EZCORP settles convertible notes, issues stock

Published 01/05/2025, 22:24
EZCORP settles convertible notes, issues stock

AUSTIN, Texas - EZCORP, Inc. (NASDAQ: EZPW), a prominent pawn transaction provider in the U.S. and Latin America, with a market capitalization of $860 million and strong financial health according to InvestingPro analysis, has completed the retirement of its outstanding 2.375% Convertible Senior Notes due 2025, with a principal amount of $103.4 million. The notes, issued in 2018, reached maturity today.

In October 2024, the company elected for physical settlement, allowing note holders to convert their debt into shares of EZCORP Class A Common Stock. Holders converted approximately $97.0 million of the notes into about 6.1 million shares at a conversion rate of 62.8931 shares per $1,000 principal, equivalent to a conversion price of $15.90 per share. The stock has shown impressive momentum, gaining over 41% in the past six months, and currently trades below its InvestingPro Fair Value.

EZCORP repaid the remaining principal balance of the notes in cash, amounting to roughly $6.4 million. Alongside this repayment, the company also disbursed interest payments and cash in lieu of fractional shares totaling $1.2 million. The company maintains a healthy liquidity position with a current ratio of 4.04, indicating strong ability to meet short-term obligations.

Founded in 1989, EZCORP has expanded its operations significantly and is known for its pawn transactions and sale of pre-owned and recycled merchandise, primarily from pawn lending operations and customer purchases. The company prides itself on catering to the short-term cash needs of consumers who lack access to traditional credit sources.

EZCORP is publicly traded on NASDAQ and is included in the S&P 1000 Index and the Nasdaq Composite Index. This financial move is based on a press release statement issued by the company.

In other recent news, EZCORP Inc. reported its second-quarter 2025 earnings, showcasing mixed results. The company’s earnings per share (EPS) surpassed expectations, reaching $0.34 compared to the forecasted $0.31, marking a 21% increase year-on-year. However, EZCORP missed revenue expectations, reporting $306.32 million against a forecast of $310.46 million, despite achieving a record Q2 revenue of $318.9 million, a 12% increase from the previous year. In terms of operational performance, the company saw a 15% rise in Pawn Loan Outstanding to $271.8 million and a 23% growth in EBITDA to $45.1 million. Analysts from Canaccord Genuity and Stephens Inc. expressed interest in the company’s growth initiatives and acquisition strategies, particularly in Latin America. EZCORP’s CFO, Tim Jugmans, highlighted the company’s focus on driving gross profit and managing inventory effectively. The firm also discussed plans to expand its digital channels and explore mergers and acquisitions in the U.S. and Latin America. Looking forward, projections indicate further EPS growth, with estimates of $0.35 for Q3 and $0.37 for Q4 of 2025.

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