What changed in this filing

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Item 1. Financial Statements

2022-08-03 compared with 2022-05-04 · 138 added, 123 removed, 601 unchanged (30% of the section changed)

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts) March 31,

(in thousands, except share and per share amounts) June 30,

September 30,

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issued and outstanding:

53,685,333 as of March 31, 2022;

52,873,568 as of March 31, 2021;

53,685,333 as of June 30, 2022;

53,086,438 as of June 30, 2021;

and 53,086,438 as of September 30, 2021

10 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(in thousands, except per share amount) 2022 2021 2022 2021

6 unchanged sentences

Jewelry scrapping cost of goods sold 6,167 5,473 16,747 16,076

Net revenues 128,928 113,748 261,039 222,138

Gross profit 129,508 108,021 390,547 330,159

Operating expenses:

3 unchanged sentences

(Gain) loss on sale or disposal of assets and other — — ( 692 ) 90

Other charges — 497 — 497

Total operating expenses 115,891 104,308 330,509 306,798

2 unchanged sentences

Interest income ( 190 ) ( 512 ) ( 749 ) ( 1,918 )

Equity in net loss (income) of unconsolidated affiliates 1,439 ( 1,250 ) 301 ( 1,766 )

Equity in net income of unconsolidated affiliates ( 1,758 ) ( 643 ) ( 1,457 ) ( 2,409 )

Other expense (income) ( 210 ) 65 41 ( 389 )

Income before income taxes 20,123 6,799 41,470 12,301

Income (loss) before income taxes 13,082 ( 766 ) 54,552 11,535

Income tax expense 867 1,804 11,729 4,476

Net income $ 14,887 $ 5,330 $ 30,608 $ 9,629

Basic earnings per share $ 0.26 $ 0.10 $ 0.54 $ 0.17

Diluted earnings per share $ 0.20 $ 0.10 $ 0.42 $ 0.17

Net income (loss) $ 12,215 $ ( 2,570 ) $ 42,823 $ 7,059

Basic earnings (loss) per share $ 0.22 $ ( 0.05 ) $ 0.76 $ 0.13

Diluted earnings (loss) per share $ 0.17 $ ( 0.05 ) $ 0.59 $ 0.13

Weighted-average basic shares outstanding 56,656 55,898 56,465 55,639

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Three Months Ended

Six Months Ended

Nine Months Ended

(in thousands) 2022 2021 2022 2021

Net income $ 14,887 $ 5,330 $ 30,608 $ 9,629

Net income (loss) $ 12,215 $ ( 2,570 ) $ 42,823 $ 7,059

Other comprehensive income:

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Balances as of March 31, 2022 56,656 $ 567 $ 341,913 $ 384,246 $ ( 51,710 ) $ 675,016

Stock compensation — — 1,850 — — 1,850

Foreign currency translation loss — — — — ( 3,327 ) ( 3,327 )

Net income — — — 12,215 — 12,215

Balances as of June 30, 2022 56,656 $ 567 $ 343,763 $ 396,461 $ ( 55,037 ) $ 685,754

Common Stock Additional

11 unchanged sentences

Stock compensation — — 1,094 — — 1,094

Transfer of consideration for prior period acquisition 33 — 185 — — 185

Transfer of consideration for acquisition 33 — 185 — — 185

Release of restricted stock 212 2 — — — 2

3 unchanged sentences

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 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

See accompanying notes to unaudited interim condensed consolidated financial statements

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

(in thousands) 2022 2021

9 unchanged sentences

Stock compensation expense 4,008 3,156

Equity in net loss (income) of unconsolidated affiliates 301 ( 1,766 )

Equity in net income of unconsolidated affiliates ( 1,457 ) ( 2,409 )

Changes in operating assets and liabilities:

12 unchanged sentences

Capital expenditures, net ( 18,100 ) ( 14,635 )

Acquisitions, net of cash acquired ( 1,850 ) ( 15,132 )

