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Item 1. Financial Statements

2023-08-02 compared with 2023-05-03 · 104 added, 99 removed, 624 unchanged (25% 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,

33 unchanged sentences

issued and outstanding:

52,561,071 as of March 31, 2023;

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

52,214,761 as of June 30, 2023;

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

and 53,454,885 as of September 30, 2022

10 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(in thousands, except per share amount) 2023 2022 2023 2022

11 unchanged sentences

Depreciation and amortization 8,026 7,746 23,977 22,770

Loss (gain) on sale or disposal of assets 73 ( 697 ) 57 ( 692 )

(Gain) loss on sale or disposal of assets ( 29 ) — 28 ( 692 )

Other ( 2,632 ) — ( 5,097 ) —

3 unchanged sentences

Interest income ( 2,584 ) ( 190 ) ( 5,146 ) ( 749 )

Equity in net loss of unconsolidated affiliates 32,501 1,439 30,917 301

Other expense (income) 80 371 ( 154 ) 251

(Loss) income before income taxes ( 7,340 ) 20,123 17,198 41,470

Income (benefit) tax expense ( 550 ) 5,236 7,210 10,862

Net (loss) income $ ( 6,790 ) $ 14,887 $ 9,988 $ 30,608

Equity in net (income) loss of unconsolidated affiliates ( 1,523 ) ( 1,758 ) 29,394 ( 1,457 )

Other (income) expense ( 5 ) ( 210 ) ( 159 ) 41

Income before income taxes 21,310 13,082 38,508 54,552

Income tax expense 3,088 867 10,298 11,729

Net income $ 18,222 $ 12,215 $ 28,210 $ 42,823

Basic earnings per share $ 0.33 $ 0.22 $ 0.51 $ 0.76

5 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(in thousands) 2023 2022 2023 2022

Net (loss) income $ ( 6,790 ) $ 14,887 $ 9,988 $ 30,608

Net income $ 18,222 $ 12,215 $ 28,210 $ 42,823

Other comprehensive income:

24 unchanged sentences

Balances as of March 31, 2023 55,531 $ 556 $ 343,088 $ 405,961 $ ( 37,017 ) $ 712,588

Stock compensation — — 3,135 — — 3,135

Foreign currency translation gain — — — — 8,101 8,101

Purchase and retirement of treasury stock ( 346 ) ( 4 ) ( 1,366 ) ( 1,634 ) — ( 3,004 )

Net income — — — 18,222 — 18,222

Balances as of June 30, 2023 55,185 $ 552 $ 344,857 $ 422,549 $ ( 28,916 ) $ 739,042

Common Stock Additional

17 unchanged sentences

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

See accompanying notes to unaudited interim condensed consolidated financial statements

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

(in thousands) 2023 2022

39 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents and restricted cash 1,420 1,219

Net increase in cash, cash equivalents and restricted cash 37,210 53

Net increase (decrease) in cash, cash equivalents and restricted cash 32,154 ( 32,668 )

Cash, cash equivalents and restricted cash at beginning of period 214,369 263,624

15 unchanged sentences

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, 2023, are not necessarily indicative of results that may be expected for the fiscal year ending September 30, 2023 or any other period due, in part, to seasonal variations.

Financial results for the three and nine-month periods ended June 30, 2023, are not necessarily indicative of results that may be expected for the fiscal year ending September 30, 2023 or any other period due, in part, to seasonal variations.

There have been no changes that have had a material impact in significant accounting policies as described in our 2022 Annual Report .

14 unchanged sentences

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

Six Months Ended March 31, 2023

Nine Months Ended June 30, 2023

(in thousands) U.S.

4 unchanged sentences

Effect of foreign currency translation changes — 5,824 5,824

Balances as of March 31, 2023 $ 254,971 $ 45,107 $ 300,078

Six Months Ended March 31, 2022

Balances as of June 30, 2023 $ 254,971 $ 47,149 $ 302,120

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

Balances as of June 30, 2022

$ 245,503 $ 41,295 $ 286,798

During the first quarter of fiscal 2023, we acquired nine pawn stores located in Houston, Texas and one luxury pawn store in Las Vegas, Nevada for total cash consideration of $ 13.0 million , inclusive of all ancillary arrangements, of which $ 9.5 million was recorded as goodwill.

These acquisitions expand our position in these strategic markets and expands our offerings by providing a dedicated and targeted focus on higher-end products.

These acquisitions expand our position in these strategic markets, a nd the luxury pawn transaction expands our offerings by providing a dedicated and targeted focus on higher-end products.

These acquisitions were immaterial, individually and in the aggregate, and we have therefore omitted or aggregated certain disclosures.

(LOSS) EARNINGS PER SHARE

The following table reconciles the number of common shares used to compute basic and diluted (loss) earnings per share attributable to EZCORP Inc., shareholders:

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

Six Months Ended

Nine Months Ended

(in thousands, except per share amounts) 2023 2022 2023 2022

Basic (loss) earnings per common share:

Net (loss) income - basic $ ( 6,790 ) $ 14,887 $ 9,988 $ 30,608

Basic earnings per common share:

Net income - basic $ 18,222 $ 12,215 $ 28,210 $ 42,823

Weighted shares outstanding - basic 55,367 56,656 55,776 56,465

Basic (loss) earnings per common share $ ( 0.12 ) $ 0.26 $ 0.18 $ 0.54

Diluted (loss) earnings per common share:

Net (loss) income - basic $ ( 6,790 ) $ 14,887 $ 9,988 $ 30,608

Basic earnings per common share $ 0.33 $ 0.22 $ 0.51 $ 0.76

Diluted earnings per common share:

Net income - basic $ 18,222 $ 12,215 $ 28,210 $ 42,823

Convertible Notes interest expense, net of tax* 2,644 1,868 1,885 5,598

Net (loss) income - diluted $ ( 6,790 ) $ 16,733 $ 7,255 $ 34,338

Net income - diluted $ 20,866 $ 14,083 $ 30,095 $ 48,421

Weighted shares outstanding - basic 55,367 56,656 55,776 56,465

2 unchanged sentences

Weighted shares outstanding - diluted 86,825 82,504 79,559 82,349

Diluted (loss) earnings per common share $ ( 0.12 ) $ 0.20 $ 0.11 $ 0.42

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

Equity-based compensation awards** 1,014 — — —

Diluted earnings per common share $ 0.24 $ 0.17 $ 0.38 $ 0.59

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

Convertible Notes*** — — 6,323 —

1 unchanged sentence

Total 1,705 1,825 8,051 2,066

* The six months ended March 31, 2023 includes $ 5.4 million gain on the partial extinguishment of debt, associated with the 2025 Convertible Notes, which was recorded to "Interest expense" in the Company's condensed consolidated statement of operations.

* The nine months ended June 30, 2023 includes $ 5.4 million gain on the partial extinguishment of debt, associated with the 2025 Convertible Notes, which was recorded to “Interest expense” in the Company’s condensed consolidated statement of operations.

Debt for additional information.

4 unchanged sentences

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 .

Our lease portfolio consists primarily of operating leases for pawn store locations and corporate offices with lease terms ranging from three to ten years and finance leases for vehicles with lease terms of five years .

The table below presents balances of our lease assets and liabilities and their balance sheet locations for both operating and financing leases:

(in thousands) Balance Sheet Location March 31, 2023 March 31, 2022 September 30, 2022

(in thousands) Balance Sheet Location June 30, 2023 June 30, 2022 September 30, 2022

Lease assets:

12 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(in thousands) 2023 2022 2023 2022

8 unchanged sentences

Total lease cost $ 23,042 $ 21,088 $ 66,549 $ 61,615

* Includes a reduction for sublease rental income of $ 1.1 million and $ 0.8 million for the three months ended March 31, 2023 and 2022, respectively and $ 1.8 million and $ 1.7 million for the six months ended March 31, 2023 and 2022, respectively.

* Includes a reduction for sublease rental income of $ 1.0 million and $ 0.9 million for the three months ended June 30, 2023 and 2022, respectively, and $ 2.8 million and $ 2.6 million for the nine months ended June 30, 2023 and 2022, respectively.

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.

Cash paid for operating leases was $ 18.9 million and $ 18.0 million for the three months ended March 31, 2023 and 2022, respectively and $ 37.4 million and $ 35.6 million for the six months ended March 31, 2023 and 2022, respectively.

Cash paid for operating leases was $ 19.5 million and $ 18.4 million for the three months ended June 30, 2023 and 2022, respectively, and $ 56.9 million and $ 54.0 million for the nine months ended June 30, 2023 and 2022, respectively.

The weighted-average term and discount rates for leases are as follows:

Six Months Ended

Nine Months Ended

Weighted-average remaining lease term (years):

4 unchanged sentences

Financing leases 11.14 % N/A

As of March 31, 2023, maturities of lease liabilities under ASC 842 by fiscal year were as follows:

As of June 30, 2023, maturities of lease liabilities under ASC 842 by fiscal year were as follows:

(in thousands) Operating Leases Financing Leases

6 unchanged sentences

Total long term net lease liabilities $ 197,499 $ 1,645

We recorded $ 34.5 million and $ 28.1 million in non-cash additions to our right-of-use assets and lease liabilities for the six months ended March 31, 2023 and March 31, 2022, respectively.

We recorded $ 55.2 million and $ 55.3 million in non-cash additions to our operating right-of-use assets and lease liabilities for the nine months ended June 30, 2023 and June 30, 2022, respectively.

We recorded $ 2.1 million in non-cash additions to our finance right-of-use assets and leases liabilities for the nine months ended June 30, 2023.

STRATEGIC INVESTMENTS

9 unchanged sentences

November 2, 2022 $ 2,100 13,000,000 273,939,157 43.7 %

On October 2021, April 2022 and November 2022, we received cash dividends of $ 1.7 million, $ 1.7 million and $ 1.8 million, respectively, from Cash Converters.

In October 2021, April 2022, November 2022 and April 2023, we received cash dividends of $ 1.7 million, $ 1.7 million, $ 1.8 million and $ 1.8 million, respectively, from Cash Converters.

The following tables present summary financial information for Cash Converters most recently reported results at December 31, 2022 after translation to U.S.

12 unchanged sentences

Net profit ( 73,197 ) 1

During the quarter ended March 31, 2023, we recorded a $ 32.5 million loss on our share of losses from Cash Converters, which included $ 32.4 million as our share of their non-cash goodwill impairment charge, that was recorded to "Equity in net loss of unconsolidated affiliates" in the condensed consolidated statements of operations.

During the three and nine months ended June 30, 2023, we recorded our share of income of $ 1.5 million and a $ 29.4 million loss on our share of losses from Cash Converters, respectively, included in “Equity in net (income) loss of unconsolidated affiliates” in the condensed consolidated statements of operations.

For the nine months ended June 30, 2023, the $ 29.4 million loss includes $ 32.4 million of our share of their non-cash goodwill impairment charge.

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

7 unchanged sentences

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

Our $ 30.0 million carrying value of the investment and $ 15.0 million Demand Promissory Note are included in “Other investments” and "Prepaid expenses and other current assets"

in our consolidated balance sheets, respectively.

Our $ 30.0 million carrying value of the investment and $ 15.0 million Demand Promissory Note are included in “Other investments” and “Prepaid expenses and other current assets” in our consolidated balance sheets, respectively.

Our maximum exposure for losses related to our investment in Founders is our $ 30.0 million equity investment and $ 15.0 million Demand Promissory Note plus accrued and unpaid interest.

13 unchanged sentences

Carrying Value Estimated Fair Value

March 31, 2023 March 31, 2023 Fair Value Measurement Using

June 30, 2023 June 30, 2023 Fair Value Measurement Using

(in thousands) Level 1 Level 2 Level 3

11 unchanged sentences

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

21 unchanged sentences

Due to the short-term nature of cash and cash equivalents, pawn loans and pawn service charges receivable, 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.

We consider our cash and cash equivalents, including money market accounts, 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, fees and interest receivable and other debt could significantly increase or decrease these fair value estimates.

1 unchanged sentence

de C.V., which owned stores operating under the name “Cash Apoyo Efectivo,” at the end of each reporting period.

This remeasurement resulted in a $ 2.5 million reduction of the obligation with an offset recorded to "Other" as an operating item in our condensed consolidated statement of operations during the second quarter of fiscal 2023.

The remaining obligation of $ 2.5 million is included in "Accounts payable, accrued expenses and other current liabilities" in our Consolidated Balance Sheet as of March 31, 2023.

This remeasurement resulted in a $ 2.6 million and $ 5.1 million reduction of the obligation with an offset recorded to “Other” as an operating item in our condensed consolidated statements of operations during the three and nine months ended June 30, 2023, respectively.

There is no remaining obligation in our Consolidated Balance Sheet as of June 30, 2023.

The key assumptions used to determine the fair value of acquisition-related contingent consideration are estimated by management, not observable in the market and, therefore, considered Level 3 inputs within the fair value hierarchy.

4 unchanged sentences

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, 2023.

The fair value of the note approximated its carrying value as of June 30, 2023.

In December 2022, we loaned $ 15.0 million to Founders in exchange for a Demand Promissory Note secured by the common interest in Founders held by the other member.

The note bears interest at the rate of 12.00 % per annum, and all principal and accrued interest is due on demand.

The fair value of the note approximated its carrying value as of March 31, 2023.

The fair value of the note approximated its carrying value as of June 30, 2023.

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

2 unchanged sentences

We included no control premium for owning a large percentage of outstanding shares.

The $ 39.2 million in "Other investments" as of March 31, 2023, includes $ 30.0 million related to our investment in Founders and $ 6.2 million related to our investment in Rich Data Corporation ("RDC") .

The $ 39.2 million in “Other investments” as of June 30, 2023, includes $ 30.0 million related to our investment in Founders and $ 6.2 million related to our investment in Rich Data Corporation ( “ RDC ” ) .

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

The $ 18.0 million "Other investments" as of March 31, 2022, includes $ 15.0 million related to our investment in Founders.

The $ 18.0 million “Other investments” as of June 30, 2022, includes $ 15.0 million related to our investment in Founders.

We determined the fair value of the 2024, 2025 and 2029 Convertible Notes using quoted price inputs.

2 unchanged sentences

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

March 31, 2023 March 31, 2022 September 30, 2022

June 30, 2023 June 30, 2022 September 30, 2022

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

3 unchanged sentences

Total long-term debt $ 367,762 $ ( 8,076 ) $ 359,686 $ 316,250 $ ( 3,729 ) $ 312,521 $ 316,250 $ ( 3,347 ) $ 312,903

The following table presents the Company's contractual maturities related to the debt instruments as of March 31, 2023:

The following table presents the Company’s contractual maturities related to the debt instruments as of June 30, 2023:

Schedule of Contractual Maturities

5 unchanged sentences

Total long-term debt $ 230,000 $ 103,373 $ 34,389 $ 367,762

The following table presents the Company's interest expense related to the Convertible Notes for the three and six months ended March 31, 2023 and 2022:

The following table presents the Company’s interest expense related to the Convertible Notes for the three and nine months ended June 30, 2023 and 2022:

Three Months Ended

Six Months Ended

Nine Months Ended

(in thousands) 2023 2022 2023 2022

14 unchanged sentences

3.750 % Convertible Senior Notes Due 2029

In December 2022, we issued $ 230.0 million aggregate principal amount of 3.750 % Convertible Senior Notes Due 2029 (the “2029 Convertible Notes”).

In December 2022, we issued $ 230.0 million aggregate principal amount of 3.750 % Convertible Senior Notes Due 2029 (the “2029 Convertible Notes”), for which $ 230.0 million remains outstanding as of June 30, 2023.

The 2029 Convertible Notes were issued pursuant to an indenture dated December 12, 2022 (the “2022 Indenture”) by and between the Company and Truist Bank, as trustee.

2 unchanged sentences

At maturity, the holders of the 2029 Convertible Notes will be entitled to receive cash equal to the principal of the 2029 Convertible Notes plus accrued interest.

The effective interest rate for the three and six months ended March 31, 2023 was approximately 4.28 %.

As of March 31, 2023, the remaining unamortized debt issuance costs will be amortized using the effective interest method through the 2029 Maturity Date assuming no early conversion.

The effective interest rate for the three and nine months ended June 30, 2023 was approximately 4.28 %.

As of June 30, 2023, the remaining unamortized debt issuance costs will be amortized using the effective interest method through the 2029 Maturity Date assuming no early conversion.

The 2029 Convertible Notes are convertible based on an initial conversion rate of 89.0313 shares of Class A Common Stock per $1,000 principal amount (equivalent to an initial conversion price of $ 11.23 per share).

9 unchanged sentences

We may not redeem the Notes prior to December 21, 2026.

At our option, we may redeem for cash all or any portion of the 2029 Convertible Notes on or after December 21, 2026, if the last reported sale price of the Class A Common Stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately

preceding the date on which we provide notice of redemption.

The redemption price will be equal to 100 % of the principal amount of the 2029 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, 2023.

As of March 31, 2023, the if-converted value of the 2029 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, 2023.

As of June 30, 2023, the if-converted value of the 2029 Convertible Notes did not exceed the principal amount.

Note Repurchases

1 unchanged sentence

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”), for which $ 103.4 million remains outstanding as of March 31, 2023.

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.

2 unchanged sentences

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 ended March 31, 2023 was approximately 2.88 % for the 2025 Convertible Notes.

As of March 31, 2023, 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, 2023 was approximately 2.88 % for the 2025 Convertible Notes.

As of June 30, 2023, 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).

11 unchanged sentences

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, 2023.

As of March 31, 2023, 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, 2023.

As of June 30, 2023, the if-converted value of the 2025 Convertible Notes did not exceed the principal amount.

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”), for which $ 34.4 million remains outstanding as of March 31, 2023.

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.

3 unchanged sentences

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 ended March 31, 2023 was approximately 3.35 %.

As of March 31, 2023, 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, 2023 was approximately 3.35 %.

As of June 30, 2023, 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).

10 unchanged sentences

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, 2023.

As of March 31, 2023, 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, 2023.

As of June 30, 2023, the if-converted value of the 2024 Convertible Notes did not exceed the principal amount.

COMMON STOCK AND STOCK COMPENSATION

4 unchanged sentences

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

As of March 31, 2023, the Company has repurchased and retired 929,336 shares of our Class A Common Stock for $ 8.0 million under the Common Stock Repurchase Program, of which $ 3.9 million was repurchased during the quarter ended March 31, 2023.

As of June 30, 2023, the Company has repurchased and retired 1,275,646 shares of our Class A Common Stock for $ 11.0 million under the Common Stock Repurchase Program, of which $ 3.0 million was repurchased during the quarter ended June 30, 2023.

The repurchase amount is allocated between “Additional paid-in capital” and “Retained earnings” in our condensed consolidated balance sheets.

15 unchanged sentences

Cancelled ( 78,029 ) 6.70

Outstanding as of March 31, 2023

Outstanding as of June 30, 2023

2,563,236 $ 6.81

11 unchanged sentences

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.

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, which was approved by the court on October 24, 2022.

The period for submitting claims expired on November 8, 2022.

The Company recorded a $ 2.0 million charge during the quarter ended June 30, 2022, which amount has since been paid to the third party claims administrator in final satisfaction of claims and related costs.

The claims administrator is in the process of disbursing settlement funds.

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

On June 16, 2022, the parties agreed to a settlement of all asserted claims and entered into a Settlement Agreement and Release, which was approved by the court on October 24, 2022.

The Company recorded a $ 2.0 million charge during the quarter ended June 30, 2022, the final payment of which was made on April 21, 2023 to the third party claims administrator for disbursement in final satisfaction of claims and related costs.

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.

The factors for determining our reportable segments include the manner in which our chief operating decision maker evaluates performance for purposes of allocating resources and assessing performance.

We currently report our segments as follows:

1 unchanged sentence

• Latin America Pawn — all pawn activities in Mexico and other parts of Latin America;

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

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

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, 2023

Three Months Ended June 30, 2023

(in thousands) U.S.

12 unchanged sentences

Depreciation and amortization 2,505 2,303 — 4,808 3,218 8,026

Loss (gain) loss on sale or disposal of assets 81 ( 8 ) — 73 — 73

Gain on sale or disposal of assets — ( 29 ) — ( 29 ) — ( 29 )

Other — ( 2,632 ) — ( 2,632 ) — ( 2,632 )

1 unchanged sentence

Interest income ( 1 ) ( 256 ) — ( 257 ) ( 2,327 ) ( 2,584 )

Equity in net loss of unconsolidated affiliates — — 32,501 32,501 — 32,501

Equity in net income of unconsolidated affiliates — — ( 1,523 ) ( 1,523 ) — ( 1,523 )

Other (income) expense — ( 65 ) 10 ( 55 ) 50 ( 5 )

Segment contribution (loss) $ 37,752 $ 7,996 $ ( 32,497 ) $ 13,251

Segment contribution $ 32,299 $ 9,714 $ 1,528 $ 43,541

Income (loss) before income taxes $ 43,541 $ ( 22,231 ) $ 21,310

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

(in thousands) U.S.

12 unchanged sentences

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

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

Interest expense — — — — 2,693 2,693

4 unchanged sentences

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

Six Months Ended March 31, 2023

Nine Months Ended June 30, 2023

(in thousands) U.S.

17 unchanged sentences

Equity in net loss of unconsolidated affiliates — — 29,394 29,394 — 29,394

Other expense (income) — 24 10 34 ( 188 ) ( 154 )

Other (income) expense — ( 41 ) 20 ( 21 ) ( 138 ) ( 159 )

Segment contribution (loss) $ 109,342 $ 25,239 $ ( 29,367 ) $ 105,214

Income (loss) before income taxes $ 105,214 $ ( 66,706 ) $ 38,508

Six Months Ended March 31, 2022

Nine Months Ended June 30, 2022

(in thousands) U.S.

16 unchanged sentences

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

Other (income) expense — 200 ( 4 ) 196 55 251

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

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

4 unchanged sentences

Investments Corporate Items Total

As of March 31, 2023

As of June 30, 2023

Pawn loans $ 178,877 $ 50,502 $ — $ — $ 229,379

Inventory, net 114,910 40,034 — — 154,944

As of March 31, 2022

As of June 30, 2022

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

2 unchanged sentences

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

(in thousands) March 31, 2023 March 31, 2022 September 30, 2022

(in thousands) June 30, 2023 June 30, 2022 September 30, 2022

Gross pawn service charges receivable $ 47,071 $ 42,277 $ 44,192

20 unchanged sentences

The following table provides supplemental disclosure of Consolidated Statements of Cash Flows information:

Six Months Ended

Nine Months Ended

(in thousands) 2023 2022

10 unchanged sentences

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