EZCORP INC 10-Q

ITEM 1. FINANCIAL STATEMENTS EZCORP, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except share and per share amounts) December 31, 2023 December 31, 2022 September 30, 2023 Assets: Current assets: Cash and cash equivalents $ 218,516 $ 207,658 $ 220,595 Restricted cash 8,470 8,359 8,373 Pawn loans 243,252 209,855 245,766 Pawn service charges receivable, net 40,002 34,921 38,885 Inventory, net 164,927 156,064 166,477 Prepaid expenses and other current assets 44,001 45,559 39,623 Total current assets 719,168 662,416 719,719 Investments in unconsolidated affiliates 10,125 37,789 10,987 Other investments 51,220 39,220 36,220 Property and equipment, net 68,998 55,612 68,096 Right-of-use assets, net 231,103 229,991 234,388 Goodwill 303,799 297,361 302,372 Intangible assets, net 56,977 58,029 58,216 Notes receivable, net — 1,224 — Deferred tax asset, net 25,984 12,428 25,702 Other assets, net 13,819 8,245 12,011 Total assets $ 1,481,193 $ 1,402,315 $ 1,467,711 Liabilities and equity: Current liabilities: Current maturities of long-term debt, net $ 34,307 $ — $ 34,265 Accounts payable, accrued expenses and other current liabilities 69,386 69,930 81,605 Customer layaway deposits 18,324 16,276 18,920 Operating lease liabilities, current 57,980 52,799 57,182 Total current liabilities 179,997 139,005 191,972 Long-term debt, net 326,223 358,984 325,847 Deferred tax liability, net 372 — 435 Operating lease liabilities 188,475 188,730 193,187 Other long-term liabilities 11,243 10,261 10,502 Total liabilities 706,310 696,980 721,943 Commitments and contingencies (Note 9) Stockholders’ equity: Class A Non-voting Common Stock, par value $ 0.01 per share; shares authorized: 100 million; issued and outstanding: 52,272,594 as of December 31, 2023; 52,877,930 as of December 31, 2022; and 51,869,569 as of September 30, 2023 523 529 519 Class B Voting Common Stock, convertible, par value $ 0.01 per share; shares authorized: 3 million; issued and outstanding: 2,970,171 30 30 30 Additional paid-in capital 343,870 343,012 346,181 Retained earnings 457,929 414,929 431,140 Accumulated other comprehensive loss ( 27,469 ) ( 53,165 ) ( 32,102 ) Total equity 774,883 705,335 745,768 Total liabilities and equity $ 1,481,193 $ 1,402,315 $ 1,467,711 See accompanying notes to unaudited condensed consolidated financial statements 1 Table of Contents EZCORP, Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended December 31, (in thousands, except per share amount) 2023 2022 Revenues: Merchandise sales $ 179,403 $ 163,787 Jewelry scrapping sales 14,082 7,884 Pawn service charges 106,449 92,593 Other revenues 57 63 Total revenues 299,991 264,327 Merchandise cost of goods sold 115,210 104,877 Jewelry scrapping cost of goods sold 12,208 6,953 Gross profit 172,573 152,497 Operating expenses: Store expenses 110,555 100,803 General and administrative 16,543 15,476 Depreciation and amortization 8,565 7,988 Gain on sale or disposal of assets and other ( 172 ) ( 16 ) Total operating expenses 135,491 124,251 Operating income 37,082 28,246 Interest expense 3,440 6,190 Interest income ( 2,639 ) ( 664 ) Equity in net income of unconsolidated affiliates ( 1,153 ) ( 1,584 ) Other income ( 271 ) ( 234 ) Income before income taxes 37,705 24,538 Income tax expense 9,235 7,760 Net income $ 28,470 $ 16,778 Basic earnings per share $ 0.52 $ 0.30 Diluted earnings per share $ 0.36 $ 0.25 Weighted-average basic shares outstanding 55,076 56,308 Weighted-average diluted shares outstanding 86,812 83,779 See accompanying notes to unaudited condensed consolidated financial statements 2 Table of Contents EZCORP, Inc. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) Three Months Ended December 31, (in thousands) 2023 2022 Net income $ 28,470 $ 16,778 Other comprehensive income: Foreign currency translation adjustment, net of income tax benefit for our investment in unconsolidated affiliate of $ 57 and $ 396 for the three months ended December 31, 2023, and 2022, respectively 4,633 2,504 Comprehensive income $ 33,103 $ 19,282 See accompanying notes to unaudited condensed consolidated financial statements 3 Table of Contents EZCORP, Inc. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders’ Equity (in thousands) Shares Par Value Balances as of September 30, 2023 54,840 $ 549 $ 346,181 $ 431,140 $ ( 32,102 ) $ 745,768 Stock compensation — — 2,264 — — 2,264 Release of restricted stock, net of shares withheld for taxes 758 8 — — — 8 Taxes paid related to net share settlement of equity awards — — ( 3,253 ) — — ( 3,253 ) Foreign currency translation gain — — — — 4,633 4,633 Purchase and retirement of treasury stock ( 355 ) ( 4 ) ( 1,322 ) ( 1,681 ) — ( 3,007 ) Net income — — — 28,470 — 28,470 Balances as of December 31, 2023 55,243 $ 553 $ 343,870 $ 457,929 $ ( 27,469 ) $ 774,883 Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders’ Equity (in thousands) Shares Par Value Balances as of September 30, 2022 56,425 $ 564 $ 345,330 $ 402,006 $ ( 55,669 ) $ 692,231 Stock compensation — — 1,886 — — 1,886 Transfer of equity consideration for acquisition 10 — 99 — — 99 Release of restricted stock, net of shares withheld for taxes 235 2 — — — 2 Taxes paid related to net share settlement of equity awards — — ( 1,138 ) — — ( 1,138 ) Foreign currency translation gain — — — — 2,504 2,504 Purchase and retirement of treasury stock ( 822 ) ( 7 ) ( 3,165 ) ( 3,855 ) — ( 7,027 ) Net income — — — 16,778 — 16,778 Balances as of December 31, 2022 55,848 $ 559 $ 343,012 $ 414,929 $ ( 53,165 ) $ 705,335 See accompanying notes to unaudited condensed consolidated financial statements 4 Table of Contents EZCORP, Inc. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended December 31, (in thousands) 2023 2022 Operating activities: Net income $ 28,470 $ 16,778 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation and amortization 8,565 7,988 Amortization of debt discount and deferred financing costs 417 378 Non-cash lease expense 14,744 13,596 Deferred income taxes 345 656 Other adjustments ( 857 ) ( 91 ) Provision for inventory reserve ( 156 ) 532 Stock compensation expense 2,264 1,886 Equity in net income from investment in unconsolidated affiliates ( 1,153 ) ( 1,584 ) Net loss on extinguishment of debt — 3,545 Changes in operating assets and liabilities, net of business acquisitions: Pawn service charges receivable ( 1,000 ) ( 691 ) Inventory 2,066 ( 1,881 ) Prepaid expenses, other current assets and other assets ( 5,823 ) ( 2,280 ) Accounts payable, accrued expenses and other liabilities ( 33,991 ) ( 34,761 ) Customer layaway deposits ( 719 ) ( 752 ) Income taxes 8,309 6,574 Dividends from unconsolidated affiliates — 1,775 Net cash provided by operating activities 21,481 11,668 Investing activities: Loans made ( 216,978 ) ( 189,074 ) Loans repaid 123,021 109,125 Recovery of pawn loan principal through sale of forfeited collateral 98,209 88,030 Capital expenditures, net ( 7,184 ) ( 7,182 ) Acquisitions, net of cash acquired ( 677 ) ( 12,884 ) Issuance of notes receivable — ( 15,500 ) Investment in unconsolidated affiliate — ( 2,133 ) Investment in other investments ( 15,000 ) ( 15,000 ) Dividends from unconsolidated affiliates 1,745 — Net cash used in investing activities ( 16,864 ) ( 44,618 ) Financing activities: Taxes paid related to net share settlement of equity awards ( 3,253 ) ( 1,138 ) Proceeds from issuance of debt — 230,000 Debt issuance cost — ( 7,403 ) Cash paid on extinguishment of debt — ( 1,951 ) Payments on debt — ( 178,488 ) Purchase and retirement of treasury stock ( 3,007 ) ( 7,027 ) Payments of finance leases ( 132 ) — Net cash (used in) provided by financing activities ( 6,392 ) 33,993 Effect of exchange rate changes on cash and cash equivalents and restricted cash ( 207 ) 605 Net (decrease) increase in cash, cash equivalents and restricted cash ( 1,982 ) 1,648 Cash and cash equivalents and restricted cash at beginning of period 228,968 214,369 Cash and cash equivalents and restricted cash at end of period $ 226,986 $ 216,017 See accompanying notes to unaudited condensed consolidated financial statements 5 Table of Contents Notes to Condensed Consolidated Financial Statements (Unaudited) NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business EZCORP, Inc. (collectively with its subsidiaries, the “Company,” “we,” “us,” or “our”) is a provider of pawn loans in the United States (“U.S.”) and Latin America. Pawn loans are non-recourse loans collateralized by tangible property. We also sell merchandise, primarily collateral forfeited from pawn lending operations and pre-owned merchandise purchased from customers. Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements (“Condensed Consolidated Financial Statements”) have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These Condensed Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the year ended September 30, 2023, filed with the Securities and Exchange Commission (“SEC”) on November 15, 2023 (“2023 Annual Report”). In the opinion of management, the accompanying Condensed Consolidated Financial Statements include all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation. Financial results for the three-month period ended December 31, 2023, are not necessarily indicative of results that may be expected for the fiscal year ending September 30, 2024 or any other period due, in part, to seasonal variations. There have been no changes that have had a material impact in significant accounting policies as described in our 2023 Annual Report . Principles of Consolidation The accompanying Condensed Consolidated Financial Statements include the accounts of EZCORP, Inc. and its wholly-owned subsidiaries. We use the equity method of accounting for entities in which we have a 50% or less investment and exercise significant influence. We account for equity investments for which we do not have significant influence and without readily determinable fair values at cost with adjustments for observable changes in price in orderly transactions for identical or similar investments of the same issuer or impairments. All inter-company accounts and transactions have been eliminated in consolidation. Use of Estimates and Assumptions The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions include the determination of inventory reserves, expected credit losses, useful lives of long-lived and intangible assets, valuation of share-based compensation, valuation of equity investments, valuation of deferred tax assets and liabilities, loss contingencies related to litigation and discount rates used for operating leases. We base our estimates on historical experience, observable trends and various other assumptions we believe are reasonable. Actual results may differ materially from these estimates under different assumptions or conditions. Merchandise Sales Revenue Recognition 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 December 31, 2023, 2022 and September 30, 2023 was $ 18.3 million, $ 16.3 million and $ 18.9 million, respectively, and are generally recognized as revenue within a one-year period. Investments We account for our investment in Rich Data Corporation (“RDC”) in accordance with Accounting Standards Codification (“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 December 31, 2023 and September 30, 2023, 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 One, LLC (“Founders”). 