AUSTIN, Texas--(BUSINESS WIRE)-- EZCORP, Inc. (NASDAQ: EZPW) today announced results for its first quarter ended December 31, 2018.

All amounts in this release are from EZCORP continuing operations and in conformity with U.S. generally accepted accounting principles ("GAAP") unless otherwise noted. Comparisons shown in this release are to the same period in the prior year unless otherwise noted.

HIGHLIGHTS FOR FIRST QUARTER OF FISCAL 2019

• Exceptional pawn operating performance:
  • Strong growth in pawn loans outstanding (PLO), pawn service charges (PSC) and revenue in Latin America and U.S. pawn segments contributed to exceptional pawn operating performance during the quarter.
  • PLO, the most influential driver of revenue and profitability, expanded�10%�to�$194.0 million, and PSC rose�10%�to $83.7 million.
  • U.S. Pawn segment same store PLO rose 7% to $155.0 million, and same store PSC increased 8% to $59.7 million.
  • Latin America Pawn total PLO grew�26%�to�$39.0 million�(up�27%�to $39.5 million on a constant currency basis1). Same store PLO increased�10%�(11% higher on a constant currency basis).
• Non-cash charges of $20.6 million, as well as discretionary growth investments and other discrete costs, contributed to a loss before tax of $5.6 million, or ($0.07) per share. Excluding those items, adjusted2 income before tax was $22.5 million and adjusted diluted earnings per share improved 15% to $0.31.
• The Company continued investing to sustain strong competitive advantages, including pawn store openings and acquisitions; the development of a new customer-centric digital platform; predictive product and customer analytics; and upgrades to its point of sale and other systems.
• Cash and cash equivalents rose 162% to $297.0 million. The improved liquidity was driven by $167.0 million of net proceeds from a convertible debt issuance in May 2018. Strong operating cash flow in the quarter increased 18% to $22.8 million, and the company collected another $7.3 million of principal under the Alpha Credit / Grupo Finmart notes receivable.

CEO COMMENTARY AND OUTLOOK

Chief Executive Officer Stuart Grimshaw commented, "We continue to deliver exceptional pawn operating performance leading to market share gains in the quarter. We maintained our intense focus on outstanding customer service and meeting our customers' need for cash.

"Our strong balance sheet and free cash flow generation enhances our ability to invest in initiatives that sustain our strong competitive advantages, leveraging our best-in-industry customer insights. Investments include: opening and acquiring more pawn stores; developing a digital platform that will provide transaction and lending services connected to a ledger of physical assets; and upgrading our POS2 that encompasses predictive product and customer analytics. These investments will build on our core pawn businesses and further differentiate us through data-driven, physical and digital customer engagement. We continually assess opportunities to better serve our customers and attract new ones. Identifying and acting on the best opportunities will allow us to further drive long-term shareholder value."

	�	�	�								�	�
CONSOLIDATED RESULTS
�
Three Months Ended December 31
in thousands, except per share amounts
													�
				As Reported									Adjusted2
				2019			�	�	2018				2019		�	�	2018
																	�
Total Revenues				$	215,850				$	204,508			$	218,100			$	204,508
Income (Loss) from Continuing Operations, Before Tax				$	(5,570	)			$	19,792			$	22,475			$	21,342
Net Income (Loss) from Continuing Operations				$	(4,538	)			$	12,355			$	16,669			$	14,697
Diluted Earnings (Loss) Per Share				$	(0.07	)			$	0.23			$	0.31			$	0.27
EBITDA2				$	6,730				$	27,092			$	30,617			$	27,490
																	�

