EZCORP INC 10-Q

ITEM 1. FINANCIAL STATEMENTS EZCORP, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) June 30, 2021 June 30, 2020 September 30, 2020 (Unaudited) Assets: Current assets: Cash and cash equivalents $ 283,668 $ 311,130 $ 304,542 Restricted cash 13,795 4,000 8,011 Pawn loans 157,155 113,290 131,323 Pawn service charges receivable, net 24,965 17,432 20,580 Inventory, net 92,242 123,112 95,891 Notes receivable, net — 3,866 — Prepaid expenses and other current assets 28,343 25,754 32,903 Total current assets 600,168 598,584 593,250 Investments in unconsolidated affiliates 35,387 29,483 32,458 Property and equipment, net 55,630 58,098 56,986 Lease right-of-use asset 185,467 204,591 183,809 Goodwill 283,619 257,326 257,582 Intangible assets, net 61,922 65,003 58,638 Notes receivable, net 1,173 1,140 1,148 Deferred tax asset, net 10,292 5,505 8,931 Other assets 4,992 4,572 4,221 Total assets $ 1,238,650 $ 1,224,302 $ 1,197,023 Liabilities and equity: Current liabilities: Current maturities of long-term debt, net $ — $ 268 $ 213 Accounts payable, accrued expenses and other current liabilities 84,966 58,358 71,504 Customer layaway deposits 11,884 11,902 11,008 Lease liability 47,241 48,840 49,742 Total current liabilities 144,091 119,368 132,467 Long-term debt, net 260,632 247,618 251,016 Deferred tax liability, net 1,309 2,165 524 Lease liability 149,342 167,716 153,040 Other long-term liabilities 10,058 7,523 10,849 Total liabilities 565,432 544,390 547,896 Commitments and Contingencies (Note 13) Stockholders’ equity: Class A Non-voting Common Stock, par value $ 0.01 per share; shares authorized: 100 million; issued and outstanding: 53,086,438 as of June 30, 2021; 52,097,590 as of June 30, 2020; and 52,332,848 as of September 30, 2020 530 521 521 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 capital 402,522 408,601 398,475 Retained earnings 325,228 341,517 318,169 Accumulated other comprehensive loss ( 55,092 ) ( 70,757 ) ( 68,068 ) Total equity 673,218 679,912 649,127 Total liabilities and equity $ 1,238,650 $ 1,224,302 $ 1,197,023 See accompanying notes to unaudited interim condensed consolidated financial statements 1 Table of Contents EZCORP, Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended June 30, Nine Months Ended June 30, (in thousands, except per share amount) 2021 2020 2021 2020 Revenues: Merchandise sales $ 107,808 $ 136,537 $ 330,816 $ 393,095 Jewelry scrapping sales 5,673 20,303 18,507 41,709 Pawn service charges 60,431 52,460 187,356 217,407 Other revenues 121 924 428 3,727 Total revenues 174,033 210,224 537,107 655,938 Merchandise cost of goods sold 60,539 91,859 190,872 261,711 Jewelry scrapping cost of goods sold 5,473 16,158 16,076 33,529 Other cost of revenues — 32 — 1,093 Net revenues 108,021 102,175 330,159 359,605 Operating expenses: Store expenses 81,803 82,341 242,261 259,264 General and administrative 14,589 16,176 40,870 50,355 Impairment of goodwill, intangible and other assets — — — 47,060 Depreciation and amortization 7,419 7,679 23,080 23,174 Loss on sale or disposal of assets and other — 255 90 1,260 Other charges 497 — 497 — Total operating expenses 104,308 106,451 306,798 381,113 Operating income (loss) 3,713 ( 4,276 ) 23,361 ( 21,508 ) Interest expense 5,569 5,379 16,542 16,589 Interest income ( 512 ) ( 628 ) ( 1,918 ) ( 2,412 ) Equity in net (income) loss of unconsolidated affiliates ( 643 ) 1,183 ( 2,409 ) 5,896 Other expense (income) 65 28 ( 389 ) ( 215 ) (Loss) income before income taxes ( 766 ) ( 10,238 ) 11,535 ( 41,366 ) Income tax expense (benefit) 1,804 ( 4,751 ) 4,476 3,757 Net (loss) income $ ( 2,570 ) $ ( 5,487 ) $ 7,059 $ ( 45,123 ) Basic (loss) earnings per share $ ( 0.05 ) $ ( 0.10 ) $ 0.13 $ ( 0.81 ) Diluted (loss) earnings per share $ ( 0.05 ) $ ( 0.10 ) $ 0.13 $ ( 0.81 ) Weighted-average basic shares outstanding 55,898 55,068 55,639 55,395 Weighted-average diluted shares outstanding 55,898 55,068 55,653 55,395 See accompanying notes to unaudited interim condensed consolidated financial statements 2 Table of Contents EZCORP, Inc. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) Three Months Ended June 30, Nine Months Ended June 30, (in thousands) 2021 2020 2021 2020 Net (loss) income $ ( 2,570 ) $ ( 5,487 ) $ 7,059 $ ( 45,123 ) Other comprehensive income (loss): Foreign currency translation adjustment, net of tax 3,459 5,416 12,976 ( 18,359 ) Comprehensive income (loss) $ 889 $ ( 71 ) $ 20,035 $ ( 63,482 ) See accompanying notes to unaudited interim condensed consolidated financial statements. 3 Table of Contents EZCORP, Inc. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited except for balances as of September 30, 2020 and September 30, 2019) Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive (Loss) Income Total Equity (in thousands) Shares Par Value Balances as of September 30, 2020 55,303 $ 551 $ 398,475 $ 318,169 $ ( 68,068 ) $ 649,127 Stock compensation — — 524 — — 524 Release of restricted stock 296 5 — — — 5 Taxes paid related to net share settlement of equity awards — — ( 730 ) — — ( 730 ) Foreign currency translation gain — — — — 11,277 11,277 Net income — — — 4,299 — 4,299 Balances as of December 31, 2020 55,599 $ 556 $ 398,269 $ 322,468 $ ( 56,791 ) $ 664,502 Stock compensation — — 1,094 — — 1,094 Transfer of consideration for prior period acquisition 33 — 185 — — 185 Release of restricted stock 212 2 — — — 2 Taxes paid related to net share settlement of equity awards — — ( 109 ) — — ( 109 ) Foreign currency translation loss — — — — ( 1,760 ) ( 1,760 ) Net Income — — — 5,330 — 5,330 Balances as of March 31, 2021 55,844 $ 558 $ 399,439 $ 327,798 $ ( 58,551 ) $ 669,244 Stock compensation — — 1,538 — — 1,538 Transfer of consideration for current period acquisition 213 2 1,545 — — 1,547 Foreign currency translation gain — — — — 3,459 3,459 Net loss — — — ( 2,570 ) — ( 2,570 ) Balances as of June 30, 2021 