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Quarterly Information (Unaudited) (Tables) | 12 Months Ended
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Sep. 30, 2014
Quarterly Financial Information Disclosure [Abstract] |
Schedule of quarterly information |
| First Quarter |  | Second Quarter |  | Third Quarter |  | Fourth Quarter
| As Restated (See Note 2)
| (in thousands, except per share amounts)
Year Ended September 30, 2014 |  |  |  |  |  |  |
Total revenues | $ | 253,756 |  |  | $ | 245,131 |  |  | $ | 223,134 |  |  | $ | 235,625 |
Net revenues | 151,407 |  |  | 149,921 |  |  | 135,588 |  |  | 133,313 |
(Loss) income from continuing operations, net of tax | 19,669 |  |  | 5,223 |  |  | 3,669 |  |  | (8,623 | )
Loss from discontinued operations, net of tax | (2,735 | ) |  | (634 | ) |  | (2,076 | ) |  | (86,579 | )
Net (loss) income | 16,934 |  |  | 4,589 |  |  | 1,593 |  |  | (95,202 | )
Net income from continuing operations attributable to redeemable noncontrolling interest | (1,796 | ) |  | (1,553 | ) |  | (2,337 | ) |  | (1,701 | )
Net (loss) income attributable to EZCORP, Inc. | $ | 18,730 |  |  | $ | 6,142 |  |  | $ | 3,930 |  |  | $ | (93,501 | )
Basic (loss) earnings per share attributable to EZCORP, Inc.: |  |  |  |  |  |  |
Continuing operations | $ | 0.40 |  |  | $ | 0.12 |  |  | $ | 0.11 |  |  | $ | (0.13 | )
Discontinued operations | (0.05 | ) |  | (0.01 | ) |  | (0.04 | ) |  | (1.62 | )
Basic (loss) earnings per share | $ | 0.35 |  |  | $ | 0.11 |  |  | $ | 0.07 |  |  | $ | (1.75 | )
Diluted (loss) earnings per share attributable to EZCORP, Inc.: |  |  |  |  |  |  |
Continuing operations | $ | 0.39 |  |  | $ | 0.12 |  |  | $ | 0.11 |  |  | $ | (0.13 | )
Discontinued operations | (0.05 | ) |  | (0.01 | ) |  | (0.04 | ) |  | (1.62 | )
Diluted (loss) earnings per share | $ | 0.34 |  |  | $ | 0.11 |  |  | $ | 0.07 |  |  | $ | (1.75 | )
Year Ended September 30, 2013 |  |  |  |  |  |  |
Total revenues | $ | 261,239 |  |  | $ | 256,890 |  |  | $ | 223,451 |  |  | $ | 228,588 |
Net revenues | 161,102 |  |  | 159,542 |  |  | 141,728 |  |  | 140,552 |
(Loss) income from continuing operations, net of tax | 29,555 |  |  | 32,670 |  |  | 15,241 |  |  | (23,184 | )
Loss from discontinued operations, net of tax | (2,562 | ) |  | (3,425 | ) |  | (22,289 | ) |  | (4,996 | )
Net (loss) income | 26,993 |  |  | 29,245 |  |  | (7,048 | ) |  | (28,180 | )
Net (loss) income from continuing operations attributable to redeemable noncontrolling interest | 26 |  |  | (995 | ) |  | (152 | ) |  | (101 | )
Net (loss) income from discontinued operations attributable to redeemable noncontrolling interest | (106 | ) |  | 12 |  |  | 54 |  |  | (36 | )
Net (loss) income attributable to EZCORP, Inc. | $ | 27,073 |  |  | $ | 30,228 |  |  | $ | (6,950 | ) |  | $ | (28,043 | )
Basic (loss) earnings per share attributable to EZCORP, Inc.: |  |  |  |  |  |  |
Continuing operations | $ | 0.57 |  |  | $ | 0.63 |  |  | $ | 0.28 |  |  | $ | (0.42 | )
Discontinued operations | (0.05 | ) |  | (0.06 | ) |  | (0.41 | ) |  | (0.10 | )
Basic (loss) earnings per share | $ | 0.52 |  |  | $ | 0.57 |  |  | $ | (0.13 | ) |  | $ | (0.52 | )
Diluted (loss) earnings per share attributable to EZCORP, Inc.: |  |  |  |  |  |  |
Continuing operations | $ | 0.57 |  |  | $ | 0.63 |  |  | $ | 0.28 |  |  | $ | (0.43 | )
Discontinued operations | (0.05 | ) |  | (0.06 | ) |  | (0.41 | ) |  | (0.10 | )
Diluted (loss) earnings per share | $ | 0.52 |  |  | $ | 0.57 |  |  | $ | (0.13 | ) |  | $ | (0.53 | )
The following tables summarize the impact of the restatement adjustments for each quarterly period within fiscal 2014.
| Fiscal 2014
| First Quarter |  | Second Quarter |  | Third Quarter |  | Fourth Quarter |  | Fiscal Year
| December 31, 2013 |  | March 31, 2014 |  | June 30, 2014 |  | September 30, 2014 |  | September 30, 2014
| (in thousands)
Income from continuing operations before income taxes (as previously reported) | $ | 37,847 |  |  | $ | 14,035 |  |  | $ | 19,207 |  |  | $ | 1,611 |  |  | $ | 72,700 |
Asset sale impact | (3,221 | ) |  | (3,590 | ) |  | (8,661 | ) |  | (9,804 | ) |  | (25,276 | )
Portfolio review impact | (9,430 | ) |  | (5,259 | ) |  | (6,970 | ) |  | (6,240 | ) |  | (27,899 | )
Other impacts | (704 | ) |  | 889 |  |  | 499 |  |  | 4,985 |  |  | 5,669 |
Net impact of adjustments | (13,355 | ) |  | (7,960 | ) |  | (15,132 | ) |  | (11,059 | ) |  | (47,506 | )
Income (loss) from continuing operations before income taxes (as restated) | $ | 24,492 |  |  | $ | 6,075 |  |  | $ | 4,075 |  |  | $ | (9,448 | ) |  | $ | 25,194 |
| Fourth Quarter of Fiscal 2014 |  | Third Quarter of Fiscal 2014
| As Previously Reported |  | Restatement Adjustments |  | As Restated |  | As Previously Reported |  | Restatement Adjustments |  | As Restated
| (in thousands, except per share amounts) |  | (in thousands, except per share amounts)
Results of Operations: |  |  |  |  |  |  |  |  |  |  |
Total revenues | $ | 242,209 |  |  | $ | (6,584 | ) |  | $ | 235,625 |  |  | $ | 232,602 |  |  | $ | (9,468 | ) |  | $ | 223,134 |
Net revenues | 142,810 |  |  | (9,497 | ) |  | 133,313 |  |  | 149,951 |  |  | (14,363 | ) |  | 135,588 |
Operating expenses | 137,813 |  |  | (2,140 | ) |  | 135,673 |  |  | 127,155 |  |  | (852 | ) |  | 126,303 |
Non-operating expenses | 3,386 |  |  | 3,702 |  |  | 7,088 |  |  | 3,589 |  |  | 1,621 |  |  | 5,210 |
(Loss) income from continuing operations before income taxes | 1,611 |  |  | (11,059 | ) |  | (9,448 | ) |  | 19,207 |  |  | (15,132 | ) |  | 4,075 |
Income tax (benefit) expense | 2,342 |  |  | (3,167 | ) |  | (825 | ) |  | 4,303 |  |  | (3,897 | ) |  | 406 |
(Loss) income from continuing operations, net of tax | $ | (731 | ) |  | $ | (7,892 | ) |  | $ | (8,623 | ) |  | $ | 14,904 |  |  | $ | (11,235 | ) |  | $ | 3,669 |
Net (loss) income attributable to EZCORP, Inc. | $ | (87,807 | ) |  | $ | (5,694 | ) |  | $ | (93,501 | ) |  | $ | 11,506 |  |  | $ | (7,576 | ) |  | $ | 3,930 |
Diluted (loss) earnings per share attributable to EZCORP, Inc. | $ | (1.64 | ) |  | $ | (0.11 | ) |  | $ | (1.75 | ) |  | $ | 0.21 |  |  | $ | (0.14 | ) |  | $ | 0.07 |
Balance Sheet Data: |  |  |  |  |  |  |  |  |  |  |
Total current assets | $ | 676,361 |  |  | $ | (41,498 | ) |  | $ | 634,863 |  |  | $ | 646,227 |  |  | $ | (16,068 | ) |  | $ | 630,159 |
Total assets | 1,403,471 |  |  | 7,073 |  |  | 1,410,544 |  |  | 1,522,367 |  |  | (1,834 | ) |  | 1,520,533 |
Total current liabilities | 124,996 |  |  | 23,218 |  |  | 148,214 |  |  | 128,705 |  |  | 19,079 |  |  | 147,784 |
Total liabilities | 492,785 |  |  | 62,655 |  |  | 555,440 |  |  | 507,796 |  |  | 48,440 |  |  | 556,236 |
Total temporary equity | 35,498 |  |  | (12,698 | ) |  | 22,800 |  |  | 36,645 |  |  | (10,983 | ) |  | 25,662 |
EZCORP, Inc. stockholders’ equity | 875,188 |  |  | (42,884 | ) |  | 832,304 |  |  | 977,926 |  |  | (39,291 | ) |  | 938,635 |
Cash Flow Data (year-to-date): |  |  |  |  |  |  |  |  |  |  |
Net cash provided by operating activities | $ | 89,244 |  |  | $ | (14,543 | ) |  | $ | 74,701 |  |  | $ | 60,779 |  |  | $ | (17,522 | ) |  | $ | 43,257 |
Net cash used in investing activities | (34,838 | ) |  | (45,222 | ) |  | (80,060 | ) |  | (31,190 | ) |  | (11,911 | ) |  | (43,101 | )
Net cash provided by (used in) financing activities | (33,862 | ) |  | 66,377 |  |  | 32,515 |  |  | (16,188 | ) |  | 36,484 |  |  | 20,296 |
Net increase in cash and cash equivalents | $ | 20,012 |  |  | $ | 6,213 |  |  | $ | 26,225 |  |  | $ | 13,682 |  |  | $ | 6,652 |  |  | $ | 20,334 |
| Second Quarter of Fiscal 2014 |  | First Quarter of Fiscal 2014
| As Previously Reported |  | Restatement Adjustments |  | As Restated |  | As Previously Reported |  | Restatement Adjustments |  | As Restated
| (in thousands, except per share amounts) |  | (in thousands, except per share amounts)
Results of Operations: |  |  |  |  |  |  |  |  |  |  |
Total revenues | $ | 250,682 |  |  | $ | (5,551 | ) |  | $ | 245,131 |  |  | $ | 263,039 |  |  | $ | (9,283 | ) |  | $ | 253,756 |
Net revenues | 158,479 |  |  | (8,558 | ) |  | 149,921 |  |  | 163,857 |  |  | (12,450 | ) |  | 151,407 |
Operating expenses | 130,397 |  |  | (400 | ) |  | 129,997 |  |  | 123,115 |  |  | 385 |  |  | 123,500 |
Non-operating expenses | 14,047 |  |  | (198 | ) |  | 13,849 |  |  | 2,895 |  |  | 520 |  |  | 3,415 |
Income from continuing operations before income taxes | 14,035 |  |  | (7,960 | ) |  | 6,075 |  |  | 37,847 |  |  | (13,355 | ) |  | 24,492 |
Income tax expense | 4,203 |  |  | (3,351 | ) |  | 852 |  |  | 9,958 |  |  | (5,135 | ) |  | 4,823 |
Income from continuing operations, net of tax | $ | 9,832 |  |  | $ | (4,609 | ) |  | $ | 5,223 |  |  | $ | 27,889 |  |  | $ | (8,220 | ) |  | $ | 19,669 |
Net income attributable to EZCORP, Inc. | $ | 7,992 |  |  | $ | (1,850 | ) |  | $ | 6,142 |  |  | $ | 22,569 |  |  | $ | (3,839 | ) |  | $ | 18,730 |
Diluted earnings per share attributable to EZCORP, Inc. | $ | 0.15 |  |  | $ | (0.04 | ) |  | $ | 0.11 |  |  | $ | 0.42 |  |  | $ | (0.08 | ) |  | $ | 0.34 |
Balance Sheet Data: |  |  |  |  |  |  |  |  |  |  |
Total current assets | $ | 537,113 |  |  | $ | (33,914 | ) |  | $ | 503,199 |  |  | $ | 556,455 |  |  | $ | (29,504 | ) |  | $ | 526,951 |
Total assets | 1,352,236 |  |  | (19,092 | ) |  | 1,333,144 |  |  | 1,369,129 |  |  | (9,278 | ) |  | 1,359,851 |
Total current liabilities | 106,680 |  |  | 6,492 |  |  | 113,172 |  |  | 111,777 |  |  | 7,922 |  |  | 119,699 |
Total liabilities | 339,653 |  |  | 19,814 |  |  | 359,467 |  |  | 370,257 |  |  | 25,071 |  |  | 395,328 |
Total temporary equity | 58,107 |  |  | (14,390 | ) |  | 43,717 |  |  | 57,578 |  |  | (11,753 | ) |  | 45,825 |
EZCORP, Inc. stockholders’ equity | 954,476 |  |  | (24,516 | ) |  | 929,960 |  |  | 941,294 |  |  | (22,596 | ) |  | 918,698 |
Cash Flow Data (year-to-date): |  |  |  |  |  |  |  |  |  |  |
Net cash provided by operating activities | $ | 53,617 |  |  | $ | (10,020 | ) |  | $ | 43,597 |  |  | $ | 17,454 |  |  | $ | (3,963 | ) |  | $ | 13,491 |
Net cash (used in) provided by investing activities | 16,086 |  |  | (7,116 | ) |  | 8,970 |  |  | (4,342 | ) |  | (14,728 | ) |  | (19,070 | )
Net cash (used in) provided by financing activities | (73,810 | ) |  | 24,540 |  |  | (49,270 | ) |  | (11,046 | ) |  | 20,148 |  |  | 9,102 |
Net (decrease) increase in cash and cash equivalents | (4,119 | ) |  | 7,347 |  |  | 3,228 |  |  | 2,169 |  |  | 1,420 |  |  | 3,589 |
The effects of the restatement on our unaudited condensed consolidated financial statements as of and for the quarter ended June 30, 2014 (the third quarter of fiscal 2014) are set forth below.