Issuance of note receivable ( 1,000 ) —

1 unchanged sentence

Investment in other investments ( 16,500 ) —

Net cash (used in) provided by investing activities ( 31,887 ) 9,080

Net cash used in investing activities ( 81,589 ) ( 37,086 )

Financing activities:

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Effect of exchange rate changes on cash and cash equivalents and restricted cash 1,219 5,076

Net increase in cash, cash equivalents and restricted cash 53 31,091

Net decrease in cash, cash equivalents and restricted cash ( 32,668 ) ( 15,090 )

Cash, cash equivalents and restricted cash at beginning of period 263,624 312,553

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Transfer of consideration for other investment 1,500 —

Transfer of consideration for 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

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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 six-month period ended March 31, 2022, are not necessarily indicative of results that may be expected for the fiscal year ending September 30, 2022.

Our business is subject to seasonal variations, and operating results for the three and six months ended March 31, 2022 and 2021 (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, 2021 except for as disclosed below related to the adoption of Accounting Standards Update ("ASU") 2020-06.

Financial results for the three and nine-month periods ended June 30, 2022, are not necessarily indicative of results that may be expected for the fiscal year ending September 30, 2022.

Our business is subject to seasonal variations, and operating results for the three and nine months ended June 30, 2022 and 2021 (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 2021 Annual Report except for as disclosed below related to the adoption of Accounting Standards Update ("ASU") 2020-06.

Principles of Consolidation

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Impact of COVID-19

The COVID-19 pandemic continues to affect the U.S.

and global economies, as disclosed in our 2021 Annual Report on Form 10-K.

The full extent and duration of the COVID-19 impact on the global economy generally, and on our business specifically, is currently unknown.

The impact of the pandemic, and the recovery therefrom, continued to adversely affect net revenues and earnings into fiscal 2021.

During the latter part of fiscal 2021, we saw pawn transaction activity continue to rebuild, driving pawn loans outstanding ("PLO") balances closer to pre-pandemic levels, which will drive accelerating pawn service charges ("PSC") revenue in the coming quarters given the natural lag between pawn originations and related fees.

We continue to assess what type of impact various COVID-19 variants may have to our business net revenues and operating expenses in fiscal year 2022.

A prolonged pandemic and recovery may have an adverse effect on our results of operations, financial position and cash flows.

Our estimates, judgments and assumptions related to COVID-19 could ultimately differ over time.

The COVID-19 pandemic adversely affected our gross profit and earnings during the latter half of fiscal 2020 and into fiscal 2021.

During the latter part of fiscal 2021, we saw pawn transaction activity start to rebuild.

That has continued to date, and our pawn loans outstanding ("PLO") balances now exceed pre-pandemic levels, which will drive accelerating pawn service charges ("PSC") revenue in the coming quarters given the natural lag between pawn originations and related fees.

Despite the recovery in pawn transaction activity, the continuing pandemic, driven by the proliferation of various COVID-19 variants, continues to affect portions of our business, such as managing appropriate staffing at the store level.

Our estimates, judgments and assumptions related to COVID-19 could vary over time, and there can be no assurance that the continuing pandemic will not have an adverse effect on our results of operations, financial position and cash flows in future periods.

Recently Adopted Accounting Policies

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The ASU 2020-06 amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years.

Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

We early adopted this standard on October 1, 2021 under the modified retrospective basis.

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Under ASU 2020-06, we no longer separate the convertible senior notes into liability and equity components.

We recognized the cumulative effect of initially applying this new standard as of October 1, 2021.

We recognized a cumulative effect of initially applying the ASU as an adjustment to the October 1, 2021 opening balance of retained earnings.

13 unchanged sentences

Retained earnings 326,781 26,857 353,638

The impact of adoption on our condensed consolidated statements of operations for the three and six months ended March 31, 2022 was primarily to decrease interest expense by $ 3.4 million and $ 6.8 million, respectively.

