EZPW

EZCORP INC

Financial Services | Small Cap

$0.28

EPS Forecast

$288.8

Revenue Forecast

Announcing earnings for the quarter ending 2024-09-30 soon
EX-99.1 2 a2020-q1erexhibit991.htm EXHIBIT 99.1 Exhibit


ezcorpa01a04a60.jpg
EZCORP Reports First Quarter Fiscal Year 2020 Results
Austin, Texas (February 3, 2020) — EZCORP, Inc. (NASDAQ: EZPW) today announced results for its first quarter ended December 31, 2019.
All amounts in this release are from EZCORP continuing operations and in conformity with U.S. generally accepted accounting principles ("GAAP") unless otherwise noted. Comparisons shown in this release are to the same period in the prior year unless otherwise noted.
HIGHLIGHTS FOR FIRST QUARTER OF FISCAL 2020
Total revenues for the quarter were up 3% to $222.4 million, reflecting record revenues in our pawn business. Merchandise sales increased 5% from the prior-year quarter, complemented by 1% growth in pawn service charge (PSC) revenue.
As anticipated, efforts to rebalance our inventory profile to drive long-term profitability depressed merchandise sales margin by approximately 260 basis points to 34%, slightly below our target range of 35-38%. Aged general merchandise in U.S. Pawn was reduced 23% from the prior-year quarter, resulting in a $1.3 million, or 3%, decrease in merchandise sales gross profit.
The Latin America segment contribution improved 20% to $8.1 million, with a 21% increase in merchandise sales and a 15% growth in total revenues. PSC increased 7% on a 74 basis point improvement in monthly yield reflecting the quality of the loan portfolio.
Continued focus on expense control drove a $0.2 million improvement in operations expenses despite a 2% growth in store count since the prior-year quarter. Corporate expense increased $4.3 million, including $2.0 million of costs not expected to recur in future periods.
Income from continuing operations before income taxes was $3.0 million, up $7.7 million compared to a $4.7 million loss in the prior-year quarter, and diluted earnings per share were $0.02 versus a loss of $0.06 in the prior-year quarter. Year-over-year comparisons were impacted by charges of $7.1 million in the current quarter and $2.9 million in the prior-year quarter for our portion of legal settlements reached by Cash Converters International Limited and a $13.3 million impairment of the Cash Converters investment in the prior-year quarter. Excluding those items and adjusting for constant currency1, adjusted1 income from continuing operations before income taxes was $13.4 million compared to $20.2 million in the prior-year quarter, and adjusted diluted earnings per share were $0.16 versus $0.28 in the prior-year quarter.
We opened four additional stores in Latin America in the current quarter; Latin America store count has increased by 21 net new stores, or 5%, over the last twelve months.
We completed the rollout of our new POS system to all U.S. and Mexico stores.
We successfully completed the initial launch of the Lana digital platform in December 2019.
We repurchased almost $1.0 million of Class A Common Stock by December 31, 2019 and an additional $1.7 million after quarter-end for approximately $2.7 million since program inception.





CEO COMMENTARY AND OUTLOOK
Chief Executive Officer Stuart Grimshaw commented, "Underlying results reflect the current management focus of reducing aged inventory levels at a time when our customers have excess cash in their hands. In Latin America we saw strong sales growth of 18% year-over-year, which was offset to a degree by the anticipated reduction in merchandise margin and loan balances. U.S. Pawn has also been focused on the efficient disposition of aged inventory with expected lower merchandise margins attached to this activity. Total consolidated revenues improved 3%, while we gained efficiencies in our operations expenses and effectively managed aged inventory. While our ongoing efforts to optimize inventory and upgrade systems, as well as the more recent government social welfare programs in Mexico, impact near-term results and loan balances, we remain focused on driving operating efficiencies, free cash flow and higher returns on earning assets, and reducing corporate expense.
In December, we introduced our differentiated digital platform, Lana, to customers in select stores in Florida, and completed the rollout of our new point-of-sale system in the U.S. and Mexico. We expect both these initiatives to enhance customer acquisition and retention, optimize lending decisions and expand earnings through improved loan redemption rates, resulting pawn service charge revenues and sales margins.
Importantly, we began repurchasing shares under the three-year, $60 million program that the Board approved in December 2019. We repurchased almost $1.0 million worth of stock by the end of the quarter, and to date we have repurchased approximately 415,000 shares for $2.7 million. Looking ahead, our free cash flow and strong balance sheet will enable us to enhance growth via new store openings, M&A opportunities that meet our strategic and financial criteria, and ongoing reinvestments, as well as return capital to shareholders through repurchasing publicly traded Class A shares under the share repurchase program.”