• The loss before tax of $5.6 million, or ($0.07) per share, includes $20.6 million in non-cash charges, as well as discretionary growth investments and other discrete costs. Excluding those items, adjusted diluted earnings per share improved 15% to $0.31.
• A strong 10% increase in average PLO drove an equivalent�10%�improvement in PSC and�6%�higher net revenues to�$130.2 million�(up 7% to $131.5 million on a constant currency basis). Consolidated merchandise sales gross profit grew�4%�to�$43.9 million on a�7%�rise in merchandise sales. On a constant currency basis, PSC expanded 11% and merchandise sales gross profit improved 4%.
• Operations expenses rose�7%�to�$89.5 million�(up 8% to $90.4 million on a constant currency basis) primarily from the inclusion of recently acquired and new stores. The Company expects expanded operating leverage as acquired stores are further integrated and recent new stores mature and build scale.
• Administrative expense increased 16% to $15.5 million principally as a result of a $2.1 million discretionary strategic investment in the development of a customer-centric digital platform that is not capitalizable in its early stages of build-out.
• The Company’s global pawn businesses (consisting of U.S. Pawn and Latin America Pawn) generated consolidated segment contribution of $33.6 million, down 9% from the prior year.�On an adjusted basis, consolidated global pawn segment contribution increased 6%, or $2.3 million, to $39.0 million.
• Non-cash charges totaled $20.6 million, consisting of a $13.3 million impairment to the carrying value of our investment in Cash Converters International Limited, an unconsolidated affiliate; $2.9 million attributable to our equity interest in Cash Converter's recognition of its settlement of a class action lawsuit; and $4.4 million to fully reserve our exposure to Republic Metals Corporation, our primary gold scrap refiner, which declared Chapter 11 bankruptcy in November 2018.

SEGMENT RESULTS

U.S. Pawn

• The U.S. Pawn segment same store PLO rose 7% and same store PSC grew 8%. The segment delivered ending PLO per store of $305,000, up 7%. This was driven by disciplined lending practices, a focus on meeting customers' need for cash and stronger performance from stores affected by hurricanes in the prior-year quarter.
• Same store sales improved 5% and merchandise margins remained strong at 38%.
• U.S. Pawn's segment revenue rose 4%�to�$166.0 million and the segment contribution decreased 1% to $27.4 million due to the $2.9 million non-cash charge to fully reserve a receivable from Republic Metals Corporation. Adjusted segment contribution, excluding the non-cash charge, increased 8% to $30.2 million.

Latin America Pawn

• Latin America Pawn's PLO grew�26%�to�$39.0 million�(up�27%�to $39.5 million on a constant currency basis). Same store PLO increased�10%�(11% on a constant currency basis). The segment delivered ending PLO per store of $84,000, up 4%.
• The company added nine stores in the quarter ended December 31, 2018, consisting of four new stores and five acquired. Pawn store count in Latin America has expanded 88% in the last 15 months to a total of 462 stores, with 201 acquired and 16 opened.
• The acquired stores offer significant opportunity for higher revenue and profit by increasing focus on general merchandise pawn loan and retail activities and implementing EZCORP's proven systems and operating practices. The company continues to see a robust pipeline of acquisition opportunities.
• Net revenues expanded�15%�to�$27.6 million�(up 20% to $28.8 million on a constant currency basis). PSC jumped�16%�to�$19.4 million (increasing 22% to $20.3 million on a constant currency basis).
• Operations expense increased 28% to $18.8 million primarily from recently acquired and new stores and discretionary growth investments. Operating leverage is expected to increase as acquired stores are further integrated and recent new stores mature and build scale.
• The segment incurred a $1.5 million non-cash charge to fully reserve a receivable from, and assets held by, Republic Metals Corporation, due to the refiner's bankruptcy proceedings.
• Segment contribution is $6.2 million�($6.4 million on a constant currency basis). Adjusted segment contribution is $8.8 million, excluding the non-cash charge, discretionary growth investments, foreign currency impacts and other discrete costs.

CONFERENCE CALL

EZCORP will host a conference call on Thursday, January 31, 2019, at 7:30am Central Time to discuss first quarter results. Analysts and institutional investors may participate on the conference call by dialing (877) 201-0168, Conference ID: 7987578, or internationally by dialing (647) 788-4901. The conference call will be webcast simultaneously to the public through this link: http://investors.ezcorp.com/. A replay of the conference call will be available online at http://investors.ezcorp.com/ shortly after the call ends.