This had the effect of increasing our basic earnings per share for the three and six months ended March 31, 2022 by $ 0.05 and $ 0.09 , and decreasing our diluted earnings per common share for the three and six months ended March 31, 2022 by $ 0.01 and $ 0.03 , respectively.

The impact of adoption on our condensed consolidated statements of operations for the three and nine months ended June 30, 2022 was primarily to decrease interest expense by $ 3.5 million and $ 10.3 million, respectively.

This had the effect of increasing our basic earnings per share for the three and nine months ended June 30, 2022 by $ 0.05 and $ 0.14 , respectively, and decreasing our diluted earnings per common share for the nine months ended June 30, 2022 by $ 0.02 .

Additionally, adoption of the standard requires interest charges on the convertible debt to be added to net income as well as the use of the “if-converted” method to calculate diluted earnings per common share.

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At the time of acquisition, the total consideration for Bajio was $ 23.6 million, consisting of $ 17.4 million of cash, and 212,870 shares of our Class A Non-Voting Common Stock valued at $ 1.6 million.

In addition, the sellers are entitled to additional payments of up to $ 4.6 million to be paid in two payments over the next two years , contingent on the growth of the loan portfolios of the acquired stores.

Up to 50 % of any

future contingent payments can be made in shares of our Class A Non-Voting Common Stock at our discretion.

In addition, the sellers are entitled to additional payments of up to $ 4.6 million to be paid in two payments over two years , contingent on the growth of the loan portfolios of the acquired stores.

Up to 50 % of any future contingent payments can be made in shares of our Class A Non-Voting Common Stock at our discretion.

The value of the contingent consideration was included in the total consideration as the metrics were considered achievable on the date of acquisition.

Cash paid at closing was $ 11.6 million and an additional $ 3.8 million was paid during the fourth quarter of 2021.

During the first quarter of 2022, both parties completed the formal working capital reconciliation stipulated within the purchase agreement.

During the first quarter of fiscal 2022, both parties completed the formal working capital reconciliation stipulated within the purchase agreement.

As part of the working capital reconciliation, the Company and the seller agreed to reduce the purchase price, which was held in restricted cash as of September 30, 2021, by $ 1.3 million.

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As the future payments decreased, we released $ 1.3 million of the previously held $ 2.0 million in restricted cash to our unrestricted cash.

Of the remaining $ 0.7 million in restricted cash, $ 0.3 million is expected to be paid prior to June 30, 2022, and $ 0.4 million is expected to be paid on or around the fifth anniversary of the date of acquisition.

During the second quarter of 2022, we obtained new information about the seller's calculation of pawn service charges receivable balance as of the date of acquisition, which resulted in a $ 0.6 million measurement period adjustment to reduce pawn service charges receivable and increase goodwill.

Of the remaining $ 0.7 million in restricted cash as of June 30, 2022, $ 0.3 million was paid during July 2022, and the remaining $ 0.4 million is expected to be paid on or around the fifth anniversary of the date of acquisition.

During the second quarter of fiscal 2022, we obtained new information about the seller's calculation of pawn service charges receivable balance as of the date of acquisition, which resulted in a $ 0.6 million measurement period adjustment to reduce pawn service charges receivable and increase goodwill.

The assets acquired and liabilities assumed are based upon the estimated fair values at the date of acquisition.

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Intangible assets acquired consist of indefinite-lived trade names.

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

Nine Months Ended

(in thousands, except per share amounts) 2021 2021

Revenue $ 180,854 $ 558,426

Net (loss) income ( 2,475 ) 6,775

Basic (loss) earnings per common share ( 0.04 ) 0.12

Diluted (loss) earnings per common share ( 0.04 ) 0.12

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.

The following table summarizes the changes in the carrying amount of goodwill by segment and in total:

Six Months Ended March 31, 2022

Nine Months Ended June 30, 2022

(in thousands) U.S.