56,057 $ 560 $ 402,522 $ 325,228 $ ( 55,092 ) $ 673,218 Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive (Loss) Income Total Equity (in thousands) Shares Par Value Balances as of September 30, 2019 55,535 $ 556 $ 407,628 $ 389,163 $ ( 52,398 ) $ 744,949 Stock compensation — — 1,695 — — 1,695 Release of restricted stock 463 5 — — — 5 Taxes paid related to net share settlement of equity awards — — ( 1,395 ) — — ( 1,395 ) Foreign currency translation gain — — — — 6,071 6,071 Purchase and retirement of treasury stock ( 142 ) ( 2 ) ( 488 ) ( 473 ) — ( 963 ) Net income — — — 1,238 — 1,238 Balances as of December 31, 2019 55,856 $ 559 $ 407,440 $ 389,928 $ ( 46,327 ) $ 751,600 Stock compensation — — 930 — — 930 Release of restricted stock 13 1 — — — 1 Taxes paid related to net share settlement of equity awards — — ( 63 ) — — ( 63 ) Foreign currency translation loss — — — — ( 29,846 ) ( 29,846 ) Purchase and retirement of treasury stock ( 801 ) ( 9 ) ( 2,136 ) ( 2,050 ) — ( 4,195 ) Net loss — — — ( 40,874 ) — ( 40,874 ) Balances as of March 31, 2020 55,068 $ 551 $ 406,171 $ 347,004 $ ( 76,173 ) $ 677,553 Stock compensation — — 2,430 — — 2,430 Foreign currency translation gain — — — — 5,416 5,416 Net loss — — — ( 5,487 ) — ( 5,487 ) Balances as of June 30, 2020 55,068 $ 551 $ 408,601 $ 341,517 $ ( 70,757 ) $ 679,912 See accompanying notes to unaudited interim condensed consolidated financial statements 4 Table of Contents EZCORP, Inc. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended June 30, (in thousands) 2021 2020 Operating activities: Net income (loss) $ 7,059 $ ( 45,123 ) Adjustments to reconcile net income (loss) to net cash flows from operating activities: Depreciation and amortization 23,080 23,174 Amortization of debt discount and deferred financing costs 10,243 9,814 Amortization of lease right-of-use asset 35,885 34,265 Accretion of notes receivable discount and deferred compensation fee — ( 688 ) Deferred income taxes ( 576 ) ( 3,327 ) Impairment of goodwill and intangible assets — 47,060 Other adjustments ( 331 ) 2,128 Provision for inventory reserve ( 6,812 ) ( 4,477 ) Stock compensation expense 3,156 5,093 Equity in net (income) loss of unconsolidated affiliates ( 2,409 ) 5,896 Changes in operating assets and liabilities, net of business acquisitions: Service charges and fees receivable ( 2,832 ) 14,076 Inventory 5,382 12,467 Prepaid expenses, other current assets and other assets 7,908 ( 3,348 ) Accounts payable, accrued expenses and other liabilities ( 51,565 ) ( 40,450 ) Customer layaway deposits 511 ( 709 ) Income taxes 4,423 514 Net cash provided by operating activities 33,122 56,365 Investing activities: Loans made ( 423,450 ) ( 442,752 ) Loans repaid 260,536 321,718 Recovery of pawn loan principal through sale of forfeited collateral 155,595 248,290 Capital expenditures, net ( 14,635 ) ( 20,867 ) Acquisitions, net of cash acquired ( 15,132 ) — Principal collections on notes receivable — 4,000 Net cash (used in) provided by investing activities ( 37,086 ) 110,389 Financing activities: Taxes paid related to net share settlement of equity awards ( 839 ) ( 1,458 ) Payout of deferred consideration — ( 350 ) Proceeds from borrowings, net of issuance costs — ( 106 ) Payments on assumed debt and other borrowings ( 15,363 ) ( 316 ) Repurchase of common stock — ( 5,158 ) Net cash used in financing activities ( 16,202 ) ( 7,388 ) Effect of exchange rate changes on cash and cash equivalents and restricted cash 5,076 ( 6,678 ) Net (decrease) increase in cash, cash equivalents and restricted cash ( 15,090 ) 152,688 Cash, cash equivalents and restricted cash at beginning of period 312,553 162,442 Cash, cash equivalents and restricted cash at end of period $ 297,463 $ 315,130 Supplemental disclosure of cash flow information Cash and cash equivalents $ 283,668 $ 311,130 Restricted cash 13,795 4,000 Total cash and cash equivalents and restricted cash $ 297,463 $ 315,130 Non-cash investing and financing activities: Pawn loans forfeited and transferred to inventory $ 145,839 $ 200,160 Transfer of consideration for current period acquisition 1,547 — Acquisition earn-out contingency 4,608 — Accrued acquisition consideration held as restricted cash 5,824 — See accompanying notes to unaudited interim condensed consolidated financial statements. 5 Table of Contents Notes to Interim Condensed Consolidated Financial Statements 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 leading provider of pawn loans in the United States 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 generally accepted accounting principles 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, 2020 , filed with the SEC on December 14, 2020 (“2020 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 and nine-month periods ended June 30, 2021, are not necessarily indicative of results that may be expected for the fiscal year ending September 30, 2021. Our business is subject to seasonal variations, and operating results for the three and nine months ended June 30, 2021 and 2020 (the "current quarter" and "prior-year quarter," respectively) are not necessarily indicative of the results of operations for the full fiscal year. There have been no changes that have had a material impact in significant accounting policies as described in our Annual Report on Form 10-K for the year ended September 30, 2020 . 