What changed in this filing

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Item 7. Management’s Discussion and Analysis

2022-11-16 compared with 2021-11-17 · 99 added, 123 removed, 258 unchanged (46% of the section changed)

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See “Part I, Item 1A — Risk Factors” and “Cautionary Statement Regarding Risks and Uncertainties That May Affect Future Results” below.

In June 2021, we completed the acquisition of 100% of the common shares of PLO del Bajio S.

(“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 was our largest acquisition to date in terms of store-count.

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, the 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 also repaid $14.9 million of Bajio’s existing debt assumed in the acquisition.

In May 2021, we acquired 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.

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

and global economies, and as disclosed in our 2020 Annual Report on Form 10-K, the pandemic also affected our business in a variety of ways beginning in the second quarter of fiscal 2020 and continuing into fiscal 2021.

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 in fiscal 2021.

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

A prolonged pandemic and recovery may have an adverse effect on our results of operations, financial position and liquidity in future periods.

Results of Operations

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We analyze results on a same store basis (which is defined as stores open during the entirety of the comparable periods) to better understand existing store performance without the influence of increases or decreases resulting solely from changes in store count.

We believe presentation of constant currency and same store results is meaningful and useful in understanding the activities and business metrics of our Latin America Pawn operations and reflect an additional way of viewing aspects of our business that, when viewed with GAAP results, provide a better understanding and evaluation of factors and trends affecting our business.

We believe presentation of constant currency and same store results is meaningful and useful in understanding the activities and business metrics of our Latin America Pawn operations (in the case of constant currency) and our store operations (in the case of same store results) and reflect an additional way of viewing aspects of our business that, when viewed with GAAP results, provide a better understanding and evaluation of factors and trends affecting our business.

We provide non-GAAP financial information for informational purposes and to enhance understanding of our GAAP consolidated financial statements.

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We used the end-of-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items.

Our statement of

operations constant currency results reflect the monthly exchange rate fluctuations and are not directly calculable from the rates below.

Our statement of operations constant currency results reflect the monthly exchange rate fluctuations and are not directly calculable from the rates below.

Constant currency results, where presented, also exclude the foreign currency gain or loss.

The end-of-period and approximate average exchange rates for each applicable currency as compared to U.S.

The end-of-period and approximate average

exchange rates for each applicable currency as compared to U.S.

dollars as of and for the twelve months ended September 30, 2022 and 2021 were as follows:

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(in thousands) 2022 2021

Net revenues:

Gross profit:

Pawn service charges $ 320,865 $ 260,196 23%

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Other revenues, net 441 532 (17)%

Net revenues 449,485 449,201 *

Gross profit 528,147 449,485 18%

Store expenses 357,417 330,837 8%

General and administrative 64,342 56,495 14%

Impairment of goodwill, intangible and other assets — 54,666 (100)%

Depreciation and Amortization 32,140 30,672 5%

Loss on sale or disposal of assets and other 83 801 (90)%

(Gain) loss on sale or disposal of assets and other (674) 83 *

Other charges — 229 *

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Interest income (817) (2,477) (67)%

Equity in net (income) loss of unconsolidated affiliates (3,803) 2,429 257%

Other (income) expense (822) (17) *

Equity in net income of unconsolidated affiliates (1,779) (3,803) (53)%

Other income (167) (790) (79)%

Total non-operating expenses 7,209 15,107 (52)%

Income (loss) from continuing operations before income taxes 16,062 (70,095) 123%

Income tax (benefit) expense 7,450 (1,632) 556%

Net income (loss) attributable to EZCORP, Inc.

$ 8,612 $ (68,463) 113%

Income before income taxes 67,713 16,062 322%

Income tax expense 17,553 7,450 136%

Net income $ 50,160 $ 8,612 482%

Net pawn earning assets:

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* Represents a percentage computation that is not mathematically meaningful.

Net revenues for fiscal 2021 were $449.5 million compared to $449.2 million in the prior year, reflecting lower average PLO (driving lower PSC), offset by improved sales profit margins.

PSC decreased 5% due to a decline in new loans activity and PLO as customer borrowing behaviors were impacted by COVID-19 during the latter half of fiscal 2020 and through much of fiscal 2021.

PLO increased 34% during fiscal 2021 as pawn transaction activity steadily rebuilt through the year.

Merchandise sales decreased 11% compared to fiscal 2020 when the

COVID-19 pandemic drove significant increases in sales volume in the latter half of year.