CONSOLIDATED RESULTS

Three Months Ended December 31
in millions, except per share amounts
 
As Reported
 
Adjusted1
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
Total Revenues
$
222.4

 
$
215.7

 
$
221.1

 
$
215.7

Net Revenues
$
130.1

 
$
130.0

 
$
129.4

 
$
130.0

Income from Continuing Operations, Before Tax
$
3.0

 
$
(4.7
)
 
$
13.4

 
$
20.2

Net Income from Continuing Operations
$
1.3

 
$
(3.7
)
 
$
9.2

 
$
15.5

Diluted Earnings Per Share from Continuing Operations
$
0.02

 
$
(0.06
)
 
$
0.16

 
$
0.28

Adjusted EBITDA1
$
15.2

 
$
7.6

 
$
22.7

 
$
28.3

Total revenues grew 3% to $222.4 million. PSC was up 1% to $84.7 million largely reflecting an improvement in pawn loan yield. Merchandise sales grew 5% and scrap sales were up 3%.
Net revenues were flat versus the prior-year quarter at $130.1 million. Consolidated merchandise sales gross profit declined 3% to $42.7 million, with a 5% increase in merchandise sales more than offset by higher cost of goods sold. Ongoing efforts to enhance inventory management impacted merchandise margins, down approximately 260 basis points to 34%.
Consolidated operations expenses improved slightly. Total store count increased 2%, consisting of a net 21 stores acquired or opened since the end of the prior-year quarter.
Administrative expense increased 33% to $17.5 million, including approximately $2.0 million not expected to recur and lower capitalization rates for IT personnel reflecting the nature of the specific work performed in the quarter.
Gross interest expense decreased $3.5 million reflecting the June 2019 repayment of $195.0 million of cash convertible debt. Gross interest income decreased $2.5 million due to collections on notes receivable since the prior-year period.
SEGMENT RESULTS
U.S. Pawn
PSC was essentially flat on a year-over-year basis, as a slightly lower balance of pawn loans outstanding (PLO) for the quarter was offset by a modest improvement in yield. PLO per store ended the period at $303,000, down 1% compared to the average for the fiscal first quarter of 2019.
Merchandise margins declined from 37.8% a year ago to 35.6%, as management focused on the effective liquidation of aged general merchandise inventory, which improved to 6.8% of total general merchandise inventory at the end of the quarter compared to 8.9% at the end of the prior-year quarter. Jewelry scrapping gross profit increased 31%, with related margins up approximately 640 basis points to 22% on higher gold prices.
Net revenues declined 2% to $99.5 million, while segment contribution increased 4% to $28.6 million on lower expenses. Prior-year results included a $2.9 million charge for an uncollectible receivable balance from a bankrupt refining partner with no comparable charge in the current period.
Adjusted EBITDA margin expanded approximately 150 basis points to 31.6%.
Latin America Pawn
Net revenues increased 8% to $29.7 million ($29.1 million on a constant currency basis) reflecting growth in same-store loan balances, new and acquired stores and expansion in pawn loan yield.