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. Reclassifications We have reclassified certain amounts in prior-period financial statements to conform to the current period presentation. Use of Estimates 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. Actual results may result in actual amounts differing from reported amounts. Impact of COVID-19 The COVID-19 pandemic continues to affect the U.S. and global economies, and as previously disclosed in our 2020 Annual Report, the pandemic also affected our businesses in a variety of ways beginning in the second quarter of fiscal 2020 and continuing into fiscal 2021. We cannot estimate the length or severity of the COVID-19 pandemic or the related financial consequences on our business and operations, including whether and when historic economic and operating conditions will resume or the extent to which the disruption may impact our 6 Table of Contents business, financial position, results of operations or cash flows. Our estimates, judgments and assumptions related to COVID-19 could ultimately differ over time. Recently Adopted Accounting Policies In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses (Topic 326) (“ASU 2016-13”). ASU 2016-13 modifies the measurement of expected credit losses of certain financial instruments, requiring entities to estimate an expected lifetime credit loss on financial assets. The ASU amends the impairment model to utilize an expected loss methodology and replaces the incurred loss methodology for financial instruments including trade receivables. The amendment requires entities to consider other factors, such as historical loss experience, current conditions and reasonable and supportable forecasts. ASU 2016-13 was effective on October 1, 2020. We adopted ASU 2016-13 effective October 1, 2020 using the modified retrospective approach. There was no net cumulative effect adjustment to retained earnings as of October 1, 2020 as a result of this adoption. This amendment did not have a material impact on our balance sheets or cash flows from operations and did not have a material impact on our operating results. Recently Issued Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for the Company for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020 and adoption must be as of the beginning of our annual fiscal year. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. NOTE 2: ACQUISITIONS On June 9, 2021, we completed the acquisition of 100 % of the common shares of PLO del Bajio S. de R.L. de C.V. (“Bajio”) and gained control of the entity, further expanding our geographic footprint within Mexico with the addition of 128 pawn stores. These stores, operating under the name "Cash Apoyo Efectivo," are located principally in the Mexico City metropolitan area and have strong brand recognition in that market. This is our largest acquisition to date in terms of store-count. We now operate a total of 1,143 pawn stores, 627 of which are in Latin America, including 503 in Mexico. The total consideration paid for Bajio was $ 23.6 million, consisting of cash of $ 17.4 million, of which $ 11.6 million was paid in cash at closing and the remaining $ 5.8 million is accrued and held as restricted cash to be paid out per the acquisition agreement and 212,870 shares of our Class A Non-Voting Common Stock valued at $ 1.6 million. In addition, t he sellers may be entitled to additional payments of up to $ 4.6 million over the next two years , contingent on the performance of the acquired stores with growing its loan portfolio. We recorded this earn-out contingency as part of the total consideration as the metrics are considered achievable by Management. We also repaid $ 14.9 million of Bajio’s existing debt assumed in the acquisition on June 9, 2021. The assets acquired and liabilities assumed are based upon the estimated fair values at the date of acquisition. The excess purchase price over the estimated fair market value of the new assets acquired has been recorded as goodwill. The estimated fair value of the assets acquired and liabilities assumed are provisional as management is still gathering additional information to complete the purchase accounting. The preliminary allocation of the consideration for the net acquired assets from this business combination were as follows, in thousands: 7 Table of Contents Cash and cash equivalents $ 308 Earning assets 9,462 Lease right-of-use assets 10,826 Property and equipment 4,317 Intangible assets* 3,965 Goodwill 22,957 Other assets 649 Accounts payable, deferred taxes and other liabilities ( 3,150 ) Lease liability ( 10,826 ) Assumed debt ( 14,931 ) Total consideration $ 23,577 *Intangible assets consist of $ 4.0 million in trade names. The factors contributing to the recognition of goodwill, which is recorded in our Latin America Pawn segment, were based on several strategic and synergistic benefits we expect to realize from the acquisition, including expansion of our store base as well as the ability to further leverage our pawn expertise, investments in information technology and other back office and support functions of our existing Mexico pawn business. We expect none of the goodwill resulting from this business combination will be deductible for income tax purposes. The results of Bajio have been included in our condensed consolidated financial statements from June 9, 2021 through June 30, 2021, and are reported in our Latin America Pawn segment. The acquired business contributed revenues of $ 1.7 million and net income of $ 0.1 million to us for the period from June 9, 2021 to June 30, 2021. The following unaudited pro forma summary presents consolidated information for us as if the business combination had occurred on October 1, 2019. The pro forma information is not necessarily indicative of our results of operations had the acquisitions been completed on the above date, nor is it necessarily indicative of our future results. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisitions, nor does it reflect additional revenue opportunities following the acquisition. The pro forma adjustments reflected in the table below are subject to change as additional analysis is performed. Three Months Ended June 30, Nine Months Ended June 30, (in thousands, except per share amounts) 2021 2020 2021 2020 Revenue $ 180,854 $ 216,083 $ 558,426 $ 681,069 Net (loss) income ( 2,475 ) ( 5,354 ) 6,775 ( 42,628 ) Basic (loss) earnings per common share ( 0.04 ) ( 0.10 ) 0.12 ( 0.75 ) Diluted (loss) earnings per common share ( 0.04 ) ( 0.10 ) 0.12 ( 0.75 ) We did not have any material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma net revenue and net income. These pro forma amounts have been calculated after applying the Company's accounting policies and adjusting the results to reflect the additional amortization that would have been incurred assuming the amortization of the trade name had been applied from October 1, 2019. During the three and nine months ended June 30, 2021, we incurred total acquisition costs of $ 0.2 million and $ 0.4 million, respectively. The acquisition costs were primarily related to legal, accounting and consulting services, were expensed as incurred through June 30, 2021 and are included in general and administrative expenses in the consolidated statements of operations. In May 2021, we acquired substantially all of the assets associated with 11 pawn stores in the Houston, Texas area, providing an immediate market-leading position in the South Houston area and enhancing our already strong position in the strategically important Houston metro market. We have concluded that this acquisition was immaterial to our overall consolidated financial results and, therefore, have omitted information that would otherwise be required. NOTE 3: EXPECTED CREDIT LOSSES We adopted ASU 2016-13 effective October 1, 2020. We have financing receivables within the scope of ASU 2016-13, specifically pawn loans receivables and related pawn service charges receivables. Our pawn loans are short-term in nature, typically 30-120 days for U.S. Pawn loans and 30 days for Latin America Pawn loans. Under our existing accounting policy, if a pawn loan is deemed to be uncollectible, we do not recognize an allowance for doubtful accounts due to the expected recovery of the loan principal amount through the sale of the collateral. We record the forfeited collateral as inventory at the pawn loan principal amount. 8 Table of Contents Pawn service charges are recorded under the interest method over the term of the related pawn loan. Under our existing accounting policy, we accrue for any earned but unpaid pawn service charges at the end each month. We then apply a reserve to pawn service charges receivable at the end of each month using a pawn loan forfeiture rate derived from a trailing twelve-month average, adjusted for seasonality factors. We have evaluated, on a collective basis, our pawn loan receivables and pawn service charges receivables and determined the new credit loss standard did not have a material impact on our consolidated financial statements, as our current polices appropriately capture lifetime expected credit losses. The presentation of pawn loan and pawn service charge receivable as separate line items on our consolidated balance sheet will remain unchanged under the new credit loss standard. As of June 30, 2021, pawn loan and related pawn service charges receivable, net were $ 157.2 million and $ 25.0 million, respectively. NOTE 4: GOODWILL The following table summarizes the changes in the carrying amount of goodwill by segment and in total: Nine Months Ended June 30, 2021 (in thousands) U.S. Pawn Latin America Pawn Consolidated Balances as of September 30, 2020 $ 241,928 $ 15,654 $ 257,582 Acquisitions 2,394 22,957 25,351 Effect of foreign currency translation changes — 686 686 Balances as of June 30, 2021 $ 244,322 $ 39,297 $ 283,619 Nine Months Ended June 30, 2020 (in thousands) U.S. Pawn Latin America Pawn Consolidated Balances as of September 30, 2019 $ 251,752 $ 48,775 $ 300,527 Effect of foreign currency translation changes — ( 1,888 ) ( 1,888 ) Measurement period adjustments 176 ( 149 ) 27 Impairment charge ( 10,000 ) ( 31,340 ) ( 41,340 ) Balances as of June 30, 2020 $ 241,928 $ 15,398 $ 257,326 NOTE 5: OTHER CHARGES During the fourth quarter of fiscal 2020, we began to implement strategic initiatives to refocus on our core pawn business and optimize our cost structure in order to improve our bottom line performance and position us for sustainable growth. The initiatives focused on workforce reductions, closure of our CASHMAX operations, store closures, write-offs and other miscellaneous charges. We recorded $ 20.4 million of such charges for the quarter ended September 30, 2020, and had accrued charges of $ 10.7 million remaining at September 30, 2020. We recorded $ 0.5 million of charges for the three months ended June 30, 2021 related to the closure of store operations in Peru. (in thousands) Accrued Charges at September 30, 2020 Charges Payments and Adjustments Accrued Charges at March 31, 2021 Charges Payments and Adjustments Accrued Charges at June 30, 2021 Cash charges: Labor reduction costs $ 5,946 $ — $ ( 3,418 ) $ 2,528 $ — $ ( 1,454 ) $ 1,074 CASHMAX shutdown costs 800 — ( 800 ) — — — — Store closure costs 1,806 — ( 1,806 ) — 497 — 497 Other 2,166 — ( 166 ) 2,000 — — 2,000 $ 10,718 $ — $ ( 6,190 ) $ 4,528 $ 497 $ ( 1,454 ) $ 3,571 9 Table of Contents NOTE 6: 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 June 30, Nine Months Ended June 30, (in thousands, except per share amounts) 2021 2020 2021 2020 Net (loss) income $ ( 2,570 ) $ ( 5,487 ) $ 7,059 $ ( 45,123 ) Earnings per common share Average common share outstanding (denominator) 55,898 55,068 55,639 55,395 (Loss) earnings per common share $ ( 0.05 ) $ ( 0.10 ) $ 0.13 $ ( 0.81 ) Diluted earnings per common share Average common share outstanding 55,898 55,068 55,639 55,395 Dilutive effect of restricted stock and convertible notes* — — 14 — Diluted average common shares outstanding (denominator) 55,898 55,068 55,653 55,395 Diluted (loss) earnings per common share $ ( 0.05 ) $ ( 0.10 ) $ 0.13 $ ( 0.81 ) Potential common shares excluded from the calculation of diluted earnings per share above: Restricted stock** 1,154 