successful execution of business transformation driving sustainable growth · successful execution...
TRANSCRIPT
Successful Execution of Business Transformation
Driving Sustainable Growth
Fourth Quarter and Full-Year Fiscal 2017 Conference Call
November 16, 2017
Preliminary Statements
2
Forward Looking Statements
This document contains certain forward-looking statements. These statements are based on the
company’s current expectations as to the outcome and timing of future events. All statements, other
than statements of historical facts, that address activities or results that the company plans, expects,
believes, projects, estimates or anticipates will, should or may occur in the future are forward-looking
statements. Actual results for future periods may differ materially from those expressed or implied by
these forward-looking statements due to a number of uncertainties and other factors, including
operating risks, liquidity risks, legislative or regulatory developments, market factors and current or
future litigation. For a discussion of these and other factors affecting the company’s business and
prospects, see the company’s annual, quarterly and other reports filed with the Securities and
Exchange Commission. The company undertakes no obligation to update or revise forward-looking
statements to reflect changed assumptions, the occurrence of unanticipated events or changes to
future operating results over time.
Other Information
This information should be read in conjunction with, and not in lieu of, the company’s annual,
quarterly and other reports filed with the Securities and Exchange Commission. Those reports contain
important information about the company’s business and performance, including financial
statements prepared in accordance with U.S. generally accepted accounting principles, as well as a
description of the important risk factors that may materially and adversely affect our business,
financial condition or results of operations.
All market comparisons are based on available information from similar publicly traded companies.
Fiscal Year 2017 Highlights
Key Messages – Growth Potential Being Realized
3
Amounts in this presentation are continuing operations only and comparisons are Q4FY17 relative to same period in prior year unless stated.
Amounts in this slide are adjusted for estimated impact of natural disasters in Q4FY17, restructuring and restatement charges, other discrete items and constant currency.
Mexico Pawn excludes closed buy/sell businesses.
Mexico PLO balance both increased and decreased over the same period on a GAAP basis.
See “EZCORP GAAP Results” and “GAAP to Non-GAAP Reconciliation.”
1
3• Focus on disciplined execution and expense control driving
operating leverage
– GAAP EPS up $0.52 in Q4 and up $0.77 to $0.62 in FY17
– Adjusted EBITDA up 39%, or $24.6m, to $88.5m in FY17
• Tracking toward annual corporate expense of $50m in FY18
• Strong balance sheet with cash balance up 150% to $164m
4
Geographic diversification and significant growth potential in Latin America
2• Acquired 112 pawn stores in four new countries in Latin America
in October 2017
• Larger scale with 41% of total pawn stores now in Latin America, a
high growth market
• Compelling growth potential, significant runway for store openings and
complementary acquisition opportunities in Latin America
Mexico Pawn is fastest growing segment
• Same Store PLO up 11%; 13 consecutive double-digit quarters
• Profit growth up 80% CAGR in two-year period ended FY17
• 10 new stores in FY17; significant runway for complementary acquisitions
and additional store openings
• Mexico Pawn is now 17% of total pawn profit before tax in Q4FY17
• Same Store PLO up 3%; led the market in eight consecutive quarters
• PLO per store unadjusted of $289k; led the market in five
consecutive quarters
• U.S. Pawn is 83% of total pawn profit before tax in Q4FY17
U.S. Pawn leading the market
Strong earnings growth and improved liquidity
Market Leading U.S. Same Store PLO Growth With
Strong Operating Leverage
4
Same Store PLO GrowthTwo-Year Stacked YOY Growth
U.S. PAWN
EZCORP achieved eight consecutive quarters of market
leading U.S. Pawn Same Store PLO growth YOY
EZC
OR
PFi
rstC
ash
Amounts in this slide are adjusted for estimated impact of natural disasters in Q4FY17, restructuring and restatement charges, and other discrete items. See “EZCORP GAAP Results” and “GAAP to Non-GAAP Reconciliation.”Weighted average based on available information from each company’s public filings. This information may be determined or calculated differently by companies, limiting the usefulness of these measures for comparative purposes.