2 unchanged sentences

$ 244,471 $ 41,287 $ 285,758

Acquisitions 1,032 — 1,032

Measurement period adjustments — ( 678 ) ( 678 )

Effect of foreign currency translation changes — 686 686

Balances as of March 31, 2022 $ 244,471 $ 41,743 $ 286,214

Six Months Ended March 31, 2021

Balances as of June 30, 2022 $ 245,503 $ 41,295 $ 286,798

Nine Months Ended June 30, 2021

(in thousands) U.S.

2 unchanged sentences

$ 241,928 $ 15,654 $ 257,582

Acquisitions 2,394 22,957 25,351

Effect of foreign currency translation changes — 686 686

Balances as of March 31, 2021

Balances as of June 30, 2021

$ 244,322 $ 39,297 $ 283,619

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(in thousands, except per share amounts) 2022 2021 2022 2021

Basic earnings per common share:

Net income - basic $ 14,887 $ 5,330 $ 30,608 $ 9,629

Net income (loss) - basic $ 12,215 $ ( 2,570 ) $ 42,823 $ 7,059

Weighted shares outstanding - basic 56,656 55,898 56,465 55,639

Basic earnings per common share $ 0.26 $ 0.10 $ 0.54 $ 0.17

Basic earnings (loss) per common share $ 0.22 $ ( 0.05 ) $ 0.76 $ 0.13

Diluted earnings per common share:

Net income - basic $ 14,887 $ 5,330 $ 30,608 $ 9,629

Net income (loss) - basic $ 12,215 $ ( 2,570 ) $ 42,823 $ 7,059

Convertible Notes interest expense, net of tax 1,868 — 5,598 —

Net income - diluted $ 16,733 $ 5,330 $ 34,338 $ 9,629

Net income (loss) - diluted $ 14,083 $ ( 2,570 ) $ 48,421 $ 7,059

Weighted shares outstanding - basic 56,656 55,898 56,465 55,639

2 unchanged sentences

Weighted shares outstanding - diluted 82,504 55,898 82,349 55,653

Diluted earnings per common share $ 0.20 $ 0.10 $ 0.42 $ 0.17

Diluted earnings (loss) per common share $ 0.17 $ ( 0.05 ) $ 0.59 $ 0.13

Potential common shares excluded from the calculation of diluted earnings per share above:

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As a result of our adoption of ASU 2020-06 on October 1, 2021, the dilutive impact of the Convertible Notes for our calculation of diluted net income per share is considered using the if-converted method.

During the three months and six months ended March 31, 2022, we increased net income by $ 1.8 million and $ 3.7 million respectively to arrive at the numerator used to calculate diluted earnings per common share, which represents interest expense recognized on the convertible notes that were subject to this change in methodology.

During the three and nine months ended June 30, 2022, we increased net income by $ 1.9 million and $ 5.6 million, respectively, t o arrive at the numerator used to calculate diluted earnings per common share, which represents interest expense recognized on the convertible notes that were subject to this change in methodology.

For periods prior to our October 1, 2021 adoption of ASU 2020-06, we applied the treasury stock method to account for the dilutive impact of the 2024 and 2025 Convertible Notes for diluted earnings per share purposes .

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The table below presents balances of our operating leases:

(in thousands) March 31, 2022 March 31, 2021 September 30,

(in thousands) June 30, 2022 June 30, 2021 September 30,

Right-of-use asset $ 217,506 $ 185,467 $ 200,990

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(in thousands) 2022 2021 2022 2021

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Other supplemental information includes the following for our operating leases:

Six Months Ended

Nine Months Ended

Weighted-average remaining contractual lease term (years)

Weighted-average incremental borrowing rate 8.20 % 7.86 %

Maturities of lease liabilities as of March 31, 2022 were as follows (in thousands):

Maturities of lease liabilities as of June 30, 2022 were as follows (in thousands):

Remaining 2022 $ 17,427

5 unchanged sentences

Non-current portion $ 175,489

We recorded $ 28.1 million and $ 6.6 million in non-cash additions to our right of use assets and lease liabilities for the six months ended March 31, 2022 and March 31, 2021, respectively.

