EZCORP INC 10-Q

ITEM 1. FINANCIAL STATEMENTS EZCORP, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except share and per share amounts) June 30, 2024 June 30, 2023 September 30, 2023 Assets: Current assets: Cash and cash equivalents $ 218,038 $ 237,974 $ 220,595 Restricted cash 9,204 8,549 8,373 Pawn loans 261,720 229,379 245,766 Pawn service charges receivable, net 40,638 34,959 38,885 Inventory, net 171,937 154,944 166,477 Prepaid expenses and other current assets 40,391 44,925 39,623 Total current assets 741,928 710,730 719,719 Investments in unconsolidated affiliates 12,297 10,247 10,987 Other investments 51,220 39,220 36,220 Property and equipment, net 59,926 61,849 68,096 Right-of-use assets, net 235,030 243,100 234,388 Goodwill 308,847 302,120 302,372 Intangible assets, net 60,164 60,009 58,216 Deferred tax asset, net 25,245 19,610 25,702 Other assets, net 15,506 10,793 12,011 Total assets $ 1,510,163 $ 1,457,678 $ 1,467,711 Liabilities and equity: Current liabilities: Current maturities of long-term debt, net $ 137,326 $ — $ 34,265 Accounts payable, accrued expenses and other current liabilities 69,742 74,458 81,605 Customer layaway deposits 20,067 18,595 18,920 Operating lease liabilities, current 58,905 56,919 57,182 Total current liabilities 286,040 149,972 191,972 Long-term debt, net 223,998 359,686 325,847 Deferred tax liability, net 416 349 435 Operating lease liabilities 188,996 197,499 193,187 Other long-term liabilities 9,258 11,130 10,502 Total liabilities 708,708 718,636 721,943 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: 51,771,917 as of June 30, 2024; 52,214,761 as of June 30, 2023; and 51,869,569 as of September 30, 2023 518 522 519 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 347,082 344,857 346,181 Retained earnings 493,830 422,549 431,140 Accumulated other comprehensive loss ( 40,005 ) ( 28,916 ) ( 32,102 ) Total equity 801,455 739,042 745,768 Total liabilities and equity $ 1,510,163 $ 1,457,678 $ 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 June 30, Nine Months Ended June 30, (in thousands, except per share amount) 2024 2023 2024 2023 Revenues: Merchandise sales $ 158,140 $ 147,980 $ 502,230 $ 464,274 Jewelry scrapping sales 15,395 13,931 43,191 34,640 Pawn service charges 107,830 93,819 321,442 279,442 Other revenues 56 82 188 206 Total revenues 281,421 255,812 867,051 778,562 Merchandise cost of goods sold 101,211 95,069 322,680 297,285 Jewelry scrapping cost of goods sold 13,483 11,958 37,479 30,813 Gross profit 166,727 148,785 506,892 450,464 Operating expenses: Store expenses 116,335 104,932 341,472 307,004 General and administrative 20,060 17,876 54,869 48,961 Depreciation and amortization 8,158 8,026 24,942 23,977 Loss (gain) on sale or disposal of assets and other 20 ( 29 ) ( 149 ) 28 Other income — ( 2,632 ) ( 765 ) ( 5,097 ) Total operating expenses 144,573 128,173 420,369 374,873 Operating income 22,154 20,612 86,523 75,591 Interest expense 3,539 3,414 10,381 12,994 Interest income ( 2,931 ) ( 2,584 ) ( 8,452 ) ( 5,146 ) Equity in net (income) loss of unconsolidated affiliates ( 1,263 ) ( 1,523 ) ( 4,135 ) 29,394 Other income ( 191 ) ( 5 ) ( 627 ) ( 159 ) Income before income taxes 23,000 21,310 89,356 38,508 Income tax expense 5,050 3,088 21,457 10,298 Net income $ 17,950 $ 18,222 $ 67,899 $ 28,210 Basic earnings per share $ 0.33 $ 0.33 $ 1.23 $ 0.51 Diluted earnings per share $ 0.25 $ 0.24 $ 0.89 $ 0.38 Weighted-average basic shares outstanding 54,898 55,367 55,022 55,776 Weighted-average diluted shares outstanding 83,008 86,825 84,309 79,559 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 June 30, Nine Months Ended June 30, (in thousands) 2024 2023 2024 2023 Net income $ 17,950 $ 18,222 $ 67,899 $ 28,210 Other comprehensive income: Foreign currency translation adjustment, net of income tax (benefit) expense for our investment in unconsolidated affiliate of $( 101 ) and $( 30 ) for the three months ended June 30, 2024, and 2023, respectively and $( 60 ) and $ 706 for the nine months ended June 30, 2024, and 2023, respectively ( 16,993 ) 8,101 ( 7,903 ) 26,753 Comprehensive income $ 957 $ 26,323 $ 59,996 $ 54,963 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 Stock compensation — — 2,580 — — 2,580 Release of restricted stock, net of shares withheld for taxes 89 1 ( 1 ) — — — Foreign currency translation gain — — — — 4,457 4,457 Purchase and retirement of treasury stock ( 305 ) ( 3 ) ( 1,275 ) ( 1,725 ) — ( 3,003 ) Net income — — — 21,479 — 21,479 Balances as of March 31, 2024 55,027 $ 551 $ 345,174 $ 477,683 $ ( 23,012 ) $ 800,396 Stock compensation — — 3,101 — — 3,101 Foreign currency translation loss — — — — ( 16,993 ) ( 16,993 ) Purchase and retirement of treasury stock ( 285 ) ( 3 ) ( 1,193 ) ( 1,803 ) — ( 2,999 ) Net income — — — 17,950 — 17,950 Balances as of June 30, 2024 54,742 $ 548 $ 347,082 $ 493,830 $ ( 40,005 ) $ 801,455 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 Stock compensation — — 1,855 — — 1,855 Release of restricted stock, net of shares withheld for taxes 132 2 — — — 2 Taxes paid related to net share settlement of equity awards ( 1 ) — ( 11 ) — — ( 11 ) Foreign currency translation gain — — — — 16,148 16,148 Purchase and retirement of treasury stock ( 448 ) ( 5 ) ( 1,768 ) ( 2,178 ) — ( 3,951 ) Net loss — — — ( 6,790 ) — ( 6,790 ) Balances as of March 31, 2023 55,531 $ 556 $ 343,088 $ 405,961 $ ( 37,017 ) $ 712,588 Stock compensation — — 3,135 — — 3,135 Foreign currency translation gain — — — — 8,101 8,101 Purchase and retirement of treasury stock ( 346 ) ( 4 ) ( 1,366 ) ( 1,634 ) — ( 3,004 ) Net income — — — 18,222 — 18,222 Balances as of June 30, 2023 55,185 $ 552 $ 344,857 $ 422,549 $ ( 28,916 ) $ 739,042 See accompanying notes to unaudited condensed consolidated financial statements 4 Table of Contents EZCORP, Inc. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended June 30, (in thousands) 2024 2023 Operating activities: Net income $ 67,899 $ 28,210 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation and amortization 24,942 23,977 Amortization of debt discount and deferred financing costs 1,212 1,135 Non-cash lease expense 43,999 41,752 Deferred income taxes 438 ( 7,489 ) Other adjustments 69 ( 4,894 ) Provision for inventory reserve 589 ( 160 ) Stock compensation expense 7,945 6,876 Equity in net (income) loss from investment in unconsolidated affiliates ( 4,135 ) 29,394 Net loss on extinguishment of debt — 3,545 Changes in operating assets and liabilities, net of business acquisitions: Pawn service charges receivable ( 1,593 ) ( 316 ) Inventory ( 2,775 ) ( 5,501 ) Prepaid expenses, other current assets and other assets ( 3,625 ) ( 2,750 ) Accounts payable, accrued expenses and other liabilities ( 65,396 ) ( 53,018 ) Customer layaway deposits 1,055 1,036 Income taxes ( 360 ) 8,923 Dividends from unconsolidated affiliates — 3,589 Net cash provided by operating activities 70,264 74,309 Investing activities: Loans made ( 683,121 ) ( 592,689 ) Loans repaid 391,297 343,886 Recovery of pawn loan principal through sale of forfeited collateral 272,781 251,608 Capital expenditures, net ( 16,870 ) ( 27,751 ) Acquisitions, net of cash acquired ( 11,963 ) ( 12,968 ) Proceeds from (issuance of) notes receivable 1,100 ( 15,500 ) Investment in unconsolidated affiliate ( 993 ) ( 2,133 ) Investment in other investments ( 15,000 ) ( 15,000 ) Dividends from unconsolidated affiliates 3,535 — Net cash used in investing activities ( 59,234 ) ( 70,547 ) Financing activities: Taxes paid related to net share settlement of equity awards ( 3,253 ) ( 1,149 ) Proceeds from issuance of debt — 230,000 Debt issuance cost — ( 7,458 ) Cash paid on extinguishment of debt — ( 1,951 ) Payments on debt — ( 178,488 ) Purchase and retirement of treasury stock ( 9,009 ) ( 13,982 ) Payments of finance leases ( 386 ) — Net cash (used in) provided by financing activities ( 12,648 ) 26,972 Effect of exchange rate changes on cash and cash equivalents and restricted cash ( 108 ) 1,420 Net (decrease) increase in cash, cash equivalents and restricted cash ( 1,726 ) 32,154 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 $ 227,242 $ 246,523 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 and nine month periods ended June 30, 2024, 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 June 30, 2024, 2023 and September 30, 2023 was $ 20.1 million, $ 18.6 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 June 30, 2024, 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 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. In March 2024, the FASB issued ASU 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements (“ASU 2024-02”). ASU 2024-02 contains amendments to the Codification that remove references to various FASB Concepts Statements. The requirements of this ASU 2024-02 are effective for the Company for fiscal years beginning after December 15, 2024 and can be applied on a prospective or retrospective basis. This standard is not expected to have a significant impact 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: Nine Months Ended June 30, 2024 (in thousands) U.S. Pawn Latin America Pawn Consolidated Balances as of September 30, 2023 $ 255,942 $ 46,430 $ 302,372 Acquisitions (a) 8,329 — 8,329 Effect of foreign currency translation changes — ( 1,854 ) ( 1,854 ) Balances as of June 30, 2024 $ 264,271 $ 44,576 $ 308,847 Nine Months Ended June 30, 2023 (in thousands) U.S. Pawn Latin America Pawn Consolidated Balances as of September 30, 2022 $ 245,503 $ 41,325 $ 286,828 Acquisitions (a) 9,468 — 9,468 Effect of foreign currency translation changes — 5,824 5,824 Balances as of June 30, 2023 $ 254,971 $ 47,149 $ 302,120 (a) 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 June 30, Nine Months Ended June 30, (in thousands, except per share amounts) 2024 2023 2024 2023 Basic earnings per common share: Net income - basic $ 17,950 $ 18,222 $ 67,899 $ 28,210 Weighted shares outstanding - basic 54,898 55,367 55,022 55,776 Basic earnings per common share $ 0.33 $ 0.33 $ 1.23 $ 0.51 Diluted earnings per common share: Net income - basic $ 17,950 $ 18,222 $ 67,899 $ 28,210 Add: Convertible Notes interest expense, net of tax* 2,427 2,644 7,501 1,885 Net income - diluted $ 20,377 $ 20,866 $ 75,400 $ 30,095 Weighted shares outstanding - basic 54,898 55,367 55,022 55,776 Equity-based compensation awards - effect of dilution** 1,056 1,041 1,129 1,058 Convertible Notes - effect of dilution*** 27,054 30,417 28,158 22,725 Weighted shares outstanding - diluted 83,008 86,825 84,309 79,559 Diluted earnings per common share $ 0.25 $ 0.24 $ 0.89 $ 0.38 Potential common shares excluded from the calculation of diluted earnings per common share above: Convertible Notes*** — — — 6,323 Restricted stock**** 1,917 1,705 1,913 1,728 Total 1,917 1,705 1,913 8,051 * Effective January 1, 2024, we are required to combination settle the 2024 Convertible Notes. As such, no interest expense is included in the diluted earnings per share computation for the three months ended June 30, 2024 and only the first quarter of 2024 interest expense is included for the nine months ended June 30, 2024. The nine months ended June 30,2023 includes $ 5.4 million gain on the partial extinguishment of debt, associated with the 2025 Convertible Notes, which was recorded to “Interest expense” in the Company’s condensed consolidated statement of operations. 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. *** As we are required to combination settle the 2024 Convertible Notes effective January 1, 2024, the 3.4 million principal shares are not included for the three months ended June 30, 2024 and only the weighted average shares of 1.2 million are included for the nine months ended June 30, 2024. Additionally, 75,854 and 25,192 potential common shares related to the accreted value of the 2024 Convertible Notes are included for the three and nine months ended June 30, 2024, respectively, as the average market rate was above the initial conversion price of $ 10.00 per share for the period ended June 30, 2024. See Note 7: Debt for conversion price, initial conversion rate and additional information on 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 June 30, 2024 June 30, 2023 September 30, 2023 Lease assets: Operating lease right-of-use assets Right-of-use assets, net $ 235,030 $ 243,100 $ 234,388 Financing lease assets Other assets 1,832 2,076 2,178 Total lease assets $ 236,862 $ 245,176 $ 236,566 Lease liabilities: Current: Operating lease liabilities Operating lease liabilities, current $ 58,905 $ 56,919 $ 57,182 Financing lease liabilities Accounts payable, accrued expenses and other current liabilities 596 472 530 Total current lease liabilities $ 59,501 $ 57,391 $ 57,712 Non-current: Operating lease liabilities Operating lease liabilities $ 188,996 $ 197,499 $ 193,187 Financing lease liabilities Other long-term liabilities 1,352 1,645 1,715 Total non-current lease liabilities $ 190,348 $ 199,144 $ 194,902 Total lease liabilities $ 249,849 $ 256,535 $ 252,614 The table below provides major components of our lease costs: Three Months Ended June 30, Nine Months Ended June 30, (in thousands) 2024 2023 2024 2023 Operating lease cost: Operating lease cost * $ 20,406 $ 18,701 $ 59,312 $ 54,219 Variable lease cost 4,318 4,188 13,176 12,068 Total operating lease cost $ 24,724 $ 22,889 $ 72,488 $ 66,287 Financing lease cost: Amortization of financing lease assets $ 140 $ 106 $ 455 $ 180 Interest on financing lease liabilities 49 47 177 82 Total financing lease cost $ 189 $ 153 $ 632 $ 262 Total lease cost $ 24,913 $ 23,042 $ 73,120 $ 66,549 * Includes a reduction for sublease rental income of $ 0.7 million and $ 1.0 million for the three months ended June 30, 2024 and 2023, respectively, and $ 2.4 million and $ 2.8 million for the nine months ended June 30, 2024 and 2023, 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” under operating expenses, based on the underlying lease use. Cash paid for operating leases was $ 15.9 million and $ 19.5 million for the three months ended June 30, 2024 and 2023, respectively, and $ 60.5 million and $ 56.9 million for the nine months ended June 30, 2024 and 2023, respectively. Cash paid for principal and interest on finance leases was $ 0.1 million and $ 0.1 million, respectively, for the three months ended June 30, 2024 and $ 0.4 million and $ 0.2 million for the nine months ended June 30, 2024 respectively . There was no cash paid for principal or interest on finance leases during the three and nine months ended June 30, 2023. 9 Table of Contents The weighted-average term and discount rates for leases are as follows: Nine Months Ended June 30, 2024 2023 Weighted-average remaining lease term (years): Operating leases 4.88 5.11 Financing leases 3.01 3.88 Weighted-average discount rate: Operating leases 8.33 % 8.52 % Financing leases 11.14 % 11.14 % As of June 30, 2024, maturities of lease liabilities under ASC 842 by fiscal year were as follows: (in thousands) Operating Leases Financing Leases Remaining 2024 $ 19,113 $ 196 Fiscal 2025 75,596 783 Fiscal 2026 64,879 783 Fiscal 2027 50,391 500 Fiscal 2028 35,301 36 Thereafter 56,958 — Total lease liabilities $ 302,238 $ 2,298 Less: portion representing imputed interest 54,337 350 Total net lease liabilities $ 247,901 $ 1,948 Less: current portion 58,905 596 Total long term net lease liabilities $ 188,996 $ 1,352 We recorded $ 46.1 million and $ 55.2 million in non-cash additions to our operating right-of-use assets and lease liabilities for the nine months ended June 30, 2024 and 2023, respectively. We recorded $ 0.3 million and $ 2.1 million in non-cash finance lease additions for the nine months ended June 30, 2024 and 2023, respectively. 10 Table of Contents NOTE 5: STRATEGIC INVESTMENTS Cash Converters International Limited As of June 30, 2024, 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 $ 3.5 million and $ 3.6 million during th e nine mon ths ended June 30, 2024 and 2023, respectively. The following tables present summary financial information for Cash Converters’ most recently reported results at December 31, 2023 after translation to U.S. dollars: December 31, (in thousands) 2023 2022 Current assets $ 186,572 $ 189,179 Non-current assets 137,271 98,301 Total assets $ 323,843 $ 287,480 Current liabilities $ 101,097 $ 91,601 Non-current liabilities 79,926 56,792 Shareholders’ equity 142,820 139,087 Total liabilities and shareholders’ equity $ 323,843 $ 287,480 Half-Year Ended December 31, (in thousands) 2023 2022 Gross revenues $ 124,874 $ 98,768 Gross profit $ 73,675 $ 63,800 Net profit (loss) $ 6,499 $ ( 73,197 ) During the three and nine m onths ended June 30, 2024, we recorded our share of income of $ 1.4 million and $ 4.3 million, respectively, from Cash Converters. During the three and nine months ended June 30, 2023, we recorded our share of income of $ 1.5 million and a $ 29.4 million loss on our share of losses from Cash Converters, respectively, included in “Equity in net (income) loss of unconsolidated affiliates” in the condensed consolidated statements of operations. For the nine months ended June 30, 2023, the $ 29.4 million loss includes $ 32.4 million of our share of their non-cash goodwill impairment charge. 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 preferred 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 preferred equity investment in Founders is accounted for utilizing the measurement alternative within ASC 321, Investments — Equity Securities. As of June 30, 2024, our $ 45.0 million carrying value of the preferred equity 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 June 30, 2024, our maximum exposure for losses related to our investment in Founders was our $ 45.0 million preferred 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 June 30, 2024 June 30, 2024 Fair Value Measurement Using (in thousands) Level 1 Level 2 Level 3 Financial assets: Promissory note receivable from Founders $ 16,186 $ 16,186 $ — $ — $ 16,186 Investments in unconsolidated affiliates 12,297 40,762 39,912 — 850 Financial liabilities: 2024 Convertible Notes $ 34,386 $ 34,690 $ — $ 34,690 $ — 2025 Convertible Notes 102,940 99,238 — 99,238 — 2029 Convertible Notes 223,998 262,564 — 262,564 — Carrying Value Estimated Fair Value June 30, 2023 June 30, 2023 Fair Value Measurement Using (in thousands) Level 1 Level 2 Level 3 Financial assets: Promissory note receivable due April 2024 $ 1,242 $ 1,242 $ — $ — $ 1,242 Promissory note receivable from Founders 16,050 16,050 — — 16,050 Investments in unconsolidated affiliates 10,247 41,367 41,367 — — Financial liabilities: 2024 Convertible Notes $ 34,223 $ 36,126 $ — $ 36,126 $ — 2025 Convertible Notes 102,433 94,586 — 94,586 — 2029 Convertible Notes 223,030 228,294 — 228,294 — 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. The Company remeasured its acquisition-related contingent obligation associated with the acquisition in June 2021 of PLO del Bajio S. de R.S. de C.V., which owned stores operating under the name “Cash Apoyo Efectivo,” at the end of each reporting period. This remeasurement resulted in a $ 2.6 million and $ 5.1 million reduction of the obligation with an offset recorded to “Other” as an operating item in our condensed consolidated statement of operations during the three and nine months ended June 30, 2023, respectively. There is no remaining obligation in our Consolidated Balance Sheet as of June 30, 2023. The key assumptions used to determine the fair value of acquisition-related contingent consideration are estimated by management, not observable in the market and, therefore, considered Level 3 inputs within the fair value hierarchy. 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 interest rate on the note was 2.89 % per annum and was secured by certain marketable securities owned by the seller and held in a U.S. brokerage account. All principal and accrued interest was received in April 2024. 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 June 30, 2024, 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 June 30, 2024. 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. 13 Table of Contents NOTE 7: DEBT The following table presents the Company's debt instruments outstanding: June 30, 2024 June 30, 2023 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 $ ( 6,002 ) $ 223,998 $ 230,000 $ ( 6,970 ) $ 223,030 $ 230,000 $ ( 6,716 ) $ 223,284 2025 Convertible Notes 103,373 ( 433 ) 102,940 103,373 ( 940 ) 102,433 103,373 ( 810 ) 102,563 2024 Convertible Notes 34,389 ( 3 ) 34,386 34,389 ( 166 ) 34,223 34,389 ( 124 ) 34,265 Total $ 367,762 $ ( 6,438 ) $ 361,324 $ 367,762 $ ( 8,076 ) $ 359,686 $ 367,762 $ ( 7,650 ) $ 360,112 Less current portion 137,762 ( 436 ) 137,326 — — — 34,389 ( 124 ) 34,265 Total long-term debt $ 230,000 $ ( 6,002 ) $ 223,998 $ 367,762 $ ( 8,076 ) $ 359,686 $ 333,373 $ ( 7,526 ) $ 325,847 The following table presents the Company’s contractual maturities related to the debt instruments as of June 30, 2024: 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 14 Table of Contents The following table presents the Company’s interest expense related to the Convertible Notes for the three and nine months ended June 30, 2024 and 2023: Three Months Ended June 30, Nine Months Ended June 30, (in thousands) 2024 2023 2024 2023 2029 Convertible Notes: Contractual interest expense $ 2,156 $ 2,157 $ 6,469 $ 4,744 Amortization of deferred financing costs 242 239 714 488 Total interest expense $ 2,398 $ 2,396 $ 7,183 $ 5,232 2025 Convertible Notes: Contractual interest expense $ 613 $ 614 $ 1,841 $ 2,170 Amortization of deferred financing costs 123 121 377 429 Gain on extinguishment — — — ( 5,389 ) Total interest expense $ 736 $ 735 $ 2,218 $ ( 2,790 ) 2024 Convertible Notes: Contractual interest expense $ 248 $ 247 $ 742 $ 1,370 Amortization of deferred financing costs 40 39 121 218 Loss on extinguishment — — — 8,935 Total interest expense $ 288 $ 286 $ 863 $ 10,523 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 June 30, 2024. 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 and nine months ended June 30, 2024 was approximately 4.28 %. As of June 30, 2024, 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. 15 Table of Contents We may not redeem the 2029 Convertible 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 June 30, 2024. As of June 30, 2024, 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 June 30, 2024. 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 and nine months ended June 30, 2024 was approximately 2.88 % for the 2025 Convertible Notes. As of June 30, 2024, 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 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 June 30, 2024. As of June 30, 2024, the if-converted value of the 2025 Convertible Notes did not exceed the principal amount. 16 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”), of which $ 34.4 million remains outstanding as of June 30, 2024. 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 and nine months ended June 30, 2024 was approximately 3.35 %. As of June 30, 2024, 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. 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. Because we did not elect an alternative settlement method prior to January 1, 2024, conversions will be settled by combination settlement, which is $1,000 cash (per the $1,000 principal value) plus stock equal to the accreted value as defined in the 2017 Indenture. As of June 30, 2024, based on the terms of the 2017 Indenture, the if-converted value of the 2024 Convertible Notes exceeded the principal amount by $ 0.8 million, or approximately 77,000 Class A common shares. Prior to the 2024 Maturity Date, certain holders of the 2024 Convertible Notes elected to convert their 2024 Convertible Notes, resulting in combination settlement on the 2024 Maturity Date. On July 1, 2024, the $ 34.4 million aggregate principal amount outstanding plus accrued interest was repaid using cash on hand and 77,328 Class A Common Stock shares, equal to the accreted value, were issued as part of the 2024 Convertible Notes conversion . 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 June 30, 2024, we had repurchased and retired 2,572,794 shares of our Class A Common Stock for $ 23.0 million under the Common Stock Repurchase Program, of which 285,392 and 945,749 shares were repurchased and retired for $ 3.0 million and $ 9.0 million during the three and nine months ended June 30, 2024, respectively. During the three and nine months ended June 30, 2023, 346,310 and 1,037,703 shares were repurchased and retired for $ 3.0 million and $ 9.0 million, respectively, 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. 