EZCORP, Inc. CONSOLIDATED BALANCE SHEET (in thousands, except share and per share amounts)
| June 30, 2014
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
Assets: |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 49,999 |  |  | $ | (565 | ) |  | $ | 49,434 |
Restricted cash | 13,248 |  |  | 35,881 |  |  | 49,129 |
Pawn loans | 157,491 |  |  | — |  |  | 157,491 |
Consumer loans, net | 76,748 |  |  | (11,961 | ) |  | 64,787 |
Pawn service charges receivable, net | 29,307 |  |  | — |  |  | 29,307 |
Consumer loan fees and interest receivable, net | 38,351 |  |  | (23,319 | ) |  | 15,032 |
Inventory, net | 132,021 |  |  | (1,182 | ) |  | 130,839 |
Deferred tax asset | 13,825 |  |  | 1,477 |  |  | 15,302 |
Prepaid income taxes | 21,779 |  |  | 21,898 |  |  | 43,677 |
Prepaid expenses and other assets | 113,458 |  |  | (38,297 | ) |  | 75,161 |
Total current assets | 646,227 |  |  | (16,068 | ) |  | 630,159 |
Investments in unconsolidated affiliates | 90,730 |  |  | — |  |  | 90,730 |
Property and equipment, net | 109,458 |  |  | — |  |  | 109,458 |
Restricted cash, non-current | 22,473 |  |  | (17,895 | ) |  | 4,578 |
Goodwill | 436,765 |  |  | — |  |  | 436,765 |
Intangible assets, net | 78,918 |  |  | (173 | ) |  | 78,745 |
Non-current consumer loans, net | 51,798 |  |  | 32,832 |  |  | 84,630 |
Deferred tax asset | 9,308 |  |  | 23 |  |  | 9,331 |
Other assets, net | 76,690 |  |  | (553 | ) |  | 76,137 |
Total assets | $ | 1,522,367 |  |  | $ | (1,834 | ) |  | $ | 1,520,533 |
Liabilities and stockholders’ equity: |  |  |  |  |
Current liabilities: |  |  |  |  |
Current maturities of long-term debt | $ | 21,029 |  |  | $ | 20,096 |  |  | $ | 41,125 |
Current capital lease obligations | 520 |  |  | — |  |  | 520 |
Accounts payable and other accrued expenses | 90,234 |  |  | (1,017 | ) |  | 89,217 |
Other current liabilities | 8,716 |  |  | — |  |  | 8,716 |
Customer layaway deposits | 8,206 |  |  | — |  |  | 8,206 |
Total current liabilities | 128,705 |  |  | 19,079 |  |  | 147,784 |
Long-term debt, less current maturities | 360,628 |  |  | 26,589 |  |  | 387,217 |
Deferred gains and other long-term liabilities | 18,463 |  |  | 2,772 |  |  | 21,235 |
Total liabilities | 507,796 |  |  | 48,440 |  |  | 556,236 |
Commitments and contingencies |  |  |  |  |
Temporary equity: |  |  |  |  |
Redeemable noncontrolling interest | 36,645 |  |  | (10,983 | ) |  | 25,662 |
Stockholders’ equity: |  |  |  |  |
Class A Non-voting Common Stock, par value $.01 per share; shares authorized: 100 million at June 30, 2014; issued and outstanding: 51,612,246 at June 30, 2014 | 519 |  |  | — |  |  | 519 |
Class B Voting Common Stock, convertible, par value $.01 per share; 3 million shares authorized; issued and outstanding: 2,970,171 | 30 |  |  | — |  |  | 30 |
Additional paid-in capital | 347,216 |  |  | (7,347 | ) |  | 339,869 |
Retained earnings | 641,947 |  |  | (31,897 | ) |  | 610,050 |
Accumulated other comprehensive income | 115 |  |  | (47 | ) |  | 68 |
Treasury stock, at cost; 1 million shares at June 30, 2014 | (11,901 | ) |  | — |  |  | (11,901 | )
EZCORP, Inc. stockholders’ equity | 977,926 |  |  | (39,291 | ) |  | 938,635 |
Total liabilities and stockholders’ equity | $ | 1,522,367 |  |  | $ | (1,834 | ) |  | $ | 1,520,533 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF OPERATIONS
| Three Months Ended June 30, 2014
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands, except per share amounts)
Revenues: |  |  |  |  |
Merchandise sales | $ | 89,170 |  |  | $ | — |  |  | $ | 89,170 |
Jewelry scrapping sales | 20,273 |  |  | — |  |  | 20,273 |
Pawn service charges | 59,917 |  |  | — |  |  | 59,917 |
Consumer loan fees and interest | 52,459 |  |  | 275 |  |  | 52,734 |
Other revenues | 10,783 |  |  | (9,743 | ) |  | 1,040 |
Total revenues | 232,602 |  |  | (9,468 | ) |  | 223,134 |
Merchandise cost of goods sold | 55,751 |  |  | 263 |  |  | 56,014 |
Jewelry scrapping cost of goods sold | 15,131 |  |  | — |  |  | 15,131 |
Consumer loan bad debt | 11,769 |  |  | 4,632 |  |  | 16,401 |
Net revenues | 149,951 |  |  | (14,363 | ) |  | 135,588 |
Operating expenses: |  |  |  |  |
Operations | 103,788 |  |  | (590 | ) |  | 103,198 |
Administrative | 14,467 |  |  | (262 | ) |  | 14,205 |
Depreciation | 7,460 |  |  | — |  |  | 7,460 |
Amortization | 1,306 |  |  | — |  |  | 1,306 |
Loss on sale or disposal of assets | 134 |  |  | — |  |  | 134 |
Total operating expenses | 127,155 |  |  | (852 | ) |  | 126,303 |
Operating income | 22,796 |  |  | (13,511 | ) |  | 9,285 |
Interest expense, net | 6,076 |  | — |  | 986 |  |  | 7,062 |
Equity in net income of unconsolidated affiliates | (2,117 | ) |  | — |  |  | (2,117 | )
Other loss (income) | (370 | ) |  | 635 |  |  | 265 |
Income from continuing operations before income taxes | 19,207 |  |  | (15,132 | ) |  | 4,075 |
Income tax expense | 4,303 |  |  | (3,897 | ) |  | 406 |
Income from continuing operations, net of tax | 14,904 |  |  | (11,235 | ) |  | 3,669 |
Loss from discontinued operations, net of tax | (2,561 | ) |  | 485 |  |  | (2,076 | )
Net (loss) income | 12,343 |  |  | (10,750 | ) |  | 1,593 |
Net (loss) income from continuing operations attributable to redeemable noncontrolling interest | 837 |  |  | (3,174 | ) |  | (2,337 | )
Net income attributable to EZCORP, Inc. | $ | 11,506 |  |  | $ | (7,576 | ) |  | $ | 3,930 |
Basic earnings (loss) per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 0.26 |  |  | $ | (0.15 | ) |  | $ | 0.11 |
Discontinued operations | (0.05 | ) |  | 0.01 |  |  | (0.04 | )
Basic earnings per share | $ | 0.21 |  |  | $ | (0.14 | ) |  | $ | 0.07 |
Diluted earnings (loss) per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 0.26 |  |  | $ | (0.15 | ) |  | $ | 0.11 |
Discontinued operations | (0.05 | ) |  | 0.01 |  |  | (0.04 | )
Diluted earnings per share | $ | 0.21 |  |  | $ | (0.14 | ) |  | $ | 0.07 |
Net income from continuing operations attributable to EZCORP, Inc. | $ | 14,067 |  |  | $ | (8,061 | ) |  | $ | 6,006 |
Loss from discontinued operations attributable to EZCORP, Inc. | (2,561 | ) |  | 485 |  |  | (2,076 | )
Net income attributable to EZCORP, Inc. | $ | 11,506 |  |  | $ | (7,576 | ) |  | $ | 3,930 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| Three Months Ended June 30, 2014
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands)
Net income | $ | 12,343 |  |  | $ | (10,750 | ) |  | $ | 1,593 |
Other comprehensive income: |  |  |  |  |
Foreign currency translation gain | 6,897 |  |  | (1,553 | ) |  | 5,344 |
Loss on effective portion of cash flow hedge: |  |  |  |  |
Unrealized loss before reclassification | (497 | ) |  | — |  |  | (497 | )
Amounts reclassified from accumulated other comprehensive income | 272 |  |  | — |  |  | 272 |
Amounts reclassified from accumulated other comprehensive income | (77 | ) |  | — |  |  | (77 | )
Income tax expense | (1,096 | ) |  | 278 |  |  | (818 | )
Other comprehensive income, net of tax | 5,499 |  |  | (1,275 | ) |  | 4,224 |
Comprehensive income | $ | 17,842 |  |  | $ | (12,025 | ) |  | $ | 5,817 |
Attributable to redeemable noncontrolling interest: |  |  |  |  |
Net (loss) income | 837 |  |  | (3,174 | ) |  | (2,337 | )
Foreign currency translation gain | 1,581 |  |  | (1,104 | ) |  | 477 |
Amounts reclassified from accumulated other comprehensive income | (90 | ) |  | — |  |  | (90 | )
Comprehensive (loss) income attributable to redeemable noncontrolling interest | 2,328 |  |  | (4,278 | ) |  | (1,950 | )
Comprehensive income attributable to EZCORP, Inc. | $ | 15,514 |  |  | $ | (7,747 | ) |  | $ | 7,767 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF CASH FLOWS
| Nine Months Ended June 30, 2014
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands)
Operating activities: |  |  |  |  |
Net income | $ | 45,805 |  |  | $ | (22,689 | ) |  | $ | 23,116 |
Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |  |  |
Depreciation and amortization | 28,083 |  |  | — |  |  | 28,083 |
Accretion of debt premium and consumer loan discount, net | — |  |  | (68 | ) |  | (68 | )
Consumer loan loss provision | 26,335 |  |  | 2,566 |  |  | 28,901 |
Deferred income taxes | (1,280 | ) |  | — |  |  | (1,280 | )
Amortization of deferred financing costs | — |  |  | 4,166 |  |  | 4,166 |
Amortization of prepaid commissions | — |  |  | 10,039 |  |  | 10,039 |
Other | 4,252 |  |  | (5,005 | ) |  | (753 | )
Gain on sale or disposal of assets | (6,137 | ) |  | — |  |  | (6,137 | )
Gain on sale of loan portfolio | (14,312 | ) |  | 14,312 |  |  | — |
Stock compensation expense | 9,929 |  |  | (442 | ) |  | 9,487 |
Income from investments in unconsolidated affiliates | (3,880 | ) |  | — |  |  | (3,880 | )
Impairment of investments | 7,940 |  |  | — |  |  | 7,940 |
Changes in operating assets and liabilities, net of business acquisitions: |  |  |  |  |
Service charges and fees receivable, net | (4,407 | ) |  | 5,984 |  |  | 1,577 |
Inventory, net | 1,061 |  |  | 1,182 |  |  | 2,243 |
Receivables, prepaid expenses, other current assets and other assets, net | (25,402 | ) |  | (9,947 | ) |  | (35,349 | )
Accounts payable and other accrued expenses | (7,221 | ) |  | (1,913 | ) |  | (9,134 | )
Deferred gains and other long-term liabilities | 943 |  |  | (1,285 | ) |  | (342 | )
Customer layaway deposits | (433 | ) |  | — |  |  | (433 | )
Tax provision from stock compensation | 570 |  |  | (570 | ) |  | — |
Prepaid income taxes | (6,196 | ) |  | (13,852 | ) |  | (20,048 | )
Dividends from unconsolidated affiliates | 5,129 |  |  | — |  |  | 5,129 |
Net cash provided by operating activities | 60,779 |  |  | (17,522 | ) |  | 43,257 |
Investing activities: |  |  |  |  |
Loans made | (705,181 | ) |  | — |  |  | (705,181 | )
Loans repaid | 476,196 |  |  | 22,026 |  |  | 498,222 |
Recovery of pawn loan principal through sale of forfeited collateral | 182,004 |  |  | — |  |  | 182,004 |
Additions to property and equipment | (15,930 | ) |  | — |  |  | (15,930 | )
Acquisitions, net of cash acquired | (12,990 | ) |  | — |  |  | (12,990 | )
Proceeds from sale of assets | 44,568 |  |  | (33,937 | ) |  | 10,631 |
Other investing activities | 143 |  |  | — |  |  | 143 |
Net cash used in investing activities | (31,190 | ) |  | (11,911 | ) |  | (43,101 | )
Financing activities: |  |  |  |  |
Tax benefit from stock compensation | (569 | ) |  | 569 |  |  | — |
Taxes paid related to net share settlement of equity awards | (1,990 | ) |  | — |  |  | (1,990 | )
Debt issuance costs | (12,686 | ) |  | — |  |  | (12,686 | )
Payout of deferred and contingent consideration | (23,000 | ) |  | — |  |  | (23,000 | )
Proceeds from issuance of convertible notes | 200,000 |  |  | — |  |  | 200,000 |
Purchase of convertible notes hedges | (40,395 | ) |  | — |  |  | (40,395 | )
Proceeds from issuance of warrants | 21,824 |  |  | — |  |  | 21,824 |
Purchase of subsidiary shares from noncontrolling interest | (21,139 | ) |  | — |  |  | (21,139 | )
Change in restricted cash | (29,992 | ) |  | (10,769 | ) |  | (40,761 | )
Proceeds from revolving line of credit | 389,900 |  |  | — |  |  | 389,900 |
Payments on revolving line of credit | (530,800 | ) |  | — |  |  | (530,800 | )
Proceeds from borrowings | 102,138 |  |  | 52,268 |  |  | 154,406 |
Payments on borrowings and capital lease obligations | (57,578 | ) |  | (5,584 | ) |  | (63,162 | )
Repurchase of common stock | (11,901 | ) |  | — |  |  | (11,901 | )
Net cash provided by (used in) financing activities | (16,188 | ) |  | 36,484 |  |  | 20,296 |
Effect of exchange rate changes on cash and cash equivalents | 281 |  |  | (399 | ) |  | (118 | )
Net increase in cash and cash equivalents | 13,682 |  |  | 6,652 |  |  | 20,334 |
Cash and cash equivalents at beginning of period | 36,317 |  |  | (7,217 | ) |  | 29,100 |
Cash and cash equivalents at end of period | $ | 49,999 |  |  | $ | (565 | ) |  | $ | 49,434 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF CASH FLOWS
Non-cash investing and financing activities: |  |  |  |  |
Pawn loans forfeited and transferred to inventory | $ | 171,288 |  |  | $ | — |  |  | $ | 171,288 |
Deferred consideration | 2,692 |  |  | — |  |  | 2,692 |
Issuance of common stock to 401(k) plan | 557 |  |  | — |  |  | 557 |
Equity adjustment due to noncontrolling interest purchase | 6,588 |  |  | — |  |  | 6,588 |
Receivable from sale of portfolio | 38,269 |  |  | (38,269 | ) |  | — |
Receivable from issuance of convertible notes | 30,000 |  |  | — |  |  | 30,000 |
Payable to purchase convertible note hedge | 6,059 |  |  | — |  |  | 6,059 |
Warrants receivable related to issuance of convertible notes | 3,282 |  |  | — |  |  | 3,282 |
Deferred finance cost payable related to convertible notes | 2,400 |  |  | — |  |  | 2,400 |
Payable to purchase additional shares of noncontrolling interest | 8,636 |  |  | — |  |  | 8,636 |
EZCORP, Inc. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
| Common Stock |  | Additional Paid-in Capital |  |  |  | Accumulated Other Comprehensive Income (Loss) |  | Treasury Stock |  | EZCORP, Inc. Stockholders' Equity
| Shares |  | Par Value |  |  | Retained Earnings |  |  | Shares |  | Par Value |
| (Unaudited, except balances as of September 30, 2013)
| (in thousands)
| As Previously Reported
Balances at September 30, 2013 | 54,240 |  |  | $ | 543 |  |  | $ | 320,777 |  |  | $ | 599,880 |  |  | $ | (6,674 | ) |  | — |  |  | $ | — |  |  | $ | 914,526 |
Issuance of common stock related to 401(k) match | 45 |  |  | 1 |  |  | 557 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 558 |
Stock compensation | — |  |  | — |  |  | 9,929 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 9,929 |
Issuance of common stock due to purchase of subsidiary shares from noncontrolling interest | — |  |  | — |  |  | (6,594 | ) |  | — |  |  | (15 | ) |  |  |  |  |  | (6,609 | )
Release of restricted stock | 297 |  |  | 5 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5 |
Tax deficiency of stock compensation | — |  |  | — |  |  | (569 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (569 | )
Taxes paid related to net share settlement of equity awards | — |  |  | — |  |  | (1,990 | ) |  | — |  |  | — |  |  | — |  |  | (1 | ) |  | (1,991 | )
Effective portion of cash flow hedge | — |  |  | — |  |  | — |  |  | — |  |  | (213 | ) |  | — |  |  | — |  |  | (213 | )
Net proceeds from sale of warrants | — |  |  | — |  |  | 25,106 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 25,106 |
Unrealized gain on available-for-sale securities | — |  |  | — |  |  | — |  |  | — |  |  | 351 |  |  | — |  |  | — |  |  | 351 |
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | 6,291 |  |  | — |  |  | — |  |  | 6,291 |
Foreign currency translation reclassification adjustment realized upon impairment | — |  |  | — |  |  | — |  |  | — |  |  | 375 |  |  | — |  |  | — |  |  | 375 |
Purchase of treasury stock | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,000 |  |  | (11,900 | ) |  | (11,900 | )
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | 42,067 |  |  | — |  |  | — |  |  | — |  |  | 42,067 |
Balances at June 30, 2014 | 54,582 |  |  | $ | 549 |  |  | $ | 347,216 |  |  | $ | 641,947 |  |  | $ | 115 |  |  | 1,000 |  |  | $ | (11,901 | ) |  | $ | 977,926 |
| Restatement Adjustments
Balances at September 30, 2013 | — |  |  | $ | — |  |  | $ | (240 | ) |  | $ | (18,632 | ) |  | $ | 229 |  |  | — |  |  | $ | — |  |  | $ | (18,643 | )
Stock compensation | — |  |  | — |  |  | (442 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (442 | )
Issuance of common stock due to purchase of subsidiary shares from noncontrolling interest | — |  |  | — |  |  | (6,665 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (6,665 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | (276 | ) |  | — |  |  | — |  |  | (276 | )
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | (13,265 | ) |  | — |  |  | — |  |  | — |  |  | (13,265 | )
Balances at June 30, 2014 | — |  |  | $ | — |  |  | $ | (7,347 | ) |  | $ | (31,897 | ) |  | $ | (47 | ) |  | — |  |  | $ | — |  |  | $ | (39,291 | )
| As Restated
Balances at September 30, 2013 | 54,240 |  |  | $ | 543 |  |  | $ | 320,537 |  |  | $ | 581,248 |  |  | $ | (6,445 | ) |  | — |  |  | $ | — |  |  | $ | 895,883 |
Issuance of common stock related to 401(k) match | 45 |  |  | 1 |  |  | 557 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 558 |
Stock compensation | — |  |  | — |  |  | 9,487 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 9,487 |
Issuance of common stock due to purchase of subsidiary shares from noncontrolling interest | — |  |  | — |  |  | (13,259 | ) |  | — |  |  | (15 | ) |  |  |  |  |  | (13,274 | )
Release of restricted stock | 297 |  |  | 5 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5 |
Tax deficiency of stock compensation | — |  |  | — |  |  | (569 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (569 | )
Taxes paid related to net share settlement of equity awards | — |  |  | — |  |  | (1,990 | ) |  | — |  |  | — |  |  | — |  |  | (1 | ) |  | (1,991 | )
Effective portion of cash flow hedge | — |  |  | — |  |  | — |  |  | — |  |  | (213 | ) |  | — |  |  | — |  |  | (213 | )
Net proceeds from sale of warrants | — |  |  | — |  |  | 25,106 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 25,106 |
Unrealized gain on available-for-sale securities | — |  |  | — |  |  | — |  |  | — |  |  | 351 |  |  | — |  |  | — |  |  | 351 |
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | 6,015 |  |  | — |  |  | — |  |  | 6,015 |
Foreign currency translation reclassification adjustment realized upon impairment | — |  |  | — |  |  | — |  |  | — |  |  | 375 |  |  | — |  |  | — |  |  | 375 |
Purchase of treasury stock | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,000 |  |  | (11,900 | ) |  | (11,900 | )
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | 28,802 |  |  | — |  |  | — |  |  | — |  |  | 28,802 |
Balances at June 30, 2014 | 54,582 |  |  | $ | 549 |  |  | $ | 339,869 |  |  | $ | 610,050 |  |  | $ | 68 |  |  | 1,000 |  |  | $ | (11,901 | ) |  | $ | 938,635 |
The effects of the restatement on our unaudited condensed consolidated financial statements as of and for the quarter ended March 31, 2014 (the second quarter of fiscal 2014) are set forth below.