We recorded $ 55.3 million and $ 33.5 million in non-cash additions to our right of use assets and lease liabilities for the nine months ended June 30, 2022 and June 30, 2021, respectively.

STRATEGIC INVESTMENTS

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This purchase increased our total ownership in Cash Converters to 242,239,157 shares, representing a 38.60 % ownership interest.

On April 5, 2022 (subsequent to the end of the quarter), we acquired an additional 13 million shares for $ 2.5 million, bringing our total ownership to 255,239,157 shares, representing an ownership interest of 40.67 %.

On April 5, 2022, we acquired an additional 13 million shares for $ 2.5 million, bringing our total ownership to 255,239,157 shares, representing an ownership interest of 40.67 %.

Additionally, on April 14, 2022, we received a cash dividend of $ 1.7 million from Cash Converters.

Subsequent Events.

The following tables present summary financial information for Cash Converters most recently reported results at December 31, 2021 after translation to U.S.

11 unchanged sentences

Gross profit 55,280 51,231

Net profit (loss) 1 5,561

Net profit 1 5,561

Fair Value Measurements for the fair value and carrying value of our investment in Cash Converters.

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Founders used that $ 15.0 million to acquire an equity interest in Simple Management Group, Inc.

(“SMG”), which owns and operates more than 20 pawn stores principally in the Caribbean region, with plans to build and acquire more stores in that region.

(“SMG”), which owns and operates 20 pawn stores principally in the Caribbean region, with plans to build and acquire more stores in that region.

The investment in Founders is a variable interest entity, but because the Company is not the primary beneficiary, we do not consolidate it.

Further, as we are not the appointed manager, we do not have the ability to direct the activities of the investment entity that most significantly impact its economic performance.

Consequently, our investment in Founders is accounted for utilizing the measurement alternative within ASC 321, Investments — Equity Securities.

Consequently, our investment in Founders is accounted for utilizing the measurement alternative within Accounting Standards Codification ("ASC") 321, Investments — Equity Securities.

Our $ 15.0 million carrying value of the investment is included in “Other investments” in our consolidated balance sheets.

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Carrying Value Estimated Fair Value

March 31, 2022 March 31, 2022 Fair Value Measurement Using

June 30, 2022 June 30, 2022 Fair Value Measurement Using

(in thousands) Level 1 Level 2 Level 3

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Carrying Value Estimated Fair Value

March 31, 2021 March 31, 2021 Fair Value Measurement Using

June 30, 2021 June 30, 2021 Fair Value Measurement Using

(in thousands) Level 1 Level 2 Level 3

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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.

Included in “Accounts payable, accrued expenses and other current liabilities“ in our Consolidated Balance Sheets as of March 31, 2022 is $ 4.6 million which represents the fair value of acquisition-related contingent consideration as discussed in Note 2:

Included in “Accounts payable, accrued expenses and other current liabilities“ in our Consolidated Balance Sheets as of June 30, 2022 is $ 4.6 million which represents the fair value of acquisition-related contingent consideration as discussed in Note 2:

Acquisitions.

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All principal and accrued interest is due and payable in April 2024.

The fair value of the note approximated its carrying value as of March 31, 2022.

The fair value of the note approximated its carrying value as of June 30, 2022.

We use the equity method of accounting to account for our ownership interest in Cash Converters.

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Of the $ 18.0 million included in the table above, $ 15.0 million is related the investment in Founders.

We believe the investment's fair value approximated it's carrying value although such fair value is highly variable and includes significant unobservable inputs .

We believe the investment's fair value approximated its 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.

1 unchanged sentence

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 March 31, 2022.

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.