EZCORP Net Revenue and Profit Before Tax YOY Growth
Strong Same Store PLO growth and
expense control driving U.S. operating leverage
Significant Compound PLO Growth Drives Profit
5
Same Store PLO GrowthTwo-Year Stacked YOY Growth
MEXICO PAWN
EZC
OR
PFi
rstC
ash
Amounts in this slide are adjusted for discrete items and constant currency. Excludes closed Mexico buy/sell business.Mexico PLO balance both increased and decreased over the same period on a GAAP basis.See “EZCORP GAAP Results” and “GAAP to Non-GAAP Reconciliation.”Weighted average based on available information from each company’s public filings. This information may be determined or calculated differently by companies, limiting the usefulness of these measures for comparative purposes. * Excludes $0.5m looting expense; the impact of looting in 12 stores in January 2017 reduced revenue through stolen pawn loan collateral and inventory effecting PSC and sales in addition to $0.5m in expenses.
EZCORP Net Revenue and Profit Before Tax YOY Growth
Significant Same Store PLO growth and
expense control driving Mexico operating leverageEZCORP achieved 13 consecutive quarters of Mexico
Pawn double-digit Same Store PLO growth YOY
6
Outstanding EBITDA Growth
$48.2
$63.9
$88.5
FY15 FY16 FY17
EBITDA Consolidated
Amounts in this slide are adjusted for estimated impact of natural disasters in Q4FY17, restructuring and restatement charges, other discrete items and constant currency. Mexico Pawn excludes closed buy/sell business. See “EZCORP GAAP Results” and “GAAP to Non-GAAP Reconciliation.”
On October 6, 2017, EZCORP acquired 112 stores in four countries in Latin America
Disciplined Execution DrivingEBITDA Growth
$9.4$15.7
$20.6
FY15 FY16 FY17
EBITDA Mexico Pawn
Proven Pawn Expertise and Outstanding Results in Growth Market
EBITDA/Net
Revenue Margin12% 15% 23%
EBITDA/Net
Revenue Margin23% 30% 35%
# of Pawn Stores 232 239 246
$106.7$113.5 $116.5
FY15 FY16 FY17
EBITDA U.S. Pawn
Market Leading Same Store PLO Growth and Expense Control Driving U.S. EBITDA Growth
EBITDA/Net
Revenue Margin31% 31% 31%
# of Pawn Stores 522 520 513
Geographic Diversification and Significant Growth Potential in Latin America
U.S. Pawn
59%
Mexico
Pawn
28%
Acquired
GPMX
Pawn
Stores
13%
EZCORP Pawn Store Count
10/6/17
41% of EZCORP total pawn stores are in Latin America as of October 6, 2017 including Mexico, Guatemala, El Salvador, Honduras, and Peru
7
Q4 net interest includes $2.3m of discrete items
including $5.3m debt extinguishment charge
offset by $3m benefit from Grupo notes
restructure
Seven consecutive quarters of YOY profit
growth
Q4 Net Revenue up1%. PSC increase of 5%
partially offset by reduced Q4 scrapping
Significant EBITDA growth in Q4 and FY17,
up 91% in FY17 to $82.6m
Strong Financial Performance
EZCORP GAAP ResultsStrong performance in Q4 despite impact of natural disasters
Q4 corporate expense reduction of 34%;
on track to $50m corporate expense in FY18
Operations expense improved to 72% from 75%
of net revenue in Q4
U.S. Same Store PLO up 3%* excluding stores
impacted by hurricanes. The effects of the
hurricanes caused an estimated reduction in
U.S. Pawn loan balances by ~$5m as of
September 30, 2017
* U.S. Same Store PLO excludes estimated impact of stores affected by hurricanes in Q4FY17.
8*Adjusted for estimated impact of natural disasters in Q4FY17, restructuring and restatement charges, other discrete items and constant currency. Mexico Pawn excludes closed buy/sell businesses. See “EZCORP GAAP Results” and “GAAP to Non-GAAP Reconciliation.”