ABOUT EZCORP

Formed in 1989, EZCORP has grown into a leading provider of pawn loans in the United States and Latin America. It also sells merchandise, primarily collateral forfeited from pawn lending operations and used merchandise purchased from customers. We are dedicated to satisfying the short-term cash needs of consumers who are both cash and credit constrained, focusing on an industry-leading customer experience. EZCORP is traded on NASDAQ under the symbol EZPW and is a member of the Russell 2000 Index, S&P SmallCap 600 Index, S&P 1000 Index and Nasdaq Composite Index.

FORWARD-LOOKING STATEMENTS

This announcement contains certain forward-looking statements regarding the company’s strategy, initiatives and expected performance. 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, including all statements regarding the company's strategy, initiatives and future performance, that address activities or results that the company plans, expects, believes, projects, estimates or anticipates, will, should or may occur in the future, including future financial or operating results, 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 or 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.

1“Constant currency” basis, which is a non-GAAP measure, excludes the impact of foreign currency exchange rate fluctuations. For additional information about these calculations, as well as a reconciliation to the most comparable GAAP financial measures, see “Non-GAAP Financial Information” at the end of this release.

2Adjusted basis, which is a non-GAAP measure, excludes certain items. For additional information about these calculations, as well as a reconciliation to the most comparable GAAP financial measures, see “Non-GAAP Financial Information” at the end of this release.

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EZCORP, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
�
	�	�	�	Three Months Ended December 31,
				2018			�	�	2017
									�
				(Unaudited)
				(in thousands, except per share amounts)
Revenues:
Merchandise sales				$	121,024				$	113,588
Jewelry scrapping sales					9,281					12,213
Pawn service charges					83,674					76,360
Other revenues				�	1,871	�			�	2,347	�
Total revenues					215,850					204,508
Merchandise cost of goods sold					77,112					71,167
Jewelry scrapping cost of goods sold					8,050					10,337
Other cost of revenues				�	484	�			�	577	�
Net revenues					130,204					122,427
Operating expenses:
Operations					89,546					83,610
Administrative					15,479					13,318
Depreciation and amortization					6,848					5,723
Loss on sale or disposal of assets and other				�	4,442	�			�	39	�
Total operating expenses				�	116,315	�			�	102,690	�
Operating income					13,889					19,737
Interest expense					8,791					5,847
Interest income					(3,339	)				(4,270	)
Equity in net loss (income) of unconsolidated affiliate					1,119					(1,450	)
Impairment of investment in unconsolidated affiliate					13,274					—
Other income				�	(386	)			�	(182	)
(Loss) income from continuing operations before income taxes					(5,570	)				19,792
Income tax (benefit) expense				�	(1,032	)			�	7,437	�
(Loss) income from continuing operations, net of tax					(4,538	)				12,355
Loss from discontinued operations, net of tax				�	(183	)			�	(222	)
Net (loss) income					(4,721	)				12,133
Net loss attributable to noncontrolling interest				�	(477	)			�	(615	)
Net (loss) income attributable to EZCORP, Inc.				$	(4,244	)			$	12,748	�
									�
Basic (loss) earnings per share attributable to EZCORP, Inc. — continuing operations				$	(0.07	)			$	0.24
Diluted (loss) earnings per share attributable to EZCORP, Inc. — continuing operations				$	(0.07	)			$	0.23
									�
Weighted-average basic shares outstanding					55,032					54,464
Weighted-average diluted shares outstanding					55,032					55,682
											�

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EZCORP, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
�
	�	�	�	December 31, 2018			�	�	December 31, 2017			�	�	September 30, 2018
														�
				(Unaudited)
Assets:
Current assets:
Cash and cash equivalents				$	297,031				$	113,584				$	286,015
Pawn loans					193,984					177,001					198,463
Pawn service charges receivable, net					38,959					34,054					38,318
Inventory, net					175,422					163,310					166,997
Notes receivable, net					26,711					36,682					34,199
Prepaid expenses and other current assets				�	31,223	�			�	26,516	�			�	33,154	�
Total current assets					763,330					551,147					757,146
Investment in unconsolidated affiliate					35,511					45,605					49,500
Property and equipment, net					69,770					62,098					73,649
Goodwill					294,881					288,773					297,448
Intangible assets, net					55,956					43,974					54,923
Notes receivable, net					4,599					23,343					3,226
Deferred tax asset, net					9,283					10,997					7,165
Other assets, net				�	4,442	�			�	16,625	�			�	3,863	�
Total assets				$	1,237,772	�			$	1,042,562	�			$	1,246,920	�
														�
Liabilities and equity:
Current liabilities:
Current maturities of long-term debt, net				$	190,238				$	—				$	190,181
Accounts payable, accrued expenses and other current liabilities					57,628					60,207					57,800
Customer layaway deposits				�	11,747	�			�	10,686	�			�	11,824	�
Total current liabilities					259,613					70,893					259,805
Long-term debt, net					229,928					294,761					226,702
Deferred tax liability, net					9,617					—					8,817
Other long-term liabilities				�	6,150	�			�	8,845	�			�	6,890	�
Total liabilities					505,308					374,499					502,214
Commitments and contingencies
Stockholders’ equity:
Class A Non-voting Common Stock, par value $.01 per share; shares authorized: 100 million; issued and outstanding: 52,475,070 as of December 31, 2018; 51,494,246 as of December 31, 2017; and 51,614,746 as of September 30, 2018					524					515					516
Class B Voting Common Stock, convertible, par value $.01 per share; shares authorized: 3 million; issued and outstanding: 2,970,171					30					30					30
Additional paid-in capital					400,081					351,110					397,927
Retained earnings					387,936					364,414					392,180
Accumulated other comprehensive loss				�	(49,104	)			�	(44,902	)			�	(42,616	)
EZCORP, Inc. stockholders’ equity					739,467					671,167					748,037
Noncontrolling interest				�	(7,003	)			�	(3,104	)			�	(3,331	)
Total equity				�	732,464	�			�	668,063	�			�	744,706	�
Total liabilities and equity				$	1,237,772	�			$	1,042,562	�			$	1,246,920	�
														�

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EZCORP, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
�
	�	�	�	Three Months Ended December 31,
				2018			�	�	2017
									�
				(Unaudited)
				(in thousands)
Operating activities:
Net (loss) income				$	(4,721	)			$	12,133
Adjustments to reconcile net (loss) income to net cash flows from operating activities:
Depreciation and amortization					6,848					5,723
Amortization of debt discount and deferred financing costs					5,585					3,682
Accretion of notes receivable discount and deferred compensation fee					(1,376	)				(2,577	)
Deferred income taxes					352					3,129
Impairment of investment in unconsolidated affiliate					13,274					—
Other adjustments					5,052					601
Stock compensation expense					2,238					2,919
Loss (income) from investment in unconsolidated affiliate					1,119					(1,450	)
Changes in operating assets and liabilities, net of business acquisitions:
Service charges and fees receivable					(877	)				(50	)
Inventory					685					(1,087	)
Prepaid expenses, other current assets and other assets					(1,564	)				(500	)
Accounts payable, accrued expenses and other liabilities					(461	)				(5,283	)
Customer layaway deposits					18					(283	)
Income taxes, net of excess tax benefit from stock compensation				�	(3,412	)			�	2,295	�
Net cash provided by operating activities					22,760					19,252
Investing activities:
Loans made					(186,588	)				(169,666	)
Loans repaid					106,643					103,041
Recovery of pawn loan principal through sale of forfeited collateral					70,594					67,144
Additions to property and equipment					(5,880	)				(9,537	)
Acquisitions, net of cash acquired					(332	)				(62,163	)
Principal collections on notes receivable				�	7,284	�			�	2,849	�
Net cash used in investing activities					(8,279	)				(68,332	)
Financing activities:
Taxes paid related to net share settlement of equity awards					(3,288	)				(311	)
Proceeds from borrowings, net of issuance costs					743					—
Payments on borrowings				�	(67	)			�	—	�
Net cash used in financing activities					(2,612	)				(311	)
Effect of exchange rate changes on cash and cash equivalents and restricted cash				�	(865	)			�	(1,165	)
Net increase (decrease) in cash, cash equivalents and restricted cash					11,004					(50,556	)
Cash, cash equivalents and restricted cash at beginning of period				�	286,282	�			�	164,393	�
Cash, cash equivalents and restricted cash at end of period				$	297,286	�			$	113,837	�
Non-cash investing and financing activities:
Pawn loans forfeited and transferred to inventory				$	80,301				$	72,649
Deferred and contingent consideration					—					1,920
									�

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EZCORP, Inc.
OPERATING SEGMENT RESULTS (UNAUDITED)
	�	�	�
				Three Months Ended December 31, 2018
				U.S. Pawn		�	�	Latin America Pawn			�	�	Other International			�	�	Total Segments			�	�	Corporate Items			�	�	Consolidated
																												�
				(in thousands)
Revenues:
Merchandise sales				$	95,103			$	25,921				$	—				$	121,024				$	—				$	121,024
Jewelry scrapping sales					6,552				2,729					—					9,281					—					9,281
Pawn service charges					64,303				19,371					—					83,674					—					83,674
Other revenues				�	48			�	42	�			�	1,781	�			�	1,871	�			�	—	�			�	1,871	�
Total revenues					166,006				48,063					1,781					215,850					—					215,850
Merchandise cost of goods sold					59,148				17,964					—					77,112					—					77,112
Jewelry scrapping cost of goods sold					5,510				2,540					—					8,050					—					8,050
Other cost of revenues				�	—			�	—	�			�	484	�			�	484	�			�	—	�			�	484	�
Net revenues					101,348				27,559					1,297					130,204					—					130,204
Segment and corporate expenses (income):
Operations					68,068				18,848					2,630					89,546					—					89,546
Administrative					—				—					—					—					15,479					15,479
Depreciation and amortization					3,035				1,422					41					4,498					2,350					6,848
Loss on sale or disposal of assets and other					2,853				1,589					—					4,442					—					4,442
Interest expense					—				29					72					101					8,690					8,791
Interest income					—				(419	)				—					(419	)				(2,920	)				(3,339	)
Equity in net loss of unconsolidated affiliate					—				—					1,119					1,119					—					1,119
Impairment of investment in unconsolidated affiliate					—				—					13,274					13,274					—					13,274
Other (income) expense				�	—			�	(126	)			�	22	�			�	(104	)			�	(282	)			�	(386	)
Segment contribution (loss)				$	27,392			$	6,216	�			$	(15,861	)			$	17,747	�
(Loss) income from continuing operations before income taxes																		$	17,747	�			$	(23,317	)			$	(5,570	)
																												�

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EZCORP, Inc.
OPERATING SEGMENT RESULTS (UNAUDITED)
				�
				Three Months Ended December 31, 2017
				U.S. Pawn			�	�	Latin America Pawn			�	�	Other International			�	�	Total Segments			�	�	Corporate Items			�	�	Consolidated
																													�
				(in thousands)
Revenues:
Merchandise sales				$	91,494				$	22,094				$	—				$	113,588				$	—				$	113,588
Jewelry scrapping sales					8,525					3,688					—					12,213					—					12,213
Pawn service charges					59,705					16,655					—					76,360					—					76,360
Other revenues				�	74	�			�	169	�			�	2,104	�			�	2,347	�			�	—	�			�	2,347	�
Total revenues					159,798					42,606					2,104					204,508					—					204,508
Merchandise cost of goods sold					56,088					15,079					—					71,167					—					71,167
Jewelry scrapping cost of goods sold					6,842					3,495					—					10,337					—					10,337
Other cost of revenues				�	—	�			�	—	�			�	577	�			�	577	�			�	—	�			�	577	�
Net revenues					96,868					24,032					1,527					122,427					—					122,427
Segment and corporate expenses (income):
Operations					66,300					14,687					2,623					83,610					—					83,610
Administrative					—					—					—					—					13,318					13,318
Depreciation and amortization					2,799					845					47					3,691					2,032					5,723
Loss on sale or disposal of assets					16					10					—					26					13					39
Interest expense					—					1					—					1					5,846					5,847
Interest income					—					(637	)				—					(637	)				(3,633	)				(4,270	)
Equity in net income of unconsolidated affiliate					—					—					(1,450	)				(1,450	)				—					(1,450	)
Other (income) expense				�	(4	)			�	115	�			�	(83	)			�	28	�			�	(210	)			�	(182	)
Segment contribution				$	27,757	�			$	9,011	�			$	390	�			$	37,158	�
Income from continuing operations before income taxes																			$	37,158	�			$	(17,366	)			$	19,792	�
																													�

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EZCORP, Inc.
STORE COUNT ACTIVITY (UNAUDITED)
�
	�	�	�	Three Months Ended December 31, 2018
				U.S. Pawn	�	�	Latin America Pawn	�	�	Other International	�	�	Consolidated
													�
As of September 30, 2018				508			453			27			988
New locations opened				—			4			—			4
Locations acquired				—			5			—			5
As of December 31, 2018				508			462			27			997

	�	�	�
				Three Months Ended December 31, 2017
				U.S. Pawn	�	�	Latin America Pawn	�	�	Other International	�	�	Consolidated
													�
As of September 30, 2017				513			246			27			786
New locations opened				—			4			—			4
Locations acquired				—			133			—			133
As of December 31, 2017				513			383			27			923
													�

Non-GAAP Financial Information (Unaudited)

In addition to the financial information prepared in conformity with accounting principles generally accepted in the United States ("GAAP"), we provide certain non-GAAP financial information on a constant currency basis ("constant currency") and adjusted basis. We use constant currency results to evaluate our Latin America Pawn operations, which are denominated primarily in Mexican pesos and other Latin American currencies. We believe that presentation of constant currency 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 more complete understanding of factors and trends affecting our business.

We believe that presentation of adjusted results is meaningful and useful in understanding the activities and business metrics of our operations exclusive of certain non-core operating or other infrequent charges. This will assist users of our financial statements in forecasting, and assessing the performance of the Company’s businesses, providing a meaningful comparison of results of the current period against results of past periods, and performing a comparable analysis to peers. This is intended to provide users of our financial statements with a view of the business's results similarly to how management of the company views and evaluates it.

In addition to constant currency adjustments, we have recorded the following adjustments to present our financial results consistent with the core operating results of our business:

• Non-cash interest income and expenses regarding our Notes receivable and Convertible debt instruments to reflect the underlying cash flows of our investments and debt;
• Discrete equity method charges for our investment in Cash Converters International Limited ("CCV"), including a non-cash impairment of our investment to fair value and non-cash litigation charges recorded in our proportionate share of CCV's earnings, neither of which are related to the core operating earnings of CCV;
• Reserves related to receivables from, and assets held by, a gold scrap refiner based on our understanding of potential collectability or return given knowledge of current bankruptcy proceedings;
• Discretionary strategic investment in the development of a digital platform representing start-up costs for the incubation of new strategic ventures not included in our core pawn operations;
• Charge off of aged assets related to historical out-of period adjustments not representative of results of operations for current or comparable periods;
• Acquisition related costs not related to current revenue generating activities; and
• Tax effects of each adjustment at the effective rate for the applicable jurisdiction.

We provide non-GAAP financial information for informational purposes and to enhance understanding of our GAAP consolidated financial statements. Readers should consider the information in addition to, but not instead of 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 Mexican pesos, Guatemalan quetzals, Honduran lempiras and Peruvian sols 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. 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 and approximate average exchange rates for each currency as compared to U.S. dollars as of and for the three months ended December�31, 2018 and�2017 were as follows:

	�	�	�					�	�
				December 31,						Three Months Ended December 31,
				2018	�	�	2017			2018	�	�	2017
													�
Mexican peso				19.6			19.7			19.8			19.0
Guatemalan quetzal				7.7			7.3			7.6			7.2
Honduran lempira				24.2			23.5			24.0			23.3
Peruvian sol				3.4			3.2			3.3			3.2
													�

Our statement of operations constant currency results reflect the monthly exchange rate fluctuations and so are not directly calculable from the above rates. Constant currency results, where presented, also exclude the foreign currency gain or loss. We have experienced a prolonged weakening of the Mexican peso to the U.S. dollar and may continue to experience further weakening in future reporting periods, which may adversely impact our future operating results when stated on a GAAP basis.

The following information provides reconciliations of certain non-GAAP financial measures presented in this press release to the most directly comparable financial measures calculated and presented in accordance with GAAP as of and for the three months ended December�31, 2018 and 2017 (2019 Q1 and 2018 Q1, respectively).

Miscellaneous Non-GAAP Financial Measures

	�	�	�				�	�
				2019 Q1					2018 Q1
									�
				(in millions)
Income (loss) from continuing operations				$	(4.5	)			$	12.4
Interest expense					8.7					5.9
Interest income					(3.3	)				(4.3	)
Income tax expense (benefit)					(1.0	)				7.4
Depreciation and amortization				�	6.8	�			�	5.7	�
EBITDA				$	6.7				$	27.1
									�

	�	�	�
				2019 Q1
				�
				(in millions)
Impairment on CCV investment				$	13.3
Impact on CCV earnings from litigation settlement					2.9
Adjustment for Republic Metals Corporation reserve				�	4.4
Non-cash charges				$	20.6
				�

	�	�	�				�	�				�	�				�	�			�	�
				Income (Loss) from Continuing Operations, Before Tax					Tax Effect					Net Income (Loss) from Continuing Operations					EBITDA				EPS
																							�
				(in millions)
2019 Q1 reported				$	(5.6	)			$	1.1				$	(4.5	)			$	6.7			$	(0.07	)
Acquisition costs					0.1					—					0.1					0.1				—
Charge-off of aged assets and other					0.8					(0.2	)				0.6					0.8				0.01
Impairment on CCV investment					13.3					(3.0	)				10.3					13.3				0.17
Impact on CCV earnings from litigation settlement					2.9					(0.7	)				2.2					2.9				0.04
Adjustment for Republic Metals Corporation reserve					4.4					(1.3	)				3.1					4.4				0.06
Currency exchange rate fluctuations					0.2					(0.1	)				0.1					0.3				0.01
Non-cash net interest expense					4.3					(1.1	)				3.2					—				0.06
Discretionary strategic investment in digital platform				�	2.1	�			�	(0.5	)			�	1.6	�			�	2.1			�	0.03	�
2019 Q1 adjusted				$	22.5				$	(5.8	)			$	16.7				$	30.6			$	0.31
																							�

