. We also sell merchandise, primarily collateral forfeited from unpaid loans or goods purchased directly from customers.
We exist to serve our customers’ short-term cash needs, helping them to live and enjoy their lives. We are focused on three strategic pillars:
Strengthen the CoreRelentless focus on superior execution and operational excellence in our core pawn business
Cost Efficiency and SimplificationShape a culture of cost efficiency through ongoing focus on simplification and optimization
Innovate and GrowBroaden customer engagement to service more customers more frequently in more locations
Pawn Activities
At our pawn stores, we advance cash against the value of collateralized tangible personal property. We earn pawn service charges (“PSC”) for those cash advances, and the PSC rate varies by state and transaction size. At the time of the transaction, we take possession of the pawned collateral, which consists of tangible personal property, generally jewelry, consumer electronics, tools, sporting goods or musical instruments. If the customer chooses to redeem their pawn, they will repay the amount advanced plus any accrued PSC. If the customer chooses not to redeem their pawn, the pawned collateral becomes our inventory, which we sell in our retail merchandise sales activities or, in some cases, scrap for its inherent gold or precious stone content. Consequently, the success of our pawn business is largely dependent on our ability to accurately assess the probability of pawn redemption and the estimated resale or scrap value of the collateralized personal property.
Our ability to offer quality second-hand goods at prices significantly lower than original retail prices attracts value-conscious customers. The gross profit on sales of inventory depends primarily on our assessment of the estimated resale or scrap value at the time the property is either accepted as pawn collateral or purchased and our ability to sell that merchandise in a timely manner. As a significant portion of our inventory and sales involve gold and jewelry, our results can be influenced by the market price of gold and diamonds.
21

Growth and Expansion
Our strategy is to expand the number of locations we operate through opening new (“de novo”) locations and through acquisitions and investments in both Latin America, the United States and potential new markets. Our ability to open de novo stores, acquire new stores and make other related investments is dependent on several variables, such as projected achievement of internal investment hurdles, the availability of acceptable sites or acquisition candidates, the alignment of acquirer/seller price expectations, the regulatory environment, local zoning ordinances, access to capital and the availability of qualified personnel.
Seasonality and Quarterly Results
In the United States, PSC is historically highest in our fourth fiscal quarter (July through September) due to a higher average loan balance during the summer lending season. PSC is historically lowest in our third fiscal quarter (April through June) following the tax refund season and merchandise sales are highest in our first and second fiscal quarters (October through March) due to the holiday season, jewelry sales surrounding Valentine’s Day and the availability of tax refunds. In Latin America, most of our customers receive additional compensation from their employers in December, and many receive additional compensation in June or July, applying downward pressure on loan balances and fueling some merchandise sales in those periods. In Mexico, we saw similar downward pressure in loan balances during the third quarter of prior year due to a recent change in law related to company profit sharing payments to employees. We believe this change will impact pawn loan balances in May and June going forward. As a net effect of these and other factors and excluding discrete charges, our consolidated income before tax is generally highest in our first fiscal quarter (October through December) and lowest in our third fiscal quarter (April through June).
Financial Highlights
We remain focused on optimizing our balance of pawn loans outstanding (“PLO”) and the resulting higher PSC. The following chart presents sources of gross profit, including PSC, merchandise sales gross profit (“Merchandise sales GP”) and jewelry scrapping gross profit (“Jewelry Scrapping GP”) for the three months ended December 31, 2023 and 2022:
353
22