EZCORP, Inc. CONSOLIDATED BALANCE SHEET (in thousands, except share and per share amounts)
| March 31, 2014
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
Assets: |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 32,198 |  |  | $ | 130 |  |  | $ | 32,328 |
Restricted cash | 21,104 |  |  | 6,140 |  |  | 27,244 |
Pawn loans | 128,683 |  |  | — |  |  | 128,683 |
Consumer loans, net | 75,501 |  |  | (18,054 | ) |  | 57,447 |
Pawn service charges receivable, net | 24,733 |  |  | — |  |  | 24,733 |
Consumer loan fees and interest receivable, net | 40,033 |  |  | (24,163 | ) |  | 15,870 |
Inventory, net | 129,013 |  |  | (919 | ) |  | 128,094 |
Deferred tax asset | 13,825 |  |  | 1,477 |  |  | 15,302 |
Prepaid income taxes | 17,702 |  |  | 17,432 |  |  | 35,134 |
Prepaid expenses and other assets | 54,321 |  |  | (15,957 | ) |  | 38,364 |
Total current assets | 537,113 |  |  | (33,914 | ) |  | 503,199 |
Investments in unconsolidated affiliates | 88,685 |  |  | — |  |  | 88,685 |
Property and equipment, net | 111,419 |  |  | — |  |  | 111,419 |
Restricted cash, non-current | 9,575 |  |  | (6,266 | ) |  | 3,309 |
Goodwill | 435,048 |  |  | — |  |  | 435,048 |
Intangible assets, net | 69,016 |  |  | (143 | ) |  | 68,873 |
Non-current consumer loans, net | 61,724 |  |  | 21,601 |  |  | 83,325 |
Deferred tax asset | 9,619 |  |  | 23 |  |  | 9,642 |
Other assets, net | 30,037 |  |  | (393 | ) |  | 29,644 |
Total assets | $ | 1,352,236 |  |  | $ | (19,092 | ) |  | $ | 1,333,144 |
Liabilities and stockholders’ equity: |  |  |  |  |
Current liabilities: |  |  |  |  |
Current maturities of long-term debt | $ | 14,228 |  |  | $ | 6,661 |  |  | $ | 20,889 |
Current capital lease obligations | 533 |  |  | — |  |  | 533 |
Accounts payable and other accrued expenses | 70,812 |  |  | (169 | ) |  | 70,643 |
Other current liabilities | 12,121 |  |  | — |  |  | 12,121 |
Customer layaway deposits | 8,986 |  |  | — |  |  | 8,986 |
Total current liabilities | 106,680 |  |  | 6,492 |  |  | 113,172 |
Long-term debt, less current maturities | 214,254 |  |  | 10,125 |  |  | 224,379 |
Long-term capital lease obligations | 106 |  |  | — |  |  | 106 |
Deferred gains and other long-term liabilities | 18,613 |  |  | 3,197 |  |  | 21,810 |
Total liabilities | 339,653 |  |  | 19,814 |  |  | 359,467 |
Commitments and contingencies |  |  |  |  |
Temporary equity: |  |  |  |  |
Redeemable noncontrolling interest | 58,107 |  |  | (14,390 | ) |  | 43,717 |
Stockholders’ equity: |  |  | — |  |  |
Class A Non-voting Common Stock, par value $.01 per share; shares authorized: 100 million at March 31, 2014; issued and outstanding: 51,411,973 at March 31, 2014 | 513 |  |  | — |  |  | 513 |
Class B Voting Common Stock, convertible, par value $.01 per share; 3 million shares authorized; issued and outstanding: 2,970,171 | 30 |  |  | — |  |  | 30 |
Additional paid-in capital | 327,385 |  |  | (319 | ) |  | 327,066 |
Retained earnings | 630,441 |  |  | (24,321 | ) |  | 606,120 |
Accumulated other comprehensive loss | (3,893 | ) |  | 124 |  |  | (3,769 | )
EZCORP, Inc. stockholders’ equity | 954,476 |  |  | (24,516 | ) |  | 929,960 |
Total liabilities and stockholders’ equity | $ | 1,352,236 |  |  | $ | (19,092 | ) |  | $ | 1,333,144 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF OPERATIONS
| Three Months Ended March 31, 2014
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands, except per share amounts)
Revenues: |  |  |  |  |
Merchandise sales | $ | 103,454 |  |  | $ | — |  |  | $ | 103,454 |
Jewelry scrapping sales | 26,193 |  |  | — |  |  | 26,193 |
Pawn service charges | 59,162 |  |  | — |  |  | 59,162 |
Consumer loan fees and interest | 55,865 |  |  | (1,088 | ) |  | 54,777 |
Other revenues | 6,008 |  |  | (4,463 | ) |  | 1,545 |
Total revenues | 250,682 |  |  | (5,551 | ) |  | 245,131 |
Merchandise cost of goods sold | 63,857 |  |  | 366 |  |  | 64,223 |
Jewelry scrapping cost of goods sold | 20,111 |  |  | — |  |  | 20,111 |
Consumer loan bad debt | 8,235 |  |  | 2,641 |  |  | 10,876 |
Net revenues | 158,479 |  |  | (8,558 | ) |  | 149,921 |
Operating expenses: |  |  |  |  |
Operations | 101,471 |  |  | (364 | ) |  | 101,107 |
Administrative | 20,032 |  |  | (36 | ) |  | 19,996 |
Depreciation | 7,414 |  |  | — |  |  | 7,414 |
Amortization | 1,393 |  |  | — |  |  | 1,393 |
Loss on sale or disposal of assets | 87 |  |  | — |  |  | 87 |
Total operating expenses | 130,397 |  |  | (400 | ) |  | 129,997 |
Operating income | 28,082 |  |  | (8,158 | ) |  | 19,924 |
Interest expense, net | 5,275 |  | — |  | 684 |  |  | 5,959 |
Equity in net income of unconsolidated affiliates | (492 | ) |  | — |  |  | (492 | )
Impairment of investments | 7,940 |  |  | — |  |  | 7,940 |
Other loss | 1,324 |  |  | (882 | ) |  | 442 |
Income from continuing operations before income taxes | 14,035 |  |  | (7,960 | ) |  | 6,075 |
Income tax expense | 4,203 |  |  | (3,351 | ) |  | 852 |
Income from continuing operations, net of tax | 9,832 |  |  | (4,609 | ) |  | 5,223 |
Loss from discontinued operations, net of tax | (765 | ) |  | 131 |  |  | (634 | )
Net income | 9,067 |  |  | (4,478 | ) |  | 4,589 |
Net (loss) income from continuing operations attributable to redeemable noncontrolling interest | 1,075 |  |  | (2,628 | ) |  | (1,553 | )
Net income attributable to EZCORP, Inc. | $ | 7,992 |  |  | $ | (1,850 | ) |  | $ | 6,142 |
Basic earnings (loss) per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 0.16 |  |  | $ | (0.04 | ) |  | $ | 0.12 |
Discontinued operations | (0.01 | ) |  | — |  |  | (0.01 | )
Basic earnings per share | $ | 0.15 |  |  | $ | (0.04 | ) |  | $ | 0.11 |
Diluted earnings (loss) per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 0.16 |  |  | $ | (0.04 | ) |  | $ | 0.12 |
Discontinued operations | (0.01 | ) |  | — |  |  | (0.01 | )
Diluted earnings per share | $ | 0.15 |  |  | $ | (0.04 | ) |  | $ | 0.11 |
Net income from continuing operations attributable to EZCORP, Inc. | $ | 8,757 |  |  | $ | (1,981 | ) |  | $ | 6,776 |
Loss from discontinued operations attributable to EZCORP, Inc. | (765 | ) |  | 131 |  |  | (634 | )
Net income attributable to EZCORP, Inc. | $ | 7,992 |  |  | $ | (1,850 | ) |  | $ | 6,142 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| Three Months Ended March 31, 2014
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands)
Net income | $ | 9,067 |  |  | $ | (4,478 | ) |  | $ | 4,589 |
Other comprehensive income: |  |  |  |  |
Foreign currency translation loss | (2,109 | ) |  | (33 | ) |  | (2,142 | )
Foreign currency translation reclassification adjustment realized upon impairment | 375 |  |  | — |  |  | 375 |
Loss on effective portion of cash flow hedge: |  |  |  |  |
Unrealized loss before reclassification | (326 | ) |  | — |  |  | (326 | )
Amounts reclassified from accumulated other comprehensive income | 297 |  |  | — |  |  | 297 |
Amounts reclassified from accumulated other comprehensive income | 626 |  |  | — |  |  | 626 |
Income tax benefit | 476 |  |  | 4 |  |  | 480 |
Other comprehensive loss, net of tax | (661 | ) |  | (29 | ) |  | (690 | )
Comprehensive income | $ | 8,406 |  |  | $ | (4,507 | ) |  | $ | 3,899 |
Attributable to redeemable noncontrolling interest: |  |  |  |  |
Net (loss) income | 1,075 |  |  | (2,628 | ) |  | (1,553 | )
Foreign currency translation loss | (37 | ) |  | (9 | ) |  | (46 | )
Amounts reclassified from accumulated other comprehensive income | (52 | ) |  | — |  |  | (52 | )
Comprehensive (loss) income attributable to redeemable noncontrolling interest | 986 |  |  | (2,637 | ) |  | (1,651 | )
Comprehensive income attributable to EZCORP, Inc. | $ | 7,420 |  |  | $ | (1,870 | ) |  | $ | 5,550 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF CASH FLOWS
| Six Months Ended March 31, 2014
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands)
Operating activities: |  |  |  |  |
Net income | $ | 33,462 |  |  | $ | (11,939 | ) |  | $ | 21,523 |
Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |  |  |
Depreciation and amortization | 18,886 |  |  | — |  |  | 18,886 |
Accretion of debt premium and consumer loan discount, net | — |  |  | (170 | ) |  | (170 | )
Consumer loan loss provision | 17,365 |  |  | 1,197 |  |  | 18,562 |
Deferred income taxes | (1,624 | ) |  | — |  |  | (1,624 | )
Amortization of deferred financing costs | — |  |  | 2,550 |  |  | 2,550 |
Amortization of prepaid commissions | — |  |  | 5,144 |  |  | 5,144 |
Other | 2,551 |  |  | (3,340 | ) |  | (789 | )
Gain on sale or disposal of assets | (6,081 | ) |  | — |  |  | (6,081 | )
Gain on sale of loan portfolio | (5,784 | ) |  | 5,784 |  |  | — |
Stock compensation expense | 8,268 |  |  | (79 | ) |  | 8,189 |
Income from investments in unconsolidated affiliates | (1,763 | ) |  | — |  |  | (1,763 | )
Impairment of investments | 7,940 |  |  | — |  |  | 7,940 |
Changes in operating assets and liabilities, net of business acquisitions: |  |  |  |  |
Service charges and fees receivable, net | 2,625 |  |  | 6,876 |  |  | 9,501 |
Inventory, net | 1,777 |  |  | 919 |  |  | 2,696 |
Receivables, prepaid expenses, other current assets and other assets, net | (15,778 | ) |  | (5,212 | ) |  | (20,990 | )
Accounts payable and other accrued expenses | (11,155 | ) |  | 493 |  |  | (10,662 | )
Deferred gains and other long-term liabilities | 1,554 |  |  | (2,409 | ) |  | (855 | )
Customer layaway deposits | 353 |  |  | — |  |  | 353 |
Tax provision from stock compensation | 411 |  |  | (411 | ) |  | — |
Prepaid income taxes | (1,987 | ) |  | (9,423 | ) |  | (11,410 | )
Dividends from unconsolidated affiliates | 2,597 |  |  | — |  |  | 2,597 |
Net cash provided by operating activities | 53,617 |  |  | (10,020 | ) |  | 43,597 |
Investing activities: |  |  |  |  |
Loans made | (448,159 | ) |  | — |  |  | (448,159 | )
Loans repaid | 325,171 |  |  | 11,799 |  |  | 336,970 |
Recovery of pawn loan principal through sale of forfeited collateral | 130,359 |  |  | — |  |  | 130,359 |
Additions to property and equipment | (10,643 | ) |  | — |  |  | (10,643 | )
Acquisitions, net of cash acquired | (10,282 | ) |  | — |  |  | (10,282 | )
Proceeds from sale of assets | 29,546 |  |  | (18,915 | ) |  | 10,631 |
Other investing activities | 94 |  |  | — |  |  | 94 |
Net cash (used in) provided by investing activities | 16,086 |  |  | (7,116 | ) |  | 8,970 |
Financing activities: |  |  |  |  |
Tax benefit from stock compensation | (411 | ) |  | 411 |  |  | — |
Taxes paid related to net share settlement of equity awards | (629 | ) |  | — |  |  | (629 | )
Debt issuance costs | (5,176 | ) |  | — |  |  | (5,176 | )
Payout of deferred and contingent consideration | (23,000 | ) |  | — |  |  | (23,000 | )
Purchase of subsidiary shares from noncontrolling interest | (1,082 | ) |  | — |  |  | (1,082 | )
Change in restricted cash | (25,099 | ) |  | 7,343 |  |  | (17,756 | )
Proceeds from revolving line of credit | 217,493 |  |  | — |  |  | 217,493 |
Payments on revolving line of credit | (273,070 | ) |  | — |  |  | (273,070 | )
Proceeds from borrowings | 86,661 |  |  | 19,108 |  |  | 105,769 |
Payments on borrowings and capital lease obligations | (49,497 | ) |  | (2,322 | ) |  | (51,819 | )
Net cash used in financing activities | (73,810 | ) |  | 24,540 |  |  | (49,270 | )
Effect of exchange rate changes on cash and cash equivalents | (12 | ) |  | (57 | ) |  | (69 | )
Net decrease in cash and cash equivalents | (4,119 | ) |  | 7,347 |  |  | 3,228 |
Cash and cash equivalents at beginning of period | 36,317 |  |  | (7,217 | ) |  | 29,100 |
Cash and cash equivalents at end of period | $ | 32,198 |  |  | $ | 130 |  |  | $ | 32,328 |
Non-cash investing and financing activities: |  |  |  |  |
Pawn loans forfeited and transferred to inventory | $ | 118,050 |  |  | $ | — |  |  | $ | 118,050 |
Deferred consideration | 5,331 |  |  | — |  |  | 5,331 |
Change in accrued additions to property and equipment | 122 |  |  | — |  |  | 122 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF CASH FLOWS
Note receivable from sale of assets | 15,903 |  |  | — |  |  | 15,903 |
Purchase of shares from noncontrolling interest | 619 |  |  | — |  |  | 619 |
EZCORP, Inc. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
| Common Stock |  | Additional Paid-in Capital |  |  |  | Accumulated Other Comprehensive (Loss) Income |  | EZCORP, Inc. Stockholders' Equity
| Shares |  | Par Value |  |  | Retained Earnings |  |
| (Unaudited, except balances as of September 30, 2013)