PSC rose 7% to $20.6 million ($20.2 million on a constant currency basis). Ending PLO grew 4% to $40.3 million (1% to $39.2 million on a constant currency basis), with ending PLO per store of $83,000, down 1% from the prior-year quarter.
Merchandise sales increased 21%, or $5.5 million (18% or $4.6 million constant currency). Merchandise margins declined to 28% driven by ongoing efforts to generate cash and reduce aged inventory.
Operations expenses increased 10% to $20.0 million primarily a function of expenses from new and expanded stores and higher same-store licensing requirements and utilities.
Latin America Pawn added four de novo stores in the quarter. New store openings typically pressure earnings in the short term as they ramp up but drive higher profitability over time.
Segment contribution increased 20% to $8.1 million (16% on a constant currency basis) primarily reflecting higher net revenues. EBITDA margin expanded approximately 400 basis points to 32.5%.
CONFERENCE CALL
EZCORP will host a conference call on Monday, February 3, 2020, at 4:00 pm Central Time to discuss first quarter results. Analysts and institutional investors may participate on the conference call by dialing (877) 201-0168, Conference ID: 5299243, or internationally by dialing (647) 788-4901. The conference call will be webcast simultaneously to the public through this link: http://investors.ezcorp.com/. A replay of the conference call will be available online at http://investors.ezcorp.com/ shortly after the end of the call.
ABOUT EZCORP
Formed in 1989, EZCORP has grown into a leading provider of pawn loans in the United States and Latin America. It also sells merchandise, primarily collateral forfeited from pawn lending operations and used merchandise purchased from customers. We are dedicated to satisfying the short-term cash needs of consumers who are both cash and credit constrained, focusing on an industry-leading customer experience. EZCORP is traded on NASDAQ under the symbol EZPW and is a member of the Russell 2000 Index, S&P SmallCap 600 Index, S&P 1000 Index and Nasdaq Composite Index.
FORWARD LOOKING STATEMENTS
This announcement contains certain forward-looking statements regarding the company’s strategy, initiatives and expected performance. These statements are based on the company’s current expectations as to the outcome and timing of future events. All statements, other than statements of historical facts, including all statements regarding the company's strategy, initiatives and future performance, that address activities or results that the company plans, expects, believes, projects, estimates or anticipates, will, should or may occur in the future, including future financial or operating results, are forward-looking statements. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of uncertainties and other factors, including operating risks, liquidity risks, legislative or regulatory developments, market factors or current or future litigation. For a discussion of these and other factors affecting the company’s business and prospects, see the company’s annual, quarterly and other reports filed with the Securities and Exchange Commission. The company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.
Contact:
Email: Investor_Relations@ezcorp.com
Phone: (512) 314-2220

1Adjusted basis, which is a non-GAAP measure, excludes certain items.“Constant currency” basis, which is a non-GAAP measure, excludes the impact of foreign currency exchange rate fluctuations. For additional information about these calculations, as well as a reconciliation to the most comparable GAAP financial measures, see “Non-GAAP Financial Information” at the end of this release.




EZCORP, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
Three Months Ended December 31,
 
2019
 
2018
 
 
 
 
 
(Unaudited)
 
(in thousands, except per share amounts)
Revenues:
 
 
 
Merchandise sales
$
126,728

 
$
121,024

Jewelry scrapping sales
9,528

 
9,281

Pawn service charges
84,725

 
83,519

Other revenues
1,454

 
1,871

Total revenues
222,435

 
215,695

Merchandise cost of goods sold
84,076

 
77,112

Jewelry scrapping cost of goods sold
7,754

 
8,050

Other cost of revenues
536

 
484

Net revenues
130,069

 
130,049

Operating expenses:
 
 
 
Operations
90,625

 
90,853

Administrative
17,489

 
13,165

Depreciation and amortization
7,733

 
6,848

Loss on sale or disposal of assets and other
744

 
4,442

Total operating expenses
116,591

 
115,308

Operating income
13,478

 
14,741

Interest expense
5,329

 
8,791

Interest income
(843
)
 
(3,339
)
Equity in net loss of unconsolidated affiliates
5,897

 
1,119

Impairment of investment in unconsolidated affiliates

 
13,274

Other expense (income)
71

 
(386
)
Income (loss) from continuing operations before income taxes
3,024

 
(4,718
)
Income tax expense (benefit)
1,759

 
(1,058
)
Income (loss) from continuing operations, net of tax
1,265

 
(3,660
)
Loss from discontinued operations, net of tax
(27
)
 
(183
)
Net income (loss)
1,238

 
(3,843
)
Net loss attributable to noncontrolling interest

 
(477
)
Net income (loss) attributable to EZCORP, Inc.
$
1,238

 
$
(3,366
)
 
 
 
 
Basic earnings (loss) per share attributable to EZCORP, Inc. — continuing operations
$
0.02

 
$
(0.06
)
Diluted earnings (loss) per share attributable to EZCORP, Inc. — continuing operations
$
0.02

 
$
(0.06
)
 
 
 
 
Weighted-average basic shares outstanding
55,666

 
55,032

Weighted-average diluted shares outstanding
55,687

 
55,032





EZCORP, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
 
December 31,
2019
 
December 31,
2018
 
September 30,
2019
 
 
 
 
 
 
 
(Unaudited)
 
 
Assets:
 
 
 
 
 
Current assets:
 
 
 
 
 
