About EZCORP

EZCORP, Inc. provides pawn services in the United States and Latin America. As of September 30, 2023, the company operated a total of 1,231 locations, consisting of 529 U.S. pawn stores (operating primarily as EZPAWN or Value Pawn & Jewelry); 549 Mexico pawn stores (operating primarily as Empeño Fácil and Cash Apoyo Efectivo); and 153 pawn stores in Guatemala, El Salvador and Honduras (operating as GuatePrenda and MaxiEfectivo). At the company's pawn stores, it advances cash against the value of collateralized tangible personal property and sells merchandise to customers looking for good value. The merchandise it sells primarily consists of second-hand collateral forfeited from its pawn activities or merchandise purchased from customers. By store count, the company is the second largest pawn store owner and operator in the U.S. and one of the largest in Latin America. The company also offers web-based applications named EZ+ that allow customers to manage their pawn transactions, layaways, and loyalty rewards online. In addition to the company's core pawn business in the U.S. and Latin America, it has made the following strategic investments: The company owns 43.7% of Cash Converters International Limited (Cash Converters). Cash Converters and its controlled companies comprise a diverse group generating revenues from franchising, store operations, personal finance (including pawn transactions) and vehicle finance in over 600 stores across 14 countries. The company owns a preferred interest in Founders One, LLC (Founders) that has majority ownership in Simple Management Group, Inc. (SMG), which owns and operates 95 pawn stores in the U.S., Caribbean and Central America, with plans to build and acquire more stores in that region. The company generates revenues primarily from pawn service charges (PSC) on pawn loans outstanding (PLO), merchandise sales and jewelry scrapping. Segments and Geographic Information The company conducts its business globally and manages its business by geography. The company's business is organized into the following reportable segments: U.S. Pawn, which includes the company's EZPAWN, Value Pawn & Jewelry and other branded pawn operations in the United States. Latin America Pawn, which includes the company's Empeño Fácil, Cash Apoyo Efectivo (CAE) and other branded pawn operations in Mexico, as well as its GuatePrenda and MaxiEfectivo pawn operations in Guatemala, El Salvador and Honduras (referred to as 'GPMX'). Cash Converters, which includes the company's equity interest in the net loss (income) of Cash Converters. Other Investments, which includes the company's investments in Rich Data Corporation (RDC) and its investment in and notes receivable from Founders. Pawn Activities At the company's pawn stores, it advances cash against the value of collateralized tangible personal property. The company earns pawn service charges (PSC) for those cash advances, and the PSC rate varies by state and transaction size. At the time of the transaction, the company takes possession of the pawned collateral, which consists of tangible personal property, generally jewelry, consumer electronics, tools, sporting goods, and musical instruments. Customers in the U.S. and the majority of the company's Latin America stores purchases a product protection plan that allows them to exchange certain general merchandise (non-jewelry) sold through its retail pawn operations within six months of purchase. In the U.S., the company also offers a jewelry VIP package, which guarantees customers a minimum future pawn advance amount on the item sold, allows them full credit if they trade in the item to purchase a more expensive piece of jewelry and provides minor repair service on the item sold. Operations The company's pawn operations are designed to provide the optimum level of support to the store teams, providing coaching, mentoring and problem solving to identify opportunities to better serve its customers and position it to be the leader in customer service and satisfaction. Strategy The company's customer-centric strategy includes serving its customers in a friendly and respectful way; always being competitive and fair; passionately serving customer needs; building enduring relationships; and recognizing and rewarding customer loyalty. That strategy consists of various fundamental pillars, such as strengthen the core (relentless focus on superior execution and operational excellence in its pawn business) and innovate and grow (broaden customer engagement to serve more customers more frequently in more locations). Part of the company's strategy is to grow the number of locations it operates through opening new (de novo) locations and through acquisitions in both Latin America and the U.S. and potential new markets. During the year ended September 30, 2023, the company continued its expansion in Latin America with the opening of 44 de novo stores (23 in Mexico, 19 in Guatemala, and 2 in Honduras). The company owns a total of 702 stores in Latin America, representing 57% of its total pawn stores. Seasonality In the U.S., PSC is historically highest in the company's fourth fiscal quarter (July through September) due to a higher average PLO balance during the summer and lowest in its third fiscal quarter (April through June) following the tax refund season, and merchandise sales are highest in its first and second fiscal quarters (October through March) due to the holiday season, jewelry sales surrounding Valentine's Day and the availability of tax refunds. In Latin America, most of the company's customers receive additional compensation from their employers in December, and many receive additional compensation in June or July, applying downward pressure on PLO balances and fueling some merchandise sales in those periods. As a net effect of these and other factors and excluding discrete charges, the company's consolidated profit before tax is generally highest in its first fiscal quarter (October through December) and lowest in its third fiscal quarter (April through June). Trademarks and