The following chart presents sources of gross profit by geographic disbursement for the three months ended December 31, 2023 and 2022:
470
Business Developments
Founders
During October 2023, we contributed an additional $15.0 million to Founders One, LLC (“Founders”) associated with our preferred interest, bringing our total equity investment in Founders to $45.0 million. See Note 5 of Notes to Condensed Consolidated Financial Statements included in “Part I, Item 1 — Financial Statements.”
Results of Operations
Non-GAAP Constant Currency and Same Store Financial Information
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, we provide certain other non-GAAP financial information on a constant currency basis (“constant currency”) and “same store” basis. We use constant currency results to evaluate our Latin America Pawn operations, which are denominated primarily in Mexican pesos, Guatemalan quetzales and other Latin American currencies. We analyze results on a same store basis (which is defined as stores open during the entirety of the comparable periods) to better understand existing store performance without the influence of increases or decreases resulting solely from changes in store count. We believe presentation of constant currency and same store results is meaningful and useful in understanding the activities and business metrics of our Latin America Pawn operations and reflect an additional way of viewing aspects of our business that, when viewed with GAAP results, provide a better understanding and evaluation 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 rather than 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 local currency 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. In addition, we have an equity method investment that is denominated in Australian dollars and is translated into U.S. dollars. 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. Our statement of operations constant currency results reflect the monthly exchange rate fluctuations and are not directly calculable from the rates below. Constant currency results, where presented, also exclude the foreign currency gain or loss. The end-of-period and approximate average exchange rates for each applicable currency as compared to U.S. dollars as of and for the three months ended December 31, 2023 and 2022 were as follows:
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December 31,
Three Months Ended
December 31,
2023202220232022
Mexican peso17.0 19.5 17.5 19.7 
Guatemalan quetzal7.7 7.7 7.6 7.7 
Honduran lempira24.3 24.4 24.4 24.3 
Australian dollar1.5 1.5 1.5 1.5 

Operating Results
Segments
We manage our business and report our financial results in three reportable segments:
U.S. Pawn — Represents all pawn activities in the United States;
Latin America Pawn — Represents all pawn activities in Mexico and other parts of Latin America; and
Other Investments — Represents our equity interest in the net income of Cash Converters along with our investment in Rich Data Corporation (“RDC”) and our investment in and notes receivable from Founders.
Store Count by Segment
 
Three Months Ended December 31, 2023
 U.S. PawnLatin America PawnConsolidated
As of September 30, 2023
529 702 1,231 
New locations opened— 
Locations acquired— 
As of December 31, 2023
530 707 1,237 
 
Three Months Ended December 31, 2022
 U.S. PawnLatin America PawnConsolidated
As of September 30, 2022
515 660 1,175 
New locations opened— 
Locations acquired10 — 10 
Locations sold, combined or closed— (1)(1)
As of December 31, 2022
525 661 1,186 
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Three Months Ended December 31, 2023 vs. Three Months Ended December 31, 2022

These tables, as well as the discussion that follows, should be read in conjunction with the accompanying Condensed Consolidated Financial Statements and related notes.
U.S. Pawn
The following table presents selected summary financial data for our U.S. Pawn segment:
 
Three Months Ended December 31,
Change
(in thousands)20232022
Gross profit:
Pawn service charges$79,073 $69,310 14%
Merchandise sales125,513 118,314 6%
Merchandise sales gross profit46,804 45,058 4%
Gross margin on merchandise sales37 %38 %(100)bps
Jewelry scrapping sales12,815 7,176 79%
Jewelry scrapping sales gross profit1,531 960 59%
Gross margin on jewelry scrapping sales12 %13 %(100)bps
Other revenues37 25 48%
Gross profit127,445 115,353 10%
Segment operating expenses:
Store expenses77,255 73,304 5%
Depreciation and amortization2,624 2,755 (5)%
Loss on sale or disposal of assets and other26 *
Segment contribution$47,540 $39,291 21%
Other data:
Net earning assets (a)$317,774 $284,880 12%
Inventory turnover2.7 2.6 4%
Average monthly ending pawn loan balance per store (b)$359 $315 14%
Monthly average yield on pawn loans outstanding14 %14 %—bps
General merchandise as a % of PLO33 %34 %(100)bps
Jewelry as a % of PLO67 %66 %100bps
*Represents a percentage computation that is not mathematically meaningful.
(a)Balance includes pawn loans and inventory.
(b)Balance is calculated based upon the average of the monthly ending balances during the applicable period.


PLO ended the quarter at $190.8 million, up 14% (13% on a same store basis).
Total revenue was up 12% and gross profit increased 10%, reflecting increased PSC and higher merchandise sales.
PSC increased 14% as a result of higher average PLO.
Merchandise sales increased 6% and gross margin decreased to 37% from 38%. Aged general merchandise was 1.1% of total general merchandise inventory.
Net inventory increased 8%, as expected with the growth in PLO. Inventory turnover increased to 2.7x from 2.6x.
Store expenses increased 5%, primarily due to wage inflationary pressures, higher store count and, to a lesser extent, rent.
Segment contribution increased 21% to $47.5 million, due to the changes noted above.
Segment store count increased by 1 store during the quarter due to an acquisition.
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Latin America Pawn
The following table presents selected summary financial data for the Latin America Pawn segment, including constant currency results, after translation to U.S. dollars from its functional currencies noted above under “Results of Operations — Non-GAAP Constant Currency and Same Store Financial Information.”
 