3,042 896 2,677 * Includes time-based share-based awards and Convertible Notes. See Note 10 for discussion of the terms and conditions of the potential impact of the 2024 Convertible Notes and 2025 Convertible Notes. This amount excludes all potential common shares for periods when there is a loss from continuing operations. ** 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. NOTE 7: 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 . The information below provides a summary of our leasing activities. See Note 12 in our 2020 Annual Report for additional information about our leasing activities. The table below presents balances of our operating leases: (in thousands) June 30, 2021 June 30, 2020 September 30, 2020 Right-of-use asset $ 185,467 $ 204,591 $ 183,809 Lease liability, current $ 47,241 $ 48,840 $ 49,742 Lease liability, non-current 149,342 167,716 153,040 Total lease liability $ 196,583 $ 216,556 $ 202,782 The table below provides the composition of our lease costs: Three Months Ended June 30, Nine Months Ended June 30, (in thousands) 2021 2020 2021 2020 Operating lease expense $ 15,699 $ 15,624 $ 47,237 $ 47,603 Variable lease expense 3,601 3,025 9,768 8,925 Other (1) ( 845 ) — ( 2,570 ) — Total lease expense $ 18,455 $ 18,649 $ 54,435 $ 56,528 (1) Includes sublease rental income. 10 Table of Contents 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. Other supplemental information includes the following for our operating leases: Nine Months Ended June 30, 2021 2020 Weighted-average remaining contractual lease term (years) 5.21 5.58 Weighted-average incremental borrowing rate 7.86 % 8.25 % Maturities of lease liabilities as of June 30, 2021 were as follows (in thousands): Remaining 2021 $ 14,491 Fiscal 2022 59,908 Fiscal 2023 47,637 Fiscal 2024 35,724 Fiscal 2025 24,970 Thereafter 57,358 Total lease payments $ 240,088 Less: Portion representing interest 43,505 Present value of operating lease liabilities $ 196,583 Less: Current portion 47,241 Non-current portion $ 149,342 We recorded $ 33.5 million and $ 10.1 million in non-cash additions to our right of use assets and lease liabilities for the nine months ended June 30, 2021 and June 30, 2020, respectively. NOTE 8: STRATEGIC INVESTMENTS On April 14, 2021, we received an additional 9,519,277 shares in Cash Converters International Limited ("Cash Converters International") resulting from the reinvestment of a dividend, bringing our total ownership to 223,702,991 shares, or 35.65 % of Cash Converters International as of June 30, 2021. The following tables present summary financial information for Cash Converters International’s most recently reported results at December 31, 2020 after translation to U.S. dollars: December 31, (in thousands) 2020 2019 Current assets $ 170,412 $ 164,906 Non-current assets 189,810 199,277 Total assets $ 360,222 $ 364,183 Current liabilities $ 59,962 $ 93,958 Non-current liabilities 58,368 60,503 Shareholders’ equity 241,892 209,722 Total liabilities and shareholders’ equity $ 360,222 $ 364,183 Half-Year Ended December 31, (in thousands) 2020 2019 Gross revenues $ 71,153 $ 98,531 Gross profit 51,231 59,250 Net profit (loss) 5,561 ( 13,280 ) See Note 9 for the fair value and carrying value of our investment in Cash Converters International. 11 Table of Contents NOTE 9: 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. Fair Value Measurement on a Recurring Basis As of June 30, 2021, June 30, 2020 and September 30, 2020, we did not have any financial assets or liabilities measured at fair value on a recurring basis. 12 Table of Contents 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 on a recurring basis: Carrying Value Estimated Fair Value June 30, 2021 June 30, 2021 Fair Value Measurement Using (in thousands) Level 1 Level 2 Level 3 Financial assets: 2.89 % promissory note receivable due April 2024 $ 1,173 $ 1,173 $ — $ — $ 1,173 Investments in unconsolidated affiliates 35,387 43,440 35,970 — 7,470 Financial liabilities: 2024 Convertible Notes $ 121,910 $ 150,219 $ — $ 150,219 $ — 2025 Convertible Notes 138,722 154,129 — 154,129 — Carrying Value Estimated Fair Value June 30, 2020 June 30, 2020 Fair Value Measurement Using (in thousands) Level 1 Level 2 Level 3 Financial assets: Notes receivable from Grupo Finmart, net $ 3,866 $ 3,945 $ — $ — $ 3,945 2.89 % promissory note receivable due April 2024 1,140 1,140 — — 1,140 Investments in unconsolidated affiliates 29,483 33,602 25,779 — 7,823 Financial liabilities: 2024 Convertible Notes $ 115,681 $ 130,669 $ — $ 130,669 $ — 2025 Convertible Notes 131,378 125,235 — 125,235 — 8.5 % unsecured debt due 2024 998 998 — — 998 CASHMAX secured borrowing facility ( 171 ) 295 — — 295 Carrying Value Estimated Fair Value September 30, 2020 September 30, 2020 Fair Value Measurement Using (in thousands) Level 1 Level 2 Level 3 Financial assets: 2.89 % promissory note receivable due April 2024 $ 1,148 $ 1,148 $ — $ — $ 1,148 Investments in unconsolidated affiliates 32,458 32,597 24,833 — 7,764 Financial liabilities: 2024 Convertible Notes $ 117,193 $ 129,979 $ — $ 129,979 $ — 2025 Convertible Notes 133,164 137,569 — 137,569 — 8.5 % unsecured debt due 2024 872 872 — — 872 Due to the short-term nature of cash and cash equivalents, pawn loans, pawn service charges receivable and other debt, we estimate that the carrying value approximates fair value. We consider our cash and cash equivalents to be measured using Level 1 inputs and our pawn loans, pawn service charges receivable and other debt to be measured using Level 3 inputs. Significant increases or decreases in the underlying assumptions used to value pawn loans, pawn service charges receivable, consumer loans, 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. The note approximated its carrying value as of June 30, 2021. We use the equity method of accounting to account for our 35.65 % ownership in Cash Converters International. These inputs are comprised 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. 13 Table of Contents We use the equity method of accounting to account for our 13.14 % ownership in Rich Data Corporation, a previously consolidated variable interest entity for which we no longer have the power to direct the activities that most significantly affect its economic performance. We believe its fair value approximates carrying value although such fair value is highly variable and includes significant unobservable inputs. We measured the fair value of the 2024 and 2025 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. In September 2020, we received the final payment from AlphaCredit on the notes receivable related to the sale of Grupo Finmart and recorded the amount under “Restricted cash” in our consolidated balance sheet as of June 30, 2021. In August 2019, AlphaCredit notified us of an indemnity claim for certain pre-closing taxes, but the nature, extent and validity of such claim has yet to be determined. NOTE 10: DEBT The following table presents the Company's debt instruments outstanding: June 30, 2021 June 30, 2020 September 30, 2020 (in thousands) Gross Amount Debt Discount and Issuance Costs Carrying Amount Gross Amount Debt Discount and Issuance Costs Carrying Amount Gross Amount Debt Discount and Issuance Costs Carrying Amount 2024 Convertible Notes $ 143,750 $ ( 21,840 ) $ 121,910 $ 143,750 $ ( 28,069 ) $ 115,681 $ 143,750 $ ( 26,557 ) $ 117,193 2025 Convertible Notes 172,500 ( 33,778 ) 138,722 172,500 ( 41,122 ) 131,378 172,500 ( 39,336 ) 133,164 8.5 % unsecured debt due 2024* — — — 998 — 998 872 — 872 CASHMAX secured borrowing facility* — — — 295 ( 466 ) ( 171 ) — — — Total $ 316,250 $ ( 55,618 ) $ 260,632 $ 317,543 $ ( 69,657 ) $ 247,886 $ 317,122 $ ( 65,893 ) $ 251,229 Less current portion — — — 268 — 268 213 — 213 Total long-term debt $ 316,250 $ ( 55,618 ) $ 260,632 $ 317,275 $ ( 69,657 ) $ 247,618 $ 316,909 $ ( 65,893 ) $ 251,016 * Amount translated from Guatemalan quetzals and Canadian dollars as of applicable period end. Certain disclosures omitted due to materiality considerations. The following table presents the Company's contractual maturities related to the debt instruments as of June 30, 2021: Schedule of Contractual Maturities (in thousands) Total Less Than 1 Year 1 - 3 Years 3 - 5 Years More Than 5 Years 2024 Convertible Notes* $ 143,750 $ — $ — $ 143,750 $ — 2025 Convertible Notes* 172,500 — — 172,500 — $ 316,250 $ — $ — $ 316,250 $ — * Excludes the potential impact of embedded derivatives as discussed below. 14 Table of Contents The following table presents the Company's interest expense related to the Convertible Notes for the three and nine months ended June 30, 2021 and 2020: Three Months Ended June 30, Nine Months Ended June 30, (in thousands) 2021 2020 2021 2020 2024 Convertible Notes: Contractual interest expense $ 1,033 $ 1,033 $ 3,100 $ 3,100 Amortization of debt discount and deferred financing costs 1,602 1,484 4,716 4,370 Total interest expense $ 2,635 $ 2,517 $ 7,816 $ 7,470 2025 Convertible Notes: Contractual interest expense $ 1,024 $ 1,024 $ 3,073 $ 3,072 Amortization of debt discount and deferred financing costs 1,886 1,754 5,558 5,168 Total interest expense $ 2,910 $ 2,778 $ 8,631 $ 8,240 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”). 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 carrying amount of the 2024 Convertible Notes as a separate equity-classified instrument (the “2024 Convertible Notes Embedded Derivative”) included in “Additional paid-in capital” in our condensed consolidated balance sheets as of June 30, 2021 was $ 39.8 million, ($ 25.3 million, net of tax). The effective interest rate for the three and nine months ended June 30, 2021 was approximately 9 %. As of June 30, 2021, the remaining unamortized debt discount and issuance costs will be amortized through the 2024 Maturity Date assuming no early conversion. The 2024 Convertible Notes are convertible into cash or shares of Class A Common Stock, or any combination thereof, at our option subject to satisfaction of certain conditions and during the periods described in the 2017 Indenture, based on an initial conversion rate of 100 shares of Class A Common Stock per $1,000 principal amount of 2024 Convertible Notes (equivalent to an initial conversion price of $ 10.00 per share of Class A Common Stock). We account for the Class A Common Stock issuable upon conversion under the treasury stock method. To the extent the average share price is over $ 10.00 per share for any fiscal quarter, we are required to recognize incremental dilution of our earnings per share. If, among other triggers described in the 2017 Indenture, the market price of the Class A Common Stock meets the threshold based on at least 20 of the final 30 trading days of the quarter for the 2024 Convertible Notes to become convertible at the option of the holders during the subsequent quarter, we may be required to classify the 2024 Convertible Notes as current on our condensed consolidated balance sheets for each quarter in which such triggers are met. The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of June 30, 2021. As of June 30, 2021, the if-converted value of the 2024 Convertible Notes did not exceed the principal amount. 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”). 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 carrying amount of the 2025 Convertible Notes as a separate equity-classified instrument (the “2025 Convertible Notes Embedded Derivative”) included in “Additional paid-in capital” in our condensed consolidated balance sheets as of June 30, 2021 was $ 49.6 million, ($ 39.1 million, net of tax). The effective interest rate for the three and nine months ended June 30, 2021 was approximately 9 %. As of June 30, 2021, the remaining unamortized debt discount and issuance costs will be amortized through the 2025 Maturity Date assuming no early conversion. 