2 unchanged sentences

The following table presents the Company's debt instruments outstanding:

March 31, 2022 March 31, 2021 September 30, 2021

June 30, 2022 June 30, 2021 September 30, 2021

(in thousands) Gross Amount Debt Issuance Costs Carrying Amount Gross Amount Debt Discount and Issuance Costs Carrying Amount Gross Amount Debt Discount and Issuance Costs Carrying Amount

2 unchanged sentences

Total long-term debt $ 316,250 $ ( 3,729 ) $ 312,521 $ 316,250 $ ( 55,618 ) $ 260,632 $ 316,250 $ ( 52,064 ) $ 264,186

The following table presents the Company's contractual maturities related to the debt instruments as of March 31, 2022:

The following table presents the Company's contractual maturities related to the debt instruments as of June 30, 2022:

Schedule of Contractual Maturities

3 unchanged sentences

$ 316,250 $ — $ 316,250 $ — $ —

The following table presents the Company's interest expense related to the Convertible Notes for the three and six months ended March 31, 2022 and 2021:

The following table presents the Company's interest expense related to the Convertible Notes for the three and nine months ended June 30, 2022 and 2021:

Three Months Ended

Six Months Ended

Nine Months Ended

(in thousands) 2022 2021 2022 2021

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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 effective interest rate for the three and six months months ended March 31, 2022 was approximately 3.35 %.

As of March 31, 2022, the remaining unamortized debt issuance costs will be amortized using the effective interest method through the 2024 Maturity Date assuming no early conversion.

The effective interest rate for the three and nine months ended June 30, 2022 was approximately 3.35 %.

As of June 30, 2022, the remaining unamortized debt issuance costs will be amortized using the effective interest method through the 2024 Maturity Date assuming no early conversion.

The 2024 Convertible Notes are convertible based on an initial conversion rate of 100 shares of Class A Common Stock per $1,000 principal amount (equivalent to an initial conversion price of $ 10.00 per share).

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The redemption price will be equal to 100 % of the principal amount of the 2024 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of March 31, 2022.

As of March 31, 2022, the if-converted value of the 2024 Convertible Notes did not exceed the principal amount.

The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of June 30, 2022.

As of June 30, 2022, the if-converted value of the 2024 Convertible Notes did not exceed the principal amount.

2.375 % 2025 Convertible Senior Notes Due 2025

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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 effective interest rate for the three and six months months ended March 31, 2022 was approximately 2.88 % for the 2025 Convertible Notes.

As of March 31, 2022, the remaining unamortized debt issuance costs will be amortized using the effective interest method through the 2025 Maturity Date assuming no early conversion.

The effective interest rate for the three and nine months ended June 30, 2022 was approximately 2.88 % for the 2025 Convertible Notes.

As of June 30, 2022, the remaining unamortized debt issuance costs will be amortized using the effective interest method through the 2025 Maturity Date assuming no early conversion.

The 2025 Convertible Notes are convertible based on an initial conversion rate of 62.8931 shares of Class A Common Stock per $1,000 principal amount (equivalent to an initial conversion price of $ 15.90 per share).

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The redemption price will be equal to 100 % of the principal amount of the 2025 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of March 31, 2022.

As of March 31, 2022, the if-converted value of the 2025 Convertible Notes did not exceed the principal amount.

The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of June 30, 2022.

As of June 30, 2022, the if-converted value of the 2025 Convertible Notes did not exceed the principal amount.

COMMON STOCK AND STOCK COMPENSATION

Share 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 .

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.

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 and no further share repurchases have been made since March of 2020.

On May 3, 2022, the Board approved a new share repurchase program, which will replace the previous program that was suspended in March 2020.

Subsequent Events.

On May 3, 2022, the Company's Board of Directors (the "Board") authorized the repurchase of up to $ 50 million of our Class A Common Stock over three years .

Execution of the program will be responsive to fluctuating market conditions and valuations, liquidity needs and the expected return on investment compared to other opportunities.

The amount and timing of purchases will be dependent on a variety of factors, including stock price, trading volume, general market conditions, legal and regulatory requirements, general business conditions, the level of cash flows, and corporate considerations determined by management and the Board, such as liquidity and capital needs and the availability of attractive alternative investment opportunities.