Three Months Ended December 31,
(in thousands)
2023 (GAAP)
2022 (GAAP)
Change (GAAP)
2023 (Constant Currency)
Change (Constant Currency)
Gross profit:
Pawn service charges$27,376 $23,283 18%$25,212 8%
Merchandise sales53,890 45,473 19%49,065 8%
Merchandise sales gross profit17,389 13,852 26%15,816 14%
Gross margin on merchandise sales32 %30 %200bps32 %200bps
Jewelry scrapping sales1,267 708 79%1,159 64%
Jewelry scrapping sales gross profit343 (29)*308 *
Gross margin on jewelry scrapping sales27 %(4)%*27 %*
Other revenues, net16 16 —%14 (13)%
Gross profit45,124 37,122 22%41,350 11%
Segment operating expenses:
Store expenses33,300 27,499 21%30,363 10%
Depreciation and amortization2,339 2,215 6%2,128 (4)%
Gain on sale or disposal of assets and other(196)(19)*(188)*
Segment operating contribution9,681 7,427 30%9,047 22%
Other segment income(468)(102)*(544)*
Segment contribution $10,149 $7,529 35%$9,591 27%
Other data:
Net earning assets (a)$90,405 $81,107 11%$81,509 —%
Inventory turnover3.8 3.3 15%3.9 18%
Average monthly ending pawn loan balance per store (b)$78 $70 11%$72 3%
Monthly average yield on pawn loans outstanding17 %17 %—bps17 %—bps
General merchandise as a % of PLO65 %70 %(500)bps63 %(700)bps
Jewelry as a % of PLO35 %30 %500bps37 %700bps
*Represents a percentage computation that is not mathematically meaningful.
(a)Balance includes pawn loans and inventory.
(b)Balance is calculated based upon the average of the monthly ending balances during the applicable period.
 2023 Change
(GAAP)
 2023 Change
(Constant Currency)
Same Store data:
PLO 19%8%
PSC 15%6%
Merchandise Sales 14%4%
Merchandise Sales Gross Profit 25%14%
Store Expenses16%6%
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PLO improved to $52.5 million, up 22% (11% on constant currency basis). On a same store basis, PLO increased 19% (8% on a constant currency basis).
Total revenue was up 19% (9% on constant currency basis) and gross profit increased 22% (11% on a constant currency basis), reflecting increased PSC, higher merchandise sales and improved merchandise sales gross profit.
PSC increased 18% (8% on a constant currency basis) as a result of higher average PLO.
Merchandise sales gross margin increased from 30% to 32%. Aged general merchandise was 1.6% of total merchandise inventory.
Net inventory remained flat (decreased 11% on a constant currency basis) due to PLO growth, offset by increased inventory turnover at 3.8x, up from 3.3x.
Store expenses increased 21% (10% on a constant currency basis), primarily due to increases in minimum wage and headcount, higher store count and, to a lesser extent, rent. Same-store expenses increased 16% (6% on a constant currency basis).
Segment contribution increased 35% (27% on a constant currency basis) to $10.1 million, due to the changes noted above.
Segment store count increased by 5 de novo stores opened during the quarter.
Other Investments
The following table presents selected financial data for our Other Investments segment after translation to U.S. dollars from its functional currency of primarily Australian dollars:
 
Three Months Ended December 31,
Change
(in thousands)20232022
Gross profit:
Consumer loan fees, interest and other$$22 (82)%
Gross profit22 (82)%
Segment operating expenses:
Interest income(573)— *
Equity in net income of unconsolidated affiliates(1,153)(1,584)(27)%
Segment operating contribution1,730 1,606 8%
Other segment loss(75)%
Segment contribution$1,729 $1,602 8%
*Represents a percentage computation that is not mathematically meaningful.
Segment contribution was $1.7 million, an increase of $0.1 million due to interest income on our notes receivable to Founders, partially offset by the decrease in our share of equity in income of Cash Converters.
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Other Items
The following table reconciles our consolidated segment contribution discussed above to net income attributable to EZCORP, Inc., including items that affect our consolidated financial results but are not allocated among segments:
 
Three Months Ended December 31,
Percentage Change
(in thousands)20232022
Segment contribution$59,418 $48,422 23%
Corporate expenses (income):
General and administrative16,543 15,479 7%
Depreciation and amortization3,602 3,018 19%
Gain on sale or disposal of assets and other(2)— *
Interest expense3,440 6,190 (44)%
Interest income(1,646)(495)*
Other income(224)(308)(27)%
Income before income taxes37,705 24,538 54%
Income tax expense9,235 7,760 19%
Net income$28,470 $16,778 70%
*Represents a percentage computation that is not mathematically meaningful.
Segment contribution increased $11.0 million or 23% over the prior year quarter primarily due to improved operating results of the U.S. Pawn and Latin America Pawn segments above.
General and administrative expense increased $1.1 million or 7%, primarily due to annual salary increases and an increase in costs related to the implementation of Workday.
Interest expense decreased $2.8 million, primarily due to the loss on extinguishment of debt in the prior year quarter. In December 2022, the Company repurchased approximately $109.4 million aggregate principal amount of 2.875% Convertible Senior Notes Due 2024 for approximately $117.5 million plus accrued interest and approximately $69.1 million aggregate principal amount of 2.375% Convertible Senior Notes Due 2025 for approximately $62.9 million plus accrued interest and recorded a $3.5 million loss on extinguishment of debt.
Interest income increased $1.2 million, due primarily to our treasury management with increased market interest rates.
Income tax expense increased $1.5 million primarily due to an increase in income before income taxes of $13.2 million this quarter compared to the prior year quarter as a result of improved operating results within the U.S. Pawn segment and the Latin American Pawn segment.
Income tax expense includes other items that do not necessarily correspond to pre-tax earnings and create volatility in our effective tax rate. These items include the net effect of state taxes, non-deductible items and changes in valuation allowances for certain foreign operations. See Annual Report on Form 10-K for the year ended September 30, 2023 Note 11: Income Taxes of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplemental Data” for quantification of these items.
Liquidity and Capital Resources
Cash and Cash Equivalents
Our cash and equivalents balance was $218.5 million at December 31, 2023 compared to $220.6 million at September 30, 2023. At December 31, 2023, our cash and equivalents were held in cash depository accounts with major banks or invested in high quality, short-term liquid investments.
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Cash Flows
The table and discussion below presents a summary of the selected sources and uses of our cash:
 
Three Months Ended
December 31,
Percentage
Change
(in thousands)20232022
Net cash provided by operating activities$21,481 $11,668 84%
Net cash used in investing activities(16,864)(44,618)(62)%
Net cash (used in) provided by financing activities (6,392)33,993 (119)%
Effect of exchange rate changes on cash, cash equivalents and restricted cash(207)605 (134)%
Net (decrease) increase in cash, cash equivalents and restricted cash$(1,982)$1,648 *


The increase in cash flows provided by operating activities quarter-over-quarter was primarily due to an increase in net income as well as changes in working capital primarily related to the timing of payments of prepaid expenses and accounts payable.
The $27.8 million decrease in cash flows used in investing activities year-over-year was primarily due to a $29.8 million decrease in cash flows used to fund acquisitions and strategic investments, offset by a $10.2 million increase in cash inflows from the sale of forfeited collateral and an increase of $14.0 million in net pawn lending outflows.
The $40.4 million decrease in cash flows provided by financing activities was primarily related to the December 2022 financing of the 2029 Convertible Notes, in which we issued $230.0 million (less issuance costs) principal amount of 3.750% Convertible Senior Notes Due 2029 offset by the extinguishment of approximately $109.4 million aggregate principal amount of our 2024 Convertible Notes for approximately $117.5 million plus accrued interest and approximately $69.1 million aggregate principal amount of our 2025 Convertible Notes for approximately $62.9 million plus accrued interest. In addition, we used approximately $5.0 million of the net proceeds from the 2029 Convertible Notes offering to repurchase 578,703 shares of our Class A common stock from purchasers of the notes in privately negotiated transactions.
The net effect of these changes was a $2.0 million decrease in cash on hand during the current year to date period, resulting in a $227.0 million ending cash and restricted cash balance.
Sources and Uses of Cash
In December 2022, we issued $230.0 million aggregate principal amount of 2029 Convertible Notes. In conjunction with the issuance of the 2029 Convertible Notes, we extinguished approximately $109.4 million aggregate principal amount of our 2024 Convertible Notes for approximately $117.5 million plus accrued interest and approximately $69.1 million aggregate principal amount of our 2025 Convertible Notes for approximately $62.9 million plus accrued interest. In addition, we used approximately $5.0 million of the net proceeds from the 2029 Convertible Notes offering to repurchase 578,703 shares of our Class A common stock from purchasers of the notes in privately negotiated transactions. See Note 7 of Notes to Condensed Consolidated Financial Statements included in “Part I, Item 1 — Financial Statements.” The shares repurchased in conjunction with the transactions discussed above were authorized separately from, and not considered part of, the publicly announced share repurchase program referred to below.
On May 3, 2022, our Board authorized the repurchase of up to $50 million of our Class A Common Stock over three years. As of December 31, 2023, we have repurchased 1,981,927 shares of our Class A Common Stock under the program for $17.0 million. Execution of the program will be responsive to fluctuating market conditions and valuations, liquidity needs and the expected return on investment compared to other opportunities.
Under the stock repurchase program, we may purchase Class A Non-Voting common stock from time to time at management’s discretion in accordance with applicable securities laws, including through open market transactions, block or privately negotiated transactions, or any combination thereof. In addition, we may purchase shares pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934.
The amount and timing of purchases will be dependent on a variety of factors, including stock price, trading volume, general market conditions, legal and regulatory requirements, general business conditions, the level of cash flows and corporate considerations determined by management and the Board, such as liquidity and capital needs and the availability of attractive alternative investment opportunities. The Board of Directors has reserved the right to modify, suspend or terminate the program at any time. See Note 8 of Notes to Condensed Consolidated Financial Statements included in “Part I, Item 1 — Financial Statements.”
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We anticipate that cash flows from operations and cash on hand will be adequate to fund ongoing operations, current debt service requirements, tax payments, any future stock repurchases, strategic investments, our contractual obligations, planned de novo store growth, capital expenditures and working capital requirements through the next twelve months. We continue to explore acquisition opportunities, both large and small, and may choose to pursue additional debt, equity or equity-linked financings in the future should the need arise. Depending on the level of acquisition activity and other factors, our ability to repay our longer-term debt obligations, including the convertible debt maturing in 2025 and 2029, may require us to refinance these obligations through the issuance of new debt securities, equity securities, convertible securities or through new credit facilities.
Contractual Obligations
In “Part II, Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended September 30, 2023, we reported that we had $736.6 million in total contractual obligations as of September 30, 2023. There have been no material changes to this total obligation since September 30, 2023.
We are responsible for the maintenance, property taxes and insurance at most of our locations. In the fiscal year ended September 30, 2023, these collectively amounted to $16.3 million.
Recently Adopted Accounting Policies and Recently Issued Accounting Pronouncements
See Note 1 of the Notes to Condensed Consolidated Financial Statements included in “Part I, Item 1 — Financial Statements” of this Quarterly Report for recently issued accounting pronouncements including the expected dates of adoption and estimated effects, if any, on our consolidated financial statements.
Cautionary Statement Regarding Risks and Uncertainties that May Affect Future Results
This Quarterly Report on Form 10-Q, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend that all forward-looking statements be subject to the safe harbors created by these laws. All statements, other than statements of historical facts, regarding our strategy, future operations, financial position, future revenues, projected costs, prospects, plans and objectives are forward-looking statements. These statements are often, but not always, made with words or phrases like “may,” “should,” “could,” “will,” “predict,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “projection” and similar expressions. Such statements are only predictions of the outcome and timing of future events based on our current expectations and currently available information and, accordingly, are subject to substantial risks, uncertainties and assumptions. Actual results could differ materially from those expressed in the forward-looking statements due to a number of risks and uncertainties, many of which are beyond our control. In addition, we cannot predict all of the risks and uncertainties that could cause our actual results to differ from those expressed in the forward-looking statements. Accordingly, you should not regard any forward-looking statements as a representation that the expected results will be achieved. Important risk factors that could cause results or events to differ from current expectations are identified and described in “Part I, Item 1A — Risk Factors of our Annual Report on Form 10-K for the year ended September 30, 2023 and “Part II, Item 1A — Risk Factors” of this Report.
We specifically disclaim any responsibility to publicly update any information contained in a forward-looking statement except as required by law. All forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary statement.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risks relating to our operations result primarily from changes in interest rates, gold values and foreign currency exchange rates, and are described in detail in “Part II, Item 7A — Quantitative and Qualitative Disclosures about Market Risk” of our Annual Report on Form 10-K for the year ended September 30, 2023. There have been no material changes in our reported market risks or risk management policies since the filing of our Annual Report on Form 10-K for the year ended September 30, 2023.
30

ITEM 4. CONTROLS AND PROCEDURES
This report includes the certifications of our Chief Executive Officer and Chief Financial Officer required by Rule 13a-14 of the Securities Exchange Act of 1934 (the “Exchange Act”). See Exhibits 31.1 and 31.2. This Item 4 includes information concerning the controls and control evaluations referred to in those certifications.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.
Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our management evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2023. Our principal executive officer and principal financial officer have concluded that as of December 31, 2023, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Internal Controls
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls or our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with associated policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See Note 9: Contingencies of Notes to Condensed Consolidated Financial Statements included in “Part I, Item 1 — Financial Statements.”
ITEM 1A. RISK FACTORS
Important risk factors that could affect our operations and financial performance, or that could cause results or events to differ from current expectations, are described in “Part I, Item 1A — Risk Factors” of our Annual Report on Form 10-K for the year ended September 30, 2023.
31

ITEM 2. Unregistered Sale of Equity Security and Use of Proceeds
The table below provides certain information about our repurchase of shares of Class A Non-voting Common Stock during the quarter ended December 31, 2023.

Share Repurchases
Total Number of Shares Purchased (1)
Average Price Paid Per ShareTotal Number of Shares Purchased as Part of Publicly Announced Programs
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Programs (1)
(in thousands, except number of shares and average price information)
October 1, 2023 through October 31, 2023122,677 $8.15 122,677 $35,004 
November 1, 2023 through November 30, 202369,062 $8.24 69,062 $34,435 
December 1, 2023 through December 31, 2023163,143 $8.77 163,143 $33,004 
Quarter ended December 31, 2023354,882 $8.45 354,882$33,004 
(1)On May 3, 2022, the Board of Directors approved a share repurchase program, under which we are authorized to repurchase up to $50 million of our Class A Non-Voting common shares over a three-year period. All repurchases under this program were in open market transactions at prevailing market prices and were executed pursuant to a trading plan under Rule 10b5-1 under the Securities Exchange Act of 1934. Execution of the program will be responsive to fluctuating market conditions and valuations, liquidity needs and the expected return on investment compared to other opportunities.
ITEM 5. Other Information
Insider Trading Arrangements
On November 29, 2023, Pablo Lagos Espinosa, Director, as sole beneficial owner of Lakeside Growth Enterprises, LP, entered into a prearranged trading plan to sell up to 20,000 shares of the Company’s Class A Non-Voting Common Stock between March 4, 2024 and February 28, 2025 pursuant to the terms of the plan. The plan is designed to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act and comply with the Company’s policies regarding stock transactions.

Other than as described above, no Director or Executive Officer adopted, modified or terminated any contract, instruction, written plan or other trading arrangement relating to the purchase or sale of Company securities during the fiscal quarter ended December 31, 2023.
32

ITEM 6. EXHIBITS
The following exhibits are filed with, or incorporated by reference into, this report.
Incorporated by ReferenceFiled Herewith
ExhibitDescription of ExhibitFormFile No.ExhibitFiling Date
31.1x
31.2x
32.1†x
101.INSInline XBRL Instance Document (the instance document does not appear in the interactive data files because the XBRL tags are embedded within the Inline XBRL document)
101.SCHInline XBRL Taxonomy Extension Schema Documentx
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Documentx
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Documentx
101.LABInline XBRL Taxonomy Extension Labels Linkbase Documentx
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Documentx
104Cover Page Interactive Data File in Inline XBRL format (contained in Exhibit 101)
_____________________________
The certifications furnished in Exhibit 32.1 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.
33

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
EZCORP, INC.
Date:January 31, 2024/s/ Timothy K. Jugmans
Timothy K. Jugmans,
Chief Financial Officer
34