Cash and cash equivalents
$
143,141

 
$
297,031

 
$
157,567

Pawn loans
195,586

 
193,984

 
199,058

Pawn service charges receivable, net
32,250

 
31,558

 
31,802

Inventory, net
187,369

 
175,422

 
179,355

Notes receivable, net
7,450

 
26,711

 
7,182

Prepaid expenses and other current assets
36,142

 
31,483

 
30,796

Total current assets
601,938

 
756,189

 
605,760

Investments in unconsolidated affiliates
29,272

 
35,511

 
34,516

Property and equipment, net
65,246

 
69,770

 
67,357

Lease right of use asset
225,950

 

 

Goodwill
301,282

 
296,638

 
300,527

Intangible assets, net
68,995

 
55,956

 
68,044

Notes receivable, net
1,124

 
4,599

 
1,117

Deferred tax asset, net
2,123

 
10,104

 
1,998

Other assets
5,012

 
4,442

 
4,383

Total assets
$
1,300,942

 
$
1,233,209

 
$
1,083,702

 
 
 
 
 
 
Liabilities and equity:
 
 
 
 
 
Current liabilities:
 
 
 
 
 
Current maturities of long-term debt, net
$
215

 
$
190,238

 
$
214

Accounts payable, accrued expenses and other current liabilities
51,621

 
57,380

 
77,957

Customer layaway deposits
12,548

 
11,747

 
12,915

Lease liability
48,052

 

 

Total current liabilities
112,436

 
259,365

 
91,086

Long-term debt, net
241,209

 
229,928

 
238,380

Deferred tax liability, net
2,119

 
9,617

 
1,985

Lease liability
186,352

 

 

Other long-term liabilities
7,226

 
6,150

 
7,302

Total liabilities
549,342

 
505,060

 
338,753

Commitments and contingencies


 


 


Stockholders’ equity:
 
 
 
 
 
Class A Non-voting Common Stock, par value $.01 per share; shares authorized: 100 million; issued and outstanding: 52,886,122 as of December 31, 2019; 52,475,070 as of December 31, 2018; and 52,565,064 as of September 30, 2019
529

 
524

 
526

Class B Voting Common Stock, convertible, par value $.01 per share; shares authorized: 3 million; issued and outstanding: 2,970,171
30

 
30

 
30

Additional paid-in capital
407,440

 
400,081

 
407,628

Retained earnings
389,928

 
383,256

 
389,163

Accumulated other comprehensive loss
(46,327
)
 
(48,739
)
 
(52,398
)
EZCORP, Inc. stockholders’ equity
751,600

 
735,152

 
744,949

Noncontrolling interest

 
(7,003
)
 

Total equity
751,600

 
728,149

 
744,949

Total liabilities and equity
$
1,300,942

 
$
1,233,209

 
$
1,083,702








EZCORP, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
Three Months Ended December 31,
 
2019
 
2018
 
 
 
 
 
(Unaudited)
 
(in thousands)
Operating activities:
 
 
 
Net income (loss)
$
1,238

 
$
(3,843
)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
 
 
 
Depreciation and amortization
7,733

 
6,848

Amortization of debt discount and deferred financing costs
3,229

 
5,585

Amortization of lease right-of-use asset
11,474

 

Accretion of notes receivable discount and deferred compensation fee
(275
)
 
(1,376
)
Deferred income taxes
10

 
352

Impairment of investment in unconsolidated affiliate

 
13,274

Other adjustments
1,298

 
5,052

Stock compensation expense
1,695

 
2,238

Loss from investments in unconsolidated affiliates
5,897

 
1,119

Changes in operating assets and liabilities, net of business acquisitions:
 
 
 
Service charges and fees receivable
(355
)
 
(726
)
Inventory
(1,592
)
 
685

Prepaid expenses, other current assets and other assets
(9,649
)
 
(1,564
)
Accounts payable, accrued expenses and other liabilities
(29,966
)
 
(836
)
Customer layaway deposits
(467
)
 
18

Income taxes
(1,188
)
 
(3,445
)
Net cash (used in) provided by operating activities
(10,918
)
 
23,381

Investing activities:
 
 
 
Loans made
(187,362
)
 
(186,588
)
Loans repaid
109,623

 
106,643

Recovery of pawn loan principal through sale of forfeited collateral
76,515

 
70,594

Additions to property and equipment, net
(5,574
)
 