15 Table of Contents The 2025 Convertible Notes are convertible into cash or shares of Class A Common Stock, or any combination thereof, at our option subject to satisfaction of certain conditions and during the periods described in the 2018 Indenture, based on an initial conversion rate of 62.8931 shares of Class A Common Stock per $1,000 principal amount of 2025 Convertible Notes (equivalent to an initial conversion price of $ 15.90 per share of Class A Common Stock). We account for the Class A Common Stock issuable upon conversion under the treasury stock method. To the extent the average share price is over $ 15.90 per share for any fiscal quarter or year-to-date period, we are required to recognize incremental dilution of our earnings per share. If, among other triggers described in the 2018 Indenture, the market price of the Class A Common Stock meets the threshold based on at least 20 of the final 30 trading days of the quarter for the 2025 Convertible Notes to become convertible at the option of the holders during the subsequent quarter, we may be required to classify the 2025 Convertible Notes as current on our condensed consolidated balance sheets for each quarter in which such triggers are met. The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of June 30, 2021. As of June 30, 2021, the if-converted value of the 2025 Convertible Notes did not exceed the principal amount. CASHMA X Secured Borrowing Facility In November 2018, we entered into a receivable's securitization facility with a third-party lender to provide funding for installment loan originations in our Canadian CASHMAX business. We terminated this facility in September 2020 as part of the closure of the operations of our CASHMAX business. See our 2020 Annual Report for additional information regarding the closure of our Canadian operations. NOTE 11: SHARE-BASED COMPENSATION Common Stock Repurchase Program In December 2019, the Company's Board of Directors (the "Board") authorized the repurchase of up to $ 60.0 million of our Class A Common Stock over three years . Repurchases under the program were suspended in March 2020 in order to preserve liquidity as a result of uncertainties related to the COVID-19 pandemic. No share repurchases under the program have been made during fiscal 2021. During fiscal 2020, we repurchased and retired 943,149 shares of our Class A Common Stock for $ 5.2 million, which was 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. In December 2020, we granted 143,145 restricted stock awards to our non-employee directors at a grant date fair value of $ 5.03 . These awards vested in February 2021 ( 79,525 awards) and March 2021 ( 63,620 awards). In February 2021, we granted 127,744 restricted stock awards to our non-employee directors at a grant date fair value of $ 5.01 , which awards will vest at the next annual meeting of stockholders, but no later than March 31, 2022. In January 2021, we granted 289,592 restricted stock awards to employees at a grant date fair value of $ 4.68 and 275,107 restricted stock awards to employees at a grant date fair value of $ 4.71 . These awards vest on September 30, 2021 and September 30, 2022, respectively. In February 2021, we granted 392,419 restricted stock awards to employees at a grant date fair value of $ 4.96 , which vest on September 30, 2023. During the first quarter of fiscal 2020, we granted 222,912 shares of restricted stock awards to non-employee directors based on a share price of $ 6.46 . These awards vested on September 30, 2020. NOTE 12: INCOME TAXES On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law and includes certain income tax provisions relevant to businesses. We recognized the effect on the consolidated financial statements in the period ended March 31, 2020. For the period ended June 30, 2021, the CARES Act has not had a material impact on our consolidated financial statements. At this time, we do not expect the impact of the CARES Act to have a material impact on our consolidated financial statements for the year ending September 30, 2021. 16 Table of Contents NOTE 13: COMMITMENTS AND 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. The amount of resulting loss may differ from these estimates. While we are unable to determine the ultimate outcome of any current litigation or regulatory actions, 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 14: 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 (CODM) evaluates performance for purposes of allocating resources and assessing performance. During the first quarter of fiscal 2021, the financial information of our Lana business activities were no longer reviewed by the CODM for evaluating performance since Lana no longer has business activities. Rather, Lana offers support activities to U.S. Pawn. As a result, Lana is no longer an operating or reportable segment. Our historical segment results have been recast to conform to current presentation. 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 International — primarily our equity interest in the net income of Cash Converters International and Rich Data Corporation. 