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. 17 Table of Contents 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) 1,442,461 7.59 Released (b) ( 1,225,328 ) 5.25 Cancelled ( 63,211 ) 7.32 Outstanding as of June 30, 2024 2,709,821 $ 7.91 (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. 18 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 June 30, 2024 (in thousands) U.S. Pawn Latin America Pawn Other Investments Total Segments Corporate Items Consolidated Revenues: Merchandise sales $ 107,849 $ 50,291 $ — $ 158,140 $ — $ 158,140 Jewelry scrapping sales 13,757 1,638 — 15,395 — 15,395 Pawn service charges 77,416 30,414 — 107,830 — 107,830 Other revenues 28 28 — 56 — 56 Total revenues 199,050 82,371 — 281,421 — 281,421 Merchandise cost of goods sold 67,229 33,982 — 101,211 — 101,211 Jewelry scrapping cost of goods sold 11,887 1,596 — 13,483 — 13,483 Gross profit 119,934 46,793 — 166,727 — 166,727 Segment and corporate expenses (income): Store expenses 81,441 34,894 — 116,335 — 116,335 General and administrative — — — — 20,060 20,060 Depreciation and amortization 2,408 2,090 — 4,498 3,660 8,158 (Gain) loss on sale or disposal of assets and other ( 2 ) 22 — 20 — 20 Interest expense — — — — 3,539 3,539 Interest income — ( 370 ) ( 605 ) ( 975 ) ( 1,956 ) ( 2,931 ) Equity in net (income) loss of unconsolidated affiliates — — ( 1,406 ) ( 1,406 ) 143 ( 1,263 ) Other (income) expense — ( 184 ) 12 ( 172 ) ( 19 ) ( 191 ) Segment contribution $ 36,087 $ 10,341 $ 1,999 $ 48,427 Income (loss) before income taxes $ 48,427 $ ( 25,427 ) $ 23,000 Three Months Ended June 30, 2023 (in thousands) U.S. Pawn Latin America Pawn Other Investments Total Segments Corporate Items Consolidated Revenues: Merchandise sales $ 102,177 $ 45,803 $ — $ 147,980 $ — $ 147,980 Jewelry scrapping sales 13,098 833 — 13,931 — 13,931 Pawn service charges 68,790 25,029 — 93,819 — 93,819 Other revenues 27 40 15 82 — 82 Total revenues 184,092 71,705 15 255,812 — 255,812 Merchandise cost of goods sold 62,799 32,270 — 95,069 — 95,069 Jewelry scrapping cost of goods sold 11,101 857 — 11,958 — 11,958 Gross profit 110,192 38,578 15 148,785 — 148,785 Segment and corporate expenses (income): Store expenses 75,389 29,543 — 104,932 — 104,932 General and administrative — — — — 17,876 17,876 Depreciation and amortization 2,505 2,303 — 4,808 3,218 8,026 Gain on sale or disposal of assets — ( 29 ) — ( 29 ) — ( 29 ) Other income — ( 2,632 ) — ( 2,632 ) — ( 2,632 ) Interest expense — — — — 3,414 3,414 Interest income ( 1 ) ( 256 ) — ( 257 ) ( 2,327 ) ( 2,584 ) Equity in net income of unconsolidated affiliates — — ( 1,523 ) ( 1,523 ) — ( 1,523 ) Other (income) expense — ( 65 ) 10 ( 55 ) 50 ( 5 ) Segment contribution $ 32,299 $ 9,714 $ 1,528 $ 43,541 Income (loss) before income taxes $ 43,541 $ ( 22,231 ) $ 21,310 19 Table of Contents Nine Months Ended June 30, 2024 (in thousands) U.S. Pawn Latin America Pawn Other Investments Total Segments Corporate Items Consolidated Revenues: Merchandise sales $ 348,211 $ 154,019 $ — $ 502,230 $ — $ 502,230 Jewelry scrapping sales 39,258 3,933 — 43,191 — 43,191 Pawn service charges 236,499 84,943 — 321,442 — 321,442 Other revenues 94 59 35 188 — 188 Total revenues 624,062 242,954 35 867,051 — 867,051 Merchandise cost of goods sold 218,736 103,944 — 322,680 — 322,680 Jewelry scrapping cost of goods sold 33,965 3,514 — 37,479 — 37,479 Gross profit 371,361 135,496 35 506,892 — 506,892 Segment and corporate expenses (income): Store expenses 239,536 101,936 — 341,472 — 341,472 General and administrative — — — — 54,869 54,869 Depreciation and amortization 7,548 6,821 — 14,369 10,573 24,942 (Gain) loss on sale or disposal of assets and other ( 6 ) ( 240 ) — ( 246 ) 97 ( 149 ) Other income — — — — ( 765 ) ( 765 ) Interest expense — — — — 10,381 10,381 Interest income — ( 1,398 ) ( 