(5,880
)
Acquisitions, net of cash acquired

 
(332
)
Principal collections on notes receivable

 
7,284

Net cash used in investing activities
(6,798
)
 
(8,279
)
Financing activities:
 
 
 
Taxes paid related to net share settlement of equity awards
(1,395
)
 
(3,288
)
Payout of deferred consideration
(175
)
 

Proceeds from borrowings, net of issuance costs
(109
)
 
743

Payments on borrowings
(292
)
 
(67
)
Repurchase of common stock
(963
)
 

Net cash used in financing activities
(2,934
)
 
(2,612
)
Effect of exchange rate changes on cash and cash equivalents and restricted cash
1,349

 
(782
)
Net (decrease) increase in cash, cash equivalents and restricted cash
(19,301
)
 
11,708

Cash, cash equivalents and restricted cash at beginning of period
162,442

 
285,578

Cash, cash equivalents and restricted cash at end of period
$
143,141

 
$
297,286

 
 
 
 
Non-cash investing and financing activities:
 
 
 
Pawn loans forfeited and transferred to inventory
$
82,878

 
$
80,301







EZCORP, Inc.
OPERATING SEGMENT RESULTS
(Unaudited and in thousands)
 
Three Months Ended December 31, 2019
  
U.S. Pawn
 
Latin America Pawn
 
Lana
 
Other
International
 
Total Segments
 
Corporate Items
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands)
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
Merchandise sales
$
95,354

 
$
31,374

 
$

 
$

 
$
126,728

 
$

 
$
126,728

Jewelry scrapping sales
6,117

 
3,411

 

 

 
9,528

 

 
9,528

Pawn service charges
64,090

 
20,635

 

 

 
84,725

 

 
84,725

Other revenues
36

 
25

 
1

 
1,392

 
1,454

 

 
1,454

Total revenues
165,597

 
55,445

 
1

 
1,392

 
222,435

 

 
222,435

Merchandise cost of goods sold
61,364

 
22,712

 

 

 
84,076

 

 
84,076

Jewelry scrapping cost of goods sold
4,755

 
2,999

 

 

 
7,754

 

 
7,754

Other cost of revenues

 

 

 
536

 
536

 

 
536

Net revenues
99,478

 
29,734

 
1

 
856

 
130,069

 

 
130,069

Segment and corporate expenses (income):
 
 
 
 
 
 
 
 
 
 
 
 
 
Operations
68,059

 
19,983

 
1,350

 
1,233

 
90,625

 

 
90,625

Administrative

 

 

 

 

 
17,489

 
17,489

Depreciation and amortization
2,865

 
1,889

 
12

 
34

 
4,800

 
2,933

 
7,733

Loss on sale or disposal of assets and other

 
28

 

 

 
28

 
716

 
744

Interest expense

 
28

 
(36
)
 
170

 
162

 
5,167

 
5,329

Interest income

 
(388
)
 

 

 
(388
)
 
(455
)
 
(843
)
Equity in net loss of unconsolidated affiliates

 

 

 
5,897

 
5,897

 

 
5,897

Other expense (income)

 
67

 

 
(1
)
 
66

 
5

 
71

Segment contribution (loss)
$
28,554

 
$
8,127

 
$
(1,325
)
 
$
(6,477
)
 
$
28,879

 
 
 
 
Income from continuing operations before income taxes
 
 
 
 
 
 
 
 
$
28,879

 
$
(25,855
)
 
$
3,024





 
Three Months Ended December 31, 2018
  
U.S. Pawn
 
Latin America Pawn
 
Lana
 
Other
International
 
Total Segments
 
Corporate Items
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands)
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
Merchandise sales
$
95,103

 
$
25,921

 
$

 
$

 
$
121,024

 
$

 
$
121,024

Jewelry scrapping sales
6,552

 
2,729

 

 

 
9,281

 

 
9,281

Pawn service charges
64,225

 
19,294

 

 

 
83,519

 

 
83,519

Other revenues
48

 
42

 

 
1,781

 
1,871

 

 
1,871

Total revenues
165,928

 
47,986

 

 
1,781

 
215,695

 

 
215,695

Merchandise cost of goods sold
59,148

 
17,964

 

 

 
77,112

 

 
77,112

Jewelry scrapping cost of goods sold
5,510

 
2,540

 

 

 
8,050

 

 
8,050

Other cost of revenues

 

 