Q4 corporate expense reduction of 38%;
on track to $50m corporate expense in FY18
Reduction in net interest expense due to
interest income on promissory notes
associated with Grupo Finmart sale
EZCORP Continuing Operations Adjusted Results*
Continued Strong Profit Growth
Significant EBITDA growth for both the quarter
and fiscal year
Q4 PSC up 5% partially offset by reduced Q4
jewelry scrapping
Consolidated merchandise margin of 36% in
Q4, in our target range of 35-38%
CCV investment profitable after prior year
strategic realignment
Operations expense improved to 70% from
74% of net revenue in Q4
Seven consecutive quarters of YOY profit
growth
Purchases+
Forfeitures
Strong Management Actions
Deliver PLO and Profit Growth
9
+ -= =
INCOME STATEMENT
Pawn Service Charges Total
Up 4% to $63m
Sales Down 4%
Sales Gross Profit Down 4% to $30m
Merchandise Margin 36%
ASSETS
SAME STORE UP 4%
GROSS PROFIT
SAME STORE DOWN 4%
InventoryTotal
Up 9%
NET REVENUEUp 1% to $93m
• Continued focus on customer experience led to Same Store
PLO up 3% and Pawn Service Charges increased 4%
• Market leading unadjusted U.S. PLO of $289k per store
TOTAL EXPENSESDown 5% to
$67m
PROFIT BEFORE TAX
Up 20% to $26m
• PLO monthly yield consistent at 13%
• Inventory turns of 1.9
• Return on Earning Assets of 132%
U.S. Pawn Q4FY17
Pawn Loans Outstanding
Total Up 2%
SAME STORE UP
3%
QualityStore
Manager
SAME STORE UP 10%
Amounts in this slide are adjusted for estimated impact of natural disasters in Q4FY17, restructuring and restatement charges, and other discrete items. See “EZCORP GAAP Results” and “GAAP to Non-GAAP Reconciliation.” Sales Gross Profit includes Merchandise, Scrap Gross Profit, and Other Revenue.
Initiatives underway to continue improving Net Revenue and profitability in the long term, including upgrading POS and analytics of customer behavior and product data
Merchandise margin consistent at 36%, in our target range of 35-38%
3% increase in Same Store PLO drove similar increase in pawn service charges
Serving and satisfying customers’ need for cash fuels continued Same Store PLO growth
10
U.S. Pawn
Amounts in this slide are adjusted for estimated impact of natural disasters in Q4FY17, restructuring and restatement charges, and other discrete items.See “EZCORP GAAP Results” and “GAAP to Non-GAAP Reconciliation.”
• Continued execution and focus on customer experience helped increase Q4 profitbefore tax up 20%
• Eight consecutive quarters of market leading Same Store PLO growth YOY
• U.S. merchandise margin consistent at 36%, in our target range of 35-38%
• Inventory aged over one year improved to 10% from 11% in Q3FY17
Strong Management Actions
Deliver PLO and Profit Growth
Business TransformationNet Revenue Growth and Expense Control Driving Profit Growth
U.S. Pawn
11
+ -= =
INCOME STATEMENT
Pawn Service Charges Total
Up 16% to $10m
Sales Up 5%
Sales Gross ProfitTotal Up 8%
to $5m
Merchandise Margin 30%
ASSETS
SAME STORE UP 14%
Purchases+
Forfeitures
Pawn Loans Outstanding
Total Up 13%
InventoryTotal
Up 8%
SAME STORE UP 11%
NET REVENUEUp 13% to $15m
TOTAL EXPENSESFlat at $10m
PROFIT BEFORE TAX
Up 64% to $5m
• Continued focus on customer experience led to PLO up 13% as
Pawn Service Charges increased 16% and Merchandise Gross
Profit increased 8%
• Average PLO per store improved 10% to $80k
• PLO monthly yield consistent at 16%
• Inventory turns of 2.3
• Return on earning assets 147% compared to 146%
Amounts in this slide are adjusted for discrete items and constant currency. Excludes closed Mexico buy/sell business.See “EZCORP GAAP Results” and “GAAP to Non-GAAP Reconciliation.” Sales Gross Profit includes Merchandise, Scrap Gross Profit and Other Revenue.
QualityStore
Manager
SAME STORE UP 5%
GROSS PROFIT
SAME STORE UP 3%
Initiatives underway to continue improving Net Revenue and profitability in the long term, including upgrading POS and analytics of customer behavior and product data
Four stores opened in Q4 for a total of ten in FY17. Significant runway for continued store openings and acquisitions
Significant Compound PLO Growth Drives Profit
Strong management, consistent execution and cost controldeliver profit before tax up 64% to $5m
Mexico Pawn Q4FY17
Amounts in this slide are adjusted for discrete items and constant currency. Excludes closed Mexico buy/sell business.See “EZCORP GAAP Results” and “GAAP to Non-GAAP Reconciliation.” 12
• Profit growth accelerated with Q4 up 64% and FY17 up 51%
• Opened four stores in Q4 and opened ten stores in FY17. Significant runway for continued store openings and acquisitions
• Mexico merchandise margin 30%, up 100bps and inventory aged over one year improved to 2% from 6% in Q3FY17
Mexico Pawn
Significant Compound PLO Growth Drives Profit
Business TransformationNet Revenue Growth and Expense Control
Driving Profit GrowthMexico Pawn
13
Estimated Impact of Natural Disasters
Consolidated
Estimated Impact on Quarter Ended September 30, 2017
Pawn service charges $(1.6m)
Merchandise sales gross profit $(0.2m)
Operating expenses and loss on disposal of assets $1.1m
Income from continuing operations before income taxes $(2.9m)
Estimated Impact on PLO Balance as of September 30, 2017
Pawn Loans Outstanding $(5.0m)
During the fourth quarter, U.S. Pawn was affected by Hurricanes Harvey and Irma, and the Mexico Pawn segment experienced an
earthquake. The estimated $2.8 million effect of the hurricanes in the U.S. consisted of a $1.8m reduction of Net Revenue and a $1.0m
increase in operating expenses in the quarter ended September 2017. The estimated effect of the earthquake in Mexico was $0.1m in
operating expenses in the quarter ended September 2017.