The Board of Directors has reserved the right to modify, suspend or terminate the program at any time.

To date, the Company has not repurchased any Class A Common Stock under the May 3, 2022 authorized share repurchase program.

Stock Compensation

11 unchanged sentences

Cancelled ( 743,299 ) 6.46

Outstanding as of March 31, 2022

Outstanding as of June 30, 2022

2,354,729 $ 6.30

12 unchanged sentences

0:21-cv-62362-RKA).

The amended complaint is brought under Section 501.059, Florida Statutes, the Florida Telephone Solicitation Act (“Act”), and alleges certain text messages were sent in violation of the Act.

The matter currently involves claims by a single individual, but alleges a class of persons who may have similar claims of violations of the Act and seeks class certification.

The parties are conducting discovery and are scheduled to conduct certain pre-trial mediation discussions.

We intend to defend vigorously against all claims, whether asserted individually or as a representative of any class.

We have not recorded a liability for this matter as of March 31, 2022.

An unfavorable resolution could have a material adverse effect on our results of operations for the period in which such resolution is recorded.

In May 2022, the federal court action was dismissed and the case was refiled in the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida (Case No.

2022-008506-CA-01).

The complaint was brought under Section 501.059, Florida Statutes, the Florida Telephone Solicitation Act (“Act”), and alleges certain text messages were sent in violation of the Act.

The matter involves claims by a single individual, but alleges a class of persons who may have similar claims of violations of the Act and seeks class certification.

On June 16, 2022, following discovery and pre-trial mediation, the parties agreed to a settlement of all asserted claims and entered into a Settlement Agreement and Release.

The agreed settlement requires the Company to make available up to $ 5 million to be used to pay verified claims (not to exceed $ 70 per verified claimant), as well as attorneys’ fees and costs.

The agreed settlement, which was preliminarily approved by the court on July 22, 2022, remains subject to the court's final approval.

The Company recorded a charge during the quarter ended June 30, 2022 representing the estimated liability for the settlement of this matter.

SEGMENT INFORMATION

5 unchanged sentences

• Other Investments — primarily our equity interest in the net results of Cash Converters and RDC along with our investment in Founders.

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.

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 March 31, 2022

Three Months Ended June 30, 2022

(in thousands) U.S.

7 unchanged sentences

Jewelry scrapping cost of goods sold 4,506 1,661 — 6,167 — 6,167

Net revenues 100,929 27,970 29 128,928 — 128,928

Gross profit 98,361 31,126 21 129,508 — 129,508

Segment and corporate expenses (income):

2 unchanged sentences

Depreciation and amortization 2,572 1,987 — 4,559 3,187 7,746

Gain on sale or disposal of assets and other — ( 9 ) — ( 9 ) ( 688 ) ( 697 )

Interest expense — — — — 2,693 2,693

Interest income ( 1 ) ( 189 ) — ( 190 ) — ( 190 )

Equity in net loss of unconsolidated affiliates — — 1,439 1,439 — 1,439

Other expense — 334 8 342 29 371

Segment contribution (loss) $ 33,812 $ 4,758 $ ( 1,418 ) $ 37,152

Equity in net income of unconsolidated affiliates — — ( 1,758 ) ( 1,758 ) — ( 1,758 )

Other (income) expense — ( 163 ) 19 ( 144 ) ( 66 ) ( 210 )

Segment contribution $ 29,754 $ 6,097 $ 1,760 $ 37,611

Income (loss) before income taxes $ 37,611 $ ( 24,529 ) $ 13,082

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

(in thousands) U.S.