Gross margin on merchandise sales grew 900 bps to 42%, resulting in a 13% increase in merchandise sales gross profit, primarily driven by effective inventory management.

Operating expenses decreased $79.3 million or 16%, primarily due to the $54.7 million goodwill impairment charge and the other charges of $20.4 million recorded during the prior year.

In fiscal 2020, a reversal of incentive compensation for $20.9 million was recorded resulting from the termination of certain executives ($12.0 million) and the impact of COVID-19 to long-term and short-term incentive plans ($8.9 million).

Excluding these charges and the reversal of incentive compensation, operating expenses decreased $25.1 million or 6%, primarily due to the strategic initiatives implemented in the fourth quarter of fiscal 2020, including cost optimization at the corporate level and cost cutting at the store level due to reduced transaction activity.

During fiscal 2020, we recorded goodwill, intangible and other assets impairment charges of $54.7 million, as further described in Note 8:

Goodwill and Intangible Assets of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplemental Data.”

During fiscal 2020, we recorded other charges of $20.4 million due to the implementation of strategic initiatives, as further described in Note 2:

Other Charges of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplemental Data.”

Total non-operating expenses decreased $6.6 million, or 30%, primarily due to non-recurring costs incurred in the prior year of a $7.1 million charge ($10.1 million, net of a $3.0 million tax benefit) for our share of the Cash Converters settlement of a class action lawsuit and a $5.0 million charge for the closure of our CASHMAX business in Canada.

Income tax expense increased $9.1 million primarily due to an increase in income before income taxes of $86.2 million, offset by a decrease in income tax expense of approximately $9.0 million due to non-deductible goodwill impairments booked in the second quarter of fiscal 2020.

PLO increased $34.1 million (19%) to $210.0 million.

This is the highest period-end PLO balance we have ever recorded.

The increase was due to strong loan demand reflecting continued recovery above pre-COVID levels.

Total revenues increased $156.7 million ( 21%), and gross profit increased 18%.

PSC increased $60.7 million ( 23%) as a result of higher PLO.

Merchandise sales increased $90.1 million (20%), and merchandise sales

gross profit increased $17.9 million (10%), due to a return to more normalized inventory levels and our improved core retail strategy of selling general merchandise inventory in the first 90 days.

Gross margin on merchandise sales declined 400 bps to 38%, reflecting a return to more normalized margins, but remained in our targeted range.

Operating expenses increased $34.9 million (8%) primarily due to (a) a $26.6 million increase in store expenses as a result of increased labor in-line with store activity and rent associated with lease renewals and (b) a $7.8 million increase in general and administrative expenses due to asset write-downs associated with IT infrastructure migration and corporate office sublease, a litigation accrual and increased labor and software licensing costs.

Total non-operating expenses decreased $7.9 million (52%).

Interest expense decreased $12.2 million, driven by the Accounting Standards Update 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) , (“ASU 2020-06”) accounting policy change, which no longer requires debt discount be included on our balance sheet effective October 1, 2021.

The policy change eliminates the non-cash interest amortization of the debt discount.

Organization and Summary of Significant Accounting Policies included in “Part II, Item 8 — Financial Statements and Supplemental Data” for further discussion of this recently adopted accounting policy.

The interest expense decrease was partially offset by a decrease in equity income for our unconsolidated affiliates primarily due to Cash Converters’ net results, which included an impairment, primarily of its ROU lease assets, that was attributed to COVID-19.

Income tax expense increased $10.1 million primarily due to an increase in income before income taxes of $51.7 million.

Income tax expense includes other items that do not necessarily correspond to pre-tax earnings and create volatility in our effective tax rate.

These items include the net effect of state taxes, non-deductible items and changes in valuation allowances for certain foreign operations.

Income Taxes of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplemental Data” for quantification of these items.

The following table presents selected summary financial data from our U.S.

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(in thousands) 2022 2021

Net revenues:

Gross profit:

Pawn service charges $ 240,982 $ 196,721 22%

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Other revenues 83 105 (21)%

Net revenues 349,541 359,235 (3)%

Gross profit 405,766 349,541 16%

Segment contribution:

Store expenses 266,114 253,344 5%

Impairment of goodwill, intangible and other assets — 10,000 (100)%

Depreciation and amortization 10,552 10,650 (1)%

Other charges — 3,106 (100)%

Segment operating contribution 129,100 85,547 51%

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(a) Balance is calculated based on the average of the monthly ending balance averages during the applicable period.