The effect of the hurricanes included an estimated reduction of U.S. pawn loan balances of ~$5m as of September 30, 2017 with a
resulting reduction in pawn service charges and merchandise sales gross profit. Pawn loan demand is expected to return to a normal
level after the annual tax refund season in the U.S. The impact of the earthquake in Mexico should not materially affect fiscal 2018
operating results.
Q4FY17 adjusted results in this presentation exclude the estimated impact of natural disasters and other discrete items, restructuring and
restatement charges, and constant currency. See “EZCORP GAAP Results” and “GAAP to Non-GAAP Reconciliation.”
3.4
3.5
2.5 2.5
2.0
4QFY16 1QFY17 2QFY17 3QFY17 4QFY17
14
Highlights
• Strengthening balance sheet and liquidity
supports continued investment in customer
experience and expansion to drive increased
profit
• Cash balance up 150% to $164m at
September 30, 2017
• Favorable restructuring of notes receivable
repayment arrangement with AlphaCredit /
Grupo Finmart in September 2017
– Receiving regular payments
• Convertible Senior Notes due 2024 offering
completed in July 2017
Strengthening Balance Sheet and Liquidity
Leverage Ratio*
Earnings Growth Strengthens Leverage Ratio
* Leverage Ratio is Net Debt / Adjusted EBITDA for the last twelve months
15
• Significantly expands our store base in four additional countries in Latin America
• Massive and highly fragmented market
• High quality management team in place with in-country expertise
• Growth opportunities:
– Implement EZCORP’s upgraded systems, processes, and procedures
– Expand general merchandise pawn loans and retail activities
– Open new stores in attractive and under-penetrated markets
– Complementary acquisition opportunities
TRANSACTION
OVERVIEW
EZCORP Acquired 112 Pawn Stores in Latin America
on October 6, 2017
PLATFORM FOR
FUTURE EXPANSION
• EZCORP’s largest pawn acquisition in terms of store count
• 46% increase in our Latin America pawn stores
• Acquired GuatePrenda - MaxiEfectivo’s (“GPMX”)
112 pawn stores in Guatemala (72 stores), El Salvador (17 stores), Honduras (12 stores)
and Peru (11 stores)
• Paid $60m in cash with additional $2.25m to be paid contingent on performance of
GPMX’s business during the 24 months following the closing*
COMPELLING
FINANCIAL BENEFITS
• Accretive to earnings in FY18
• Geographic diversification
• Larger scale with 41% of total pawn stores now in Latin America, a high growth market
• Existing GPMX business is very attractive, with an average per store pawn loan balance
higher than our existing stores in Mexico or the Latin American stores of our major
competitor. PLO is the most influential driver of revenue and profitability
*Comprised of $53.4m in cash at closing on October 6, 2017 and repayment in October 2017 of seller’s prior advances to GPMX.
16
• Initiatives to improve customer experience and deliver profitable growth:
– Deployment of upgraded POS
– Further investment in analytics of customer behavior and product data
• Continuous measurement of customer experience and feedback driving higher
revenue and profitability
Market Leadership in
PLO Growth
Geographic
Diversification and
Potential
Significant Growth
Attractive Industry
Dynamics
• Acquired 112 pawn stores in October 2017; geographic diversification and larger scale
with 41% of total pawn stores now in Latin America, a high growth market
• Continue to assess acquisitions and store openings in U.S. and Latin America against
strict investment criteria:
– Significant runway for store openings and acquisitions;
opened 10 stores in Mexico in FY17
EZCORP Strengths
Successful Focus on
Customer Leadership
• Eight consecutive quarters of market leading U.S. Pawn Same Store PLO growth YOY
• 13 consecutive quarters of Mexico Pawn double-digit Same Store PLO growth YOY*
• Seven consecutive quarters of YOY profit before tax growth
• Solid demand for pawn services across economic cycles
• Fully collateralized loan portfolio
• Large and highly fragmented consumer market in U.S. and Latin America
• Internet resistant
• Stable pawn regulatory environment
U.S. Same Store PLO excludes estimated impact of stores affected by hurricanes in Q4FY17.*Calculated in constant currency. Mexico PLO balance both increased and decreased over the same period on a GAAP basis.
17
Additional Information
U.S. Financial Servicesbusiness closed
Renewed Executive Leadership Team including CEO and President of Pawn
Successful Execution of Business Transformation
18
25 Pawn Stores acquired in FY15
Closed 25 underperforming pawn stores in U.S.
and Mexico in FY15
Sold Grupo Finmart
Investment in field management enabling more coaching & mentoring
6 U.S. pawn stores acquired in Q2FY16
Procurement opportunities identified Store incentive
plans re-aligned to operatingcontribution
INITIATIVES TO DRIVE
CONTINUED
PROFIT GROWTH
1. Geographic diversity and larger scale with 41% of total pawn stores now in Latin America. Opened 10 pawn stores in FY17 and acquired 112 pawn stores in October 2017
2. Significant runway for continued store openings and complementary acquisitions
3. POS will deliver improved customer experience and increase productivity
4. Further Investment in analytics of customer behavior and product data
5. Tracking toward annual corporate expense of$50m in FY18
Mexico Buy/Sell business closed
Transformational customer focused
3-year strategic plan released
JULY
2015
SEPT
2017
Initiated deployment of upgraded POS
Initiated store refresh program
Opened ten stores in Mexico in FY17
Convertible debt due 2024 issued in July 2017; liquidity and debt maturity
profile improved
Favorable restructuring of note receivable
repayment arrangement with AlphaCredit
Receiving Notes Receivable Payments Within
Schedule
19
¹Interest income on notes receivable from AlphaCredit.
²Total Deferred Compensation Fee will be reduced to $10m if the notes are pre-paid on or prior to June 30, 2019.
Amounts above are in millions of U.S. dollars and based on exchange rates in effect historically or as of September 30, 2017 for all future amounts.
GAAP Interest Income From Notes¹ $14.8 $5.6 $0.8 $21.2
Detail:
Amortization of Deferred Compensation Fee² $9.2 $4.0 $0.8 $14.0
Cash Interest Income $5.6 $1.6 $0.0 $7.2
$1.0 $1.0
$31.6
$28.3$32.6
$59.9
FY18 FY19 FY20 Total
Notes Receivable(Principal as of 11/15/17)
Notes Receivable
Cash Received
As of November 15, 2017
$0
$60.9
EZCORP Benefits From Notes Receivable Restructuring in September 2017:
• $14m additional deferred compensation fee²
• Interest rates substantially increased
• Receive principal and interest monthly
• Now guaranteed by AlphaCredit, Grupo Finmart’s parent
• Received $4.1m held in escrow six months early
• Termination of our indemnification obligations with respect to representations and warranties under original sale agreement of Grupo Finmart
• All interest accelerated upon early pre-payment
AlphaCredit has already paid $34m principal and interest owed to EZCORP in connection with the sale of Grupo Finmart
Expect to collect an additional $32.6m principal in the remainder of FY18 and $28.3m in FY19 in addition to interest and a deferred compensation fee of $14.0m, payable $6.0m in September 2019, $4.0m in March 2020 and $4.0m in September 2020²
20
Convertible Senior Notes with
2.875% Coupon Due July 2024
Convertible Senior Notes with 2.875% Coupon Due July 2024
• Highlights:
o Strengthened balance sheet and improved debt maturity profile at attractive fixed cash interest rate
o Net proceeds of $140.0m in July 2017
• Use of Proceeds:
o $51.6m used to retire principal, accrued interest and transaction fees on senior secured credit facility that
carried substantially higher cost of funds
o $34.4m to repurchase $35m face value of existing Cash Convertible Senior Notes due 2019, leaving
$195m of those convertible notes outstanding
o Remaining $54.0m increased company’s cash balance providing funding for general corporate
purposes, including potential acquisitions
Interest expense in Q4FY17 includes a one-time debt extinguishment charge totaling $5.3m comprised primarily
of write-off of unamortized debt discount and issuance costs on partial repayment of Cash Convertible Notes
due 2019
Even with the net $54m increase in liquidity, expect annual cash interest to improve to ~$8.3m – a savings of
~$2m annually, due to lower coupon rates. Including non-cash accretion of debt discount and issuance costs,
GAAP interest expense on our convertible notes is expected to be ~$24m in FY18
2.875% Convertible Senior Notes Due 2024
Potential EPS Dilution
21
In July 2017, we issued $143.75 million aggregate principal amount of 2.875% Convertible Senior Notes Due 2024. The Convertible
Notes are convertible into cash or shares of Class A Non-voting Common Stock, or any combination thereof, at our option subject
to satisfaction of certain conditions and during certain periods, based on an initial conversion rate of 100 shares of Class A
Common Stock per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of $10.00 per share of
our Class A Common Stock).