| (in thousands)
| As Previously Reported
Balances at September 30, 2013 | 54,240 |  |  | $ | 543 |  |  | $ | 320,777 |  |  | $ | 599,880 |  |  | $ | (6,674 | ) |  | $ | 914,526 |
Stock compensation | — |  |  | — |  |  | 8,276 |  |  | — |  |  | — |  |  | 8,276 |
Issuance of common stock due to purchase of subsidiary shares from noncontrolling interest | — |  |  | — |  |  | (619 | ) |  | — |  |  | (15 | ) |  | (634 | )
Release of restricted stock | 142 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Tax deficiency of stock compensation | — |  |  | — |  |  | (420 | ) |  | — |  |  | — |  |  | (420 | )
Taxes paid related to net share settlement of equity awards | — |  |  | — |  |  | (629 | ) |  | — |  |  | — |  |  | (629 | )
Effective portion of cash flow hedge | — |  |  | — |  |  | — |  |  | — |  |  | (78 | ) |  | (78 | )
Unrealized gain on available-for-sale securities | — |  |  | — |  |  | — |  |  | — |  |  | 401 |  |  | 401 |
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | 2,098 |  |  | 2,098 |
Foreign currency translation reclassification adjustment realized upon impairment | — |  |  | — |  |  | — |  |  | — |  |  | 375 |  |  | 375 |
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | 30,561 |  |  | — |  |  | 30,561 |
Balances at March 31, 2014 | 54,382 |  |  | $ | 543 |  |  | $ | 327,385 |  |  | $ | 630,441 |  |  | $ | (3,893 | ) |  | $ | 954,476 |
| Restatement Adjustments
Balances at September 30, 2013 | — |  |  | $ | — |  |  | $ | (240 | ) |  | $ | (18,632 | ) |  | $ | 229 |  |  | $ | (18,643 | )
Stock compensation | — |  |  | — |  |  | (79 | ) |  | — |  |  | — |  |  | (79 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | (105 | ) |  | (105 | )
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | (5,689 | ) |  | — |  |  | (5,689 | )
Balances at March 31, 2014 | — |  |  | $ | — |  |  | $ | (319 | ) |  | $ | (24,321 | ) |  | $ | 124 |  |  | $ | (24,516 | )
| As Restated
Balances at September 30, 2013 | 54,240 |  |  | $ | 543 |  |  | $ | 320,537 |  |  | $ | 581,248 |  |  | $ | (6,445 | ) |  | $ | 895,883 |
Stock compensation | — |  |  | — |  |  | 8,197 |  |  | — |  |  | — |  |  | 8,197 |
Issuance of common stock due to purchase of subsidiary shares from noncontrolling interest | — |  |  | — |  |  | (619 | ) |  | — |  |  | (15 | ) |  | (634 | )
Release of restricted stock | 142 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Tax deficiency of stock compensation | — |  |  | — |  |  | (420 | ) |  | — |  |  | — |  |  | (420 | )
Taxes paid related to net share settlement of equity awards | — |  |  | — |  |  | (629 | ) |  | — |  |  | — |  |  | (629 | )
Effective portion of cash flow hedge | — |  |  | — |  |  | — |  |  | — |  |  | (78 | ) |  | (78 | )
Unrealized loss on available-for-sale securities | — |  |  | — |  |  | — |  |  | — |  |  | 401 |  |  | 401 |
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | 1,993 |  |  | 1,993 |
Foreign currency translation reclassification adjustment realized upon impairment | — |  |  | — |  |  | — |  |  | — |  |  | 375 |  |  | 375 |
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | 24,872 |  |  | — |  |  | 24,872 |
Balances at March 31, 2014 | 54,382 |  |  | $ | 543 |  |  | $ | 327,066 |  |  | $ | 606,120 |  |  | $ | (3,769 | ) |  | $ | 929,960 |
The effects of the restatement on our unaudited condensed consolidated financial statements as of and for the quarter ended December 31, 2013 (the first quarter of fiscal 2014) are set forth below.
EZCORP, Inc. CONSOLIDATED BALANCE SHEET (in thousands, except share and per share amounts)
| December 31, 2013
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
Assets: |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 38,486 |  |  | $ | (5,797 | ) |  | $ | 32,689 |
Restricted cash | 4,019 |  |  | 4,352 |  |  | 8,371 |
Pawn loans | 153,421 |  |  | — |  |  | 153,421 |
Consumer loans, net | 82,807 |  |  | (20,154 | ) |  | 62,653 |
Pawn service charges receivable, net | 30,842 |  |  | — |  |  | 30,842 |
Consumer loan fees and interest receivable, net | 40,181 |  |  | (22,766 | ) |  | 17,415 |
Inventory, net | 142,711 |  |  | (552 | ) |  | 142,159 |
Deferred tax asset | 13,825 |  |  | 1,477 |  |  | 15,302 |
Prepaid income taxes | 7,268 |  |  | 13,936 |  |  | 21,204 |
Prepaid expenses and other assets | 42,895 |  |  | — |  |  | 42,895 |
Total current assets | 556,455 |  |  | (29,504 | ) |  | 526,951 |
Investments in unconsolidated affiliates | 97,424 |  |  | — |  |  | 97,424 |
Property and equipment, net | 114,539 |  |  | — |  |  | 114,539 |
Restricted cash, non-current | 2,742 |  |  | 1,447 |  |  | 4,189 |
Goodwill | 434,835 |  |  | — |  |  | 434,835 |
Intangible assets, net | 65,178 |  |  | 1,571 |  |  | 66,749 |
Non-current consumer loans, net | 60,750 |  |  | 17,936 |  |  | 78,686 |
Deferred tax asset | 7,521 |  |  | 22 |  |  | 7,543 |
Other assets, net | 29,685 |  |  | (750 | ) |  | 28,935 |
Total assets | $ | 1,369,129 |  |  | $ | (9,278 | ) |  | $ | 1,359,851 |
Liabilities and stockholders’ equity: |  |  |  |  |
Current liabilities: |  |  |  |  |
Current maturities of long-term debt | $ | 16,737 |  |  | $ | 6,779 |  |  | $ | 23,516 |
Current capital lease obligations | 533 |  |  | — |  |  | 533 |
Accounts payable and other accrued expenses | 77,619 |  |  | 261 |  |  | 77,880 |
Other current liabilities | 11,106 |  |  | 882 |  |  | 11,988 |
Customer layaway deposits | 5,782 |  |  | — |  |  | 5,782 |
Total current liabilities | 111,777 |  |  | 7,922 |  |  | 119,699 |
Long-term debt, less current maturities | 235,289 |  |  | 11,563 |  |  | 246,852 |
Long-term capital lease obligations | 253 |  |  | — |  |  | 253 |
Deferred gains and other long-term liabilities | 22,938 |  |  | 5,586 |  |  | 28,524 |
Total liabilities | 370,257 |  |  | 25,071 |  |  | 395,328 |
Commitments and contingencies |  |  |  |  |  |
Temporary equity: |  |  |  |  |
Redeemable noncontrolling interest | 57,578 |  |  | (11,753 | ) |  | 45,825 |
Stockholders’ equity: |  |  |  |  |
Class A Non-voting Common Stock, par value $.01 per share; shares authorized: 56 million at December 31, 2013; issued and outstanding: 51,389,307 at December 31, 2013 | 513 |  |  | — |  |  | 513 |
Class B Voting Common Stock, convertible, par value $.01 per share; 3 million shares authorized; issued and outstanding: 2,970,171 | 30 |  |  | — |  |  | 30 |
Additional paid-in capital | 321,623 |  |  | (269 | ) |  | 321,354 |
Retained earnings | 622,449 |  |  | (22,471 | ) |  | 599,978 |
Accumulated other comprehensive loss | (3,321 | ) |  | 144 |  |  | (3,177 | )
EZCORP, Inc. stockholders’ equity | 941,294 |  |  | (22,596 | ) |  | 918,698 |
Total liabilities and stockholders’ equity | $ | 1,369,129 |  |  | $ | (9,278 | ) |  | $ | 1,359,851 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF OPERATIONS
| Three Months Ended December 31, 2013
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands, except per share amounts)
Revenues: |  |  |  |  |
Merchandise sales | $ | 105,587 |  |  | $ | — |  |  | $ | 105,587 |
Jewelry scrapping sales | 27,703 |  |  | — |  |  | 27,703 |
Pawn service charges | 64,133 |  |  | — |  |  | 64,133 |
Consumer loan fees and interest | 60,117 |  |  | (4,913 | ) |  | 55,204 |
Other revenues | 5,499 |  |  | (4,370 | ) |  | 1,129 |
Total revenues | 263,039 |  |  | (9,283 | ) |  | 253,756 |
Merchandise cost of goods sold | 63,588 |  |  | 553 |  |  | 64,141 |
Jewelry scrapping cost of goods sold | 20,020 |  |  | — |  |  | 20,020 |
Consumer loan bad debt | 15,574 |  |  | 2,614 |  |  | 18,188 |
Net revenues | 163,857 |  |  | (12,450 | ) |  | 151,407 |
Operating expenses: |  |  |  |  |
Operations | 104,955 |  |  | 406 |  |  | 105,361 |
Administrative | 15,745 |  |  | (21 | ) |  | 15,724 |
Depreciation | 7,340 |  |  | — |  |  | 7,340 |
Amortization | 1,365 |  |  | — |  |  | 1,365 |
Gain on sale or disposal of assets | (6,290 | ) |  | — |  |  | (6,290 | )
Total operating expenses | 123,115 |  |  | 385 |  |  | 123,500 |
Operating income | 40,742 |  |  | (12,835 | ) |  | 27,907 |
Interest expense, net | 4,334 |  | — |  | 520 |  | — |  | 4,854 |
Equity in net income of unconsolidated affiliates | (1,271 | ) |  | — |  |  | (1,271 | )
Other income | (168 | ) |  | — |  |  | (168 | )
Income from continuing operations before income taxes | 37,847 |  |  | (13,355 | ) |  | 24,492 |
Income tax expense | 9,958 |  |  | (5,135 | ) |  | 4,823 |
Income from continuing operations, net of tax | 27,889 |  |  | (8,220 | ) |  | 19,669 |
Loss from discontinued operations, net of tax | (3,494 | ) |  | 759 |  |  | (2,735 | )
Net income | 24,395 |  |  | (7,461 | ) |  | 16,934 |
Net (loss) income from continuing operations attributable to redeemable noncontrolling interest | 1,826 |  |  | (3,622 | ) |  | (1,796 | )
Net income attributable to EZCORP, Inc. | $ | 22,569 |  |  | $ | (3,839 | ) |  | $ | 18,730 |
Basic earnings (loss) per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 0.48 |  |  | $ | (0.08 | ) |  | $ | 0.40 |
Discontinued operations | (0.06 | ) |  | 0.01 |  |  | (0.05 | )
Basic earnings per share | $ | 0.42 |  |  | $ | (0.07 | ) |  | $ | 0.35 |
Diluted earnings (loss) per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 0.48 |  |  | $ | (0.09 | ) |  | $ | 0.39 |
Discontinued operations | (0.06 | ) |  | 0.01 |  |  | (0.05 | )
Diluted earnings per share | $ | 0.42 |  |  |  | $ | (0.08 | ) |  |  | $ | 0.34 |
Net income from continuing operations attributable to EZCORP, Inc. | $ | 26,063 |  |  | $ | (4,598 | ) |  | $ | 21,465 |
Loss from discontinued operations attributable to EZCORP, Inc. | (3,494 | ) |  | 759 |  |  | (2,735 | )
Net income attributable to EZCORP, Inc. | $ | 22,569 |  |  | $ | (3,839 | ) |  | $ | 18,730 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| Three Months Ended December 31, 2013
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands)
Net income | $ | 24,395 |  |  | $ | (7,461 | ) |  | $ | 16,934 |
Other comprehensive income: |  |  |  |  |
Foreign currency translation gain | 4,716 |  |  | (151 | ) |  | 4,565 |
Loss on effective portion of cash flow hedge: |  |  |  |  |
Unrealized loss before reclassification | (346 | ) |  | — |  |  | (346 | )
Amounts reclassified from accumulated other comprehensive income | 245 |  |  | — |  |  | 245 |
Amounts reclassified from accumulated other comprehensive income | (9 | ) |  | — |  |  | (9 | )
Income tax expense | (894 | ) |  | 31 |  |  | (863 | )
Other comprehensive income, net of tax | 3,712 |  |  | (120 | ) |  | 3,592 |
Comprehensive income | $ | 28,107 |  |  | $ | (7,581 | ) |  | $ | 20,526 |
Attributable to redeemable noncontrolling interest: |  |  |  |  |
Net (loss) income | 1,826 |  |  | (3,622 | ) |  | (1,796 | )
Foreign currency translation gain | 359 |  |  | (35 | ) |  | 324 |
Comprehensive (loss) income attributable to redeemable noncontrolling interest | 2,185 |  |  | (3,657 | ) |  | (1,472 | )
Comprehensive income attributable to EZCORP, Inc. | $ | 25,922 |  |  | $ | (3,924 | ) |  | $ | 21,998 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF CASH FLOWS
| Three Months Ended December 31, 2013
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands)
Operating activities: |  |  |  |  |
Net income | $ | 24,395 |  |  | $ | (7,461 | ) |  | $ | 16,934 |
Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |  |  |
Depreciation and amortization | 9,363 |  |  | — |  |  | 9,363 |
Accretion of debt premium and consumer loan discount, net | (432 | ) |  | — |  |  | (432 | )
Consumer loan loss provision | 11,350 |  |  | (119 | ) |  | 11,231 |
Deferred income taxes | 693 |  |  | 1 |  |  | 694 |
Amortization of deferred financing costs | 890 |  |  | — |  |  | 890 |
Amortization of prepaid commissions | 1,937 |  |  | 289 |  |  | 2,226 |
Other | (114 | ) |  | (92 | ) |  | (206 | )
Gain on sale or disposal of assets | (6,422 | ) |  | — |  |  | (6,422 | )
Gain on sale of loan portfolio | (4,543 | ) |  | 4,543 |  |  | — |
Stock compensation expense | 1,236 |  |  | (29 | ) |  | 1,207 |
Income from investments in unconsolidated affiliates | (1,271 | ) |  | — |  |  | (1,271 | )
Changes in operating assets and liabilities, net of business acquisitions: |  |  |  |  |
Service charges and fees receivable, net | (2,292 | ) |  | 5,471 |  |  | 3,179 |
Inventory, net | (385 | ) |  | 553 |  |  | 168 |
Receivables, prepaid expenses, other current assets and other assets, net | (17,870 | ) |  | — |  |  | (17,870 | )
Accounts payable and other accrued expenses and deferred gains and other long-term liabilities | (8,022 | ) |  | (633 | ) |  | (8,655 | )
Customer layaway deposits | (2,853 | ) |  | — |  |  | (2,853 | )
Deferred gains and other long-term liabilities | 335 |  |  | (168 | ) |  | 167 |
Tax provision from stock compensation | 390 |  |  | (390 | ) |  | — |
Prepaid income taxes | 8,472 |  |  | (5,928 | ) |  | 2,544 |
Dividends from unconsolidated affiliates | 2,597 |  |  | — |  |  | 2,597 |
Net cash provided by operating activities | 17,454 |  |  | (3,963 | ) | — |  | 13,491 |
Investing activities: |  |  |  |  |
Loans made | (232,294 | ) |  | — |  |  | (232,294 | )
Loans repaid | 150,206 |  |  | 4,370 |  |  | 154,576 |
Recovery of pawn loan principal through sale of forfeited collateral | 64,776 |  |  | — |  |  | 64,776 |
Additions to property and equipment | (5,615 | ) |  | — |  |  | (5,615 | )
Acquisitions, net of cash acquired | (10,395 | ) |  | — |  |  | (10,395 | )
Proceeds from sale of assets | 28,980 |  |  | (19,098 | ) |  | 9,882 |
Net cash used in investing activities | (4,342 | ) |  | (14,728 | ) |  | (19,070 | )
Financing activities: |  |  |  |  |
Tax benefit of stock compensation | (389 | ) |  | 389 |  |  | — |
Debt issuance costs | (3,080 | ) |  | — |  |  | (3,080 | )
Payout of deferred and contingent consideration | (11,500 | ) |  | — |  |  | (11,500 | )
Change in restricted cash | (1,263 | ) |  | 1,417 |  |  | 154 |
Proceeds from revolving line of credit | 80,887 |  |  | — |  |  | 80,887 |
Payments on revolving line of credit | (74,908 | ) |  | — |  |  | (74,908 | )
Proceeds from borrowings | 16,703 |  |  | 19,135 |  |  | 35,838 |
Payments on borrowings and capital lease obligations | (17,496 | ) |  | (793 | ) |  | (18,289 | )
Net cash (provided by) used in financing activities | (11,046 | ) |  | 20,148 |  |  | 9,102 |
Effect of exchange rate changes on cash and cash equivalents | 103 |  |  | (37 | ) |  | 66 |
Net increase in cash and cash equivalents | 2,169 |  |  | 1,420 |  |  | 3,589 |
Cash and cash equivalents at beginning of period | 36,317 |  |  | (7,217 | ) |  | 29,100 |
Cash and cash equivalents at end of period | $ | 38,486 |  |  | $ | (5,797 | ) |  | $ | 32,689 |
Non-cash investing and financing activities: |  |  |  |  |
Pawn loans forfeited and transferred to inventory | $ | 63,256 |  |  | $ | — |  |  | $ | 63,256 |
Deferred consideration | 5,350 |  |  | — |  |  | 5,350 |
Contingent consideration | 4,792 |  |  | — |  |  | 4,792 |
Change in accrued additions to property and equipment | 122 |  |  | — |  |  | 122 |
Note receivable from sale of assets | 1,000 |  |  | — |  |  | 1,000 |
EZCORP, Inc. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
| Common Stock |  | Additional Paid-in Capital |  |  |  | Accumulated Other Comprehensive (Loss) Income |  | EZCORP, Inc. Stockholders' Equity
| Shares |  | Par Value |  |  | Retained Earnings |  |
| (Unaudited, except balances as of September 30, 2013)
| (in thousands)
| As Previously Reported
Balances at September 30, 2013 | 54,240 |  |  | $ | 543 |  |  | $ | 320,777 |  |  | $ | 599,880 |  |  | $ | (6,674 | ) |  | $ | 914,526 |
Stock compensation | — |  |  | — |  |  | 1,236 |  |  | — |  |  | — |  |  | 1,236 |
Release of restricted stock | 120 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Tax deficiency of stock compensation | — |  |  | — |  |  | (390 | ) |  | — |  |  | — |  |  | (390 | )
Effective portion of cash flow hedge | — |  |  | — |  |  | — |  |  | — |  |  | (101 | ) |  | (101 | )
Unrealized loss on available-for-sale securities | — |  |  | — |  |  | — |  |  | — |  |  | (6 | ) |  | (6 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | 3,460 |  |  | 3,460 |
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | 22,569 |  |  | — |  |  | 22,569 |
Balances at December 31, 2013 | 54,360 |  |  | $ | 543 |  |  | $ | 321,623 |  |  | $ | 622,449 |  |  | $ | (3,321 | ) |  | $ | 941,294 |
| Restatement Adjustments
Balances at September 30, 2013 | — |  |  | $ | — |  |  | $ | (240 | ) |  | $ | (18,632 | ) |  | $ | 229 |  |  | $ | (18,643 | )
Stock compensation | — |  |  | — |  |  | (29 | ) |  | — |  |  | — |  |  | (29 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | (85 | ) |  | (85 | )
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | (3,839 | ) |  | — |  |  | (3,839 | )
Balances at December 31, 2013 | — |  |  | $ | — |  |  | $ | (269 | ) |  | $ | (22,471 | ) |  | $ | 144 |  |  | $ | (22,596 | )
| As Restated
Balances at September 30, 2013 | 54,240 |  |  | $ | 543 |  |  | $ | 320,537 |  |  | $ | 581,248 |  |  | $ | (6,445 | ) |  | $ | 895,883 |
Stock compensation | — |  |  | — |  |  | 1,207 |  |  | — |  |  | — |  |  | 1,207 |
Release of restricted stock | 120 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Tax deficiency of stock compensation | — |  |  | — |  |  | (390 | ) |  | — |  |  | — |  |  | (390 | )
Effective portion of cash flow hedge | — |  |  | — |  |  | — |  |  | — |  |  | (101 | ) |  | (101 | )
Unrealized loss on available-for-sale securities | — |  |  | — |  |  | — |  |  | — |  |  | (6 | ) |  | (6 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | 3,375 |  |  | 3,375 |
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | 18,730 |  |  | — |  |  | 18,730 |
Balances at December 31, 2013 | 54,360 |  |  | $ | 543 |  |  | $ | 321,354 |  |  | $ | 599,978 |  |  | $ | (3,177 | ) |  | $ | 918,698 |
The following tables summarize the impact of the restatement adjustments for each quarterly period within fiscal 2013.
| Fiscal 2013
| First Quarter |  | Second Quarter |  | Third Quarter |  | Fourth Quarter |  | Fiscal Year
| December 31, 2012 |  | March 31, 2013 |  | June 30, 2013 |  | September 30, 2013 |  | September 30, 2013
| (in thousands)
Income (loss) from continuing operations before income taxes (as previously reported) | $ | 51,719 |  |  | $ | 55,077 |  |  | $ | 27,013 |  |  | $ | (31,350 | ) |  | $ | 102,459 |
Asset sale impact | — |  |  | — |  |  | — |  |  | — |  |  | — |
Portfolio review impact | (5,179 | ) |  | (6,718 | ) |  | (4,513 | ) |  | (4,941 | ) |  | (21,351 | )
Other impacts | (2,718 | ) |  | 76 |  |  | 103 |  |  | 1,911 |  |  | (628 | )
Net impact of adjustments | (7,897 | ) |  | (6,642 | ) |  | (4,410 | ) |  | (3,030 | ) |  | (21,979 | )
Income (loss) from continuing operations before income taxes (as restated) | $ | 43,822 |  |  | $ | 48,435 |  |  | $ | 22,603 |  |  | $ | (34,380 | ) |  | $ | 80,480 |
| Fourth Quarter of Fiscal 2013 |  | Third Quarter of Fiscal 2013
| As Previously Reported |  | Restatement Adjustments |  | As Restated |  | As Previously Reported |  | Restatement Adjustments |  | As Restated
| (in thousands, except per share amounts) |  | (in thousands, except per share amounts)
Results of Operations: |  |  |  |  |  |  |  |  |  |  |
Total revenues | $ | 227,980 |  |  | $ | (2,923 | ) |  | $ | 228,588 |  |  | $ | 226,696 |  |  | $ | (3,245 | ) |  | $ | 223,451 |
Net revenues | 143,699 |  |  | (3,147 | ) |  | 140,552 |  |  | 145,773 |  |  | (4,045 | ) |  | 141,728 |
Operating expenses | 124,903 |  |  | 363 |  |  | 125,266 |  |  | 119,355 |  |  | 365 |  |  | 119,720 |
Non-operating expense (income) | 50,146 |  |  | (480 | ) |  | 49,666 |  |  | (595 | ) |  | — |  |  | (595 | )
(Loss) income from continuing operations before income taxes | (31,350 | ) |  | (3,030 | ) |  | (34,380 | ) |  | 27,013 |  |  | (4,410 | ) |  | 22,603 |
Income tax (benefit) expense | (12,062 | ) |  | 866 |  |  | (11,196 | ) |  | 8,956 |  |  | (1,594 | ) |  | 7,362 |
(Loss) income from continuing operations, net of tax | $ | (19,288 | ) |  | $ | (3,896 | ) |  | $ | (23,184 | ) |  | $ | 18,057 |  |  | $ | (2,816 | ) |  | $ | 15,241 |
Net loss attributable to EZCORP, Inc. | $ | (24,740 | ) |  | $ | (3,303 | ) |  | $ | (28,043 | ) |  | $ | (5,881 | ) |  | $ | (1,069 | ) |  | $ | (6,950 | )
Diluted loss per share attributable to EZCORP, Inc. | $ | (0.46 | ) |  | $ | (0.07 | ) |  | $ | (0.53 | ) |  | $ | (0.11 | ) |  | $ | (0.02 | ) |  | $ | (0.13 | )
Balance Sheet Data: |  |  |  |  |  |  |  |  |  |  |
Total current assets | $ | 536,950 |  |  | $ | (16,917 | ) |  | $ | 520,033 |  |  | $ | 498,503 |  |  | $ | 10,389 |  |  | $ | 508,892 |
Total assets | 1,352,190 |  |  | (19,222 | ) |  | 1,332,968 |  |  | 1,361,101 |  |  | (15,060 | ) |  | 1,346,041 |
Total current liabilities | 141,901 |  |  | 1,772 |  |  | 143,673 |  |  | 133,570 |  |  | 4,028 |  |  | 137,598 |
Total liabilities | 382,271 |  |  | 7,517 |  |  | 389,788 |  |  | 364,764 |  |  | 7,442 |  |  | 372,206 |
Total temporary equity | 55,393 |  |  | (8,096 | ) |  | 47,297 |  |  | 56,837 |  |  | (7,072 | ) |  | 49,765 |
EZCORP, Inc. stockholders’ equity | 914,526 |  |  | (18,643 | ) |  | 895,883 |  |  | 939,500 |  |  | (15,430 | ) |  | 924,070 |
Cash Flow Data (year-to-date): |  |  |  |  |  |  |  |  |  |  |
Net cash provided by operating activities | $ | 126,473 |  |  | $ | (6,006 | ) |  | $ | 120,467 |  |  | $ | 99,415 |  |  | $ | (7,477 | ) |  | $ | 91,938 |
Net cash used in investing activities | (160,384 | ) |  | 5,184 |  |  | (155,200 | ) |  | (108,850 | ) |  | 6,887 |  |  | (101,963 | )
Net cash provided by financing activities | 22,213 |  |  | 1,436 |  |  | 23,649 |  |  | 7,669 |  |  | (9,791 | ) |  | (2,122 | )
Net decrease in cash and cash equivalents | (12,160 | ) |  | $ | 1,436 |  |  | (10,724 | ) |  | (2,522 | ) |  | $ | (9,791 | ) |  | (12,313 | )
| Second Quarter of Fiscal 2013 |  | First Quarter of Fiscal 2013
| As Previously Reported |  | Restatement Adjustments |  | As Restated |  | As Previously Reported |  | Restatement Adjustments |  | As Restated
| (in thousands, except per share amounts) |  | (in thousands, except per share amounts)
Results of Operations: |  |  |  |  |  |  |  |  |  |  |
Total revenues | $ | 259,963 |  |  | $ | (3,073 | ) |  | $ | 256,890 |  |  | $ | 265,482 |  |  | $ | (4,243 | ) |  | $ | 261,239 |
Net revenues | 166,143 |  |  | (6,601 | ) |  | 159,542 |  |  | 169,089 |  |  | (7,987 | ) |  | 161,102 |
Operating expenses | 111,032 |  |  | 41 |  |  | 111,073 |  |  | 119,272 |  |  | (90 | ) |  | 119,182 |
Non-operating expense (income) | 34 |  |  | — |  |  | 34 |  |  | (1,902 | ) |  | — |  |  | (1,902 | )
Income from continuing operations before income taxes | 55,077 |  |  | (6,642 | ) |  | 48,435 |  |  | 51,719 |  |  | (7,897 | ) |  | 43,822 |
Income tax expense | 16,072 |  |  | (307 | ) |  | 15,765 |  |  | 16,616 |  |  | (2,349 | ) |  | 14,267 |
Income from continuing operations, net of tax | $ | 39,005 |  |  | $ | (6,335 | ) |  | $ | 32,670 |  |  | $ | 35,103 |  |  | $ | (5,548 | ) |  | $ | 29,555 |
Net income attributable to EZCORP, Inc. | $ | 33,981 |  |  | $ | (3,753 | ) |  | $ | 30,228 |  |  | $ | 30,717 |  |  | $ | (3,644 | ) |  | $ | 27,073 |
Diluted earnings per share attributable to EZCORP, Inc. | $ | 0.63 |  |  | $ | (0.06 | ) |  | $ | 0.57 |  |  | $ | 0.59 |  |  | $ | (0.07 | ) |  | $ | 0.52 |
Balance Sheet Data: |  |  |  |  |  |  |  |  |  |  |
Total current assets | $ | 454,251 |  |  | $ | 4,896 |  |  | $ | 459,147 |  |  | $ | 501,952 |  |  | $ | (183 | ) |  | $ | 501,769 |
Total assets | 1,319,199 |  |  | (17,691 | ) |  | 1,301,508 |  |  | 1,342,306 |  |  | (12,418 | ) |  | 1,329,888 |
Total current liabilities | 143,030 |  |  | (225 | ) |  | 142,805 |  |  | 130,233 |  |  | (1,517 | ) |  | 128,716 |
Total liabilities | 311,030 |  |  | 3,548 |  |  | 314,578 |  |  | 380,816 |  |  | 2,507 |  |  | 383,323 |
Total temporary equity | 52,982 |  |  | (6,309 | ) |  | 46,673 |  |  | 49,323 |  |  | (4,167 | ) |  | 45,156 |
EZCORP, Inc. stockholders’ equity | 955,187 |  |  | (14,930 | ) |  | 940,257 |  |  | 912,167 |  |  | (10,758 | ) |  | 901,409 |
Cash Flow Data (year-to-date): |  |  |  |  |  |  |  |  |  |  |
Net cash provided by operating activities | $ | 94,168 |  |  | $ | (2,672 | ) |  | $ | 91,496 |  |  | $ | 30,508 |  |  | $ | 3,691 |  |  | $ | 34,199 |
Net cash used in investing activities | (49,825 | ) |  | 3,641 |  |  | (46,184 | ) |  | (47,755 | ) |  | (2,109 | ) |  | (49,864 | )
Net cash (used in) provided by financing activities | (51,742 | ) |  | 3,425 |  |  | (48,317 | ) |  | 15,622 |  |  | 3,456 |  |  | 19,078 |
Net decrease in cash and cash equivalents | (7,034 | ) |  | 3,425 |  |  | (3,609 | ) |  | (1,809 | ) |  | 5,198 |  |  | 3,389 |
The effects of the restatement on our unaudited condensed consolidated financial statements as of and for the quarter ended June 30, 2013 (the third quarter of fiscal 2013) are set forth below.
EZCORP, Inc. CONSOLIDATED BALANCE SHEET (in thousands, except share and per share amounts)
| June 30, 2013
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
Assets: |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 45,955 |  |  | $ | (18,444 | ) |  | $ | 27,511 |
Restricted cash | 3,132 |  |  | 17,193 |  |  | 20,325 |
Pawn loans | 154,095 |  |  | — |  |  | 154,095 |
Consumer loans, net | 42,883 |  |  | 11,393 |  |  | 54,276 |
Pawn service charges receivable, net | 28,590 |  |  | — |  |  | 28,590 |
Consumer loan fees and interest receivable, net | 35,315 |  |  | (13,133 | ) |  | 22,182 |
Inventory, net | 122,503 |  |  | — |  |  | 122,503 |
Deferred tax asset | 15,716 |  |  | 1,472 |  |  | 17,188 |
Prepaid income taxes | 12,937 |  |  | 7,908 |  |  | 20,845 |
Prepaid expenses and other assets | 37,377 |  |  | 4,000 |  |  | 41,377 |
Total current assets | 498,503 |  |  | 10,389 |  |  | 508,892 |
Investments in unconsolidated affiliates | 146,707 |  |  | (1,362 | ) |  | 145,345 |
Property and equipment, net | 110,312 |  |  | — |  |  | 110,312 |
Restricted cash, non-current | 2,182 |  |  | 1,250 |  |  | 3,432 |
Goodwill | 430,940 |  |  | — |  |  | 430,940 |
Intangible assets, net | 60,687 |  |  | — |  |  | 60,687 |
Non-current consumer loans, net | 82,935 |  |  | (25,022 | ) |  | 57,913 |
Other assets, net | 28,835 |  |  | (315 | ) |  | 28,520 |
Total assets | $ | 1,361,101 |  |  | $ | (15,060 | ) |  | $ | 1,346,041 |
Liabilities and stockholders’ equity: |  |  |  |  |
Current liabilities: |  |  |  |  |
Current maturities of long-term debt | $ | 33,525 |  |  | $ | — |  |  | $ | 33,525 |
Current capital lease obligations | 533 |  |  | — |  |  | 533 |
Accounts payable and other accrued expenses | 68,960 |  |  | 4,028 |  |  | 72,988 |
Other current liabilities | 22,640 |  |  | — |  |  | 22,640 |
Customer layaway deposits | 7,912 |  |  | — |  |  | 7,912 |
Total current liabilities | 133,570 |  |  | 4,028 |  |  | 137,598 |
Long-term debt, less current maturities | 198,374 |  |  | — |  |  | 198,374 |
Long-term capital lease obligations | 521 |  |  | — |  |  | 521 |
Deferred tax liability | 8,948 |  |  | — |  |  | 8,948 |
Deferred gains and other long-term liabilities | 23,351 |  |  | 3,414 |  |  | 26,765 |
Total liabilities | 364,764 |  |  | 7,442 |  |  | 372,206 |
Commitments and contingencies |  |  |  |  |
Temporary equity: |  |  |  |  |
Redeemable noncontrolling interest | 56,837 |  |  | (7,072 | ) |  | 49,765 |
Stockholders’ equity: |  |  |  |  |
Class A Non-voting Common Stock, par value $.01 per share; shares authorized: 54 million at June 30, 2013; issued and outstanding: 51,230,843 at June 30, 2013 | 512 |  |  | — |  |  | 512 |
Class B Voting Common Stock, convertible, par value $.01 per share; 3 million shares authorized; issued and outstanding: 2,970,171 | 30 |  |  | — |  |  | 30 |
Additional paid-in capital | 317,258 |  |  | (209 | ) |  | 317,049 |
Retained earnings | 624,620 |  |  | (15,329 | ) |  | 609,291 |
Accumulated other comprehensive loss | (2,920 | ) |  | 108 |  |  | (2,812 | )
EZCORP, Inc. stockholders’ equity | 939,500 |  |  | (15,430 | ) |  | 924,070 |
Total liabilities and stockholders’ equity | $ | 1,361,101 |  |  | $ | (15,060 | ) |  | $ | 1,346,041 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF OPERATIONS
| Three Months Ended June 30, 2013
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands, except per share amounts)
Revenues: |  |  |  |  |
Merchandise sales | $ | 86,576 |  |  | $ | — |  |  | $ | 86,576 |
Jewelry scrapping sales | 26,288 |  |  | — |  |  | 26,288 |
Pawn service charges | 60,397 |  |  | — |  |  | 60,397 |
Consumer loan fees and interest | 51,450 |  |  | (3,545 | ) |  | 47,905 |
Other revenues | 1,985 |  |  | 300 |  |  | 2,285 |
Total revenues | 226,696 |  |  | (3,245 | ) | — |  | 223,451 |
Merchandise cost of goods sold | 51,050 |  |  | — |  |  | 51,050 |
Jewelry scrapping cost of goods sold | 20,377 |  |  | — |  |  | 20,377 |
Consumer loan bad debt | 9,496 |  |  | 800 |  |  | 10,296 |
Net revenues | 145,773 |  |  | (4,045 | ) | — |  | 141,728 |
Operating expenses: |  |  |  |  |
Operations | 98,320 |  |  | 378 |  |  | 98,698 |
Administrative | 12,644 |  |  | (13 | ) |  | 12,631 |
Depreciation | 7,251 |  |  | — |  |  | 7,251 |
Amortization | 962 |  |  | — |  |  | 962 |
Loss on sale or disposal of assets | 178 |  |  | — |  |  | 178 |
Total operating expenses | 119,355 |  |  | 365 |  | — |  | 119,720 |
Operating income | 26,418 |  |  | (4,410 | ) |  | 22,008 |
Interest expense, net | 3,637 |  | — |  | — |  | — |  | 3,637 |
Equity in net income of unconsolidated affiliates | (4,328 | ) |  | — |  |  | (4,328 | )
Other loss | 96 |  |  | — |  |  | 96 |
Income from continuing operations before income taxes | 27,013 |  |  | (4,410 | ) | — |  | 22,603 |
Income tax expense | 8,956 |  |  | (1,594 | ) |  | 7,362 |
Income from continuing operations, net of tax | 18,057 |  |  | (2,816 | ) | — |  | 15,241 |
Loss from discontinued operations, net of tax | (22,897 | ) |  | 608 |  |  | (22,289 | )
Net loss | (4,840 | ) |  | (2,208 | ) |  | (7,048 | )
Net (loss) income from continuing operations attributable to redeemable noncontrolling interest | 996 |  |  | (1,148 | ) |  | (152 | )
Net income from discontinued operations attributable to redeemable noncontrolling interest | 45 |  |  | 9 |  |  | 54 |
Net loss attributable to EZCORP, Inc. | $ | (5,881 | ) |  | $ | (1,069 | ) |  | $ | (6,950 | )
Basic (loss) earnings per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 0.31 |  |  | $ | (0.03 | ) |  | $ | 0.28 |
Discontinued operations | (0.42 | ) |  | 0.01 |  |  | (0.41 | )
Basic loss per share | $ | (0.11 | ) |  | $ | (0.02 | ) |  | $ | (0.13 | )
Diluted (loss) earnings per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 0.31 |  |  | $ | (0.03 | ) |  | $ | 0.28 |
Discontinued operations | (0.42 | ) |  | 0.01 |  |  | (0.41 | )
Diluted (loss) earnings per share | $ | (0.11 | ) |  | $ | (0.02 | ) |  | $ | (0.13 | )
Net income from continuing operations attributable to EZCORP, Inc. | $ | 17,061 |  |  | $ | (1,668 | ) |  | $ | 15,393 |
Loss from discontinued operations attributable to EZCORP, Inc. | (22,942 | ) |  | 599 |  |  | (22,343 | )
Net loss attributable to EZCORP, Inc. | $ | (5,881 | ) |  | $ | (1,069 | ) |  | $ | (6,950 | )
EZCORP, Inc. CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
| Three Months Ended June 30, 2013
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands)
Net loss | $ | (4,840 | ) |  | $ | (2,208 | ) |  | $ | (7,048 | )
Other comprehensive loss: |  |  |  |  |
Foreign currency translation loss | (15,529 | ) |  | 2,494 |  |  | (13,035 | )
Loss on effective portion of cash flow hedge: |  |  |  |  |
Unrealized gain before reclassification | 2,388 |  |  | — |  |  | 2,388 |
Amounts reclassified from accumulated other comprehensive income | (1,888 | ) |  | — |  |  | (1,888 | )
Unrealized holding loss arising during period | (1,457 | ) |  | — |  |  | (1,457 | )
Income tax benefit | 1,189 |  |  | (823 | ) |  | 366 |
Other comprehensive loss, net of tax | (15,297 | ) |  | 1,671 |  |  | (13,626 | )
Comprehensive loss | $ | (20,137 | ) |  | $ | (537 | ) |  | $ | (20,674 | )
Attributable to redeemable noncontrolling interest: |  |  |  |  |
Net (loss) income | 1,041 |  |  | (1,139 | ) |  | (98 | )
Foreign currency translation loss | (3,321 | ) |  | 376 |  |  | (2,945 | )
Comprehensive loss attributable to redeemable noncontrolling interest | (2,280 | ) |  | (763 | ) |  | (3,043 | )
Comprehensive loss attributable to EZCORP, Inc. | $ | (17,857 | ) |  | $ | 226 |  |  | $ | (17,631 | )
EZCORP, Inc. CONSOLIDATED STATEMENT OF CASH FLOWS
| Nine Months Ended June 30, 2013
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands)
Operating activities: |  |  |  |  |
Net income | $ | 62,195 |  |  | $ | (13,005 | ) |  | $ | 49,190 |
Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |  |  |
Depreciation and amortization | 25,732 |  |  | — |  |  | 25,732 |
Accretion of debt premium and consumer loan discount, net | — |  |  | (9,978 | ) |  | (9,978 | )
Consumer loan loss provision | 19,982 |  |  | 2,209 |  |  | 22,191 |
Deferred income taxes | 245 |  |  | (1 | ) |  | 244 |
Amortization of deferred financing costs | — |  |  | 2,344 |  |  | 2,344 |
Amortization of prepaid commissions | — |  |  | 2,902 |  |  | 2,902 |
Other | 73 |  |  | 7,472 |  |  | 7,545 |
Loss on sale or disposal of assets | 6,060 |  |  | — |  |  | 6,060 |
Stock compensation expense | 5,202 |  |  | (156 | ) |  | 5,046 |
Income from investments in unconsolidated affiliates | (13,491 | ) |  | — |  |  | (13,491 | )
Changes in operating assets and liabilities, net of business acquisitions: |  |  |  |  |
Service charges and fees receivable, net | (4,203 | ) |  | 6,507 |  |  | 2,304 |
Inventory, net | (51 | ) |  | — |  |  | (51 | )
Receivables, prepaid expenses, other current assets and other assets, net | (13,119 | ) |  | (6,657 | ) |  | (19,776 | )
Accounts payable and other accrued expenses | 7,330 |  |  | 6,775 |  |  | 14,105 |
Customer layaway deposits | 588 |  |  | — |  |  | 588 |
Deferred gains and other long-term liabilities | 439 |  |  | (109 | ) |  | 330 |
Tax benefit from stock compensation | (321 | ) |  | — |  |  | (321 | )
Prepaid income taxes | (5,664 | ) |  | (5,780 | ) |  | (11,444 | )
Dividends from unconsolidated affiliates | 8,418 |  |  | — |  |  | 8,418 |
Net cash provided by operating activities | 99,415 |  |  | (7,477 | ) |  | 91,938 |
Investing activities: |  |  |  |  |
Loans made | (682,184 | ) |  | — |  |  | (682,184 | )
Loans repaid | 451,182 |  |  | 6,887 |  |  | 458,069 |
Recovery of pawn loan principal through sale of forfeited collateral | 181,461 |  |  | — |  |  | 181,461 |
Additions to property and equipment | (33,351 | ) |  | — |  |  | (33,351 | )
Acquisitions, net of cash acquired | (14,940 | ) |  | — |  |  | (14,940 | )
Investments in unconsolidated affiliates | (11,018 | ) |  | — |  |  | (11,018 | )
Net cash used in investing activities | (108,850 | ) |  | 6,887 |  |  | (101,963 | )
Financing activities: |  |  |  |  |
Proceeds from exercise of stock options | 45 |  |  | — |  |  | 45 |
Tax provision from stock compensation | 321 |  |  | — |  |  | 321 |
Taxes paid related to net share settlement of equity awards | (3,596 | ) |  | — |  |  | (3,596 | )
Change in restricted cash | 96 |  |  | (9,791 | ) |  | (9,695 | )
Proceeds from revolving line of credit | 403,131 |  |  | — |  |  | 403,131 |
Payments on revolving line of credit | (385,964 | ) |  | — |  |  | (385,964 | )
Proceeds from borrowings | 21,637 |  |  | — |  |  | 21,637 |
Payments on borrowings and capital lease obligations | (28,001 | ) |  | — |  |  | (28,001 | )
Net cash provided by financing activities | 7,669 |  |  | (9,791 | ) |  | (2,122 | )
Effect of exchange rate changes on cash and cash equivalents | (756 | ) |  | 590 |  |  | (166 | )
Net increase in cash and cash equivalents | (2,522 | ) |  | (9,791 | ) |  | (12,313 | )
Cash and cash equivalents at beginning of period | 48,477 |  |  | (8,653 | ) |  | 39,824 |
Cash and cash equivalents at end of period | $ | 45,955 |  |  | $ | (18,444 | ) |  | $ | 27,511 |
Non-cash investing and financing activities: |  |  |  |  |
Pawn loans forfeited and transferred to inventory | $ | 192,150 |  |  | $ | — |  |  | $ | 192,150 |
Issuance of common stock due to acquisitions | 38,705 |  |  | — |  |  | 38,705 |
Deferred consideration | 25,872 |  |  | — |  |  | 25,872 |
Contingent consideration | 7,148 |  |  | — |  |  | 7,148 |
Change in accrued additions to property and equipment | 107 |  |  | — |  |  | 107 |
EZCORP, Inc. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
| Common Stock |  | Additional Paid-in Capital |  |  |  | Accumulated Other Comprehensive (Loss) Income |  | EZCORP, Inc. Stockholders' Equity
| Shares |  | Par Value |  |  | Retained Earnings |  |
| (Unaudited, except balances as of September 30, 2012)
| (in thousands)
| As Previously Reported
Balances at September 30, 2012 | 51,226 |  |  | $ | 512 |  |  | $ | 268,626 |  |  | $ | 565,803 |  |  | $ | (113 | ) |  | $ | 834,828 |
Stock compensation | — |  |  | — |  |  | 5,202 |  |  | — |  |  | — |  |  | 5,202 |
Stock options exercised | 18 |  |  | — |  |  | 45 |  |  | — |  |  | — |  |  | 45 |
Issuance of common stock due to acquisitions | 1,965 |  |  | 20 |  |  | 38,685 |  |  | — |  |  | — |  |  | 38,705 |
Issuance of common stock due to purchase of subsidiary shares from noncontrolling interest | 592 |  |  | 6 |  |  | 10,398 |  |  | — |  |  | — |  |  | 10,404 |
Purchase of subsidiary shares from noncontrolling interest | — |  |  | — |  |  | (2,423 | ) |  | — |  |  | 85 |  |  | (2,338 | )
Release of restricted stock | 400 |  |  | 4 |  |  | — |  |  | — |  |  | — |  |  | 4 |
Tax benefit of stock compensation | — |  |  | — |  |  | 321 |  |  | — |  |  | — |  |  | 321 |
Taxes paid related to net share settlement of equity awards | — |  |  | — |  |  | (3,596 | ) |  | — |  |  | — |  |  | (3,596 | )
Effective portion of cash flow hedge | — |  |  | — |  |  | — |  |  | — |  |  | 500 |  |  | 500 |
Unrealized loss on available-for-sale securities | — |  |  | — |  |  | — |  |  | — |  |  | (1,120 | ) |  | (1,120 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | (2,272 | ) |  | (2,272 | )
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | 58,817 |  |  | — |  |  | 58,817 |
Balances at June 30, 2013 | 54,201 |  |  | $ | 542 |  |  | $ | 317,258 |  |  | $ | 624,620 |  |  | $ | (2,920 | ) |  | $ | 939,500 |
| Restatement Adjustments
Balances at September 30, 2012 | — |  |  | $ | — |  |  | $ | (54 | ) |  | $ | (6,863 | ) |  | $ | (120 | ) |  | (7,037 | )
Stock compensation | — |  |  | — |  |  | (155 | ) |  | — |  |  | — |  |  | (155 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | 228 |  |  | 228 |
Net income (loss) attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | (8,466 | ) |  | — |  |  | (8,466 | )
Balances at June 30, 2013 | — |  |  | $ | — |  |  | $ | (209 | ) |  | $ | (15,329 | ) |  | $ | 108 |  |  | $ | (15,430 | )
| As Restated
Balances at September 30, 2012 | 51,226 |  |  | $ | 512 |  |  | $ | 268,572 |  |  | $ | 558,940 |  |  | $ | (233 | ) |  | $ | 827,791 |
Stock compensation | — |  |  | — |  |  | 5,047 |  |  | — |  |  | — |  |  | 5,047 |
Stock options exercised | 18 |  |  | — |  |  | 45 |  |  | — |  |  | — |  |  | 45 |
Issuance of common stock due to acquisitions | 1,965 |  |  | 20 |  |  | 38,685 |  |  | — |  |  | — |  |  | 38,705 |
Issuance of common stock due to purchase of subsidiary shares from noncontrolling interest | 592 |  |  | 6 |  |  | 10,398 |  |  | — |  |  | — |  |  | 10,404 |
Purchase of subsidiary shares from noncontrolling interest | — |  |  | — |  |  | (2,423 | ) |  | — |  |  | 85 |  |  | (2,338 | )
Release of restricted stock | 400 |  |  | 4 |  |  | — |  |  | — |  |  | — |  |  | 4 |
Tax benefit of stock compensation | — |  |  | — |  |  | 321 |  |  | — |  |  | — |  |  | 321 |
Taxes paid related to net share settlement of equity awards | — |  |  | — |  |  | (3,596 | ) |  | — |  |  | — |  |  | (3,596 | )
Effective portion of cash flow hedge | — |  |  | — |  |  | — |  |  | — |  |  | 500 |  |  | 500 |
Unrealized loss on available-for-sale securities | — |  |  | — |  |  | — |  |  | — |  |  | (1,120 | ) |  | (1,120 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | (2,044 | ) |  | (2,044 | )
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | 50,351 |  |  | — |  |  | 50,351 |
Balances at June 30, 2013 | 54,201 |  |  | $ | 542 |  |  | $ | 317,049 |  |  | $ | 609,291 |  |  | $ | (2,812 | ) |  | $ | 924,070 |
The effects of the restatement on our unaudited condensed consolidated financial statements as of and for the quarter ended March 31, 2013 (the second quarter of fiscal 2013) are set forth below.
EZCORP, Inc. CONSOLIDATED BALANCE SHEET (in thousands, except share and per share amounts)
| March 31, 2013
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
Assets: |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 41,443 |  |  | $ | (5,228 | ) |  | $ | 36,215 |
Restricted cash | 1,204 |  |  | 4,244 |  |  | 5,448 |
Pawn loans | 138,380 |  |  | — |  |  | 138,380 |
Consumer loans, net | 36,596 |  |  | 12,549 |  |  | 49,145 |
Pawn service charges receivable, net | 25,388 |  |  | — |  |  | 25,388 |
Consumer loan fees and interest receivable, net | 33,507 |  |  | (14,227 | ) |  | 19,280 |
Inventory, net | 116,517 |  |  | — |  |  | 116,517 |
Deferred tax asset | 15,716 |  |  | 1,472 |  |  | 17,188 |
Prepaid income taxes | 3,079 |  |  | 6,086 |  |  | 9,165 |
Prepaid expenses and other assets | 42,421 |  |  | — |  |  | 42,421 |
Total current assets | 454,251 |  |  | 4,896 |  |  | 459,147 |
Investments in unconsolidated affiliates | 147,232 |  |  | (1,362 | ) |  | 145,870 |
Property and equipment, net | 118,979 |  |  | — |  |  | 118,979 |
Restricted cash, non-current | 2,197 |  |  | 983 |  |  | 3,180 |
Goodwill | 438,016 |  |  | — |  |  | 438,016 |
Intangible assets, net | 60,387 |  |  | — |  |  | 60,387 |
Non-current consumer loans, net | 77,414 |  |  | (22,038 | ) |  | 55,376 |
Other assets, net | 20,723 |  |  | (170 | ) |  | 20,553 |
Total assets | $ | 1,319,199 |  |  | $ | (17,691 | ) |  | $ | 1,301,508 |
Liabilities and stockholders’ equity: |  |  |  |  |
Current liabilities: |  |  |  |  |
Current maturities of long-term debt | $ | 34,912 |  |  | $ | — |  |  | $ | 34,912 |
Current capital lease obligations | 533 |  |  | — |  |  | 533 |
Accounts payable and other accrued expenses | 63,298 |  |  | (225 | ) |  | 63,073 |
Other current liabilities | 36,096 |  |  | — |  |  | 36,096 |
Customer layaway deposits | 8,191 |  |  | — |  |  | 8,191 |
Total current liabilities | 143,030 |  |  | (225 | ) |  | 142,805 |
Long-term debt, less current maturities | 137,376 |  |  | — |  |  | 137,376 |
Long-term capital lease obligations | 648 |  |  | — |  |  | 648 |
Deferred tax liability | 10,104 |  |  | — |  |  | 10,104 |
Deferred gains and other long-term liabilities | 19,872 |  |  | 3,773 |  |  | 23,645 |
Total liabilities | 311,030 |  |  | 3,548 |  |  | 314,578 |
Commitments and contingencies |  |  |  |  |
Temporary equity: |  |  |  |  |
Redeemable noncontrolling interest | 52,982 |  |  | (6,309 | ) |  | 46,673 |
Stockholders’ equity: |  |  |  |  |
Class A Non-voting Common Stock, par value $.01 per share; shares authorized: 54 million at March 31, 2013; issued and outstanding: 51,208,328 at March 31, 2013 | 508 |  |  | — |  |  | 508 |
Class B Voting Common Stock, convertible, par value $.01 per share; 3 million shares authorized; issued and outstanding: 2,970,171 | 30 |  |  | — |  |  | 30 |
Additional paid-in capital | 315,092 |  |  | (193 | ) |  | 314,899 |
Retained earnings | 630,501 |  |  | (14,260 | ) |  | 616,241 |
Accumulated other comprehensive income | 9,056 |  |  | (477 | ) |  | 8,579 |
EZCORP, Inc. stockholders’ equity | 955,187 |  |  | (14,930 | ) |  | 940,257 |
Total liabilities and stockholders’ equity | $ | 1,319,199 |  |  | $ | (17,691 | ) |  | $ | 1,301,508 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF OPERATIONS
| Three Months Ended March 31, 2013
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands, except per share amounts)
Revenues: |  |  |  |  |
Merchandise sales | $ | 100,082 |  |  | $ | — |  |  | $ | 100,082 |
Jewelry scrapping sales | 42,582 |  |  | — |  |  | 42,582 |
Pawn service charges | 62,015 |  |  | — |  |  | 62,015 |
Consumer loan fees and interest | 53,180 |  |  | (2,702 | ) |  | 50,478 |
Other revenues | 2,104 |  |  | (371 | ) |  | 1,733 |
Total revenues | 259,963 |  |  | (3,073 | ) |  | 256,890 |
Merchandise cost of goods sold | 58,716 |  |  | — |  |  | 58,716 |
Jewelry scrapping cost of goods sold | 29,311 |  |  | — |  |  | 29,311 |
Consumer loan bad debt | 5,793 |  |  | 3,528 |  |  | 9,321 |
Net revenues | 166,143 |  |  | (6,601 | ) |  | 159,542 |
Operating expenses: |  |  |  |  |
Operations | 94,779 |  |  | 50 |  |  | 94,829 |
Administrative | 8,603 |  |  | (9 | ) |  | 8,594 |
Depreciation | 6,950 |  |  | — |  |  | 6,950 |
Amortization | 687 |  |  | — |  |  | 687 |
Loss on sale or disposal of assets | 13 |  |  | — |  |  | 13 |
Total operating expenses | 111,032 |  |  | 41 |  |  | 111,073 |
Operating income | 55,111 |  |  | (6,642 | ) |  | 48,469 |
Interest expense, net | 3,754 |  | — |  | — |  | — |  | 3,754 |
Equity in net income of unconsolidated affiliates | (4,125 | ) |  | — |  |  | (4,125 | )
Other loss | 405 |  |  | — |  |  | 405 |
Income from continuing operations before income taxes | 55,077 |  |  | (6,642 | ) |  | 48,435 |
Income tax expense | 16,072 |  |  | (307 | ) |  | 15,765 |
Income from continuing operations, net of tax | 39,005 |  |  | (6,335 | ) |  | 32,670 |
Loss from discontinued operations, net of tax | (4,125 | ) |  | 700 |  |  | (3,425 | )
Net income | 34,880 |  |  | (5,635 | ) |  | 29,245 |
Net (loss) income from continuing operations attributable to redeemable noncontrolling interest | 897 |  |  | (1,892 | ) |  | (995 | )
Net income from discontinued operations attributable to redeemable noncontrolling interest | 2 |  |  | 10 |  |  | 12 |
Net income attributable to EZCORP, Inc. | $ | 33,981 |  |  | $ | (3,753 | ) |  | $ | 30,228 |
Basic earnings (loss) per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 0.71 |  |  | $ | (0.08 | ) |  | $ | 0.63 |
Discontinued operations | (0.08 | ) |  | 0.02 |  |  | (0.06 | )
Basic earnings (loss) per share | $ | 0.63 |  |  | $ | (0.06 | ) |  | $ | 0.57 |
Diluted earnings (loss) per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 0.71 |  |  | $ | (0.08 | ) |  | $ | 0.63 |
Discontinued operations | (0.08 | ) |  | 0.02 |  |  | (0.06 | )
Diluted earnings (loss) per share | $ | 0.63 |  |  | $ | (0.06 | ) |  | $ | 0.57 |
Net income from continuing operations attributable to EZCORP, Inc. | $ | 38,108 |  |  | $ | (4,443 | ) |  | $ | 33,665 |
Loss from discontinued operations attributable to EZCORP, Inc. | (4,127 | ) |  | 690 |  |  | (3,437 | )
Net income attributable to EZCORP, Inc. | $ | 33,981 |  |  | $ | (3,753 | ) |  | $ | 30,228 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| Three Months Ended March 31, 2013
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands)
Net income | $ | 34,880 |  |  | $ | (5,635 | ) |  | $ | 29,245 |
Other comprehensive income: |  |  |  |  |
Foreign currency translation gain | 11,111 |  |  | (2,054 | ) |  | 9,057 |
Loss on effective portion of cash flow hedge: |  |  |  |  |
Unrealized holding loss arising during period | (221 | ) |  | — |  |  | (221 | )
Income tax benefit | (1,057 | ) |  | 678 |  |  | (379 | )
Other comprehensive income, net of tax | 9,833 |  |  | (1,376 | ) |  | 8,457 |
Comprehensive income | $ | 44,713 |  |  | $ | (7,011 | ) |  | $ | 37,702 |
Attributable to redeemable noncontrolling interest: |  |  |  |  |
Net income (loss) | 899 |  |  | (1,882 | ) |  | (983 | )
Foreign currency translation gain | 2,760 |  |  | (260 | ) |  | 2,500 |
Comprehensive income attributable to redeemable noncontrolling interest | 3,659 |  |  | (2,142 | ) |  | 1,517 |
Comprehensive income attributable to EZCORP, Inc. | $ | 41,054 |  |  | $ | (4,869 | ) |  | $ | 36,185 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF CASH FLOWS
| Six Months Ended March 31, 2013
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands)
Operating activities: |  |  |  |  |
Net income | $ | 67,035 |  |  | $ | (10,797 | ) |  | $ | 56,238 |
Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |  |  | — |
Depreciation and amortization | 16,415 |  |  | — |  |  | 16,415 |
Accretion of debt premium and consumer loan discount, net | — |  |  | (9,297 | ) |  | (9,297 | )
Consumer loan loss provision | 12,900 |  |  | 1,820 |  |  | 14,720 |
Deferred income taxes | 1,400 |  |  | (1 | ) |  | 1,399 |
Amortization of deferred financing costs | — |  |  | 1,524 |  |  | 1,524 |
Amortization of prepaid commissions | — |  |  | 1,464 |  |  | 1,464 |