Pawn service charges decreased 6% primarily due to a decline in new loans activity and PLO as customer borrowing behaviors were impacted by COVID-19 and related government stimulus initiatives during the latter half of fiscal 2020 and through the first half of fiscal 2021.

Merchandise sales decreased 13% compared to fiscal 2020 when the COVID-19 pandemic drove significant increases in sales volume in the latter half of year.

Gross margin on merchandise sales grew 800 bps to 44%, resulting in a 7% increase in merchandise sales gross profit, primarily driven by effective inventory management.

Store expenses decreased 3%.

In fiscal 2020, a reversal of incentive compensation for $2.4 million was recorded resulting from the termination of certain executives ($1.2 million) and the impact of COVID-19 to long-term and short-term incentive plans ($1.2 million).

Excluding the reversal of incentive compensation, store expenses decreased $10.7 million or 4%, primarily due to the strategic initiatives implemented in the fourth quarter of fiscal year 2020, including cost cutting at the store level due to reduced transaction activity.

Segment contribution increased $12.4 million primarily due to the $10.0 million goodwill impairment charge and the other charges of $3.1 million recorded during the prior year.

Excluding these charges and the reversal of incentive compensation described above, segment contribution increased $1.7 million due to the changes in net revenues and store expenses described above.

PLO continued to increase, ending the year at $163.5 million, up 20% in total and on a same store basis, due to increased loan demand reflecting a recovery above pre-COVID levels.

Total revenues increased 19% and gross profit increased 16%, reflecting higher average PLO for the year driving higher PSC.

PSC increased 22% primarily as a result of higher average PLO.

Merchandise sales increased 15% due to our return to more normalized inventory levels and our improved core retail strategy of selling general merchandise inventory in the first 90 days.

Offsetting the sales increase, merchandise sales gross margin decreased 300 bps to 41%, reflecting a return to more normalized margins, but remained in our targeted range.

Store expenses increased 5% primarily due to increased labor in-line with store activity and rent associated with lease renewals.

Segment contribution increased $43.5 million due to the changes described above.

During fiscal 2022, we acquired three stores in the U.S.

Latin America Pawn

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Change (Constant Currency)

Net revenues:

Gross profit:

Pawn service charges $ 79,883 $ 63,475 26% $ 80,199 26%

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Gross margin on jewelry scrapping sales 6 % 9 % (300) bps 6 % (300) bps

Other revenues (expenses), net 7 (101) 107% 6 106%

Net revenues 99,524 87,096 14% 96,409 11%

Other revenues, net 247 7 * 249 *

Gross profit 122,270 99,524 23% 122,857 23%

Segment contribution:

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Depreciation and amortization 7,913 7,371 7% 7,955 8%

Impairment of goodwill, intangible and other assets — 35,938 (100)% — (100)%

Other charges — 229 * — *

Segment operating contribution (loss) 14,431 (27,788) 152% 13,187 147%

Segment operating contribution 23,054 14,431 60% 23,091 60%

Other segment income (a) (1,000) (2,862) (65)% (1,059) (63)%

Segment contribution (loss) $ 17,293 $ (26,659) 165% $ 15,969 160%

Segment contribution $ 24,054 $ 17,293 39% $ 24,150 40%

Average monthly ending pawn loan balance per store (b) $ 64 $ 59 8% $ 64 8%

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Pawn loan redemption rate (c) 79 % 80 % (100) bps 79 % (100) bps

(a) Fiscal 2021 and 2020 constant currency amounts exclude net GAAP basis foreign currency transaction gains of $0.1 million and $0.5 million, respectively, resulting from movement in exchange rates.

* Represents a percentage computation that is not mathematically meaningful.

(a) Fiscal 2022 and 2021 constant currency amounts exclude net GAAP basis foreign currency transaction minimal loss and a gain of $0.1 million, respectively, resulting from movement in exchange rates.

(b) Balance is calculated based on the average of the monthly ending balance averages during the applicable period.

(GAAP) 2022 Change

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Same Store data:

PSC (4)% (7)%

Merchandise Sales 23% 24%

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(a) Stores open at the end of the period included in the same store calculation were 631.

During fiscal 2021, we acquired 128 stores and opened 15 de novo stores.

PLO increased 60% to $40.0 million (51% on constant currency basis).

During fiscal 2022, we opened 28 de novo stores in Latin America.

PLO improved to $46.6 million, up 17% (15% on constant currency basis).

On a same store basis, PLO increased 15% (13% on a constant currency basis).

Though PLO has significantly improved, the average monthly ending PLO per store during the year was down 16% (19% on

a constant currency basis) resulting from a substantial decline in new loans activity and associated loan balances due to the COVID-19 effects on the business in fiscal 2020.

PSC increased 1% (decreased 2% on a constant currency basis) and same store PSC decreased by 4% (7% on a constant currency basis) due to the lower average PLO during the year offset by a higher yield.

Merchandise sales decreased 5% (8% on a constant currency basis) and 12% on a same store basis (14% on a constant currency basis).

This decrease in merchandise sales was offset by an increase in merchandise sales gross profit driven by a substantial improvement in merchandise sales gross profit margin primarily due to effective inventory management.

Store expenses increased $7.6 million or 11% (8% on a constant currency basis) primarily due to growth in store count during the year.

On a same-store basis, store expenses increased by $2.8 million or 4% (1% on a constant currency basis).

Segment contribution increased $44.0 million, or 165%, to $17.3 million (160% on a constant currency basis).

Excluding the $35.9 million goodwill impairment charge and the other charges of $1.7 million recorded during the prior year, segment contribution increased $6.3 million, primarily due to the changes in net revenues and store expenses described above.

Other International

The following table presents selected summary financial data for our Other International segment after translation to U.S.

dollars from its functional currency of primarily Australian and Canadian dollars:

The increase was attributable to increased loan demand reflecting a recovery above pre-COVID levels.

Total revenues were up 30% and on a constant currency basis, while gross profit increased by 23% and on a constant currency basis, reflecting higher average PLO for the year driving higher PSC

PSC increased 26% on a GAAP and constant currency basis, as a result of higher average PLO during the year.

Merchandise sales increased 39% (40% on a constant currency basis) due to our return to more normalized inventory levels and our improved core retail strategy of selling general merchandise inventory in the first 90 days.

Offsetting the sales increase, merchandise sales gross margin decreased 500 bps to 30%, reflecting a return to more normalized margins.

Store expenses increased $13.8 million, up 18% (18% on a constant currency basis), primarily due to increased labor in-line with store activity and rent associated with lease renewals and annual inflation adjustments.

Same-store expenses increased 5% (5% on a constant currency basis).

Segment contribution was up 39% to $24.1 million (40% increase to $24.2 million on a constant currency basis) primarily due to the changes described above.

Other Investments

The following table presents selected summary financial data for our Other Investment segment after translation to U.S.

dollars from its functional currency of primarily Australian dollars:

Fiscal Year Ended

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(in thousands) 2022 2021

Net revenues:

Gross profit:

Consumer loan fees and interest $ 111 $ 420 (74)%

Consumer loan bad debt — (953) (100)%

Net revenues 420 2,870 (85)%

Gross profit 111 420 (74)%

Segment operating expenses:

Store expenses — 5,314 (100)%

Impairment of goodwill, intangible and other assets — 1,149 (100)%

Other charges — 3,802 (100)%

Equity in net (income) loss of unconsolidated affiliates (3,803) 2,429 257%

Segment operating contribution (loss) 4,223 (9,824) 143%

Other segment (income) expense (173) 535 132%

Segment contribution (loss) $ 4,396 $ (10,359) 142%

Segment contribution was $4.4 million.

When excluding the $7.1 million charge ($10.1 million, net of a $3.0 million tax benefit) for our share of the Cash Converters settlement of a class action lawsuit and a $5.0 million charge for the closure of our CASHMAX business in Canada in the prior year, segment contribution increased $2.7 million, primarily due to the elimination of store losses from CASHMAX.

The following table reconciles our consolidated segment contribution discussed above to net income attributable to EZCORP, Inc., including items that affect our consolidated financial results but are not allocated among segments:

Equity in net income of unconsolidated affiliates (1,779) (3,803) (53)%

Segment operating contribution 1,890 4,223 (55)%

Other segment loss (income) 52 (173) (130)%

Segment contribution $ 1,838 $ 4,396 (58)%

Segment contribution was $1.8 million, a decrease of $2.6 million, due to a decrease in equity income for our unconsolidated affiliates.

The decrease is primarily due to Cash Converters’ net results, which included an impairment, primarily of its ROU lease assets, that was attributed to COVID-19.