We have included above an estimate of the incremental shares we would need to include in our calculation of fully diluted EPS
using the “treasury stock” method of accounting, if our average share price is above $10.00 while the Convertible Notes due 2024
are outstanding.
Average Share Estimated Incremental
Price for Period Dilutive Shares for Period
10.00$ -
11.00$ 1,306,818
12.00$ 2,395,833
13.00$ 3,317,308
14.00$ 4,107,143
15.00$ 4,791,667
16.00$ 5,390,625
17.00$ 5,919,118
18.00$ 6,388,889
19.00$ 6,809,211
20.00$ 7,187,500
The following is provided for purposes of calculating the potentially dilutive shares to be included in accounting for diluted EPS at a
hypothetical conversion price of $10 or higher:
At higher share prices above $20, there is a potential for further increase in dilution
22
Definition of Terms
Monthly PLO Yield =
pawn service chargesdays in periodaverage PLO
X 365
Inventory Yield =
sales gross profitdays in period
average net inventory
X 365
Return on Earning Assets
sales gross profit + PSCdays in period
average net inventory + average PLO
X 365
Inventory Turnover =
total cost of salesdays in period
average net inventory
X 365
=
/ 12
23
GAAP to Non-GAAP Reconciliation
In addition to the financial information prepared in conformity with generally accepted accounting principles in the United States of America ("GAAP"), we provide certain other financial information that is adjusted to exclude the impact of restructuring and restatement charges and other discreet items and to reflect the results of our Mexico Pawn operations on a constant currency basis. We believe that presentation of the non-GAAP financial information is meaningful and useful in evaluating and comparing our operating results across accounting periods and understanding the operating and financial performance of our business. We believe that the non-GAAP financial information reflects an additional way of viewing aspects of our business that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our business. We provide non-GAAP financial information for informational purposes and to enhance understanding of our GAAP consolidated financial statements.
You should consider the non-GAAP information in addition to, but not instead of or superior to, our results prepared in accordance with GAAP. Non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of that information for comparative purposes.
24
GAAP to Non-GAAP Reconciliation Q4 – Continuing Operations*
(B)
(C)
(A)
(D)
(E)
(F)
(G)
(H)
(I)
Footnote * - Includes immaterial presentation reclassifications and rounding
Footnote (A) Amount includes $1.9m of Natural Disaster Impact, Footnote (B) Amount includes $1m Hurricane Store Operating Expenses Impact,
Footnote (C) Amount includes $0.8m of Acquisition related Expenses, Footnote (D) Amount includes ~$0.1m Gain on FX
Footnote (E) Amount includes $3m Credit from Restructuring of Grupo Finmart Notes Receivable and $5.2m of Expense from Retirement of Fortress Debt and $35m Repurchase of Convertible
Notes due 2019
Footnote (F) Estimated Tax impact of Discrete Items listed above, Footnote (G) Amount includes $0.2m of Discrete Corporate Adjustment
Footnote (H) Amount includes $11.0m impairment on investment in Other International and $0.2m loss on asset impairments in Corporate
Footnote (I) Estimated Tax impact of Discrete Items listed above
*We used the end-of-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. The
end-of-period exchange rate for September 30, 2017 and 2016 was 18.2 to 1 and 19.4 to 1, respectively. The approximate average exchange rate for the quarter ended September 30, 2017
and 2016 was 17.8 to 1, 18.7 to 1, respectively, however our statement of operations constant currency results reflect the impact of monthly effects of exchange rates and so are not directly
calculable from the above rates.
25
GAAP to Non-GAAP Reconciliation Q4 – U.S. Pawn*
Footnote * - Includes immaterial presentation reclassifications and rounding
Footnote (A) Amount includes $1.8m of Natural Disaster Impact
Footnote (B) Amount includes $1m Hurricane Store Operating Expenses Impact,
(B)
(A)
26
GAAP to Non-GAAP Reconciliation Q4 – Mexico Pawn*
Footnote * - Includes immaterial presentation reclassifications and roundingFootnote (A) Amount includes $0.1m of Natural Disaster Impact
Footnote (B) Amount includes $0.5m Credit for Restructuring of Grupo Finmart Notes Receivable
**We used the end-of-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. The
end-of-period exchange rate for September 30, 2017 and 2016 was 18.2 to 1 and 19.4 to 1, respectively. The approximate average exchange rate for the quarter ended September 30, 2017
and 2016 was 17.8 to 1, 18.7 to 1, respectively, however our statement of operations constant currency results reflect the impact of monthly effects of exchange rates and so are not directly
calculable from the above rates.
(B)
(A)
27
GAAP to Non-GAAP Reconciliation FY17 – Continuing Operations*
Footnote * - Includes immaterial presentation reclassifications and rounding
Footnote (A) Amount includes $1.9m of Natural Disaster Impact, Footnote (B) Amount includes $1m Hurricane Store Operating Expenses Impact
Footnote (C) Amount includes $1.1m of Acquisition related Expenses and $1.1m of CFO Severance, Footnote (D) Amount includes $0.3m Gain on FX
Footnote (E) Amount includes $3m Credit from Restructuring of Grupo Finmart Notes Receivable and $5.2m of Expense from Retirement of Fortress Debt and $35m Repurchase of Convertible
Notes due 2019
Footnote (F) Estimated Tax impact of Discrete Items listed above, Footnote (G) Amount includes $4.2m of restatement expense and $(0.3)m of discrete adjustments in Corporate
Footnote (H) Amount includes $11.0m impairment on investment in Other International, $1.4m of restructuring expenses ($1.0m of U.S. Pawn, $0.2m of Corporate, and $0.2m of Other
International) and $0.1m of discrete adjustments in Corporate
Footnote (I) Estimated Tax impact of Discrete Items listed above
*We used the end-of-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. The
end-of-period exchange rate for September 30, 2017 and 2016 was 18.2 to 1 and 19.4 to 1, respectively. The approximate average exchange rate for the years ended September 30, 2017 and
2016 was 19.1 to 1 and 17.9 to 1, respectively, however our statement of operations constant currency results reflect the impact of monthly effects of exchange rates and so are not directly
calculable from the above rates.
(B)
(C)
(A)
(D)
(E)
(F)
(G)
(H)
(I)
(E)
28
GAAP to Non-GAAP Reconciliation FY17 – U.S. Pawn*
Footnote * - Includes immaterial presentation reclassifications and roundingFootnote (A) Amount includes $1.8m of Natural Disaster Impact
Footnote (B) Amount includes $1m Hurricane Store Operating Expenses Impact,
Footnote (C) Amount includes $1.0m restructuring expense
(B)
(A)
(C)
29
GAAP to Non-GAAP Reconciliation FY17 – Mexico Pawn*
(A)
Footnote * - Includes immaterial presentation reclassifications and roundingFootnote (A) Amount includes $0.1m of Natural Disaster Impact
Footnote (B) Amount includes $0.1m of Gain on FX
Footnote (C) Amount includes $0.5m Credit for Restructuring of Grupo Finmart Notes Receivable
**We used the end-of-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. The
end-of-period exchange rate for September 30, 2017 and 2016 was 18.2 to 1 and 19.4 to 1, respectively. The approximate average exchange rate for the years ended September 30, 2017 and
2016 was 19.1 to 1 and 17.9 to 1, respectively, however our statement of operations constant currency results reflect the impact of monthly effects of exchange rates and so are not directly
calculable from the above rates.
(C)
(A)
(B)
30
Net Debt/Adjusted EBITDA Reconciliation*
Footnote * - Includes immaterial presentation reclassifications and rounding
31
Pawn Quarterly Growth Reconciliation*
Footnote * - Includes immaterial presentation reclassifications and rounding