EZCORP, Inc. (NASDAQ:EZPW) Q2 2018 Earnings Conference Call - Preliminary Transcript

Feb 01, 2018 • 08:30 am ET

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EZCORP, Inc. (NASDAQ:EZPW) Q2 2018 Earnings Conference Call - Preliminary Transcript

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Presentation
Operator
Operator

Good day ladies and gentlemen, and welcome to EZCORP's Second Quarter 2018 Earnings Conference Call. At this time all participants are in a listen-only mode. (Operator Instructions) As a reminder, this call may be recorded.

I would now like to turn the conference call over to Jeff Christensen, Vice President of Investor Relations for EZCORP. Please go ahead, Jeff.

Executive
Jeff Christensen

Thank you, Mathew, and good morning everyone. During our prepared remarks, we will be referring to slides, which are available for viewing or download from our website at investors.ezcorp.com.

Before we begin, I'd like to remind everyone that this conference call, as well as the presentation slides contains certain forward-looking statements, regarding the company's expected operating and financial performance for future periods. These statements are based on the company's current expectations.

Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements, due to a number of risk and other factors that are discussed in our annual, quarterly, and other reports filed with the Securities and Exchange Commission.

Now, I'd like to turn the call over to Mr. Stuart Grimshaw. Stuart?

Executive
Stuart I. Grimshaw

Thanks Jeff. And thanks once again for everyone for joining us this morning, particularly from the west where now it's very early. Second quarter has again provided a terrific bunch of numbers that's really supported by our key strategies. Now, if you turn to Page 3 on the presentation, I'll quickly run through the four key issues or the key points that have come out of the quarter.

Firstly, the net income was up 47% to $12.3 million with basic EPS up 53% to $0.23 a share, and this represented our ninth consecutive quarter of year-on-year earnings growth. PLO importantly was up 11% to $159 million and PSC up by the same percentage to $74 million. The net revenue was strong and was supported by a great merchandise margin of 37%. And importantly, when you look at the balance sheet, you'll see that liquidity of the company has been enhanced over the quarter.

The second point is, the U.S. Pawn business continues to operate very strongly. It now represents 80% of all pawn profit and with an adjusted profit before tax up 5%. We continue to grow PLO to a great rate and certainly these store levels were 243,000 which is quite markedly ahead of our listed competitor, and this is despite the hurricane impacts. These are industry-leading numbers and if you look at the PSC that we're driving out of the PLO we have it is quite instructive to see the benefits we're getting from the strong management that is occurring at the store level.

The third point is, Latin America continues to grow rapidly. Earnings this quarter more than doubled and we're getting growth from new acquisition in GuatePrenda and also Mexico is supporting it strongly. PLO is up 90% to $35 million. Same-store PLO is up 9% and PLO per store is up to 90,000 which leads the market and it is