 
484

 
484

 

 
484

Net revenues
101,270

 
27,482

 

 
1,297

 
130,049

 

 
130,049

Segment and corporate expenses (income):
 
 
 
 
 
 
 
 
 
 
 
 
 
Operations
67,937

 
18,196

 
2,090

 
2,630

 
90,853

 

 
90,853

Administrative

 

 

 

 

 
13,165

 
13,165

Depreciation and amortization
3,035

 
1,422

 

 
41

 
4,498

 
2,350

 
6,848

Loss on sale or disposal of assets and other
2,853

 
1,589

 

 

 
4,442

 

 
4,442

Interest expense

 
29

 

 
72

 
101

 
8,690

 
8,791

Interest income

 
(419
)
 

 

 
(419
)
 
(2,920
)
 
(3,339
)
Equity in net loss of unconsolidated affiliates

 

 

 
1,119

 
1,119

 

 
1,119

Impairment of investments in unconsolidated affiliates

 

 

 
13,274

 
13,274

 

 
13,274

Other (income) expense

 
(126
)
 

 
22

 
(104
)
 
(282
)
 
(386
)
Segment contribution (loss)
$
27,445

 
$
6,791

 
$
(2,090
)
 
$
(15,861
)
 
$
16,285

 
 
 
 
Loss from continuing operations before income taxes
 
 
 
 
 
 
 
 
$
16,285

 
$
(21,003
)
 
$
(4,718
)






EZCORP, Inc.
STORE COUNT ACTIVITY
(Unaudited)
 
Three Months Ended December 31, 2019
 
U.S. Pawn
 
Latin America Pawn
 
Other International
 
Consolidated
 
 
 
 
 
 
 
 
As of September 30, 2019
512

 
480

 
22

 
1,014

New locations opened

 
4

 

 
4

As of December 31, 2019
512

 
484

 
22

 
1,018

 
Three Months Ended December 31, 2018
 
U.S. Pawn
 
Latin America Pawn
 
Other International
 
Consolidated
 
 
 
 
 
 
 
 
As of September 30, 2018
508

 
453

 
27

 
988

New locations opened

 
4

 

 
4

Locations acquired

 
5

 

 
5

As of December 31, 2018
508

 
462

 
27

 
997





Non-GAAP Financial Information (Unaudited)
In addition to the financial information prepared in conformity with accounting principles generally accepted in the United States ("GAAP"), we provide certain other non-GAAP financial information on a constant currency ("constant currency") and adjusted basis. We use constant currency results to evaluate our Latin America Pawn operations, which are denominated primarily in Mexican pesos, Guatemalan quetzals and other Latin American currencies. We believe that presentation of constant currency and adjusted results is meaningful and useful in understanding the activities and business metrics of our operations and reflect an additional way of viewing aspects of our business that, when viewed with GAAP results, provide a more complete understanding of factors and trends affecting our business. We provide non-GAAP financial information for informational purposes and to enhance understanding of our GAAP consolidated financial statements. We use this non-GAAP financial information primarily to evaluate and compare operating results across accounting periods.
Readers should consider the information in addition to, but not instead of or superior to, our financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.
Constant currency results reported herein are calculated by translating consolidated balance sheet and consolidated statement of operations items denominated in local currency to U.S. dollars using the exchange rate from the prior-year comparable period, as opposed to the current period, in order to exclude the effects of foreign currency rate fluctuations. We used the end-of-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. Our statement of operations constant currency results reflect the monthly exchange rate fluctuations and so are not directly calculable from the above rates. Constant currency results, where presented, also exclude the foreign currency gain or loss. The end-of-period and approximate average exchange rates for each applicable currency as compared to U.S. dollars as of and for the three months ended December 31 were as follows:
 
 
December 31,
 
Three Months Ended December 31,
 
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
Mexican peso
 
18.9

 
19.6

 
19.2

 
19.8

Guatemalan quetzal
 
7.5

 
7.7

 
7.5

 
7.6

Honduran lempira
 
24.4

 
24.2

 
24.3

 
24.0

Peruvian sol
 
3.3

 
3.4

 
3.3

 
3.3

Miscellaneous Non-GAAP Financial Measures
 
2020 Q1
 
2019 Q1
 
 
 
 
 
(in millions)
Net income (loss)
$
1.2

 
$
(3.8
)
Loss from discontinued operations, net of tax

 
0.2

Interest expense
5.3

 
8.8

Interest income
(0.8
)
 