7 unchanged sentences

Jewelry scrapping cost of goods sold 1,878 3,595 — 5,473 — 5,473

Net revenues 92,053 21,521 174 113,748 — 113,748

Gross profit 83,256 24,676 89 108,021 — 108,021

Segment and corporate expenses (income):

2 unchanged sentences

Depreciation and amortization 2,600 1,806 — 4,406 3,013 7,419

Loss on sale or disposal of assets and other — 101 — 101 11 112

Other Charges — 497 — 497 — 497

Interest expense — — — — 5,569 5,569

1 unchanged sentence

Equity in net income of unconsolidated affiliates — — ( 643 ) ( 643 ) — ( 643 )

Other expense — 85 9 94 51 145

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 )

Six Months Ended March 31, 2022

Nine Months Ended June 30, 2022

(in thousands) U.S.

7 unchanged sentences

Jewelry scrapping cost of goods sold 11,279 5,468 — 16,747 — 16,747

Net revenues 202,759 58,208 72 261,039 — 261,039

Gross profit 301,120 89,334 93 390,547 — 390,547

Segment and corporate expenses (income):

5 unchanged sentences

Interest income ( 1 ) ( 626 ) — ( 627 ) ( 122 ) ( 749 )

Equity in net loss of unconsolidated affiliates — — 301 301 — 301

Equity in net income of unconsolidated affiliates — — ( 1,457 ) ( 1,457 ) — ( 1,457 )

Other expense (income) — 37 15 52 ( 11 ) 41

Segment contribution (loss) $ 68,283 $ 11,245 $ ( 225 ) $ 79,303

Segment contribution $ 98,037 $ 17,342 $ 1,535 $ 116,914

Income (loss) before income taxes $ 116,914 $ ( 62,362 ) $ 54,552

Six Months Ended March 31, 2021

Nine Months Ended June 30, 2021

(in thousands) U.S.

7 unchanged sentences

Jewelry scrapping cost of goods sold 7,871 8,205 — 16,076 — 16,076

Other cost of revenues — — — — —

Net revenues 177,649 44,240 249 222,138 — 222,138

Gross profit 260,905 68,916 338 330,159 — 330,159

Segment and corporate expenses (income):

3 unchanged sentences

Loss on sale or disposal of assets and other 27 — — 27 63 90

Other Charges — 497 — 497 — 497

Interest expense — — — — 16,542 16,542

8 unchanged sentences

Investments Corporate Items Total

As of March 31, 2022

As of June 30, 2022

Pawn loans $ 159,680 $ 44,475 $ — $ — $ 204,155

Inventory, net 101,831 30,882 — — 132,713

As of March 31, 2021

As of June 30, 2021

Pawn loans $ 117,186 $ 39,969 $ — $ — $ 157,155

2 unchanged sentences

The following table provides supplemental information on net amounts included in our condensed consolidated balance sheets:

(in thousands) March 31, 2022 March 31, 2021 September 30,

(in thousands) June 30, 2022 June 30, 2021 September 30,

Gross pawn service charges receivable $ 42,277 $ 31,648 $ 37,360

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Accounts payable, accrued expenses and other current liabilities $ 76,566 $ 84,966 $ 90,268

SUBSEQUENT EVENTS

Share Repurchase Program

On May 3, 2022, the Board of Directors approved a new share repurchase program, which will replace the previous program that was suspended in March 2020 at the onset of the COVID-19 pandemic.

Share-Based Compensation — Common Stock Repurchase Program.

Under the new program, the Company is authorized to repurchase up to $ 50 million of our Class A Non-Voting common shares over the next three years .

Execution of the program will be responsive to fluctuating market conditions and valuations, liquidity needs and the expected return on investment compared to other opportunities.

by management and the Board, such as liquidity and capital needs and the availability of attractive alternative investment opportunities.

The Board of Directors has reserved the right to modify, suspend or terminate the program at any time.

Purchase Additional Shares of Cash Converters

On April 5, 2022, we purchased an additional 13 million shares of Cash Converters for $ 2.5 million.

This purchase increased our total ownership in Cash Converters to 255,239,157 shares, representing an ownership interest of 40.67 %.

Additionally, in April 2022, we received a cash dividend of $ 1.8 million from Cash Converters.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements