EZCORP, Inc. (NASDAQ:EZPW) Q4 2019 Earnings Conference Call - Preliminary Transcript

Dec 05, 2019 • 05:00 pm ET


EZCORP, Inc. (NASDAQ:EZPW) Q4 2019 Earnings Conference Call - Preliminary Transcript


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Stuart I. Grimshaw

simplifying the business with a sale of Grupo Finmart as well as the closure of our US financial services business.

Turning now to Slide 5. Simplistically this chart shows that we have followed a disciplined path of growth that has seen an EBITDA CAGR of 20% per annum from 2015 to 2019. As we have highlighted this growth has been driven by focusing the business back on to our core customer by the pawn business supported by strong operational performance, acquisitions, de novo store openings and expense control.

On Page 6 this shows the strong free cash flow generated by the business as well as the collections of the notes receivable from the sale of the Grupo Finmart business. To date, we received $96 million from the purchases of that business. You can see the material change in free cash flow generated from fiscal 2018 of $59 million to

million in fiscal 2019.

On Slide 7, we look towards the more strategic objectives. We continue to focus on serving and satisfying our customer's need for cash and we've seen this focus play out through a history of long-term PLO growth. As mentioned we opened 22 stores in fiscal 2019, 10 in the fourth quarter of this year and plan to accelerate this to 40 in fiscal 2020. We remain disciplined on the acquisition front and coupled with an effective capital management strategy have authorized a three year up to $60 million share repurchase program.

Our digital platforms in the (ph) beta stage would anticipate a public release by the end of this calendar year initially in Texas and Florida. We believe this platform now called (inaudible) will enhance the retention and acquisition of pawn customers as well as attract completely new customers to this platform.And with that I'll hand over to Danny.

Daniel M. Chism

Thanks, Stuart and good afternoon. I want to start by flushing out the share repurchase authorization we announced in conjunction with the earnings that Stuart mentioned a moment ago. At a high level, we remain focused on allocating capital to opportunities that can deliver the highest long-term returns to our shareholders.

In light of the disconnect we see between the value of our core business and the stock's current valuation we see Ezcorp stock is one of the highest investment return opportunities with a favorable risk reward relationship. It also allows us to return capital to shareholders in a tax efficient manner. The Board's approval of a share repurchase program of up to $60 million over the next three years, reflects the strength of our balance sheet, combined with a strong free cash flow generation of the business. To that point we ended fiscal 2019 with $162 million in total cash on hand and our net cash from operating activities continues to build.

Including collections on notes receivable we generated $112 million of free cash flow in fiscal 2019, up 23% from the prior year. Looking back over the past three years free cash flow plus AlphaCredit