The following table reconciles our consolidated segment contribution discussed above to net income, including items that affect our consolidated financial results but are not allocated among segments:

Fiscal Year Ended

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General and administrative 64,342 56,495 14%

Impairment of goodwill and intangibles — 7,579 (100)%

Depreciation and amortization 13,675 12,651 8%

Loss on sale or disposal of assets and other 62 508 (88)%

Other charges — 11,765 (100)%

(Gain) Loss on sale or disposal of assets and other (688) 62 (1,210)%

Interest expense 9,972 22,177 (55)%

Interest income — (461) (100)%

Other expense 223 133 68%

Income (loss) before income taxes 16,062 (70,095) 123%

Income tax expense (benefit) 7,450 (1,632) 556%

Net income (loss) $ 8,612 $ (68,463) 113%

Segment contribution increased $71.1 million, primarily due to a $47.1 million impairment charge of certain long-lived assets, $8.6 million in other charges and a $7.1 million charge ($10.1 million, net of a $3.0 million tax benefit) for our share of the Cash Converters settlement of a class action lawsuit in fiscal 2020.

Excluding those charges, segment contribution increased by $8.3 million or 8% primarily due to the improvements of the Latin America pawn segment.

General and administrative expenses increased $2.4 million, or 4%.

In fiscal 2020, a reversal of incentive compensation for $17.0 million was recorded resulting from the termination of certain executives ($10.3 million) and the impact of COVID-19 to long-term and short-term incentive plans ($6.7 million).

Excluding the reversal of incentive compensation, general and administrative expenses decreased $14.6 million or 21%, due to expense optimization initiatives that started at the end of the fourth quarter of fiscal 2020.

Other charges of $11.8 million incurred in the prior year resulted from the implementation of cost saving initiatives and rationalizing non-core activities.

Income tax expense increased $9.1 million primarily due to an increase in income before income taxes of $86.2 million offset by a decrease in income tax expense of approximately $9.0 million due to non-deductible goodwill impairments booked in the second quarter of fiscal 2020.

Other (income) expense (71) 223 (132)%

Income before income taxes 67,713 16,062 (322)%

Income tax expense 17,553 7,450 (136)%

Net income $ 50,160 $ 8,612 (482)%

Segment contribution increased $47.7 million (45%), primarily due to the improved operating results of the segments, as discussed above.

General and administrative expenses increased $7.8 million (14%), primarily due to a litigation accrual and increased salaries, including performance-based incentive compensation.

Interest expense decreased $12.2 million (55%) primarily driven by the ASU 2020-06 accounting policy change, which no longer requires debt discount be included on our balance sheet effective October 1, 2021.

The policy change eliminates the non-cash interest amortization of the debt discount.

Organization and Summary of Significant Accounting Policies of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplemental Data” for further discussion of this recently adopted accounting policy.

Income tax expense increased $10.1 million primarily due to an increase in income before income taxes of $51.7 million.

Income tax expense includes other items that do not necessarily correspond to pre-tax earnings and create volatility in our effective tax rate.

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The Results of Operations discussion for fiscal 2021 vs.

fiscal 2019 has been omitted and is located in “Part II, Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended September 30, 2020, which was filed with the SEC on December 14, 2020.

fiscal 2020 is located in “Part II, Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended September 30, 2021.

Liquidity and Capital Resources

Cash and Cash Equivalents

Our cash and equivalents balance was $206.0 million at September 30, 2022 compared to $253.7 million at September 30, 2021.

Our cash and equivalents were held in cash depository accounts with major banks or invested in high quality, short-term liquid investments.

The table and discussion below present a summary of the sources and uses of our cash:

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(in thousands) 2022 2021

Cash flows from operating activities $ 46,438 $ 49,078 (5)%

Cash flows (used in) provided by investing activities (84,611) 109,898 (177)%

Cash flows provided by operating activities $ 66,535 $ 46,438 43%

Cash flows used in investing activities (113,283) (84,611) 34%

Cash flows used in financing activities (2,832) (16,253) (83)%

Effect of exchange rate changes on cash and cash equivalents and restricted cash 325 5,497 (94)%

Net (decrease) increase in cash and cash equivalents and restricted cash $ (48,929) $ 150,111 (133)%

Net decrease in cash and cash equivalents and restricted cash $ (49,255) $ (48,929) 1%

* Represents a percentage computation that is not mathematically meaningful.