6 Table of Contents Recently Issued Accounting Pronouncements In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-06, Disclosure Improvements - Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative (“ASU 2023-06”). ASU 2023-06 will impact various disclosure areas, including the statement of cash flows, accounting changes and error corrections, earnings per share, debt, equity, derivatives, and transfers of financial assets. The amendments in this ASU 2023-06 will be effective on the date the related disclosures are removed from Regulation S-X or Regulation S-K by the SEC, and will no longer be effective if the SEC has not removed the applicable disclosure requirement by June 30, 2027. Early adoption is prohibited. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires disclosure of significant segment expenses regularly provided to the chief operating decision maker (“CODM”) included within segment operating profit or loss. Additionally, the ASU requires a description of how the CODM utilizes segment operating profit or loss to assess segment performance. The requirements of this ASU 2023-07 are effective for the Company for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted, and retrospective application is required for all periods presented. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires disclosure of specific categories and disaggregation of information in the rate reconciliation table. The ASU also requires disclosure of disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations. The requirements of this ASU 2023-09 are effective for the Company for fiscal years beginning after December 15, 2024. Early adoption is permitted, and the amendments should be applied on a prospective basis. Retrospective application is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. NOTE 2: GOODWILL The following table summarizes the changes in the carrying amount of goodwill by segment and in total: Three Months Ended December 31, 2023 (in thousands) U.S. Pawn Latin America Pawn Consolidated Balances as of September 30, 2023 $ 255,942 $ 46,430 $ 302,372 Acquisitions (a) 416 — 416 Effect of foreign currency translation changes — 1,011 1,011 Balances as of December 31, 2023 $ 256,358 $ 47,441 $ 303,799 (a) Amount represents goodwill recognized in connection with an immaterial acquisition within the U.S. Pawn segment and we have therefore omitted certain disclosures. Three Months Ended December 31, 2022 (in thousands) U.S. Pawn Latin America Pawn Consolidated Balances as of September 30, 2022 $ 245,503 $ 41,325 $ 286,828 Acquisitions (b) 9,413 — 9,413 Effect of foreign currency translation changes — 1,120 1,120 Balances as of December 31, 2022 $ 254,916 $ 42,445 $ 297,361 (b) Amount represents goodwill recognized in connection with acquisitions within the U.S. Pawn segment that were immaterial, individually and in the aggregate, and we have therefore omitted certain disclosures. 7 Table of Contents NOTE 3: EARNINGS PER SHARE The following table reconciles the number of common shares used to compute basic and diluted earnings per share attributable to EZCORP Inc., shareholders: Three Months Ended December 31, (in thousands, except per share amounts) 2023 2022 Basic earnings per common share: Net income - basic $ 28,470 $ 16,778 Weighted shares outstanding - basic 55,076 56,308 Basic earnings per common share $ 0.52 $ 0.30 Diluted earnings per common share: Net income - basic $ 28,470 $ 16,778 Add: Convertible Notes interest expense, net of tax* 2,659 4,540 Net income - diluted $ 31,129 $ 21,318 Weighted shares outstanding - basic 55,076 56,308 Equity-based compensation awards - effect of dilution** 1,318 1,118 Convertible Notes - effect of dilution*** 30,418 26,353 Weighted shares outstanding - diluted 86,812 83,779 Diluted earnings per common share $ 0.36 $ 0.25 Potential common shares excluded from the calculation of diluted earnings per common share above: Restricted stock**** 1,581 1,552 * The three months ended December 31,2022 includes $ 3.5 million loss on extinguishment of debt recorded to “Interest expense” in the Company’s condensed consolidated statement of operations. See Note 7: 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 7: Debt for conversion price and initial conversion rate of the 2024 Convertible Notes, 2025 Convertible Notes, and 2029 Convertible Notes. **** 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. 8 Table of Contents NOTE 4: LEASES We determine if a contract contains a lease at inception. Our lease portfolio consists primarily of operating leases for pawn store locations and corporate offices with lease terms ranging from three to ten years and finance leases for vehicles with lease terms ranging from two to five years . The table below presents balances of our lease assets and liabilities and their balance sheet locations for both operating and financing leases: (in thousands) Balance Sheet Location December 31, 2023 December 31, 2022 September 30, 2023 Lease assets: Operating lease right-of-use assets Right-of-use assets, net $ 231,103 $ 229,991 $ 234,388 Financing lease assets Other assets 2,124 563 2,178 Total lease assets $ 233,227 $ 230,554 $ 236,566 Lease liabilities: Current: Operating lease liabilities Operating lease liabilities, current $ 57,980 $ 52,799 $ 57,182 Financing lease liabilities Accounts payable, accrued expenses and other current liabilities 572 121 530 Total current lease liabilities $ 58,552 $ 52,920 $ 57,712 Non-current: Operating lease liabilities Operating lease liabilities $ 188,475 $ 188,730 $ 193,187 Financing lease liabilities Other long-term liabilities 1,644 447 1,715 Total non-current lease liabilities $ 190,119 $ 189,177 $ 194,902 Total lease liabilities $ 248,671 $ 242,097 $ 252,614 The table below provides major components of our lease costs: Three Months Ended December 31, (in thousands) 2023 2022 Operating lease cost: Operating lease cost * $ 19,066 $ 17,495 Variable lease cost 4,215 3,852 Total operating lease cost $ 23,281 $ 21,347 Financing lease cost: Amortization of financing lease assets $ 151 $ 19 Interest on financing lease liabilities 65 11 Total financing lease cost $ 216 $ 30 Total lease cost $ 23,497 $ 21,377 * Includes a reduction for sublease rental income of $ 1.1 million and $ 0.8 million for the three months ended December 31, 2023 and 2022, respectively. Lease expense is recognized on a straight-line basis over the lease term with variable lease expense recognized in the period in which the costs are incurred. The components of lease expense are included in “Store” and “General and Administrative” expense, based on the underlying lease use. Cash paid for operating leases was $ 20.3 million and $ 21.4 million for the three months ended December 31, 2023 and 2022, respectively. Cash paid for principal and interest on finance leases was $ 0.1 million and $ 0.1 million, respectively, for the three months ended December 31, 2023 . There was no cash paid for principal and interest on finance leases during the three months ended December 31, 2022. 9 Table of Contents The weighted-average term and discount rates for leases are as follows: Three Months Ended December 31, 2023 2022 Weighted-average remaining lease term (years): Operating leases 4.86 5.21 Financing leases 3.42 4.03 Weighted-average discount rate: Operating leases 8.53 % 8.36 % Financing leases 11.14 % 11.14 % As of December 31, 2023, maturities of lease liabilities under ASC 842 by fiscal year were as follows: (in thousands) Operating Leases Financing Leases Remaining 2024 $ 57,570 $ 597 Fiscal 2025 69,671 790 Fiscal 2026 58,523 790 Fiscal 2027 44,089 486 Fiscal 2028 28,904 8 Thereafter 42,810 — Total lease liabilities $ 301,567 $ 2,671 Less: portion representing imputed interest 55,112 455 Total net lease liabilities $ 246,455 $ 2,216 Less: current portion 57,980 572 Total long term net lease liabilities $ 188,475 $ 1,644 We recorded $ 9.3 million and $ 20.5 million in non-cash additions to our operating right-of-use assets and lease liabilities for the three months ended December 31, 2023 and 2022, respectively. We recorded $ 0.1 million and $ 0.4 million in non-cash finance lease additions for the three months ended December 31, 2023 and 2022, respectively. 10 Table of Contents NOTE 5: STRATEGIC INVESTMENTS Cash Converters International Limited As of December 31, 2023, we owned 273,939,157 shares, or approximately 43.7 %, of Cash Converters. 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. We received cash dividends from Cash Converters of $ 1.7 million and $ 1.8 million, during the three months ended December 31, 2023 and 2022, respectively. The following tables present summary financial information for Cash Converters most recently reported results at June 30, 2023 after translation to U.S. dollars: June 30, (in thousands) 2023 2022 Current assets $ 189,563 $ 158,987 Non-current assets 103,595 170,798 Total assets $ 293,158 $ 329,785 Current liabilities $ 97,630 $ 59,256 Non-current liabilities 58,777 53,045 Shareholders’ equity 136,751 217,484 Total liabilities and shareholders’ equity $ 293,158 $ 329,785 Full-Year Ended June 30, (in thousands) 2023 2022 Gross revenues $ 203,608 $ 178,215 Gross profit $ 125,709 $ 116,106 Net (loss) profit $ ( 65,351 ) $ 8,099 During the three months ended December 31, 2023 and 2022, we recorded our share of income of $ 1.2 million and $ 1.6 million, respectively, from Cash Converters, included in “Equity in net income of unconsolidated affiliates” in the condensed consolidated statements of operations. See Note 6: Fair Value Measurements for the fair value and carrying value of our investment in Cash Converters. 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 then newly-formed entity with one other member. On December 2, 2022, we contributed an additional $ 15.0 million to Founders associated with our preferred interest. 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. In October 2023, we contributed an additional $ 15.0 million to Founders associated with our preferred interest, bringing our total equity investment in Founders to $ 45.0 million. 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 equity investment in Founders is accounted for utilizing the measurement alternative within ASC 321, Investments — Equity Securities. As of December 31, 2023, our $ 45.0 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 condensed consolidated balance sheets, respectively. As of December 31, 2023, our maximum exposure for losses related to our investment in Founders was our $ 45.0 million equity investment and $ 15.0 million Demand Promissory Note plus accrued and unpaid interest. See Note 6: Fair Value Measurements for the fair value and carrying value of our loan to Founders . 11 Table of Contents NOTE 6: FAIR VALUE MEASUREMENTS The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: • Level 1 — Quoted market prices in active markets for identical assets or liabilities. • Level 2 — Other observable market-based inputs or unobservable inputs that are corroborated by market data. • Level 3 — Unobservable inputs that are not corroborated by market data. We have elected not to measure at fair value any eligible items for which fair value measurement is optional. There were no transfers in or out of Level 1, Level 2 or Level 3 for financial assets or liabilities measured at fair value on a recurring basis during the periods presented. Financial Assets and Liabilities Not Measured at Fair Value The tables below present our estimates of fair value of financial assets and liabilities that were not measured at fair value: Carrying Value Estimated Fair Value December 31, 2023 December 31, 2023 Fair Value Measurement Using (in thousands) Level 1 Level 2 Level 3 Financial assets: Promissory note receivable due April 2024 $ 1,259 $ 1,259 $ — $ — $ 1,259 Promissory note receivable from Founders 17,073 17,073 — — 17,073 Investments in unconsolidated affiliates 10,125 39,528 39,528 — — Financial liabilities: 2024 Convertible Notes $ 34,307 $ 34,733 $ — $ 34,733 $ — 2025 Convertible Notes 102,695 94,173 — 94,173 — 2029 Convertible Notes 223,528 236,900 — 236,900 — Carrying Value Estimated Fair Value December 31, 2022 December 31, 2022 Fair Value Measurement Using (in thousands) Level 1 Level 2 Level 3 Financial assets: Promissory note receivable due April 2024 $ 1,224 $ 1,224 $ — $ — $ 1,224 Promissory note receivable from Founders 15,100 15,100 — — 15,100 Investments in unconsolidated affiliates 37,789 43,497 43,497 — — Financial liabilities: 2024 Convertible Notes $ 34,143 $ 35,851 $ — $ 35,851 $ — 2025 Convertible Notes 102,192 89,883 — 89,883 — 2029 Convertible Notes 222,649 225,975 — 225,975 — Carrying Value Estimated Fair Value September 30, 2023 September 30, 2023 Fair Value Measurement Using (in thousands) Level 1 Level 2 Level 3 Financial assets: Promissory note receivable due April 2024 $ 1,251 $ 1,251 $ — $ — $ 1,251 Promissory note receivable from Founders 16,500 16,500 — — 16,500 Investments in unconsolidated affiliates 10,987 35,998 35,998 — — Financial liabilities: 2024 Convertible Notes $ 34,265 $ 35,765 $ — $ 35,765 $ — 2025 Convertible Notes 102,563 96,137 — 96,137 — 2029 Convertible Notes 223,284 224,112 — 224,112 — 12 Table of Contents Based primarily on the short-term nature of cash and cash equivalents, pawn loans, pawn service charges receivable and other liabilities, we estimate that their carrying value approximates fair value. We consider our cash and cash equivalents, including money market accounts, to be measured using Level 1 inputs and our pawn loans, pawn service charges receivable and other liabilities to be measured using Level 3 inputs. Significant increases or decreases in the underlying assumptions used to value pawn loans, pawn service charges receivable, fees and interest receivable and other debt could significantly increase or decrease these fair value estimates. In March 2019, we received $ 1.1 million in previously escrowed seller funds as a result of settling certain indemnification claims with the seller of GPMX. In April 2019, we loaned the $ 1.1 million back to the seller of GPMX in exchange for a promissory note. The note bears interest at the rate of 2.89 % per annum and is secured by certain marketable securities owned by the seller and held in a U.S. brokerage account. All principal and accrued interest is due and payable in April 2024. Based primarily on the short-term nature of the note, we estimate that its carrying value approximates fair value as of December 31, 2023. As of December 31, 2023, our $ 1.3 million carrying value of the promissory note is recorded within “Prepaid expenses and other current assets” in our condensed consolidated balance sheets. 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 December 31, 2023, the interest rate on the note was 15.00 % 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 December 31, 2023. We use the equity method of accounting to account for our ownership interest in Cash Converters. 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. We included no control premium for owning a large percentage of outstanding shares. We measured the fair value of the 2024, 2025 and 2029 Convertible Notes using quoted price inputs. The notes are not actively traded, and thus the price inputs represent a Level 2 measurement. As the quoted price inputs are highly variable from day to day, the fair value estimates disclosed above could significantly increase or decrease. NOTE 7: DEBT The following table presents the Company's debt instruments outstanding: December 31, 2023 December 31, 2022 September 30, 2023 (in thousands) Gross Amount Debt Issuance Costs Carrying Amount Gross Amount Debt Issuance Costs Carrying Amount Gross Amount Debt Issuance Costs Carrying Amount 2029 Convertible Notes $ 230,000 $ ( 6,472 ) $ 223,528 $ 230,000 $ ( 7,351 ) $ 222,649 $ 230,000 $ ( 6,716 ) $ 223,284 2025 Convertible Notes 103,373 ( 678 ) 102,695 103,373 ( 1,181 ) 102,192 103,373 ( 810 ) 102,563 2024 Convertible Notes 34,389 ( 82 ) 34,307 34,389 ( 246 ) 34,143 34,389 ( 124 ) 34,265 Total $ 367,762 $ ( 7,232 ) $ 360,530 $ 367,762 $ ( 8,778 ) $ 358,984 $ 367,762 $ ( 7,650 ) $ 360,112 Less current portion 34,389 ( 82 ) 34,307 — — — 34,389 ( 124 ) 34,265 Total long-term debt $ 333,373 $ ( 7,150 ) $ 326,223 $ 367,762 $ ( 8,778 ) $ 358,984 $ 333,373 $ ( 7,526 ) $ 325,847 The following table presents the Company’s contractual maturities related to the debt instruments as of December 31, 2023: Schedule of Contractual Maturities (in thousands) 2029 Convertible Notes 2025 Convertible Notes 2024 Convertible Notes Total Remaining 2024 $ — $ — $ 34,389 $ 34,389 Fiscal 2025 — 103,373 — 103,373 Fiscal 2026 — — — — Fiscal 2027 — — — — Fiscal 2028 — — — — Thereafter 230,000 — — 230,000 Total long-term debt $ 230,000 $ 103,373 $ 34,389 $ 367,762 13 Table of Contents The following table presents the Company’s interest expense related to the Convertible Notes for the three months ended December 31, 2023 and 2022: Three Months Ended December 31, (in thousands) 2023 2022 2029 Convertible Notes: Contractual interest expense $ 2,156 $ 431 Amortization of deferred financing costs 244 52 Total interest expense $ 2,400 $ 483 2025 Convertible Notes: Contractual interest expense $ 614 $ 942 Amortization of deferred financing costs 131 188 Gain on extinguishment — ( 5,389 ) Total interest expense $ 745 $ ( 4,259 ) 2024 Convertible Notes: Contractual interest expense $ 247 $ 876 Amortization of deferred financing costs 42 138 Loss on extinguishment — 8,935 Total interest expense $ 289 $ 9,949 3.750 % Convertible Senior Notes Due 2029 In December 2022, we issued $ 230.0 million aggregate principal amount of 3.750 % Convertible Senior Notes Due 2029 (the “2029 Convertible Notes”), for which $ 230.0 million remains outstanding as of December 31, 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 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. The effective interest rate for the three months ended December 31, 2023 was approximately 4.28 %. As of December 31, 2023, the remaining unamortized debt issuance costs will be amortized using the effective interest method through the 2029 Maturity Date assuming no early conversion. The 2029 Convertible Notes are convertible based on an initial conversion rate of 89.0313 shares of Class A Common Stock per $1,000 principal amount (equivalent to an initial conversion price of $ 11.23 per share). The conversion rate will not be adjusted for any accrued and unpaid interest. The 2029 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 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; (3) if we call any or all of the 2029 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 2022 Indenture. 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. 14 Table of Contents We may not redeem the Notes prior to December 21, 2026. At our option, we may redeem for cash all or any portion of the 2029 Convertible Notes on or after December 21, 2026, if the last reported sale price of the Class A Common Stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption. The redemption price will be equal to 100 % of the principal amount of the 2029 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of December 31, 2023. As of December 31, 2023, the if-converted value of the 2029 Convertible Notes did not exceed the principal amount. Note Repurchases In December 2022, the Company 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 the Company’s condensed consolidated statement of operations for the three months ended December 31, 2022. 2.375 % 2025 Convertible Senior Notes Due 2025 In May 2018, we issued $ 172.5 million aggregate principal amount of 2.375 % Convertible Senior Notes Due 2025 (the “2025 Convertible Notes”), for which $ 103.4 million remains outstanding as of December 31, 2023. The 2025 Convertible Notes were issued pursuant to an indenture dated May 14, 2018 (the “2018 Indenture”) by and between the Company and Wells Fargo Bank, National Association, as the original trustee. Effective October 1, 2019, Truist (formerly BB&T) assumed the duties and responsibilities as trustee under the 2018 Indenture. The 2025 Convertible Notes were issued in a private offering under Rule 144A under the Securities Act of 1933. The 2025 Convertible Notes pay interest semi-annually in arrears at a rate of 2.375 % per annum on May 1 and November 1 of each year, commencing November 1, 2018, and mature on May 1, 2025 (the “2025 Maturity Date”), unless converted, redeemed or repurchased in accordance with the terms prior to such date. The effective interest rate for the three months ended December 31, 2023 was approximately 2.88 % for the 2025 Convertible Notes. As of December 31, 2023, the remaining unamortized debt issuance costs will be amortized using the effective interest method through the 2025 Maturity Date assuming no early conversion. The 2025 Convertible Notes are convertible based on an initial conversion rate of 62.8931 shares of Class A Common Stock per $1,000 principal amount (equivalent to an initial conversion price of $ 15.90 per share). The conversion rate will not be adjusted for any accrued and unpaid interest. The 2025 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 November 1, 2024, the 2025 Convertible Notes are convertible only under the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ended on June 30, 2018 (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 2018 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 2025 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 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. 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. The redemption price will be equal to 100 % of the principal amount of the 2025 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of December 31, 2023. As of December 31, 2023, the if-converted value of the 2025 Convertible Notes did not exceed the principal amount. 