1,811 ) ( 3,209 ) ( 5,243 ) ( 8,452 ) Equity in net (income) loss of unconsolidated affiliates — — ( 4,278 ) ( 4,278 ) 143 ( 4,135 ) Other (income) expense — ( 231 ) 27 ( 204 ) ( 423 ) ( 627 ) Segment contribution $ 124,283 $ 28,608 $ 6,097 $ 158,988 Income (loss) before income taxes $ 158,988 $ ( 69,632 ) $ 89,356 Nine Months Ended June 30, 2023 (in thousands) U.S. Pawn Latin America Pawn Other Investments Total Segments Corporate Items Consolidated Revenues: Merchandise sales $ 329,231 $ 135,043 $ — $ 464,274 $ — $ 464,274 Jewelry scrapping sales 30,088 4,552 — 34,640 — 34,640 Pawn service charges 208,045 71,397 — 279,442 — 279,442 Other revenues 84 75 47 206 — 206 Total revenues 567,448 211,067 47 778,562 — 778,562 Merchandise cost of goods sold 203,698 93,587 — 297,285 — 297,285 Jewelry scrapping cost of goods sold 25,867 4,946 — 30,813 — 30,813 Gross profit 337,883 112,534 47 450,464 — 450,464 Segment and corporate expenses (income): Store expenses 220,639 86,365 — 307,004 — 307,004 General and administrative — ( 3 ) — ( 3 ) 48,964 48,961 Depreciation and amortization 7,820 6,850 — 14,670 9,307 23,977 Loss (gain) on sale or disposal of assets 84 ( 56 ) — 28 — 28 Other income — ( 5,097 ) — ( 5,097 ) — ( 5,097 ) Interest expense — — — — 12,994 12,994 Interest income ( 2 ) ( 723 ) — ( 725 ) ( 4,421 ) ( 5,146 ) Equity in net loss of unconsolidated affiliates — — 29,394 29,394 — 29,394 Other (income) expense — ( 41 ) 20 ( 21 ) ( 138 ) ( 159 ) Segment contribution (loss) $ 109,342 $ 25,239 $ ( 29,367 ) $ 105,214 Income (loss) before income taxes $ 105,214 $ ( 66,706 ) $ 38,508 20 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 June 30, 2024 Pawn loans $ 199,277 $ 62,443 $ — $ — $ 261,720 Pawn service charges receivable, net 35,489 5,149 — — 40,638 Inventory, net 121,941 49,996 — — 171,937 Total assets 1,030,571 317,888 78,136 83,568 1,510,163 As of June 30, 2023 Pawn loans $ 178,877 $ 50,502 $ — $ — $ 229,379 Pawn service charges receivable, net 30,668 4,291 — — 34,959 Inventory, net 114,910 40,034 — — 154,944 Total assets 943,438 312,156 66,032 136,052 1,457,678 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. 21 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) June 30, 2024 June 30, 2023 September 30, 2023 Gross pawn service charges receivable $ 53,532 $ 47,071 $ 50,881 Allowance for uncollectible pawn service charges receivable ( 12,894 ) ( 12,112 ) ( 11,996 ) Pawn service charges receivable, net $ 40,638 $ 34,959 $ 38,885 Gross inventory $ 175,187 $ 157,590 $ 169,138 Inventory reserves ( 3,250 ) ( 2,646 ) ( 2,661 ) Inventory, net $ 171,937 $ 154,944 $ 166,477 Prepaid expenses and other $ 4,753 $ 6,081 $ 4,106 Accounts receivable, notes receivable and other 30,845 29,860 30,548 Income taxes prepaid and receivable 4,793 8,984 4,969 Prepaid expenses and other current assets $ 40,391 $ 44,925 $ 39,623 Property and equipment, gross $ 278,231 $ 335,296 $ 345,461 Accumulated depreciation ( 218,305 ) ( 273,447 ) ( 277,365 ) Property and equipment, net $ 59,926 $ 61,849 $ 68,096 Accounts payable $ 14,910 $ 19,220 $ 23,022 Accrued payroll 16,551 13,668 11,472 Incentive accrual 14,508 13,564 18,544 Other payroll related expenses 2,951 6,059 5,262 Accrued sales and VAT taxes 4,106 6,663 5,565 Accrued income taxes payable 2,115 2,646 2,628 Other current liabilities 14,601 12,638 15,112 Accounts payable, accrued expenses and other current liabilities $ 69,742 $ 74,458 $ 81,605 The following table provides supplemental disclosure of condensed consolidated statements of cash flows information: Nine Months Ended June 30, (in thousands) 2024 2023 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 $ 218,038 $ 237,974 Restricted cash at end of period 9,204 8,549 Total cash and cash equivalents and restricted cash at end of period $ 227,242 $ 246,523 Non-cash investing and financing activities: Pawn loans forfeited and transferred to inventory $ 276,101 $ 238,899 Transfer of equity consideration for acquisition — 99 Acquisition earn-out contingency — 2,000 Accrued acquisition consideration 741 1,220 22 Table of Contents