The decrease in cash flows from operating activities year-over-year was due to a $31.2 million decrease from changes in working capital, offset by a $28.6 million increase in net income, exclusive of non-cash items.

Changes in working capital are primarily related to the timing of collections in pawn service charges receivable, inventory purchases and the timing of payments of accounts payable and prepaid expenses.

The decrease in cash flows from investing activities year-over-year was primarily due to a $95.8 million decrease in the sale of forfeited collateral, a decrease of $76.6 million in net pawn lending and collections and acquisitions of $19.0 million.

The decrease in sale of forfeited collateral and decrease in net pawn lending and collections was primarily attributable to a change in customer borrowing behaviors during the COVID-19 pandemic.

The $19.0 million in acquisitions is primarily attributable to the CAE acquisition discussed in Note 3:

Acquisitions of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplemental Data.”

The increase in cash flows used in financing activities year-over-year was primarily due to the payment of assumed debt of $14.9 million from the CAE acquisition, offset by a $5.2 million decrease from the repurchase of common stock in the prior year.

The increase in cash flows from operating activities was primarily due to a $41.5 million increase in net income, partially offset by cash flows used to purchase inventory and other changes to working capital primarily related to the timing of collections in pawn service charges receivable and the timing of payments of accounts payable and prepaid expenses.

The $28.7 million increase in cash flows used in investing activities was primarily due to $16.5 million in outgoing cash used to fund other investments and $6.9 million investment in unconsolidated affiliate, offset by the prior-year increased acquisition activity, primarily attributable to CAE.

In the current year, there was an increase of $79.0 million in net pawn lending associated with PLO growth, partially offset by a $65.9 million increase in the sale of forfeited collateral in line with our growing merchandise sales.

Of the $16.5 million used to fund other investments, $15.0 million was invested in Founders, as discussed in Note 5:

Strategic Investments of Notes to Consolidated Financial Statements included in in “Part II, Item 8 — Notes to the Condensed Consolidated Financial Statements.”

The decrease in cash flows used in financing activities was primarily due to the prior-year payment of assumed debt of $14.9 million from the CAE acquisition, offset by a $2.0 million current year increase in cash used to repurchase and retire common stock.

The net effect of these changes was a $49.3 million decrease in cash on hand during the current year, resulting in a $214.4 million ending cash and restricted cash balance.

Sources and Uses of Cash

In December 2019, our Board of Directors authorized a stock repurchase program that will allow us to repurchase up to $60 million of our Class A Non-voting Common Stock over three years.

On March 20, 2020, we suspended the repurchase of shares under the program in order to preserve current liquidity given the uncertainty of the impact of the COVID-19 pandemic to our operations.

As of September 30, 2021, we had repurchased and retired 943,149 shares of our Class A Common Stock for $5.2 million.

The resumption of our stock repurchase program and the amount and timing of purchases will be dependent on a variety of factors, such as the return to normal business conditions, stock price, trading volume, general market conditions, legal and regulatory requirements, cash flow levels and corporate considerations determined by management and the Board, such as liquidity and capital needs and the availability of attractive alternative investment opportunities.

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 3 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.

We did not make any stock repurchases during the year ended September 30, 2021.

We anticipate that cash flows from operations and cash on hand will be adequate to fund any future stock repurchases, our contractual obligations, planned de novo store growth, capital expenditures and working capital requirements through fiscal 2022.

Through September 30, 2022, the Company has repurchased and retired 237,943 shares of our Class A Common Stock for $2.0 million, which amount was allocated between "Additional paid-in capital" and "Retained earnings" in our Consolidated Balance Sheets.

We anticipate that cash flows from operations and cash on hand will be adequate to fund any future stock repurchases, our contractual obligations, tax payments, planned de novo store growth, capital expenditures and working capital requirements through fiscal 2023.

We continue to explore acquisition opportunities, both large and small, and may choose to pursue additional debt, equity or equity-linked financings in the future should the need arise.

Given the current uncertainty related to the COVID-19 pandemic, we may adjust our capital or other expenditures.

Depending on the level of acquisition activity and other factors, our ability to repay our longer term debt obligations, including the convertible debt maturing in 2024 and 2025, may require us to refinance these obligations through the issuance of new debt securities, equity securities, convertible securities or through new credit facilities.

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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-K

Item 7. Management’s Discussion and Analysis