15 Table of Contents 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 December 31, 2023. The 2024 Convertible Notes were issued pursuant to an indenture dated July 5, 2017 (the “2017 Indenture”) by and between the Company and Wells Fargo Bank, National Association, as the original trustee. 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 the three months ended December 31, 2023 was approximately 3.35 %. As of December 31, 2023, the remaining unamortized debt issuance costs will be amortized using the effective interest method through the 2024 Maturity Date assuming no early conversion. The 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 would have been 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 was 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 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 had called 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. From 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. The redemption price will be equal to 100 % of the principal amount of the 2024 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of December 31, 2023. As of December 31, 2023, the if-converted value of the 2024 Convertible Notes did not exceed the principal amount. NOTE 8: 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 (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. As of December 31, 2023, we had repurchased and retired 1,981,927 shares of our Class A Common Stock for $ 17.0 million under the Common Stock Repurchase Program, of which 354,882 shares were repurchased and retired for $ 3.0 million during the quarter ended December 31, 2023. During the quarter ended December 31, 2022, 243,062 shares were repurchased and retired for $ 2.0 million under the Common Stock Repurchase Program. The repurchase amount is allocated between “Additional paid-in capital” and “Retained earnings” in our condensed consolidated balance sheets. 16 Table of Contents Other Common Stock Repurchases During December 2022, the Company used approximately $ 5.0 million of the net proceeds from the 2029 Convertible Notes offering to repurchase for cash 578,703 shares of its 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 share repurchase program discussed above. The repurchase amount is allocated between “Additional paid-in capital” and “Retained earnings” in our condensed consolidated balance sheets. Stock Compensation We maintain a Board-approved incentive plan to retain the services of our valued officers, directors and employees and to incentivize such persons to make contributions to our company and motivate excellent performance (the “Incentive Plan”). Under the Incentive Plan, we grant awards of restricted stock or restricted stock units to employees and non-employee directors. Awards granted to employees are typically subject to performance and service conditions. Awards granted to non-employee directors are time-based awards subject only to service conditions. Awards granted under the Incentive Plan are measured at the grant date fair value with compensation costs associated with the awards recognized over the requisite service period, usually the vesting period, on a straight-line basis. The following table presents a summary of stock compensation activity: Shares Weighted Average Grant Date Fair Value Outstanding as of September 30, 2023 2,555,899 $ 6.80 Granted (a) 1,349,752 7.39 Released (b) ( 1,135,138 ) 4.96 Cancelled ( 32,566 ) 6.96 Outstanding as of December 31, 2023 2,737,947 $ 7.85 (a) Includes performance adjustment of 353,993 shares awarded above their target grants resulting from the achievement of performance targets established at the grant date. (b) 377,231 shares were withheld to satisfy related income tax withholding. NOTE 9: CONTINGENCIES Currently, and from time to time, we are involved in various claims, disputes, lawsuits, investigations, and legal and regulatory proceedings. We accrue for contingencies if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because these matters are inherently unpredictable and unfavorable developments or resolutions can occur, assessing contingencies requires judgments and is highly subjective about future events, and the amount of resulting loss may differ from these estimates. We do not believe the resolution of any particular matter will have a material adverse effect on our financial condition, results of operations or liquidity. NOTE 10: SEGMENT INFORMATION Our operations are primarily managed on a geographical basis and are comprised of three reportable segments. The factors for determining our reportable segments include the manner in which our chief operating decision maker evaluates performance for purposes of allocating resources and assessing performance. We currently report our segments as follows: • U.S. Pawn — all pawn activities in the United States; • Latin America Pawn — all pawn activities in Mexico and other parts of Latin America; and • Other Investments — primarily our equity interest in the net income of Cash Converters along with 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 condensed consolidated financial statements. 