Trade Names The company operates its U.S. pawn stores principally under the names 'EZPAWN' or 'Value Pawn & Jewelry', its Mexico pawn stores principally under the name 'EMPEÑO FÁCIL' and 'Cash Apoyo Efectivo', its Guatemala pawn stores under the name 'GuatePrenda,' and its El Salvador and Honduras pawn stores under the name 'MaxiEfectivo'. The company has registered the names EZPAWN, Value Pawn & Jewelry and EZCORP, among others, with the United States Patent and Trademark Office. In Mexico, the company has registered the names 'EMPEÑO FÁCIL', 'Bazareño', 'Presta Dinero', 'Montepio San Patricio' and 'Cash Apoyo Efectivo' with the Instituto Mexicano de la Propiedad Industrial. The company has registered the name 'GuatePrenda' in Guatemala and the name 'MaxiEfectivo' in Guatemala, El Salvador, and Honduras. Regulation Some of the company's pawn stores in the U.S. handle firearms and each of those stores maintains a federal firearms license as required by federal law. The federal Gun Control Act of 1968 and regulations issued by the Bureau of Alcohol, Tobacco and Firearms also require each pawn store dealing in firearms to maintain a permanent written record of all receipts and dispositions of firearms. In addition, the company must comply with the Brady Handgun Violence Prevention Act, which requires it to conduct a background check before releasing, selling or otherwise disposing of firearms. The company's pawn lending activities are subject to other state and federal statutes and regulations, including the following: The company is subject to the federal Gramm-Leach-Bliley Act and its underlying regulations, as well as various state laws and regulations relating to privacy and data security. Under these regulations, the company is required to disclose to its customers its policies and practices relating to the protection and sharing of customers' nonpublic personal information. These regulations also require the company to ensure that its systems are designed to protect the confidentiality of customers' nonpublic personal information, and many of these regulations dictate certain actions that it must take to notify customers if their personal information is disclosed in an unauthorized manner. The company is subject to the Fair Credit Reporting Act, which was enacted, in part, to address privacy concerns associated with the sharing of consumers' financial information and credit history contained in consumer credit reports and limits its ability to share certain consumer report information. The company is subject to the Federal Fair and Accurate Credit Transactions Act, which amended the Fair Credit Reporting Act and requires it to adopt written guidance and procedures for detecting, preventing and mitigating identity theft, and to adopt various policies and procedures that address and aid in detecting and responding to suspicious activity or identity theft 'red flags'. As a provider of consumer financial products, the company is prohibited from engaging in any unfair, deceptive or abusive act or practice (UDAAP) under the Dodd-Frank Act, as they can cause significant financial injury to consumers, erode consumer confidence and undermine the financial marketplace. Under the USA PATRIOT Act, the company must maintain an anti-money laundering compliance program that includes the development of internal policies, procedures and controls; the designation of a compliance officer; an ongoing Team Member training program and an independent audit function to test the program. The company is subject to the Bank Secrecy Act and its underlying regulations, which require it to report and maintain records of certain high-dollar transactions. In addition, federal laws and regulations require the company to report certain transactions (or series of transactions) deemed suspicious to the Financial Crimes Enforcement Network of the Treasury Department (FinCen). Generally, a transaction is considered suspicious if the company knows, suspects or has reason to suspect that the transaction involves funds derived from illegal activity or is intended to hide or disguise such funds, is designed to evade the requirements of the Bank Secrecy Act, or appears to serve no legitimate business or lawful purpose. The Office of Foreign Assets Control (OFAC) of the Department of the Treasury administers and enforces economic and trade sanctions based on the U.S. foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction and other threats to the national security, foreign policy or economy of the United States. The company is prohibited from doing business with named individuals, businesses and countries subject to sanctions and restrictions; and it is required to report any transactions involving those named by the U.S. Department of the Treasury. The Foreign Corrupt Practices Act (FCPA) makes it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. The Department of Defense regulations promulgated under the Military Lending Act limit the annual percentage rate charged on certain consumer loans (including pawn loans) made to active military personnel or their dependents to 36%. The Federal Law on the Protection of Personal Data Held by Private Parties requires the company to protect its customers' personal information. This law requires the company to inform customers if it shares customer personal information with third parties and to post (both online and in-store) its Data Privacy Policy. The company's pawn business in Mexico is subject to the General Law of Administrative Responsibility (GLAR), which requires it to implement an integrity policy that contains mechanisms to ensure integrity standards throughout the organization. The company is also subject to The Federal Law for the Prevention and Identification of Transactions with Funds from Illegal Sources, which requires reporting of certain transactions exceeding certain monetary limits, the appointment of a compliance officer and maintenance of customer identification records and controls. History EZCORP, Inc. was founded in 1989. The company was incorporated in 1989.