	�	�	�	Income from Continuing Operations, Before Tax			�	�	Tax Effect			�	�	Net Income from Continuing Operations			�	�	EBITDA			�	�	EPS
																								�
				(in millions)
2018 Q1 reported				$	19.8				$	(7.4	)			$	12.4				$	27.1				$	0.23
Expiration of statute of limitation on uncertain tax positions					—					(1.6	)				(1.6	)				—					(0.03	)
Revaluation of deferred tax assets upon tax reform					—					2.8					2.8					—					0.04
Acquisition costs					0.4					(0.1	)				0.3					0.4					0.01
Impact from hurricane store operating expenses					0.3					—					0.3					0.3					0.01
Currency exchange rate fluctuations					(0.3	)				0.1					(0.2	)				(0.3	)				—
Non-cash net interest expense				�	1.1	�			�	(0.4	)			�	0.7	�			�	—	�			�	0.01	�
2018 Q1 adjusted				$	21.3				$	(6.6	)			$	14.7				$	27.5				$	0.27
																								�

	�	�	�	U.S. Pawn		�	�	Latin America Pawn		�	�	Total
												�
				(in millions)
Segment contribution 2019 Q1				$	27.4			$	6.2			$	33.6
Adjustment for Republic Metals Corporation reserve					2.8				1.5				4.3
Charge-off of aged assets and other					—				0.8				0.8
Currency exchange rate fluctuations				�	—			�	0.3			�	0.3
Adjusted segment contribution 2019 Q1				$	30.2			$	8.8			$	39.0
												�

	�	�	�	U.S. Pawn
				�
				(in millions)
Segment contribution 2018 Q1				$	27.8
Impact from hurricane store operating expenses				�	0.3
Adjusted segment contribution 2018 Q1				$	28.1
				�

	�	�	�				�	�
2019 Q1:				U.S. Dollar Amount					Percentage Change YOY
									�
				(in millions)
Latin America Pawn PLO				$	39.0				26	%
Currency exchange rate fluctuations				�	0.5	�			�
Constant currency Latin America Pawn PLO				$	39.5				27	%
									�
Latin America Pawn same store PLO				$	34.1				10	%
Currency exchange rate fluctuations				�	0.4	�			�
Constant currency Latin America Pawn same store PLO				$	34.5				11	%
									�
Latin America Pawn same store PSC revenue				$	17.1				3	%
Currency exchange rate fluctuations				�	0.8	�			�
Constant currency Latin America Pawn same store PSC revenue				$	17.9				7	%
									�
Consolidated revenue				$	215.9				6	%
Currency exchange rate fluctuations				�	2.2	�			�
Constant currency consolidated revenue				$	218.1				7	%
									�
Consolidated net revenue				$	130.2				6	%
Currency exchange rate fluctuations				�	1.3	�			�
Constant currency consolidated net revenue				$	131.5	�			7	%
									�
Consolidated PSC revenue				$	83.7				10	%
Currency exchange rate fluctuations				�	0.9	�			�
Constant currency consolidated PSC revenue				$	84.6				11	%
									�
Consolidated merchandise sales gross profit				$	43.9				4	%
Currency exchange rate fluctuations				�	0.4	�			�
Constant currency consolidated merchandise sales gross profit				$	44.3				4	%
									�
Consolidated operations expenses				$	89.5				7	%
Currency exchange rate fluctuations				�	0.9	�			�
Constant currency consolidated operations expenses				$	90.4				8	%
									�
Latin America Pawn net revenue				$	27.6				15	%
Currency exchange rate fluctuations				�	1.2	�			�
Constant currency Latin America Pawn net revenue				$	28.8				20	%
									�
Latin America Pawn PSC revenue				$	19.4				16	%
Currency exchange rate fluctuations				�	0.9	�			�
Constant currency Latin America Pawn PSC revenue				$	20.3				22	%
									�
Latin America Pawn segment profit before tax				$	6.2				(31	)%
Currency exchange rate fluctuations				�	0.2	�			�
Constant currency Latin America Pawn segment profit before tax				$	6.4				(29	)%

View source version on businesswire.com: https://www.businesswire.com/news/home/20190130005790/en/

Jeff Christensen

Vice President, Investor Relations

Email: [email protected]

Phone: (512) 437-3545

Source: EZCORP, Inc.

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