17 Table of Contents 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. Three Months Ended December 31, 2023 (in thousands) U.S. Pawn Latin America Pawn Other Investments Total Segments Corporate Items Consolidated Revenues: Merchandise sales $ 125,513 $ 53,890 $ — $ 179,403 $ — $ 179,403 Jewelry scrapping sales 12,815 1,267 — 14,082 — 14,082 Pawn service charges 79,073 27,376 — 106,449 — 106,449 Other revenues 37 16 4 57 — 57 Total revenues 217,438 82,549 4 299,991 — 299,991 Merchandise cost of goods sold 78,709 36,501 — 115,210 — 115,210 Jewelry scrapping cost of goods sold 11,284 924 — 12,208 — 12,208 Gross profit 127,445 45,124 4 172,573 — 172,573 Segment and corporate expenses (income): Store expenses 77,255 33,300 — 110,555 — 110,555 General and administrative — — — — 16,543 16,543 Depreciation and amortization 2,624 2,339 — 4,963 3,602 8,565 Loss (gain) on sale or disposal of assets and other 26 ( 196 ) — ( 170 ) ( 2 ) ( 172 ) Interest expense — — — — 3,440 3,440 Interest income — ( 420 ) ( 573 ) ( 993 ) ( 1,646 ) ( 2,639 ) Equity in net income of unconsolidated affiliates — — ( 1,153 ) ( 1,153 ) — ( 1,153 ) Other (income) expense — ( 48 ) 1 ( 47 ) ( 224 ) ( 271 ) Segment contribution $ 47,540 $ 10,149 $ 1,729 $ 59,418 Income (loss) before income taxes $ 59,418 $ ( 21,713 ) $ 37,705 Three Months Ended December 31, 2022 (in thousands) U.S. Pawn Latin America Pawn Other Investments Total Segments Corporate Items Consolidated Revenues: Merchandise sales $ 118,314 $ 45,473 $ — $ 163,787 $ — $ 163,787 Jewelry scrapping sales 7,176 708 — 7,884 — 7,884 Pawn service charges 69,310 23,283 — 92,593 — 92,593 Other revenues 25 16 22 63 — 63 Total revenues 194,825 69,480 22 264,327 — 264,327 Merchandise cost of goods sold 73,256 31,621 — 104,877 — 104,877 Jewelry scrapping cost of goods sold 6,216 737 — 6,953 — 6,953 Gross profit 115,353 37,122 22 152,497 — 152,497 Segment and corporate expenses (income): Store expenses 73,304 27,499 — 100,803 — 100,803 General and administrative — ( 3 ) — ( 3 ) 15,479 15,476 Depreciation and amortization 2,755 2,215 — 4,970 3,018 7,988 Loss (gain) on sale or disposal of assets and other 3 ( 19 ) — ( 16 ) — ( 16 ) Interest expense — — — — 6,190 6,190 Interest income — ( 169 ) — ( 169 ) ( 495 ) ( 664 ) Equity in net income of unconsolidated affiliates — — ( 1,584 ) ( 1,584 ) — ( 1,584 ) Other expense (income) — 70 4 74 ( 308 ) ( 234 ) Segment contribution $ 39,291 $ 7,529 $ 1,602 $ 48,422 Income (loss) before income taxes $ 48,422 $ ( 23,884 ) $ 24,538 18 Table of Contents The following table presents separately identified segment assets: (in thousands) U.S. Pawn Latin America Pawn Other Investments (a) Corporate Items Total As of December 31, 2023 Pawn loans $ 190,766 $ 52,486 $ — $ — $ 243,252 Pawn service charges receivable, net 35,707 4,295 — — 40,002 Inventory, net 127,008 37,919 — — 164,927 Total assets 1,004,075 323,209 78,419 75,490 1,481,193 As of December 31, 2022 Pawn loans $ 166,886 $ 42,969 $ — $ — $ 209,855 Pawn service charges receivable, net 31,064 3,857 — — 34,921 Inventory, net 117,994 38,070 — — 156,064 Total assets 900,211 272,153 77,009 152,942 1,402,315 As of September 30, 2023 Pawn loans $ 190,624 $ 55,142 $ — $ — $ 245,766 Pawn service charges receivable, net 34,318 4,567 — — 38,885 Inventory, net 128,901 37,576 — — 166,477 Total assets 984,539 313,164 63,707 106,301 1,467,711 (a) Segment assets as of September 30, 2023 have been recast to conform to current year presentation as CCV no longer meets the 10 percent threshold to be considered its own segment. 19 Table of Contents NOTE 11: SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION The following table provides supplemental information on net amounts included in our condensed consolidated balance sheets: (in thousands) December 31, 2023 December 31, 2022 September 30, 2023 Gross pawn service charges receivable $ 50,919 $ 44,397 $ 50,881 Allowance for uncollectible pawn service charges receivable ( 10,917 ) ( 9,476 ) ( 11,996 ) Pawn service charges receivable, net $ 40,002 $ 34,921 $ 38,885 Gross inventory $ 167,660 $ 159,286 $ 169,138 Inventory reserves ( 2,733 ) ( 3,222 ) ( 2,661 ) Inventory, net $ 164,927 $ 156,064 $ 166,477 Prepaid expenses and other $ 6,868 $ 11,581 $ 4,106 Accounts receivable, notes receivable and other 34,032 22,730 30,548 Income taxes prepaid and receivable 3,101 11,248 4,969 Prepaid expenses and other current assets $ 44,001 $ 45,559 $ 39,623 Property and equipment, gross $ 352,291 $ 312,502 $ 345,461 Accumulated depreciation ( 283,293 ) ( 256,890 ) ( 277,365 ) Property and equipment, net $ 68,998 $ 55,612 $ 68,096 Accounts payable $ 18,200 $ 20,220 $ 23,022 Accrued payroll 7,682 4,952 11,472 Incentive accrual 6,859 6,010 18,544 Other payroll related expenses 7,849 10,911 5,262 Accrued sales and VAT taxes 6,089 8,086 5,565 Accrued income taxes payable 9,068 2,562 2,628 Other current liabilities 13,639 17,189 15,112 Accounts payable, accrued expenses and other current liabilities $ 69,386 $ 69,930 $ 81,605 The following table provides supplemental disclosure of condensed consolidated statements of cash flows information: Three Months Ended December 31, (in thousands) 2023 2022 Supplemental disclosure of cash flow information Cash and cash equivalents at beginning of period $ 220,595 $ 206,028 Restricted cash at beginning of period 8,373 8,341 Total cash and cash equivalents and restricted cash at beginning of period $ 228,968 $ 214,369 Cash and cash equivalents at end of period $ 218,516 $ 207,658 Restricted cash at end of period 8,470 8,359 Total cash and cash equivalents and restricted cash at end of period $ 226,986 $ 216,017 Non-cash investing and financing activities: Pawn loans forfeited and transferred to inventory $ 96,472 $ 84,851 Transfer of equity consideration for acquisition — 99 Acquisition earn-out contingency — 2,000 Accrued acquisition consideration 37 1,250 20 Table of Contents