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. The following tables present revenue for each reportable segment, disaggregated revenue within our three reportable segments and Corporate, segment profits and segment contribution. Three Months Ended June 30, 2021 (in thousands) U.S. Pawn Latin America Pawn Other International Total Segments Corporate Items Consolidated Revenues: Merchandise sales $ 84,465 $ 23,343 $ — $ 107,808 $ — $ 107,808 Jewelry scrapping sales 1,908 3,765 — 5,673 — 5,673 Pawn service charges 44,039 16,392 — 60,431 — 60,431 Other revenues 32 — 89 121 — 121 Total revenues 130,444 43,500 89 174,033 — 174,033 Merchandise cost of goods sold 45,310 15,229 — 60,539 — 60,539 Jewelry scrapping cost of goods sold 1,878 3,595 — 5,473 — 5,473 Other cost of revenues — — — — — — Net revenues 83,256 24,676 89 108,021 — 108,021 Segment and corporate expenses (income): Store expenses 62,507 19,296 — 81,803 — 81,803 General and administrative — — — — 14,589 14,589 Depreciation and amortization 2,600 1,806 — 4,406 3,013 7,419 Other charges — 497 — 497 — 497 Interest expense — — — — 5,569 5,569 Interest income — ( 484 ) — ( 484 ) ( 28 ) ( 512 ) Equity in net income of unconsolidated affiliates — — ( 643 ) ( 643 ) — ( 643 ) Other (income) expense — ( 5 ) 18 13 52 65 Segment contribution $ 18,149 $ 3,566 $ 714 $ 22,429 Income (loss) before income taxes $ 22,429 $ ( 23,195 ) $ ( 766 ) 17 Table of Contents Three Months Ended June 30, 2020 (in thousands) U.S. Pawn Latin America Pawn Other International Total Segments Corporate Items Consolidated Revenues: Merchandise sales $ 116,258 $ 20,279 $ — $ 136,537 $ 136,537 Jewelry scrapping sales 17,129 3,174 — 20,303 — 20,303 Pawn service charges 41,069 11,391 — 52,460 — 52,460 Other revenues 40 — 884 924 — 924 Total revenues 174,496 34,844 884 210,224 — 210,224 Merchandise cost of goods sold 75,838 16,021 — 91,859 — 91,859 Jewelry scrapping cost of goods sold 12,875 3,283 — 16,158 — 16,158 Other cost of revenues — 32 — 32 — 32 Net revenues 85,783 15,508 884 102,175 — 102,175 Segment and corporate expenses (income): Store expenses 66,243 15,041 1,057 82,341 — 82,341 General and administrative — — — — 16,176 16,176 Depreciation and amortization 2,749 1,647 3 4,399 3,280 7,679 (Gain) loss on sale or disposal of assets and other 234 23 ( 20 ) 237 18 255 Interest expense — — 140 140 5,239 5,379 Interest income — ( 404 ) — ( 404 ) ( 224 ) ( 628 ) Equity in net income of unconsolidated affiliates — — 1,183 1,183 — 1,183 Other (income) expense — ( 61 ) ( 5 ) ( 66 ) 94 28 Segment contribution (loss) $ 16,557 $ ( 738 ) $ ( 1,474 ) $ 14,345 Loss before income taxes $ 14,345 $ ( 24,583 ) $ ( 10,238 ) 18 Table of Contents Nine Months Ended June 30, 2021 (in thousands) U.S. Pawn Latin America Pawn Other International Total Segments Corporate Items Consolidated Revenues: Merchandise sales $ 260,545 $ 70,271 $ — $ 330,816 $ — $ 330,816 Jewelry scrapping sales 9,493 9,014 — 18,507 — 18,507 Pawn service charges 143,836 43,520 — 187,356 — 187,356 Other revenues 83 7 338 428 — 428 Total revenues 413,957 122,812 338 537,107 — 537,107 Merchandise cost of goods sold 145,181 45,691 — 190,872 — 190,872 Jewelry scrapping cost of goods sold 7,871 8,205 — 16,076 — 16,076 Net revenues 260,905 68,916 338 330,159 — 330,159 Segment and corporate expenses (income): Store expenses 188,256 54,005 — 242,261 — 242,261 General and administrative — — — — 40,870 40,870 Depreciation and amortization 7,972 5,459 — 13,431 9,649 23,080 Loss on sale or disposal of assets and other 27 — — 27 63 90 Other charges — 497 — 497 — 497 Interest expense — — — — 16,542 16,542 Interest income — ( 1,819 ) — ( 1,819 ) ( 99 ) ( 1,918 ) Equity in net income of unconsolidated affiliates — — ( 2,409 ) ( 2,409 ) — ( 2,409 ) Other (income) expense — ( 375 ) ( 183 ) ( 558 ) 169 ( 389 ) Segment contribution $ 64,650 $ 11,149 $ 2,930 $ 78,729 Income (loss) before income taxes $ 78,729 $ ( 67,194 ) $ 11,535 Nine Months Ended June 30, 2020 (in thousands) U.S. Pawn Latin America Pawn Other International Total Segments Corporate Items Consolidated Revenues: Merchandise sales $ 314,059 $ 79,036 $ — $ 393,095 $ — $ 393,095 Jewelry scrapping sales 32,905 8,804 — 41,709 — 41,709 Pawn service charges 166,859 50,548 — 217,407 — 217,407 Other revenues 107 50 3,570 3,727 — 3,727 Total revenues 513,930 138,438 3,570 655,938 — 655,938 Merchandise cost of goods sold 202,488 59,223 — 261,711 — 261,711 Jewelry scrapping cost of goods sold 25,430 8,099 — 33,529 — 33,529 Other cost of revenues — 69 1,024 1,093 — 1,093 Net revenues 286,012 71,047 2,546 359,605 — 359,605 Segment and corporate expenses (income): Store expenses 201,921 53,493 3,850 259,264 — 259,264 General and administrative — — — — 50,355 50,355 Impairment of goodwill, intangible and other assets 10,000 35,936 1,124 47,060 — 47,060 Depreciation and amortization 8,325 5,476 60 13,861 9,313 23,174 (Gain) loss on sale or disposal of assets and other 234 ( 72 ) ( 20 ) 142 1,118 1,260 Interest expense — 430 464 894 15,695 16,589 Interest income — ( 1,161 ) — ( 1,161 ) ( 1,251 ) ( 2,412 ) Equity in net loss of unconsolidated affiliates — 5,896 5,896 — 5,896 Other (income) expense — ( 303 ) 14 ( 289 ) 74 ( 215 ) Segment contribution (loss) $ 65,532 $ ( 22,752 ) $ ( 8,842 ) $ 33,938 Income (loss) before income taxes $ 33,938 $ ( 75,304 ) $ ( 41,366 ) 19 Table of Contents NOTE 15: SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION The following table provides supplemental information on net amounts included in our condensed consolidated balance sheets: (in thousands) June 30, 2021 June 30, 2020 September 30, 2020 Gross pawn service charges receivable $ 31,648 $ 23,674 $ 27,259 Allowance for uncollectible pawn service charges receivable ( 6,683 ) ( 6,242 ) ( 6,679 ) Pawn service charges receivable, net $ 24,965 $ 17,432 $ 20,580 Gross inventory $ 98,761 $ 133,319 $ 108,205 Inventory reserves ( 6,519 ) ( 10,207 ) ( 12,314 ) Inventory, net $ 92,242 $ 123,112 $ 95,891 Prepaid expenses and other $ 7,278 $ 8,980 $ 10,614 Accounts receivable and other 7,111 6,813 6,991 Income taxes receivable 13,954 9,961 15,298 Prepaid expenses and other current assets $ 28,343 $ 25,754 $ 32,903 Property and equipment, gross $ 283,304 $ 265,149 $ 267,509 Accumulated depreciation ( 227,674 ) ( 207,051 ) ( 210,523 ) Property and equipment, net $ 55,630 $ 58,098 $ 56,986 Accounts payable $ 19,325 $ 15,304 $ 19,114 Accrued expenses and other 65,641 43,054 52,390 Accounts payable, accrued expenses and other current liabilities $ 84,966 $ 58,358 $ 71,504 20 Table of Contents