(3.3
)
Income tax expense (benefit)
1.8

 
(1.1
)
Depreciation and amortization
7.7

 
6.8

Adjusted EBITDA
$
15.2

 
$
7.6

 
Income from Continuing Operations, Before Tax
 
Tax Effect
 
Net Income from Continuing Operations
 
Adjusted EBITDA
 
Continuing Operations Diluted EPS
 
 
 
 
 
 
 
 
 
 
 
(in millions)
2020 Q1 reported
$
3.0

 
$
(1.7
)
 
$
1.3

 
$
15.2

 
$
0.02

Impact on CCV earnings from litigation settlement
7.1

 
(2.1
)
 
5.0

 
7.1

 
0.09

Termination of non-core software project
0.6

 
(0.1
)
 
0.5

 
0.6

 
0.01

Currency exchange rate fluctuations
(0.2
)
 

 
(0.2
)
 
(0.2
)
 

Non-cash net interest expense
2.9

 
(0.3
)
 
2.6

 

 
0.04

2020 Q1 adjusted
$
13.4

 
$
(4.2
)
 
$
9.2

 
$
22.7

 
$
0.16





 
Income (Loss) from Continuing Operations, Before Tax
 
Tax Effect
 
Net Income (Loss) from Continuing Operations
 
Adjusted EBITDA
 
Continuing Operations Diluted EPS
 
 
 
 
 
 
 
 
 
 
 
(in millions)
2019 Q1 reported
$
(4.7
)
 
$
1.0

 
$
(3.7
)
 
$
7.6

 
$
(0.06
)
Acquisition costs
0.1

 

 
0.1

 
0.1

 

Charge-off of aged assets and other
0.2

 

 
0.2

 
0.2

 

Impairment on CCV investment
13.3

 
(2.8
)
 
10.5

 
13.3

 
0.18

Impact on CCV earnings from litigation settlement
2.9

 
(0.7
)
 
2.2

 
2.9

 
0.04

Adjustment for Republic Metals Corporation reserve
4.4

 
(1.1
)
 
3.3

 
4.4

 
0.06

Currency exchange rate fluctuations
(0.2
)
 

 
(0.2
)
 
(0.2
)
 

Non-cash net interest expense
4.2

 
(1.1
)
 
3.1

 

 
0.06

2019 Q1 adjusted*
$
20.2

 
$
(4.7
)
 
$
15.5

 
$
28.3

 
$
0.28

* During the first quarter of fiscal 2020, we revised the financial information our chief operating decision maker (currently our chief executive officer) reviews for operational decision-making purposes to include the separate financial results of our Lana business. Our historical segment results have been recast to conform to current presentation including the removal of discretionary strategic investment in digital platform costs in historically adjusted results. We additionally recast certain other adjustments to conform to restated historical results.
 2020 Q1:
U.S. Dollar Amount
 
Percentage Change YOY
 
 
 
 
 
(in millions)
 
 
Latin America Pawn net revenue (three months ended December 31, 2019)
$
29.7

 
8
%
Currency exchange rate fluctuations
(0.6
)
 
 
Constant currency Latin America Pawn net revenue (three months ended December 31, 2019)
$
29.1

 
6
%
 
 
 
 
Latin America Pawn PLO
$
40.3

 
4
%
Currency exchange rate fluctuations
(1.7
)
 
 
Constant currency Latin America Pawn PLO
$
39.2

 
1
%
 
 
 
 
Latin America Pawn PSC revenues (three months ended December 31, 2019)
$
20.6

 
7
%
Currency exchange rate fluctuations
(0.4
)
 
 
Constant currency Latin America Pawn PSC revenues (three months ended December 30, 2019)
$
20.2

 
5
%
 
 
 
 
Latin America Pawn merchandise sales (three months ended December 31, 2019)
$
31.4

 
21
%
Currency exchange rate fluctuations
(0.9
)
 
 
Constant currency Latin America Pawn merchandise sales (three months ended December 31, 2019)
$
30.5

 
18
%
 
 
 
 
Latin America Pawn segment profit before tax (three months ended December 31, 2019)
$
8.1

 
20
%
Currency exchange rate fluctuations
(0.3
)
 
 
Constant currency Latin America Pawn segment profit before tax (three months ended December 31, 2019)
$
7.8

 
16
%