What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-11-15 compared with 2022-11-16 · 345 added, 276 removed, 982 unchanged (39% of the section changed)

1 unchanged sentence

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (BDO USA, LLP;

Report of Independent Registered Public Accounting Firm (BDO USA, P.C.

Dallas, Texas;

3 unchanged sentences

Consolidated Statements of Operations for each of the three years ended September 30, 2023, 2022 and 2021

Consolidated Statements of Comprehensive Income (Loss) for three years ended September 30, 2022, 2021 and 2020

Consolidated Statements of Comprehensive Income for three years ended September 30, 2023, 2022 and 2021

Consolidated Statements of Stockholders’ Equity for each of the three years ended September 30, 2023, 2022 and 2021

3 unchanged sentences

Other Charges

Earnings (Loss) Per Share

Earnings Per Share

Strategic Investments

8 unchanged sentences

Report of Independent Registered Public Accounting Firm

Stockholders and Board of Directors

Shareholders and Board of Directors

Rollingwood, Texas

1 unchanged sentence

We have audited the accompanying consolidated balance sheets of EZCORP, Inc.

(the “Company”) as of September 30, 2022, and 2021, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended September 30, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).

(the “Company”) as of September 30, 2023 and 2022, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended September 30, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at September 30, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2023, in conformity with accounting principles generally accepted in the United States of America.

1 unchanged sentence

Change in Accounting Principle

As is discussed in Notes 1 and 9 to the consolidated financial statements, the Company changed its method of accounting for convertible debt as of October 1, 2021, due to the adoption of 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):

As is discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for convertible debt as of October 1, 2021, due to the adoption of 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):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.

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(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Accounting for Investment in Founders One, LLC

As described in Note 5 to the Company’s consolidated financial statements, the Company invested $15.0 million in exchange for a non-redeemable voting participating preferred equity interest in Founders One, LLC (the “Founders Investment”), a newly formed entity with one other member.

The Company concluded that Founders One, LLC is a variable interest entity (“VIE”) but because the Company is not the primary beneficiary, it is not consolidated.

The Company accounts for the investment in accordance with Accounting Standards Codification 321, Investments-Equity Securities , utilizing the measurement alternative available for equity securities without a readily determinable fair value.

We identified the Company’s accounting for the Founders Investment as a critical audit matter.

Determination of the accounting treatment for the Founders Investment required complex evaluation of whether the investment entity meets the definition of, and potentially consolidates as a VIE, or whether other investment accounting guidance applies.

Auditing management’s conclusions with respect to the Founders Investment required an increased level of audit effort, including the involvement of professionals with additional experience in consolidation and investment accounting assessments.

The procedures we performed to address this critical audit matter included:

• Analyzing the Founders One, LLC Operating Agreement to assess the reasonableness of management’s accounting treatment for the investment.

• Utilizing personnel with increased knowledge and experience in the area of accounting for consolidation and investment assessments to assist in evaluating the appropriateness of management’s conclusion on the accounting for the Founders Investment.

/s/ BDO USA, LLP

The communication of critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Accounting for Convertible Debt

As described in Note 9 to the Company’s consolidated financial statements, in December 2022, the Company issued $230.0 million aggregate principal amount of 3.750% Convertible Senior Notes Due 2029 (the “2029 Convertible Notes”).

The 2029 Convertible Notes contain certain conversion, redemption, and other embedded features that require the Company to assess if such features are embedded derivatives that require bifurcation from the 2029 Convertible Notes, and are to be accounted for separately.

The Company determined the embedded features did not require bifurcation from the 2029 Convertible Notes, and therefore were not accounted for separately.

We identified the Company’s accounting for the 2029 Convertible Notes as a critical audit matter.

Determination of the accounting treatment for the 2029 Convertible Notes required complex evaluation in order to:

(a) identify the embedded conversion, redemption, and other features present within the 2029 Convertible Notes, and (b) assess if the conditions requiring one or more of the identified embedded features to be bifurcated were satisfied.

Auditing management’s conclusions required an increased level of audit effort, including the involvement of professionals with specialized skill and knowledge in the accounting treatment for embedded derivatives.

The primary procedures we performed to address this critical audit matter included:

• Analyzing the terms included in the 2029 Convertible Notes Indenture, to assess the appropriateness of management's conclusion on the accounting treatment for the 2029 Convertible Notes.

• Utilizing personnel with specialized skill and knowledge in the relevant technical accounting guidance to (a) assist with identifying the embedded conversion, redemption and other features present within the 2029 Convertible Notes, and (b) assist with evaluating the appropriateness of management’s conclusions regarding bifurcation of the embedded features.

/s/ BDO USA, P.C.

We have served as the Company’s auditor since 2015.

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Inventory, net

166,477 151,615

Prepaid expenses and other current assets 39,623 34,694

8 unchanged sentences

Deferred tax asset, net 25,702 12,145

Other assets 6,444 4,736

Other assets, net 12,011 6,625

Total assets $ 1,467,711 $ 1,347,878

1 unchanged sentence

Current liabilities:

Current maturities of long-term debt, net $ 34,265 $ —

Accounts payable, accrued expenses and other current liabilities 81,605 84,509

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Jewelry scrapping cost of goods sold 44,424 28,696 22,848

Other cost of revenues — — 1,054

Gross profit 609,838 528,147 449,485

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General and administrative 67,529 64,342 56,495

Impairment of goodwill, intangible and other assets — — 54,666

Impairment of other assets 4,343 — —

Depreciation and amortization 32,131 32,140 30,672

(Gain) loss on sale or disposal of assets and other ( 674 ) 83 801

Other charges — 229 20,388

Loss (gain) on sale or disposal of assets and other 208 ( 674 ) 83

Other (income) expense ( 5,097 ) — 229

Total operating expenses 517,688 453,225 418,316

Operating income (loss) 74,922 31,169 ( 48,384 )

Operating income 92,150 74,922 31,169

Interest expense 16,456 9,972 22,177

Interest income ( 7,470 ) ( 817 ) ( 2,477 )

Equity in net (income) loss of unconsolidated affiliates ( 1,779 ) ( 3,803 ) 2,429

Other income ( 167 ) ( 790 ) ( 17 )

Income (loss) before income taxes 67,713 16,062 ( 70,095 )

Income tax expense (benefit) 17,553 7,450 ( 1,632 )

Net income (loss) 50,160 8,612 ( 68,463 )

Basic earnings (loss) per share $ 0.89 $ 0.15 $ ( 1.24 )

Diluted earnings (loss) per share $ 0.70 $ 0.15 $ ( 1.24 )

Equity in net loss (income) of unconsolidated affiliates 28,459 ( 1,779 ) ( 3,803 )

Other expense (income) 3,072 ( 167 ) ( 790 )

Income before income taxes 51,633 67,713 16,062

Income tax expense 13,170 17,553 7,450

Net income $ 38,463 $ 50,160 $ 8,612

Basic earnings per share $ 0.69 $ 0.89 $ 0.15

Diluted earnings per share $ 0.53 $ 0.70 $ 0.15

Weighted-average basic shares outstanding 55,586 56,498 55,744

1 unchanged sentence

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Fiscal Year Ended September 30,

(in thousands) 2023 2022 2021

Net income (loss) $ 50,160 $ 8,612 $ ( 68,463 )

Other comprehensive income ( loss):

Foreign currency translation adjustment, net of tax 2,746 9,653 ( 15,678 )

Comprehensive income (loss) $ 52,906 $ 18,265 $ ( 84,141 )

Net income $ 38,463 $ 50,160 $ 8,612

Other comprehensive income:

Foreign currency translation adjustment, net of income tax expense for our investment in unconsolidated affiliate of $ 666 , $ 229 and $ 280 for the years ended September 30, 2023, 2022 and 2021, respectively

23,567 2,746 9,653

Comprehensive income $ 62,030 $ 52,906 $ 18,265

See accompanying notes to consolidated financial statements.

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Stock compensation — — 3,946 — — 3,946

Release of restricted stock 711 6 — — — 6

Taxes paid related to net share settlement of equity awards — — ( 1,435 ) — — ( 1,435 )

Foreign currency translation loss — — — ( 8 ) ( 15,670 ) ( 15,678 )

Purchase and retirement of treasury stock ( 943 ) ( 11 ) ( 2,624 ) ( 2,523 ) — ( 5,158 )

Net loss — — — ( 68,463 ) — ( 68,463 )

Balances as of September 30, 2020

55,303 $ 551 $ 398,475 $ 318,169 $ ( 68,068 ) $ 649,127

Stock compensation — — 3,946 — — 3,946

Transfer of consideration for current period acquisition 213 2 1,545 — — 1,547

16 unchanged sentences

56,425 $ 564 $ 345,330 $ 402,006 $ ( 55,669 ) $ 692,231

See accompanying notes to consolidated financial statements.

Stock compensation — — 9,539 — — 9,539

Transfer of equity consideration for acquisition 10 — 99 — — 99

Release of restricted stock, net of shares withheld for taxes 373 5 — — — 5

Taxes paid related to net share settlement of equity awards ( 1 ) — ( 1,148 ) — — ( 1,148 )

Foreign currency translation gain — — — — 23,567 23,567

Purchase and retirement of treasury stock ( 1,967 ) ( 20 ) ( 7,639 ) ( 9,329 ) — ( 16,988 )

Net income — — — 38,463 — 38,463

Balances as of September 30, 2023

54,840 $ 549 $ 346,181 $ 431,140 $ ( 32,102 ) $ 745,768

S ee accompanying notes to consolidated financial statements.

EZCORP, Inc .

CONSOLIDATED STATEMENTS OF CASH FLOWS

2 unchanged sentences

Operating activities:

Net income (loss) $ 50,160 $ 8,612 $ ( 68,463 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net income $ 38,463 $ 50,160 $ 8,612

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 32,131 32,140 30,672

Amortization of debt discount and deferred financing costs 1,561 1,433 13,797

Amortization of right-of-use asset 52,201 48,480 45,649

Accretion of notes receivable discount and deferred compensation fee — — ( 821 )

Non-cash lease expense 56,937 52,201 48,480

Deferred income taxes ( 12,802 ) 4,945 3,283

Impairment of goodwill, intangibles and other assets — — 54,666

Impairment of other assets 4,343 — —

Other adjustments ( 2,890 ) 2,511 ( 185 )

1 unchanged sentence

Stock compensation expense 9,539 5,053 3,946

Equity in net (income) loss from investment in unconsolidated affiliates ( 1,779 ) ( 3,803 ) 2,429

Equity in net loss (income) from investment in unconsolidated affiliates 28,459 ( 1,779 ) ( 3,803 )

Net loss on extinguishment of debt 3,545 — —

Changes in operating assets and liabilities, net of business acquisitions:

16 unchanged sentences

Investment in other investments ( 15,000 ) ( 16,500 ) —

Principal collections on notes receivable — — 8,000

Net cash (used in) provided by investing activities ( 113,283 ) ( 84,611 ) 109,898

Dividends from unconsolidated affiliates 3,589 — —

Net cash used in investing activities ( 110,886 ) ( 113,283 ) ( 84,611 )

Financing activities:

Taxes paid related to net share settlement of equity awards ( 1,148 ) ( 792 ) ( 839 )

Payout of deferred consideration — — ( 350 )

Proceeds from borrowings, net of issuance costs — — 912

Proceeds from borrowings 230,000 — —

Debt issuance cost ( 7,458 ) — —

Cash paid on extinguishment of debt ( 1,951 ) — —

Payments on assumed debt and other borrowings ( 178,488 ) — ( 15,414 )

Purchase and retirement of treasury stock ( 16,988 ) ( 2,040 ) —

Net cash used in financing activities ( 2,832 ) ( 16,253 ) ( 6,253 )

Payments of finance leases ( 275 ) — —

Net cash provided by (used in) financing activities 23,692 ( 2,832 ) ( 16,253 )

Effect of exchange rate changes on cash and cash equivalents and restricted cash ( 41 ) 325 5,497

Net (decrease) increase in cash and cash equivalents and restricted cash ( 49,255 ) ( 48,929 ) 150,111

Net increase (decrease) in cash and cash equivalents and restricted cash 14,599 ( 49,255 ) ( 48,929 )

Cash and cash equivalents and restricted cash at beginning of period 214,369 263,624 312,553

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We have an equity interest ( 43.7 % as of September 30, 2023) in Cash Converters International Limited (“Cash Converters”), a publicly traded company (ASX:CCV) headquartered in Perth, Western Australia.

Cash Converters and its controlled companies comprise a diverse group generating revenues from franchising, store operations, personal finance (including pawn transactions) and vehicle finance, in 700 stores across 14 countries.

Additionally, we own a preferred interest in Founders One, LLC (“Founders”) that has majority ownership in Simple Management Group, Inc.

Basis of Presentation and Principles of Consolidation

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We base our estimate of collectability on several inputs, including recent redemption rates, historical trends in redemption rates and the amount of loans due in the following months.

Unexpected variations in any of these factors could change our estimate of collectibility and affect our results of operations and financial condition.

Unexpected variations in any of these factors could change our estimate of collectability and affect our results of operations and financial condition.

If a pawn loan is not repaid, the forfeited collateral is recorded as inventory at the lower of the principal balance of the pawn loan or the net realizable value of the item.

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We recognize the satisfaction of the performance obligations and record merchandise sales revenue and the related costs when merchandise inventory is sold and delivered to the customer or, in the case of a layaway sale, when we receive the final payment.

Customer layaway deposits are recorded as liabilities when a customer provides a deposit for merchandise.

Customer layaway deposits are generally refundable upon cancellation.

Our customer layaway deposits balance as of September 30, 2023, 2022 and 2021 was $ 18.9 million, $ 16.0 million and $ 12.6 million, respectively, and are generally recognized as revenue within a one-year period.

Customers have a limited period of time to return merchandise for a refund or exchange, and actual returns for refunds are not material.

14 unchanged sentences

Significant variances in those margins may require a revision to future inventory reserve estimates.

We determine our reserve estimates pertaining to jewelry inventory based on the current and projected prices of gold.

We determine our reserve pertaining to jewelry inventory based on the current and projected prices of gold.

Future declines in the value of gold may result in an increase in reserves pertaining to jewelry inventory.

Situations that may result in excess or obsolete inventory include changes in business and economic conditions, changes in consumer confidence caused by changes in market conditions, decreases in demand for our products or inventory obsolescence resulting from changes in technology.

Included in “Merchandise cost of goods sold” during fiscal 2020, is $ 2.6 million of expense for inventory provisions primarily related to the write-off of excess and obsolete inventory due to the impacts of COVID-19.

With respect to our Mexico pawn operations, we do not own the forfeited collateral.

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Restricted Cash

Restricted cash consists of $ 8.0 million held in escrow pending the resolution of a pre-closing tax indemnity claim related to the sale of Grupo Finmart and $ 0.3 million related to the acquisition of PLO del Bajio S.

Restricted cash consists of $ 0.3 million related to the acquisition of PLO del Bajio S.

as discussed in Note 3:

Acquisitions.

Equity Method Investments

Acquisitions and $ 8.1 million held in escrow pending the resolution of a pre-closing tax indemnity claim related to the sale of Grupo Finmart.

We account for our investment in Cash Converters under the equity method.

1 unchanged sentence

Thus, the results of our operations reported for the fiscal years ended September 30, 2023, 2022 and 2021 include our percentage interest in the results of Cash Converters for the twelve-month periods ended June 30, 2023, 2022 and 2021, respectively.

We record our percentage interest in the results of Cash Converters for the three months ended June 30 based on an estimate of the results of Cash Converters for the three months ended March 31 of that year.

Similarly, we record our percentage interest in the results of Cash Converters for the three months ended December 31 using the estimated results of Cash Converters for the three months ended September 30 of that year.

During the first quarter of our fiscal year, we record our percentage interest in the results of Cash Converters for the three months ended June 30 based on an estimate of the results of Cash Converters for the three months ended March 31 of that year.

Similarly, during the third quarter of our fiscal year, we record our percentage interest in the results of Cash Converters for the three months ended December 31 using the estimated results of Cash Converters for the three months ended September 30 of that year.

Cash Converters files semi-annual financial reports with the Australian Securities & Investments Commission and the Australian Stock Exchange as of and for the periods ended June 30 and December 31.

1 unchanged sentence

The actual results of Cash Converters may vary from our estimates.

Refer to Note 5:

Strategic Investments for further details on our investment in Cash Converters.

We account for our investment in Rich Data Corporation (“RDC”) in accordance with ASC 321, Investments — Equity Securities, and we have elected to use the measurement alternative to measure this investment at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any.

As of September 30, 2023 and 2022, the carrying value of our investment in RDC was $ 6.2 million.

Refer to Note 5:

Strategic Investments for details on our investment in Founders.

We determine if an arrangement contains a lease at inception.

We have elected not to recognize on the balance sheet leases with terms of one year or less as a practical expedient.

Operating lease and financing lease assets are included in Right-of-use assets, net on the Consolidated Balance Sheets.

Operating lease assets are included in Right-of-use assets, net and financing lease assets are included in Other assets, net on the Consolidated Balance Sheets.

We enter into operating lease agreements for real estate related to pawn locations and corporate offices.

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We evaluate renewal options periodically for any changes in assumptions.

Effective October 1, 2019, we adopted the Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 842:

Leases (“ASC 842”).

Upon adoption, we elected to utilize the modified retrospective method, including not to account for lease and non-lease components separately.

We do not account for lease and non-lease components separately.

Lease components generally include rent, taxes and insurance, and non-lease components generally include common area maintenance.

17 unchanged sentences

When we perform a quantitative goodwill impairment test, we estimate the fair value of the reporting unit using an income approach based on the present value of expected future cash flows, including terminal value, utilizing a market-based weighted average cost of capital (“WACC”) determined separately for each reporting unit.

The determination of fair value involves the use of estimates and assumptions, including

revenue growth rates, operating margins and terminal growth rates discounted by an estimated WACC derived from other publicly traded companies that are similar but not identical to us from an operational and economic standpoint.

The determination of fair value involves the use of estimates and assumptions, including revenue growth rates, operating margins and terminal growth rates discounted by an estimated WACC derived from other publicly traded companies that are similar but not identical to us from an operational and economic standpoint.

We use discount rates that are commensurate with the risks and uncertainties inherent in the respective businesses and in our internally developed forecasts.

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If a cloud computing arrangement does not include a software license, we account for the arrangement as a service contract.

For cloud computing arrangements that meet the definition of a service contract, the Company capitalizes implementation costs incurred during the application development stage and until the software is ready for its intended use within Other assets, net in our Consolidated Balance Sheets and then amortizes the costs on a straight-line basis over the term of the contract.

The hosting service fees are not considered an implementation cost and are treated as a prepaid expense and then the Company amortizes the costs on a straight-line basis over the term of the contract.

Costs related to data conversion, training and other maintenance activities are expensed as incurred.

Business Combinations

3 unchanged sentences

Convertible Debt Securities

On October 1, 2021, we early adopted 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”) on a modified retrospective basis.

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

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

The conversion option that was previously accounted for in equity under the cash conversion model was recombined into the convertible debt outstanding, and as a result, additional paid in capital and the related unamortized debt discount on the convertible senior notes were reduced.

The removal of the remaining debt discounts recorded for this previous separation has the effect of increasing our net debt balance.

The prior period consolidated financial statements have not been retrospectively adjusted and continue to be reported under the accounting standards in effect for those periods.

Prior to our adoption of 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”) , on October 1, 2021, we accounted for our convertible debt securities at issuance, by separating the securities into debt and equity components pursuant to the prior accounting standards for convertible debt instruments.

3 unchanged sentences

The conversion premium of the convertible debt securities were accounted for under the treasury method in accordance with our previous accounting policy, which assumed settlement of the conversion premium (equal to the as-converted value over the face principal amount) in shares of our Class A Common Stock.

See Recently Adopted Accounting Policies within this Note 1 :

S ummary of S ignificant Accounting Policies for a discussion of the adoption of ASU 2020-06 and related impact.

Foreign Currency

2 unchanged sentences

We present resulting translation adjustments as a separate component of stockholders’ equity.

The cumulative translation adjustments associated with the net assets of foreign subsidiaries are the only amounts recorded in Accumulated Other Comprehensive Loss in the accompanying Consolidated Statements of Stockholders’ Equity.

Foreign currency transaction gains and losses not accounted for as translations are included in “Other expense (income)” in our Consolidated Statements of Operations.

These gains were $ 0.1 million and $ 0.5 million for fiscal 2021 and 2020, respectively.

There was no net gain or loss for fiscal 2022.

Store Expenses

4 unchanged sentences

This includes executive and administrative salaries, wages, stock and incentive compensation, professional fees, license fees, costs related to the operation of our administrative offices such as rent, property taxes, insurance, information technology and other corporate costs.

Advertising costs are expensed as incurred and included primarily under “Operations” expense in our Consolidated Statements of Operations.

Advertising costs are expensed as incurred and included primarily within “Store expenses” in our Consolidated Statements of Operations.

These costs were $ 4.9 million, $ 2.3 million and $ 1.6 million for fiscal 2023, 2022 and 2021, respectively.

During fiscal years 2023 and 2022, we incurred $ 2.9 million and $ 0.3 million, respectively, related to digital advertising.

The remaining for each year relates to general advertising costs.

Stock Compensation

1 unchanged sentence

Our policy is to recognize expense on performance-based awards, where satisfaction of the performance condition is probable, ratably over the awards’ vesting period and recognize expense on awards that only have service requirements on a straight-line basis.

We recognize forfeitures as they occur, and no longer estimate forfeitures when calculating share-based compensation expense.

We recognize forfeitures as they occur when calculating share-based compensation expense.

We account for income taxes using the asset and liability method.

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federal and state income taxes and foreign withholding taxes of our undistributed earnings of foreign subsidiaries indefinitely invested outside the U.S.

We treat taxes due on future U.S.

inclusions in taxable income related to Global Intangible Low-Taxed Income (“GILTI”) as a current-period expense when incurred.

We may be subject to income tax audits by the respective tax authorities in any or all of the jurisdictions in which we operate or have operated within a relevant period.

5 unchanged sentences

We adjust these reserves in light of changing facts and circumstances, such as the closing of an audit or the refinement of an estimate.

Changes in recognition or measurement are reflected in the

period in which the change in judgment occurs.

Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

We believe adequate provisions for income taxes have been made for all periods.

We recognize interest and penalties related to unrecognized tax benefits as “Income tax expense” in our Consolidated Statements of Operations.

Our policy is to release income tax effects from accumulated other comprehensive income on a segregated unit of account basis.

We consider our assessment of the recognition of deferred tax assets as well as estimates of uncertain tax positions to be critical estimates.

1 unchanged sentence

We compute basic earnings per share based on the weighted average number of shares of common stock outstanding during the period.

We calculate diluted earnings per share based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method.

Upon our adoption of ASU 2020-06 on October 1, 2021, interest charges on the convertible debt are required to be added to net income and we calculate diluted earnings per share during the period using the if-converted method.

Diluted net income (loss) and diluted weighted-average shares outstanding are adjusted to account for the impact of the assumed issuance of potential common shares that are dilutive, subject to dilution sequencing rules.

Dilutive potential common shares include outstanding restricted stock awards as well as shares issuable on conversion of our outstanding convertible debt securities.

3 unchanged sentences

Prior to our adoption of ASU 2020-06 on October 1, 2021, diluted earnings per share included the effect of dilutive potential associated with the conversion features embedded in our outstanding convertible debt using the treasury stock method.

See Recently Adopted Accounting Policies within this Note 1:

Summary of Significant Accounting Policies and Note 4:

E arnings ( L oss) Per Share for further discussions of the adoption of ASU 2020-06 and related impact.

Our capital stock consists of two classes of common stock designated as Class A Non-Voting Common Stock (“Class A Common Stock”) and Class B Voting Common Stock (“Class B Common Stock”).

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The prior period consolidated financial statements have not been retrospectively adjusted and continue to be reported under the accounting standards in effect for those periods.

The impact of adoption on our consolidated statements of operations for the fiscal year ended September 30, 2022 was primarily to decrease interest expense by $ 13.9 million.

This had the effect of increasing both our basic and diluted earnings per share for the fiscal year ended September 30, 2022 by $ 0.19 , and $ 0.01 , respectively.

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.

(in thousands) As Reported

9 unchanged sentences

Retained earnings 326,781 26,166 352,947

The impact of adoption on our consolidated statements of operations for the fiscal year ended September 30, 2022 was primarily to decrease interest expense by $ 13.9 million.

This had the effect of increasing both our basic and diluted earnings per share for the fiscal year ended September 30, 2022 by $ 0.19 , and $ 0.01 , respectively.

Refer to Note 4:

Earnings Per Share for a discussion of the effect of the convertible notes on diluted earnings per common share.

Recently Issued Accounting Pronouncements

3 unchanged sentences

The initiatives focused on workforce reductions, closure of our CASHMAX operations, store closures, write-offs and other miscellaneous charges.

There were no additional charges recorded for fiscal year ended September 30, 2022.

Accrued charges at September 30, 2022 were $ 0.2 million and $ 2.0 million related to store closure costs and other costs, respectively.

We recorded $ 0.2 million of charges for the fiscal year ended September 30, 2021 related to the closure of store operations in Peru.

Accrued charges at September 30, 2021 were $ 0.3 million, $ 0.2 million and $ 2.0 million related to labor reduction cost, store closure costs and other costs, respectively.

We recorded $ 20.4 million of aggregate charges for the fiscal year ended September 30, 2020 related to $ 6.4 million in labor reduction costs, $ 4.9 million in CASHMAX shutdown costs, $ 4.1 million in store closure costs and $ 5.0 million of other costs.

Accrued charges at September 30, 2020 were $ 5.9 million, $ 0.8 million, $ 1.8 million and $ 2.2 million related to labor reduction costs, CASHMAX shutdown costs, store closure costs and other costs respectively.

Accrued charges at September 30, 2023 and 2022 were $ 2.0 million and $ 2.2 million, respectively, and are included within Accounts payable, accrued expenses and other current liabilities in our Consolidated Balance Sheets.

Accrued charges includes $ 2.0 million related to other costs at September 30, 2023 and 2022 and $ 0.2 million related to store closure costs at September 30, 2022.

There were no charges recorded for fiscal years ended September 30, 2023 and 2022 and we recorded $ 0.2 million of charges for the fiscal year ended September 30, 2021 related to the closure of store operations in Peru.

Fiscal 2021 Acquisitions

3 unchanged sentences

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.

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

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

We had the right, in our discretion, to pay up to 50 % of any contingent payment in the form of shares of our Class A Non-Voting Common Stock.

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

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

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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 $ 0.7 million measurement period adjustment to reduce pawn service charges receivable and increase goodwill.

The remeasurement of the acquisition-related contingent obligation resulted in a reduction of the obligation to zero as of September 30, 2023, resulting in a $ 5.1 million reduction of the obligation with an offset recorded to “Other (income) expense” as an operating item in our consolidated statements of operations during year ended September 30, 2023.

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

As of September 30, 2022, the estimated fair value of the contingent obligation was $ 4.6 million and was included in “Accounts payable, accrued expenses and other current liabilities“ in our Consolidated Balance Sheets as of such date.

Reductions of acquisition-related contingent obligation after the measurement period adjustment have no impact to goodwill.

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

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We expect none of the goodwill resulting from this business combination will be deductible for income tax purposes.

The results of Bajio have been included in our condensed consolidated financial statements from the date of acquisition in our Latin America Pawn segment.

The acquired business contributed revenues of $ 9.6 million and net loss of $ 0.1 million during the fiscal year 2021.

The results of Bajio have been included in our consolidated financial statements from the date of acquisition in our Latin America Pawn segment.

The acquired business contributed revenues of $ 9.6 million and net loss of $ 0.1 million during the fiscal year 2021, the year of acquisition.

On June 9, 2021, we repaid $ 14.9 million of Bajio’s existing debt assumed in the acquisition.

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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.

Fiscal Years Ended September 30,

Fiscal Year Ended September 30,

(in thousands, except per share amounts) 2021

Revenue $ 748,957

Net income (loss) $ 8,828 $ ( 65,206 )

Basic earnings (loss) per common share $ 0.16 $ ( 1.18 )

Diluted earnings (loss) per common share $ 0.16 $ ( 1.18 )

Net income $ 8,828

Basic earnings per common share $ 0.16

Diluted earnings per common share $ 0.16

We did not have any material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma gross profit 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.

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, 2020.

During the fiscal year end ended September 30, 2021, we incurred total acquisition-related costs of $ 0.8 million.

The acquisition-related costs were primarily related to legal, accounting and consulting services and were expensed as incurred through September 30, 2021, and are included in general and administrative expenses in the Consolidated Statements of Operations .

EARNINGS (LOSS) PER SHARE

EARNINGS PER SHARE

The following table reconciles the number of common shares used to compute basic and diluted earnings per common share:

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(in thousands, except per share amounts) 2023 2022 2021

Basic earnings (loss) per common share:

Net Income (loss) - Basic $ 50,160 $ 8,612 $ ( 68,463 )

Basic earnings per common share:

Net Income - Basic $ 38,463 $ 50,160 $ 8,612

Weighted shares outstanding - Basic 55,586 56,498 55,744

Basic earnings (loss) per common share $ 0.89 $ 0.15 $ ( 1.24 )

Diluted earnings (loss) per common share:

Net Income (loss) - Basic $ 50,160 $ 8,612 $ ( 68,463 )

Basic earnings per common share $ 0.69 $ 0.89 $ 0.15

Diluted earnings per common share:

Net Income - Basic $ 38,463 $ 50,160 $ 8,612

Convertible Notes interest expense, net of tax* 4,327 7,489 —

Net Income (loss) - Diluted $ 57,649 $ 8,612 $ ( 68,463 )

Net Income - Diluted $ 42,790 $ 57,649 $ 8,612

Weighted shares outstanding - basic 55,586 56,498 55,744

Effect of dilution from equity-based compensation awards* 678 205 —

Effect of dilution from if-converted Convertible Notes** 25,224 — —

Equity-based compensation awards - effect of dilution** 1,482 678 205

Convertible Notes - effect of dilution 23,797 25,224 —

Weighted Shares Outstanding - Diluted 80,865 82,400 55,949

Diluted earnings (loss) per common share $ 0.70 $ 0.15 $ ( 1.24 )

Diluted earnings per common share $ 0.53 $ 0.70 $ 0.15

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

Convertible Notes*** 5,596 — —

Restricted stock**** 801 1,975 1,233

Total 6,397 1,975 1,233

* The year ended September 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 consolidated statement of operations.

Debt for additional information.

** Includes time-based share-based awards and performance based awards for which targets for fiscal year tranches have been achieved and vesting is subject only to achievement of service conditions.

*** See Note 9:

Debt for conversion price and initial conversion rate of the 2024 Convertible Notes and 2025 Convertible Notes.

Debt for conversion price and initial conversion rate of the 2024 Convertible Notes, 2025 Convertible Notes and 2029 Convertible Notes.

The 2024 Convertible Notes are considered anti-dilutive in the sequencing calculation for the fiscal year ended September 30, 2023.

**** Includes antidilutive share-based awards as well as performance-based share-based awards that are contingently issuable, but for which the condition for issuance has not been met as of the end of the reporting period.

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 fiscal year ended September 30, 2022, we increased net income by $ 7.5 million, 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.

STRATEGIC INVESTMENTS

Cash Converters International Limited

On October 1, 2021, we purchased an additional 13 million shares of Cash Converters International Limited ("Cash Converters") for $ 2.5 million.

This purchase increased our total ownership in Cash Converters to 236,702,991 shares, representing a 37.7 % ownership interest.

Additionally, on October 14, 2021, we received a cash dividend of $ 1.7 million from Cash Converters.

On March 10, 2022, we purchased an additional 5.5 million shares of Cash Converters for $ 1.0 million.

This purchase increased our total ownership in Cash Converters to 242,239,157 shares, representing a 38.6 % ownership interest.

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 40.7 %.

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

On September 15, 2022, we acquired an additional 5.7 million shares for $ 0.9 million, bringing our total ownership to 260,939,157 shares, representing an ownership interest of 41.6 %.

The following table presents the Company’s ownership in Cash Converters International Limited (“Cash Converters”) for the periods presented:

Date of purchase Purchase amount

(in thousands)

Shares purchased Shares owned Ownership percentage

October 1, 2021 $ 2,500 13,000,000 236,702,991 37.7 %

March 10, 2022 $ 1,000 5,500,000 242,239,157 38.6 %

April 5, 2022 $ 2,500 13,000,000 255,239,157 40.7 %

September 15, 2022 $ 900 5,700,000 260,939,157 41.6 %

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

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.

As of September 30, 2023, we owned 273,939,157 shares, or approximately 43.7 %, of Cash Converters.

Since September 30, 2022, we have acquired an additional 13 million shares, bringing our total ownership as of November 2, 2022 to 273,939,157 shares representing an ownership interest of 43.7 %.

Subsequent Events.

We acquired our original investment (representing approximately 30 % of the outstanding shares) in November 2009 and have increased our ownership through the acquisition of additional shares periodically since that time.

Our equity in Cash Converters’s net income was $ 2.9 million and $ 4.3 million in fiscal 2022 and 2021, respectively, and our equity in net loss was $ 2.1 million in fiscal 2020.

Cash Converters did not declare or pay a dividend in fiscal 2020.

Cash Converters’s accumulated undistributed after-tax earnings included in our consolidated retained earnings were $ 15.9 million as of September 30, 2022.

The following tables present summary financial information for Cash Converters’s most recently reported results as applicable after translation to U.S.

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Gross profit $ 125,709 $ 116,106 $ 105,851

Net profit (loss) $ 8,099 $ 12,081 $ ( 7,032 )

Net (loss) profit $ ( 65,351 ) $ 8,099 $ 12,081

Our equity in Cash Converters’s net loss was $ 28.5 million in fiscal 2023.

This includes $ 32.4 million of our share of their non-cash goodwill impairment charge.

Our equity in Cash Converters’s net income was $ 2.9 million and $ 4.3 million in fiscal 2022 and 2021, respectively.

Cash Converters’s accumulated undistributed after-tax loss included in our consolidated retained earnings were $ 16.2 million as of September 30, 2023.

At September 30, 2023, 2022 and 2021, the fair value of our investment in Cash Converters, as estimated by reference to its quoted market price per share, was greater than its carrying value.

Founders One, LLC

In October 2021, we invested $ 15.0 million in exchange for a non-redeemable voting participating preferred equity interest in Founders One, LLC (“Founders”), a newly-formed entity with one other member.

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

(“SMG”), which owns and operates 21 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.

In October 2021, we invested $ 15.0 million in exchange for a non-redeemable voting participating preferred equity interest in Founders, a newly-formed entity with one other member.

Founders used that $ 15.0 million to acquire an equity interest in SMG.

On December 2, 2022, we contributed an additional $ 15.0 million to Founders associated with our preferred interest, which proceeds were used by Founders to acquire additional common stock in SMG.

In addition, 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.

Founders then loaned that $ 15.0 million to SMG in exchange for a Subordinated Promissory Note.

We have an interest in Founders, a variable interest entity, but because the Company is not the primary beneficiary, we do not consolidate Founders.

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.

Our $ 15.0 million carrying value of the investment is

included in “Other investments” in our consolidated balance sheets.

Our maximum exposure for losses in this investment is its contributed investment of $ 15.0 million.

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

As of September 30, 2023, 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.

As of September 30, 2023, our maximum exposure for losses related to our investment in Founders was our $ 30.0 million equity investment and $ 15.0 million Demand Promissory Note plus accrued and unpaid interest.

In October 2023, we contributed an additional $ 15.0 million to Founders associated with our preferred interest, for a total equity investment of $ 45.0 million.

Subsequent Events.

FAIR VALUE MEASUREMENTS

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$ 1,251 $ 1,251 $ — $ — $ 1,251

Investments in unconsolidated affiliates 37,733 40,279 40,279 — —

Other investments 24,220 24,220 — — 24,220

12.00 % promissory note receivable from Founders

16,500 16,500 — — 16,500

Investments in unconsolidated affiliate 10,987 35,998 35,998 — —

Financial liabilities:

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2025 Convertible Notes 102,563 96,137 — 96,137 —

2029 Convertible Notes 223,284 224,112 — 224,112 —

Carrying Value Estimated Fair Value

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$ 1,215 $ 1,215 $ — $ — $ 1,215

Investments in unconsolidated affiliates 37,724 48,954 41,638 — 7,316

Investments in unconsolidated affiliate 37,733 40,279 40,279 — —

Financial liabilities:

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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 is $ 4.6 million which represents the fair value of acquisition-related contingent consideration as discussed in Note 3:

Acquisitions.

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.

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 September 30, 2022 and 2021, respectively.

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.

The inputs used to generate the fair value of the investment in Cash Converters were considered Level 1 inputs.

These inputs consist of (a) the quoted stock price on the Australian Stock Exchange multiplied by (b) the number of shares we owned multiplied by (c) the applicable

foreign currency exchange rate as of the end of our reporting period.

These inputs consist of (a) the quoted stock price on the Australian Stock Exchange multiplied by (b) the number of shares we owned multiplied by (c) the applicable foreign currency exchange rate as of the end of our reporting period.

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

Of the $ 24.2 million included Other investments in the table above as of September 30, 2022, $ 15.0 million is related to our investment in Founders and $ 6.2 million is related to our investment in RDC.

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

We previously used the equity method of accounting for our 14.6 % ownership in RDC.

Effective September 2022, the Company no longer had the ability to exercise significant influence and therefore changed its accounting for this investment from the equity method to the cost method, utilizing the measurement alternative in ASC 321, Investments - Equity Securities .

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

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

The principal amount of the note approximated its carrying value as of September 30, 2022 and 2021, respectively.

Based primarily on the short-term nature of the note, we estimate that its carrying value approximates fair value as of September 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.

As of September 30, 2023, the interest rate on the note was 12.00 % per annum, and all principal and accrued interest is due on demand.

Based primarily on the short-term nature of the note, we estimate that its carrying value approximates fair value as of September 30, 2023.

In October 2023, the interest rate on the demand promissory note from Founders was increased to 15.00 % per annum.

See “Note 16:

Subsequent Events.”

The Company remeasures its acquisition-related contingent obligation associated with the acquisition of Bajio at the end of each reporting period.

This remeasurement resulted in a $ 5.1 million reduction of the obligation with an offset recorded to “Other” as an operating item in our consolidated statements of operations during year ended September 30, 2023.

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

See “Note 12:

Leases” for discussion on the non-recurring fair value adjustment related to our corporate office lease during fiscal year 2023.

PROPERTY AND EQUIPMENT

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As a result of our assessment, no goodwill impairment charge was recorded during the fiscal year ended September 30, 2023.

During the second quarter of fiscal 2020, the decline in our market capitalization indicated a possible impairment in the carrying value of goodwill.

We elected to perform a quantitative analysis as of March 31, 2020, using the income approach with discount rates from 11 % to 19 %.

As a result of our quantitative analysis, we determined the fair value of each of our reporting units was below its carrying value, primarily as a result of the impact of the COVID-19 pandemic on typical customer behavior, which led to a significant decline in pawn loan balances, and the mandated closure of stores in our GPMX countries.

We recorded a goodwill impairment charge of $ 41.3 million in the second quarter of fiscal 2020 as “Impairment of goodwill, intangible and other assets” in our Consolidated Statements of Operations.

As of September 30, 2022, we assessed qualitative and quantitative factors and determined that it was not more-likely-than-not that the fair values of our indefinite-lived intangible assets were less than their carrying values.

Based on our assessment as of September 30, 2022, no impairment charges were recorded related to intangible assets or long-lived asset groups.

In connection with the analysis of goodwill as of March 31, 2020, we determined that the fair values of the trade names associated with acquired entities in our Mexico and GPMX reporting units were also impaired and recorded an impairment charge of $ 2.9 million and $ 1.7 million, respectively.

Furthermore, we determined the carrying amount of certain long-lived asset groups were not recoverable and recorded an impairment charge of $ 1.1 million in the second quarter of 2020 related to these asset groups.

These impairment charges were recorded as “ Impairment of goodwill, intangible and other assets ” in our Consolidated Statements of Operations.

There was no impairment charge during the fiscal year ended September 30, 2022.

Accumulated goodwill impairment losses of $ 41.3 million were recorded prior to 2021 associated with the U.S.

Pawn ($ 10.0 million) and Latin America Pawn ($ 31.3 million) segments because of the impact of the COVID-19 pandemic on typical customer behavior, which led to a significant decline in pawn loan balances and the mandated closure of stores in our GPMX countries.

The following table presents the changes in the carrying value of goodwill by segment:

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Acquisitions 1,032 — 1,032

Measurement period adjustments — ( 678 ) ( 678 )

Effect of foreign currency translation changes — 716 716

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Acquisitions 10,439 — 10,439

Measurement period adjustments — ( 678 ) ( 678 )

Effect of foreign currency translation changes — 5,105 5,105

Balances as of September 30, 2023 $ 255,942 $ 46,430 $ 302,372

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.

During the fourth quarter of fiscal 2023, we acquired one pawn store located in Nashville, Tennessee and one store in San Antonio, Texas for total cash consideration of $ 1.9 million, inclusive of all ancillary arrangements, of which $ 0.9 million was recorded as goodwill.

Th ese 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.

As of September 30, 2023, we assessed qualitative and quantitative factors and determined that it was not more-likely-than-not that the fair values of our indefinite-lived intangible assets were less than their carrying values.

Based on our assessment as of September 30, 2023, no impairment charges were recorded related to intangible assets or long-lived asset groups.

The following table presents the balance of each major class of intangible assets:

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Trade names $ 19,793 $ 18,591

Accumulated impairment losses ( 4,598 ) ( 4,598 )

18,591 18,438

Pawn licenses 9,535 9,535

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Accumulated amortization ( 60,628 ) ( 50,600 )

Accumulated impairment losses — ( 2,579 )

$ 28,860 $ 28,546

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Accumulated amortization ( 2,318 ) ( 2,197 )

$ 147 $ 2,087

Intangible assets, net $ 58,216 $ 56,819

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These amounts were $ 10.0 million, $ 11.7 million and $ 11.3 million for fiscal 2023, 2022 and 2021, respectively.

A charge of $ 2.4 million was recorded in fourth quarter of fiscal 2022 to "”General and administrative” expenses in our Consolidated Statements of Operations related to an asset write-down associated with an information technology software infrastructure migration.

A charge of $ 2.4 million was recorded during fiscal 2022 to ”General and administrative” expenses in our Consolidated Statements of Operations related to an asset write-down associated with an information technology software infrastructure migration.

As of September 30, 2023, our estimate of future amortization expense for definite-lived intangible assets is as follows (in thousands):

2023 $ 10,275

2027 and thereafter $ 3,815

Thereafter 9,359

As acquisitions and dispositions occur in the future, amortization expense may vary from these estimates.

The Company adopted ASU 2020-06 on October 1, 2021.

Organization And Summary Of Significant Accounting Policies for further discussion of this recently adopted accounting policy.

The following tables present our debt instruments outstanding, contractual maturities and interest expense:

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

September 30, 2023 September 30, 2022

(in thousands) Gross Amount Debt Issuance Costs Carrying

Amount Gross Amount Debt Discount and Issuance Costs Carrying

2024 Convertible Notes $ 143,750 $ ( 1,175 ) $ 142,575 $ 143,750 $ ( 20,207 ) $ 123,543

Amount Gross Amount Debt Issuance Costs Carrying

2029 Convertible Notes $ 230,000 $ ( 6,716 ) $ 223,284 $ — $ — $ —

Total long-term debt $ 316,250 $ ( 3,347 ) $ 312,903 $ 316,250 $ ( 52,064 ) $ 264,186

Schedule of Contractual Maturities

(in thousands) Total Less Than

1 Year 1 - 3 Years 3 - 5 Years

2025 Convertible Notes 103,373 ( 810 ) 102,563 172,500 ( 2,172 ) 170,328

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Total $ 367,762 $ ( 7,650 ) $ 360,112 $ 316,250 $ ( 3,347 ) $ 312,903

Less current portion 34,389 ( 124 ) 34,265 — — —

Total long-term debt $ 333,373 $ ( 7,526 ) $ 325,847 $ 316,250 $ ( 3,347 ) $ 312,903

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

Schedule of Contractual Maturities

(in thousands) 2029 Convertible Notes 2025 Convertible Notes 2024 Convertible Notes Total

$ — $ — $ 34,389 $ 34,389

— 103,373 — 103,373

Thereafter 230,000 — — 230,000

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:

Fiscal Year Ended September 30,

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Amortization of deferred financing costs 742 — —

Total interest expense $ 7,642 $ — $ —

2025 Convertible Notes:

Contractual interest expense $ 2,779 $ 4,097 $ 4,097

Amortization of deferred financing costs 559 797 560

Amortization of debt discount — — 6,919

Gain on extinguishment ( 5,389 ) — —

Total interest expense $ ( 2,051 ) $ 4,894 $ 11,576

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Amortization of debt discount — — 5,903

Loss on extinguishment 8,935 — —

Total interest expense $ 10,804 $ 4,768 $ 10,482

3.750 % Convertible Senior Notes Due 2029

In July 2017, we issued $ 143.75 million aggregate principal amount of 2.875 % Convertible Senior Notes Due 2024 (the “2024 Convertible Notes”).

The 2024 Convertible Notes were issued pursuant to an indenture dated July 5, 2017 (the "2017 Indenture") by and between the Company and Wells Fargo Bank, National Association, as the original trustee.

Effective October 1, 2019, Truist (formerly BB&T) assumed the duties and responsibilities as trustee under the 2017 Indenture.

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 September 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.

The 2029 Convertible Notes were issued in a private offering under Rule 144A under the Securities Act of 1933.

The 2024 Convertible Notes pay interest semi-annually in arrears at a rate of 2.875 % per annum on January 1 and July 1 of each year, commencing January 1, 2018, and mature on July 1, 2024 (the "2024 Maturity Date"), unless converted, redeemed or repurchased in accordance with the terms prior to such date.

The 2029 Convertible Notes pay interest semi-annually in arrears at a rate of 3.750 % per annum on June 15 and December 15 of each year, commencing June 15, 2023, and mature on December 15, 2029 (the “2029 Maturity Date”), unless converted, redeemed or repurchased in accordance with the terms prior to such date.

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.

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Upon conversion, we may settle in cash, shares of Class A Common Stock or any combination thereof, at our election.

Prior to January 1, 2024, the 2024 Convertible Notes will be convertible only under the following circumstances:

(1) during any fiscal quarter commencing after the fiscal quarter ending on September 30, 2017 (and only during such fiscal quarter), if the last reported sale price of our Class A Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130 % of the conversion price on each applicable trading day;

Prior to June 15, 2029, the 2029 Convertible Notes will be convertible only under the following circumstances:

(1) during any fiscal quarter commencing after the fiscal quarter ending on March 31, 2023 (and only during such fiscal quarter), if the last reported sale price of our Class A Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130 % of the conversion price on each applicable trading day;

(2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price, as defined in the 2022 Indenture, per $1,000 principal amount of notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of our Class A Common Stock and the conversion rate on such trading day;

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or (4) upon the occurrence of specified corporate events, as defined in the 2022 Indenture.

On or after January 1, 2024 until the close of business on the business day immediately preceding the 2024 Maturity Date, holders of 2024 Convertible Notes may, at their option, convert their 2024 Convertible Notes at any time, regardless of the foregoing circumstances.

At our option, we may redeem for cash all or any portion of the 2024 Convertible Notes on or after July 6, 2021, 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.

On or after June 15, 2029 until the close of business on the business day immediately preceding the 2029 Maturity Date, holders of 2029 Convertible Notes may, at their option, convert their 2029 Convertible Notes at any time, regardless of the foregoing circumstances.

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.

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As of September 30, 2023, none of the note holders had elected to convert their 2029 Convertible Notes.

The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of September 30, 2023.

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

Note Repurchases

In December 2022, we repurchased approximately $ 109.4 million aggregate principal amount of 2.875 % Convertible Senior Notes Due 2024 for approximately $ 117.5 million plus accrued interest and approximately $ 69.1 million aggregate principal amount of 2.375 % Convertible Senior Notes Due 2025 for approximately $ 62.9 million plus accrued interest and recognized a $ 3.5 million loss on extinguishment of debt recorded to “Interest expense” in our Consolidated Statement of Operations.

2.375 % 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”).

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 September 30, 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.

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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 fiscal 2022 was approximately 2.88 %.

The effective interest rate for fiscal 2023 was approximately 2.88 % for the 2025 Convertible Notes.

As of September 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.

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or (4) upon the occurrence of specified corporate events, as defined in the 2018 Indenture.

On or after November 1,

2024 until the close of business on the business day immediately preceding the 2025 Maturity Date, holders of 2025 Convertible Notes may, at their option, convert their 2025 Convertible Notes at any time, regardless of the foregoing circumstances.

On or after November 1, 2024 until the close of business on the business day immediately preceding the 2025 Maturity Date, holders of 2025 Convertible Notes may, at their option, convert their 2025 Convertible Notes at any time, regardless of the foregoing circumstances.

At our option, we may redeem for cash all or any portion of the 2025 Convertible Notes on or after May 1, 2022, 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.

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As of September 30, 2023, none of the note holders had elected to convert their 2025 Convertible Notes.

The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of September 30, 2023.

As of September 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 September 30, 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.

Effective October 1, 2019, Truist (formerly BB&T) assumed the duties and responsibilities as trustee under the 2017 Indenture.

The 2024 Convertible Notes were issued in a private offering under Rule 144A under the Securities Act of 1933.

The 2024 Convertible Notes pay interest semi-annually in arrears at a rate of 2.875 % per annum on January 1 and July 1 of each year, commencing January 1, 2018, and mature on July 1, 2024 (the “2024 Maturity Date”), unless converted, redeemed or repurchased in accordance with the terms prior to such date.

At maturity, the holders of the 2024 Convertible Notes will be entitled to receive cash equal to the principal of the 2024 Convertible Notes plus accrued interest.

The effective interest rate for fiscal 2023 was approximately 3.35 %.

As of September 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).

The conversion rate will not be adjusted for any accrued and unpaid interest.

The 2024 Convertible Notes contain certain make-whole fundamental change premiums and customary anti-dilution adjustments.

Upon conversion, we may settle in cash, shares of Class A Common Stock or any combination thereof, at our election.

Prior to January 1, 2024, the 2024 Convertible Notes will be convertible only under the following circumstances:

(2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price, as defined in the 2017 Indenture, per $1,000 principal amount of notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of our Class A Common Stock and the conversion rate on such trading day;

(3) if we call any or all of the 2024 Convertible Notes for redemption, at any time prior to the close of business on the business day immediately preceding the redemption date;

or (4) upon the occurrence of specified corporate events, as defined in the 2017 Indenture.

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.

As of September 30, 2023, the 2024 Convertible Notes were not convertible as no conditions of conversion had been met.

The 2024 Convertible Notes mature on July 1, 2024, accordingly, the balance was classified as a current liability in our Consolidated Balance Sheets as of September 30, 2023.

If the note holders elect to convert their 2024 Convertible Notes prior to maturity, any unamortized debt issuance costs will be recognized as expense at the time of conversion.

If the entire outstanding principal amount had been converted on September 30, 2023, we would have recorded an expense associated with the conversion, comprised of $ 0.1 million of unamortized debt issuance costs.

As of September 30, 2023, none of the note holders had elected to convert their 2024 Convertible Notes.

The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of September 30, 2023.

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

COMMON STOCK AND STOCK COMPENSATION

Common Stock Repurchase Program

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 .

On May 3, 2022, our Board of Directors (the “Board”) authorized the repurchase of up to $ 50 million of our Class A Common Stock over three years (the “Common Stock Repurchase Program”).

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.

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.

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

As of September 30, 2023, we had repurchased and retired 1,627,045 shares of our Class A Common Stock for $ 14.0 million under the Common Stock Repurchase Program, of which 1,389,102 shares were repurchased and retired for $ 12.0 million during fiscal year ended September 30, 2023.

The repurchase amount is allocated between “Additional paid-in capital” and “Retained earnings” in our Consolidated Balance Sheets.

Other Common Stock Repurchases

During December 2022, we used approximately $ 5.0 million of the net proceeds from the 2029 Convertible Notes offering to repurchase for cash 578,703 shares of our Class A Common Stock from purchasers of the notes in privately negotiated transactions.

Such transactions were authorized separately from, and not considered a part of, the publicly announced Common Stock Repurchase Program discussed above.

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

Stock Compensation

The Company utilizes equity-based awards as a long-term incentive to attract and retain qualified employees, consultants and directors and motivate them to achieve long-term goals, thereby promoting the long-term financial interests of the Company and enhancing long-term stockholder return.

We utilize equity-based awards as a long-term incentive to attract and retain qualified employees, consultants and directors and motivate them to achieve long-term goals, thereby promoting the long-term financial interests of the Company and enhancing long-term stockholder return.

2022 LTI Plan

On March 1, 2022, the Company adopted the 2022 Long-Term Incentive Plan (the “2022 LTI Plan”), which gives the Company the ability to grant equity-based incentive compensation awards, in the form of restricted stock or restricted stock units, to its employees, members of the Board of Directors and consultants, independent contractors or advisors who are determined to have a direct and significant effect on the Company’s performance.

The total number of shares of Class A Non-Voting Common Stock that may be issued pursuant to awards under the 2022 LTI Plan (“Authorized Shares”) is such number that is from time to time approved by the holder of the Company’s Class B Voting Common Stock (the “Voting Stockholder”).

At the time the 2022 LTI Plan was adopted, 400,000 shares of our Class A Non-Voting Common Stock were added as Authorized Shares, and that number was increased to 1,900,000 in October 2022.

At any time, the number of shares that are available for issuance under future awards (“Available Shares”) is equal to the number of Authorized Shares reduced by the number of shares previous issued and the number of shares that may be issued under outstanding awards.

On March 1, 2022, we adopted the 2022 Long-Term Incentive Plan (the “2022 LTI Plan”), which gives us the ability to grant equity-based incentive compensation awards, in the form of restricted stock or restricted stock units, to its employees, members of the Board of Directors and consultants, independent contractors or advisors who are determined to have a direct and significant effect on the Company’s performance.

The total number of shares of Class A Common Stock that may be issued pursuant to awards under the 2022 LTI Plan (“Authorized Shares”) is such number that is from time to time approved by the holder of the Company’s Class B Voting Common Stock (the “Voting Stockholder”).

At the time the 2022 LTI Plan was adopted, 400,000 shares of our Class A Common Stock were added as Authorized Shares.

That number was increased to 1,900,000 in October 2022 and to 3,300,000 in November 2023.

At any time, the number of shares that are available for issuance under future awards (“Available Shares”) is equal to the number of Authorized Shares reduced by the number of shares previously issued and the number of shares that may be issued under outstanding awards.

The number of Available Shares is increased for shares covered by awards that are forfeited, cancelled or otherwise terminated without the issuance of shares or shares that are withheld at the request of a participant to satisfy such participant’s tax withholding obligations.

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Those shares are scheduled to vest on the day immediately preceding the 2024 Annual Meeting of Stockholders (but in no event later than March 31, 2024), subject only to service conditions.

In March 2022, we granted each of the five non-employee directors a restricted stock award covering 26,490 shares ( 132,450 shares in total).

Those shares vested on the day immediately preceding the 2023 Annual Meeting of Stockholders in March 2023.

In February 2021, we granted each of the four non-employee directors serving at that time a restricted stock award covering 31,936 shares ( 127,744 shares in total).

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The remaining 63,620 shares vested on March 31, 2021.

In May 2020, we granted 12,346 shares of restricted stock to a newly-appointed non-employee director, and in December 2019, we granted each of the nine non-employee directors serving at that time a restricted stock award covering 24,768 shares ( 222,912 shares in total).

The vesting of these shares was subject only to service conditions, and all of such shares vested on September 30, 2020.

Employee Awards

FY23 Awards — In October 2022, we granted restricted stock unit awards covering a total of 912,524 shares to our executive officers and other key employees.

These awards were issued as part of our annual LTI program for fiscal 2023.

The awards have a three-year performance period consisting of fiscal 2023, fiscal 2024 and fiscal 2025.

For each award, 60 % of the total number of shares was allocated equally among the three fiscal years in the performance period ( 20 % each), with each tranche having separate performance conditions.

In addition, 20 % of the total number of shares was allocated to a three-year cumulative performance condition applicable to the entire three-year performance period, and 20 % was subject only to continued service.

The number of shares available to vest from each performance-based tranche can range from 0 to 150 % and is dependent on the achievement of the performance conditions for that tranche.

All of the performance-based shares that become available to vest based on the achievement of the performance conditions, along with the time-based tranche, will vest on September 30, 2025, so long as the recipient continues active employment with the Company through that date.

Performance targets for the fiscal 2023 tranche and the three-year cumulative tranche were determined and communicated at the time of grant.

Grant dates for the fiscal 2024 and fiscal 2025 tranches will be determined when the applicable performance targets are established for those tranches.

As of September 30, 2023, we considered the performance targets for the fiscal 2023 tranche to be probable of achievement at the 147.3 % level and the cumulative performance target for the three-year cumulative tranche to be probable of achievement at the 100 % level.

During fiscal 2023, we granted restricted stock unit awards covering an additional 8,036 shares to key employees in connection with promotions or new hires.

These additional awards carry the same terms as those granted in October 2022.

FY22 Awards — In October and November 2021, we granted restricted stock unit awards covering a total of 981,327 shares to our executive officers and other key employees.

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Grant dates for the other two tranches will be determined when the applicable performance targets are established for these tranches.

As of September 30, 2022, we considered the performance targets for the fiscal 2022 tranche to be probable of achievement at the 150 % level.

As of September 30, 2022, we considered the performance targets for the fiscal 2022 tranche to be probable of achievement at the 150 % level, and as of September 30, 2023, we considered the performance targets for the fiscal 2023 tranche to be probable of achievement at the 147.3 % level.

During fiscal 2022, we granted restricted stock unit awards covering an additional 161,265 shares to executive officers and other key employees in connection with promotions or new hires.

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The number of shares available to vest from each tranche can range from 0 to 150 % and is dependent on the achievement of the performance condition for that tranche.

All of the shares that become available to vest based on the achievement of the performance conditions will vest on September 30, 2023, so long as the recipient continues active employment with the Company through

Performance targets for the fiscal 2021 tranche were determined and communicated in February 2021, and performance targets for the fiscal 2022 tranche were determined and communicated in October 2021.

The grant date for the fiscal 2023 tranche will be determined when the applicable performance targets are established for that tranche.

As of September 30, 2021, we considered the performance targets for the fiscal 2021 tranche to be probable of achievement at the 150 % level, and as of September 30, 2022, we considered the performance targets for the fiscal 2022 tranche to be probable of achievement at the 150 % level.

As of September 30, 2021, we considered the performance targets for the fiscal 2021 tranche to be probable of achievement at the 150 % level, as of September 30, 2022, we considered the performance targets for the fiscal 2022 tranche to be probable of achievement at the 150 % level, and as of September 30, 2023, we considered the performance targets for the fiscal 2023 tranche to be probable of achievement at the 135.4 % level.

During fiscal 2021, we granted restricted stock unit awards covering an additional 4,722 shares of restricted stock to employees in connection with promotions or new hires.

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As of September 30, 2021, we considered the performance targets for the fiscal 2021 tranche to be probable of achievement at the 100 % level, and as of September 30, 2022, we considered the performance targets for the fiscal 2022 tranche to be probably of achievement at the 100 % level.

All of these awards vested in November 2022, after the Committee determined that the performance condition had been met.

FY19 Awards — In December 2018, we granted restricted stock unit awards covering a total of 971,615 shares to executive officers and other key employees.

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All of these awards vested in November 2021, after the Committee determined that the performance condition had been met.

FY18 Awards — In December 2017, we granted restricted stock unit awards covering a total of 1,308,533 shares to executive officers and other key employees.

The awards had a three-year performance period consisting of fiscal 2018, fiscal 2019 and fiscal 2020, and were subject to a single three-year performance condition as well as a service condition through the end of the performance period.

Awards covering 190,725 shares vested on September 30, 2018.

In November 2020, the Committee determined that the performance target applicable to the awards was only partially achieved, and approved the vesting of 295,723 shares in December 2020.

Awards covering 81,896 shares were cancelled, resulting in a reversal of $ 0.8 million of previously recognized stock compensation expense.

As of September 30, 2023, the unamortized fair value of share awards to be amortized over their remaining vesting periods was approximately $ 10.6 million.

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Share-based compensation costs $ 9,539 $ 5,053 $ 3,946

Income tax expense (benefit) on share-based compensation ( 557 ) 561 420

Income tax (benefit) expense on share-based compensation ( 1,125 ) ( 557 ) 561

The following table presents a summary of stock compensation activity:

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( 12,802 ) 4,945 3,283

Total income tax (benefit) expense $ 17,553 $ 7,450 $ ( 1,632 )

Total income tax expense $ 13,170 $ 17,553 $ 7,450

The following table presents a reconciliation of income taxes calculated at the statutory rate and the provision for income taxes:

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Uncertain tax positions ( 174 ) ( 2,025 ) 208

Non-deductible impairment — — 9,093

Deferred tax true-up ( 165 ) 3,811 896

Dividends received deduction ( 754 ) ( 699 ) —

Non-deductible loss on debt restructuring 1,710 — —

GAAP/statutory book adjustments ( 1,143 ) — —

Other ( 2,459 ) ( 906 ) ( 96 )

Total income tax expense (benefit) $ 17,553 $ 7,450 $ ( 1,632 )

Total income tax expense $ 13,170 $ 17,553 $ 7,450

Effective tax rate 26 % 26 % 46 %

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Tax over book amortization 30,906 29,663

Note receivable discount — 13,483

Prepaid expenses 2,097 2,051

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Deferred tax assets and liabilities are recorded for the estimated tax impact of temporary differences between the tax basis and book basis of assets and liabilities.

The Company has elected to account for the tax on Global Intangible Low-Taxed Income (“GILTI”) as a period cost and therefore has not recorded deferred taxes related to GILTI on its foreign subsidiaries.

The Company has elected to account for the tax on GILTI as a period cost and therefore has not recorded deferred taxes related to GILTI on its foreign subsidiaries.

A valuation allowance is established against a deferred tax asset when it is more likely than not that the deferred tax asset will not be realized.

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Deferred taxes are not provided for undistributed earnings of foreign subsidiaries of approximately $ 99.8 million which are intended to be reinvested outside of the U.S.

Accordingly, no provision for foreign withholding taxes associated with a distribution of those earnings has

Accordingly, no provision for foreign withholding taxes associated with a distribution of those earnings has been made.

We estimate that, upon distribution of our share of these earnings, we would be subject to withholding taxes of approximately $ 5.0 million as of September 30, 2023.

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Increase for tax positions taken during a prior period 396 547 2,135

Increase for tax positions taken during the current period — — 249

Decrease for settlement for tax positions taken during a prior period ( 259 ) — —

Decrease for tax positions as a result of the lapse of the statute of limitations ( 412 ) ( 1,742 ) ( 457 )

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The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense.

During 2022, the Company recognized income tax expense of $ 0.2 million offset by the reversal of previously accrued interest and penalties of $ 1.0 million due to the lapse of the statue of limitations on the associated tax position and an income tax expense of $ 0.3 million and $ 1.2 million, during 2021 and 2020 respectively, due to the accrual of interest and penalties.

During 2023, the Company recognized income tax expense of $ 0.2 million offset by the reversal of previously accrued interest and penalties of $ 0.4 million due to the lapse of the statute of limitations on the associated tax position and an income tax benefit of $ 0.8 million during 2022 and an income tax expense of $ 0.3 million during 2021, related to interest and penalties.

The total amount of accrued interest and penalties was $ 0.7 million, $ 1.0 million and $ 1.8 million in 2023, 2022 and 2021, respectively.

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We believe that adequate provisions have been made for any adjustments that may result from tax examinations.

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

(in thousands) Balance Sheet Location September 30, 2022 September 30, 2021

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

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

Lease assets:

Operating lease right-of-use assets Right-of-use assets, net $ 234,388 $ 221,405

Financing lease assets Right-of-use assets, net 181 —

Financing lease assets Other assets, net 2,178 181

Total lease assets $ 236,566 $ 221,586

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Total lease cost $ 90,873 $ 82,647 $ 74,980

* Includes a reduction for sublease rental income of $ 3.6 million and $ 3.4 million for fiscal years ending September 2022 and 2021, respectively.

* Includes a reduction for sublease rental income of $ 3.7 million, $ 3.6 million and $ 3.4 million for fiscal years ending September 2023, 2022 and 2021, 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 expenses” and “General and administrative” expense, based on the underlying lease use.

Cash paid for operating leases are $ 72.3 million and $ 61.9 million for the fiscal years ended September 30, 2022 and 2021, respectively.

Cash paid for operating leases was $ 76.7 million and $ 72.3 million for the fiscal years ended September 30, 2023 and 2022, respectively.

Cash paid for principal and interest on finance leases was $ 0.3 million and $ 0.1 million, respectively, for the fiscal year ended September 30, 2023.

There was no cash paid for finance leases for the fiscal years ended September 30, 2022 and 2021.

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

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The estimated minimum future rental payments under the lease are approximately $ 24.4 million as of September 30, 2023.

During fiscal 2017 and 2016, we initiated subleases for a portion of our corporate operating office lease for estimated minimum future sublease payments of approximately $ 12.2 million.

In addition to the above subleases, during fiscal 2018 we entered into an amendment to the operating lease surrendering another 15 % of the initial leased premises.

As a result, sublease payments were expected to fully offset our original operating lease obligations through August 2022, with renewal options available until the end of the master operating lease in March 2029.

As of September 30, 2023, we have subleases in place for a portion of our corporate operating office lease for estimated minimum future sublease payments of approximately $ 6.3 million.

We assessed the recoverability of the right-of-use asset for our corporate office, primarily due to the termination of a significant sublease.

We determined the undiscounted cash flows of the relative corporate lease and sublease did not exceed the net book value of the right-of-use asset.

We then determined the fair value of the corporate lease and sublease did not exceed the book value of the right-of-use asset, and an impairment charge of $ 4.3 million was recorded in fiscal year 2023 to “Impairment of other assets” in the Consolidated Statements of Operations.

The following table presents our corporate office lease measured at fair value as a result of the aforementioned impairment charges aggregated by the level in the fair value hierarchy within which measurements fall on a non-recurring basis at September 30, 2023, and the related impairment charge recorded (in thousands):

Fair Value as of September 30, 2023 Fiscal Year Ended 2023

Level 1 Level 2 Level 3 Total Impairment Charges

Corporate office $ — $ — $ 6,233 $ 6,233 $ 4,343

During the second quarter of fiscal 2015, we entered into cancellable subleases for our Miami office for an estimated minimum future sublease payment of approximately $ 2.9 million.

Sublease payments are expected to offset substantially all of our original operating lease obligations over the nine-year period beginning March 2015 and ending September 2024.

During the fourth quarter of fiscal 2022, the Miami office lease and sublease were terminated with no fees, and the deposit to the subtenant was returned.

As a result of the COVID-19 pandemic, we believe there was a significant adverse change in the business climate that impacted the office leasing market and a significant decrease in the market prices of an asset or asset group that affected the value of the right of use asset for our corporate office.

We determined the undiscounted cash flows of the subleases did not exceed the net book value of the right of use asset.

We then determined the discounted cash flows of the subleases did not exceed the book value of the right of use asset, and an impairment charge of $ 5.0 million was recorded in fiscal year 2020 to “Impairment of goodwill, intangible and other assets” in the Consolidated Statements of Operations.

We recorded $ 69.4 million and $ 62.8 million in non-cash additions to our right of use assets and lease liabilities for the fiscal year ended September 30, 2022 and 2021, respectively.

We recorded $ 66.5 million and $ 69.4 million in non-cash additions to our operating right-of-use assets and lease liabilities for the fiscal year ended September 30, 2023 and 2022, respectively.

We recorded $ 2.5 million in non-cash additions to our finance right-of-use assets and lease liabilities for the year ended September 30, 2023.

CONTINGENCIES

Currently, and from time to time, we are involved in various claims, disputes, lawsuits, investigations, and legal and regulatory proceedings, including the matter described below.

Currently, and from time to time, we are involved in various claims, disputes, lawsuits, investigations, and legal and regulatory proceedings.

We accrue for contingencies if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

Because these matters are inherently unpredictable and unfavorable developments or resolutions can occur, assessing contingencies requires judgments and is highly subjective about future events, and the amount of resulting loss may differ from these estimates.

Except as noted below, we do not believe the resolution of any particular matter will have a material adverse effect on our financial condition, results of operations or liquidity.

On October 14, 2021, Andrew Kowlessar filed an action in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida styled Andrew Kowlessar, individually and on behalf of all others similarly situated vs.

d/b/a Value Pawn & Jewelry (Case No.

CACE-21-018864).

The matter subsequently was amended and removed to the United States District Court of the Southern District of Florida as Andrew Kowlessar, individually and on behalf of all others similarly situated vs.

EZPAWN Florida, Inc.

d/b/a Value Pawn & Jewelry (Case No.

0:21-cv-62362-RKA).

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 was

approved by the court on October 24, 2022;

the period for submitting claims expired on November 8, 2022;

and the third party claims administrator is in the process of verifying the submitted claims.

The Company recorded a charge during the quarter ended June 30, 2022 representing the estimated liability for the settlement of this matter and believes the accrual remains sufficient to cover the Company’s liability in this matter as finally determined.

We do not believe the resolution of any particular matter will have a material adverse effect on our financial condition, results of operations or liquidity.

SEGMENT INFORMATION

Our operations are primarily managed on a geographical basis and consist of three reportable segments.

Our operations are primarily managed on a geographical basis and consist of four reportable segments.

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

During the first quarter of fiscal 2021, the financial information of our Lana business activities were no longer reviewed by the CODM for evaluating performance since Lana no longer has business activities but, rather, offers support activities to our U.S.

Pawn and Latin America Pawn operating segments.

As a result, Lana is no longer an operating or reportable segment.

We currently report our segments as follows:

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• 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.

• Cash Converters — Represents our equity interest in the net loss (income) of Cash Converters.

Our equity in Cash Converters’s net loss was $ 28.5 million in fiscal 2023, which includes $ 32.4 million of our share of their non-cash goodwill impairment charge.

As a result of this one-time impairment charge, our share of the absolute value of Cash Converters’s reported loss meets the 10 percent threshold to be considered its own reporting segment.

Our equity in their net income was $ 2.9 million and $ 4.3 million for fiscal 2022 and 2021, respectively.

Refer to Note 5:

Strategic Investments and Note 6:

Fair Value Measurements for additional details on our investment in Cash Converters.

• Other Investments — Represents our investment in RDC and our investment in and notes receivable from 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 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.

The following income (loss) before income taxes tables present revenue for each reportable segment, disaggregated revenue within our reportable segments and Corporate, segment profits and segment contribution.

We have continued to include the Cash Converters reporting segment within the “Other Investments” columns below as the investments in RDC and Founders do not have a material impact on our statements of operations due to the investments being accounted for under the measurement alternative within ASC 321.

Fiscal Year Ended September 30, 2023

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General and administrative — ( 3 ) — ( 3 ) 67,532 67,529

Impairment of other assets — — — — 4,343 4,343

Depreciation and amortization 10,382 9,191 — 19,573 12,558 32,131

(Gain) loss on sale or disposal of assets and other 51 ( 37 ) — 14 ( 688 ) ( 674 )

Loss (gain) on sale or disposal of assets and other 115 ( 289 ) — ( 174 ) 382 208

Other income — ( 5,097 ) — ( 5,097 ) — ( 5,097 )

Interest expense — — — — 16,456 16,456

Interest income ( 2 ) ( 1,139 ) ( 1,500 ) ( 2,641 ) ( 4,829 ) ( 7,470 )

Equity in net income of unconsolidated affiliates — — ( 1,779 ) ( 1,779 ) — ( 1,779 )

Equity in net loss of unconsolidated affiliates — — 28,459 28,459 — 28,459

Other (income) expense — ( 131 ) 31 ( 100 ) 3,172 3,072

17 unchanged sentences

Depreciation and amortization 10,552 7,913 — 18,465 13,675 32,140

Gain (loss) on sale or disposal of assets 27 ( 6 ) — 21 62 83

Other Charges — 229 — 229 — 229

Loss (gain) on sale or disposal of assets 51 ( 37 ) — 14 ( 688 ) ( 674 )

Interest expense — — — — 9,972 9,972

15 unchanged sentences

Jewelry scrapping cost of goods sold 13,001 9,847 — 22,848 — 22,848

Other cost of revenues — 101 953 1,054 — 1,054

Gross profit 349,541 99,524 420 449,485 — 449,485

2 unchanged sentences

General and administrative — — — — 56,495 56,495

Impairment of goodwill and intangibles assets 10,000 35,938 1,149 47,087 7,579 54,666

Depreciation and amortization 10,650 7,371 — 18,021 12,651 30,672

5 unchanged sentences

Other (income) expense — ( 840 ) ( 173 ) ( 1,013 ) 223 ( 790 )

Segment contribution (loss) $ 73,106 $ ( 26,659 ) $ ( 10,359 ) $ 36,088

Segment contribution $ 85,520 $ 17,293 $ 4,396 $ 107,209

Income (loss) before income taxes $ 107,209 $ ( 91,147 ) $ 16,062

1 unchanged sentence

(in thousands) U.S.

Pawn Latin America Pawn Other

Pawn Latin America Pawn Cash Converters Other

Investments Corporate Total

36 unchanged sentences

Prepaid expenses and other $ 4,106 $ 8,336

Accounts receivable and other 8,435 9,322

Accounts receivable, notes receivable and other 30,548 8,435

Income taxes prepaid and receivable 4,969 17,923

37 unchanged sentences

Pawn loans forfeited and transferred to inventory $ 330,947 $ 300,487 $ 212,756

Transfer of consideration for acquisition — 1,545 —

Transfer of stock consideration for other investment 1,500 — —

Transfer of consideration for other investment — 1,500 —

Transfer of equity consideration for acquisition 99 — 1,545

Acquisition earn-out contingency 2,000 — 4,608

Accrued acquisition consideration held as restricted cash — 1,986 —

Accrued acquisition consideration 1,412 — 1,986

SUBSEQUENT EVENTS

On November 2, 2022, we purchased an additional 13 million shares of Cash Converters for $ 2.0 million.

This purchase increased our total ownership in Cash Converters to 273,939,157 shares, representing a 43.7 % ownership interest.

Additionally, in November 2022, we received a cash dividend of $ 1.7 million from Cash Converters.

In October 2023, we contributed an additional $ 15.0 million to Founders associated with our preferred equity interest, bringing our total equity investment in Founders to $ 45.0 million.

Additionally, the interest rate on our $ 15.0 million demand promissory note from Founders was increased to 15.00 % per annum.

In October 2023, we received a cash dividend of $ 1.7 million from Cash Converters.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data