Other | — |  |  | 7,992 |  |  | 7,992 |
Gain on sale or disposal of assets | 42 |  |  | — |  |  | 42 |
Stock compensation expense | 3,054 |  |  | (139 | ) |  | 2,915 |
Income from investments in unconsolidated affiliates | (9,163 | ) |  | — |  |  | (9,163 | )
Changes in operating assets and liabilities, net of business acquisitions: |  |  |  |  |
Service charges and fees receivable, net | 2,366 |  |  | 7,340 |  |  | 9,706 |
Inventory, net | (3,034 | ) |  | — |  |  | (3,034 | )
Receivables, prepaid expenses, other current assets and other assets, net | (7,072 | ) |  | (1,363 | ) |  | (8,435 | )
Accounts payable and other accrued expenses | (2,743 | ) |  | 2,536 |  |  | (207 | )
Customer layaway deposits | 812 |  |  | — |  |  | 812 |
Deferred gains and other long-term liabilities | 350 |  |  | 207 |  |  | 557 |
Tax benefit from stock compensation | (342 | ) |  | — |  |  | (342 | )
Income taxes receivable / payable | 7,320 |  |  | (3,958 | ) |  | 3,362 |
Dividends from unconsolidated affiliates | 4,828 |  |  | — |  |  | 4,828 |
Net cash provided by operating activities | 94,168 |  |  | (2,672 | ) |  | 91,496 |
Investing activities: |  |  |  |  |
Loans made | (440,917 | ) |  | — |  |  | (440,917 | )
Loans repaid | 307,930 |  |  | 3,641 |  |  | 311,571 |
Recovery of pawn loan principal through sale of forfeited collateral | 129,965 |  |  | — |  |  | 129,965 |
Additions to property and equipment | (23,506 | ) |  | — |  |  | (23,506 | )
Acquisitions, net of cash acquired | (12,279 | ) |  | — |  |  | (12,279 | )
Investments in unconsolidated affiliates | (11,018 | ) |  | — |  |  | (11,018 | )
Net cash used in investing activities | (49,825 | ) |  | 3,641 |  |  | (46,184 | )
Financing activities: |  |  |  |  |
Proceeds from exercise of stock options | 6 |  |  | — |  |  | 6 |
Tax provision from stock compensation | 342 |  |  | — |  |  | 342 |
Taxes paid related to net share settlement of equity awards | (3,596 | ) |  | — |  |  | (3,596 | )
Debt issuance costs | (259 | ) |  | — |  |  | (259 | )
Change in restricted cash | 2,303 |  |  | 3,425 |  |  | 5,728 |
Proceeds from revolving line of credit | 148,265 |  |  | — |  |  | 148,265 |
Payments on revolving line of credit | (194,805 | ) |  | — |  |  | (194,805 | )
Proceeds from borrowings | 1,172 |  |  | — |  |  | 1,172 |
Payments on borrowings and capital lease obligations | (5,170 | ) |  | — |  |  | (5,170 | )
Net cash used in financing activities | (51,742 | ) |  | 3,425 |  |  | (48,317 | )
Effect of exchange rate changes on cash and cash equivalents | 365 |  |  | (969 | ) |  | (604 | )
Net increase in cash and cash equivalents | (7,034 | ) |  | 3,425 |  |  | (3,609 | )
Cash and cash equivalents at beginning of period | 48,477 |  |  | (8,653 | ) |  | 39,824 |
Cash and cash equivalents at end of period | $ | 41,443 |  |  | $ | (5,228 | ) |  | $ | 36,215 |
Non-cash investing and financing activities: |  |  |  |  |
Pawn loans forfeited and transferred to inventory | $ | 130,675 |  |  | $ | — |  |  | $ | 130,675 |
Issuance of common stock due to acquisitions | 38,705 |  |  | — |  |  | 38,705 |
Deferred consideration | 24,000 |  |  | — |  |  | 24,000 |
Contingent consideration | 4,792 |  |  | — |  |  | 4,792 |
EZCORP, Inc. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
| Common Stock |  | Additional Paid-in Capital |  |  |  | Accumulated Other Comprehensive Income (Loss) |  | EZCORP, Inc. Stockholders' Equity
| Shares |  | Par Value |  |  | Retained Earnings |  |
| (Unaudited, except balances as of September 30, 2012)
| (in thousands)
| As Previously Reported
Balances at September 30, 2012 | 51,226 |  |  | $ | 512 |  |  | $ | 268,626 |  |  | $ | 565,803 |  |  | $ | (113 | ) |  | 834,828 |
Stock compensation | — |  |  | — |  |  | 3,054 |  |  | — |  |  | — |  |  | 3,054 |
Stock options exercised | 3 |  |  | — |  |  | 6 |  |  | — |  |  | — |  |  | 6 |
Issuance of common stock due to acquisitions | 1,965 |  |  | 20 |  |  | 38,685 |  |  | — |  |  | — |  |  | 38,705 |
Issuance of common stock due to purchase of subsidiary shares from noncontrolling interest | 592 |  |  | 6 |  |  | 10,398 |  |  | — |  |  | — |  |  | 10,404 |
Purchase of subsidiary shares from noncontrolling interest | — |  |  | — |  |  | (2,423 | ) |  | — |  |  | 85 |  |  | (2,338 | )
Release of restricted stock | 392 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Tax benefit of stock compensation | — |  |  | — |  |  | 342 |  |  | — |  |  | — |  |  | 342 |
Taxes paid related to net share settlement of equity awards | — |  |  | — |  |  | (3,596 | ) |  | — |  |  | — |  |  | (3,596 | )
Unrealized loss on available-for-sale securities | — |  |  | — |  |  | — |  |  | — |  |  | (172 | ) |  | (172 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | 9,256 |  |  | 9,256 |
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | 64,698 |  |  | — |  |  | 64,698 |
Balances at March 31, 2013 | 54,178 |  |  | $ | 538 |  |  | $ | 315,092 |  |  | $ | 630,501 |  |  | $ | 9,056 |  |  | $ | 955,187 |
| Restatement Adjustments
Balances at September 30, 2012 | — |  |  | $ | — |  |  | $ | (54 | ) |  | $ | (6,863 | ) |  | $ | (120 | ) |  | (7,037 | )
Stock compensation | — |  |  | — |  |  | (139 | ) |  | — |  |  | — |  |  | (139 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | (357 | ) |  | (357 | )
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | (7,397 | ) |  | — |  |  | (7,397 | )
Balances at March 31, 2013 | — |  |  | $ | — |  |  | $ | (193 | ) |  | $ | (14,260 | ) |  | $ | (477 | ) |  | $ | (14,930 | )
| As Restated
Balances at September 30, 2012 | 51,226 |  |  | $ | 512 |  |  | $ | 268,572 |  |  | $ | 558,940 |  |  | $ | (233 | ) |  | $ | 827,791 |
Stock compensation | — |  |  | — |  |  | 2,915 |  |  | — |  |  | — |  |  | 2,915 |
Stock options exercised | 3 |  |  | — |  |  | 6 |  |  | — |  |  | — |  |  | 6 |
Issuance of common stock due to acquisitions | 1,965 |  |  | 20 |  |  | 38,685 |  |  | — |  |  | — |  |  | 38,705 |
Issuance of common stock due to purchase of subsidiary shares from noncontrolling interest | 592 |  |  | 6 |  |  | 10,398 |  |  | — |  |  | — |  |  | 10,404 |
Purchase of subsidiary shares from noncontrolling interest | — |  |  | — |  |  | (2,423 | ) |  | — |  |  | 85 |  |  | (2,338 | )
Release of restricted stock | 392 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Tax benefit of stock compensation | — |  |  | — |  |  | 342 |  |  | — |  |  | — |  |  | 342 |
Taxes paid related to net share settlement of equity awards | — |  |  | — |  |  | (3,596 | ) |  | — |  |  | — |  |  | (3,596 | )
Unrealized loss on available-for-sale securities | — |  |  | — |  |  | — |  |  | — |  |  | (172 | ) |  | (172 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | 8,899 |  |  | 8,899 |
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | 57,301 |  |  | — |  |  | 57,301 |
Balances at March 31, 2013 | 54,178 |  |  | $ | 538 |  |  | $ | 314,899 |  |  | $ | 616,241 |  |  | $ | 8,579 |  |  | $ | 940,257 |
The effects of the restatement on our unaudited condensed consolidated financial statements as of and for the quarter December 31, 2012 (the first quarter of fiscal 2013) are set forth below.
EZCORP, Inc. CONSOLIDATED BALANCE SHEET (in thousands, except share and per share amounts)
| December 31, 2012
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
Assets: |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 46,668 |  |  | $ | (3,455 | ) |  | $ | 43,213 |
Restricted cash | 1,133 |  |  | 692 |  |  | 1,825 |
Pawn loans | 162,150 |  |  | — |  |  | 162,150 |
Consumer loans, net | 40,470 |  |  | 11,003 |  |  | 51,473 |
Pawn service charges receivable, net | 31,077 |  |  | — |  |  | 31,077 |
Consumer loan fees and interest receivable, net | 34,073 |  |  | (14,067 | ) |  | 20,006 |
Inventory, net | 120,271 |  |  | — |  |  | 120,271 |
Deferred tax asset | 15,716 |  |  | 1,472 |  |  | 17,188 |
Prepaid income taxes | — |  |  | 4,172 |  |  | 4,172 |
Prepaid expenses and other assets | 50,394 |  |  | — |  |  | 50,394 |
Total current assets | 501,952 |  |  | (183 | ) |  | 501,769 |
Investments in unconsolidated affiliates | 144,232 |  |  | (1,362 | ) |  | 142,870 |
Property and equipment, net | 114,082 |  |  | — |  |  | 114,082 |
Restricted cash, non-current | 1,994 |  |  | 2,764 |  |  | 4,758 |
Goodwill | 434,671 |  |  | — |  |  | 434,671 |
Intangible assets, net | 59,562 |  |  | — |  |  | 59,562 |
Non-current consumer loans, net | 66,615 |  |  | (13,531 | ) |  | 53,084 |
Other assets, net | 19,198 |  |  | (106 | ) |  | 19,092 |
Total assets | $ | 1,342,306 |  |  | $ | (12,418 | ) |  | $ | 1,329,888 |
Liabilities and stockholders’ equity: |  |  |  |  |
Current liabilities: |  |  |  |  |
Current maturities of long-term debt | $ | 27,562 |  |  | $ | — |  |  | $ | 27,562 |
Current capital lease obligations | 533 |  |  | — |  |  | 533 |
Accounts payable and other accrued expenses | 70,829 |  |  | (858 | ) |  | 69,971 |
Other current liabilities | 24,396 |  |  | — |  |  | 24,396 |
Customer layaway deposits | 6,254 |  |  | — |  |  | 6,254 |
Income taxes payable | 659 |  |  | (659 | ) |  | — |
Total current liabilities | 130,233 |  |  | (1,517 | ) |  | 128,716 |
Long-term debt, less current maturities | 207,978 |  |  | — |  |  | 207,978 |
Long-term capital lease obligations | 771 |  |  | — |  |  | 771 |
Deferred tax liability | 10,815 |  |  | — |  |  | 10,815 |
Deferred gains and other long-term liabilities | 31,019 |  |  | 4,024 |  |  | 35,043 |
Total liabilities | 380,816 |  |  | 2,507 |  |  | 383,323 |
Commitments and contingencies |  |  |  |  |
Temporary equity: |  |  |  |  |
Redeemable noncontrolling interest | 49,323 |  |  | (4,167 | ) |  | 45,156 |
Stockholders’ equity: |  |  | — |  |  |
Class A Non-voting Common Stock, par value $.01 per share; shares authorized: 56 million at December 31, 2012; issued and outstanding: 51,196,870 at December 31, 2012 | 508 |  |  | — |  |  | 508 |
Class B Voting Common Stock, convertible, par value $.01 per share; 3 million shares authorized; issued and outstanding: 2,970,171 | 30 |  |  | — |  |  | 30 |
Additional paid-in capital | 313,126 |  |  | (180 | ) |  | 312,946 |
Retained earnings | 596,520 |  |  | (10,507 | ) |  | 586,013 |
Accumulated other comprehensive income | 1,983 |  |  | (71 | ) |  | 1,912 |
EZCORP, Inc. stockholders’ equity | 912,167 |  |  | (10,758 | ) |  | 901,409 |
Total liabilities and stockholders’ equity | $ | 1,342,306 |  |  | $ | (12,418 | ) |  | $ | 1,329,888 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF OPERATIONS
| Three Months Ended December 31, 2012
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands, except per share amounts)
Revenues: |  |  |  |  |
Merchandise sales | $ | 94,604 |  |  | $ | — |  |  | $ | 94,604 |
Jewelry scrapping sales | 44,709 |  |  | — |  |  | 44,709 |
Pawn service charges | 65,400 |  |  | — |  |  | 65,400 |
Consumer loan fees and interest | 56,063 |  |  | (1,865 | ) |  | 54,198 |
Other revenues | 4,706 |  |  | (2,378 | ) |  | 2,328 |
Total revenues | 265,482 |  |  | (4,243 | ) | — |  | 261,239 |
Merchandise cost of goods sold | 54,945 |  |  | — |  |  | 54,945 |
Jewelry scrapping cost of goods sold | 31,305 |  |  | — |  |  | 31,305 |
Consumer loan bad debt | 10,143 |  |  | 3,744 |  |  | 13,887 |
Net revenues | 169,089 |  |  | (7,987 | ) |  | 161,102 |
Operating expenses: |  |  |  |  |
Operations | 98,419 |  |  | 1 |  |  | 98,420 |
Administrative | 13,671 |  |  | (91 | ) |  | 13,580 |
Depreciation | 6,465 |  |  | — |  |  | 6,465 |
Amortization | 688 |  |  | — |  |  | 688 |
Loss on sale or disposal of assets | 29 |  |  | — |  |  | 29 |
Total operating expenses | 119,272 |  |  | (90 | ) |  | 119,182 |
Operating income | 49,817 |  |  | (7,897 | ) |  | 41,920 |
Interest expense, net | 3,637 |  | — |  | — |  | — |  | 3,637 |
Equity in net income of unconsolidated affiliates | (5,038 | ) |  | — |  |  | (5,038 | )
Other income | (501 | ) |  | — |  |  | (501 | )
Income from continuing operations before income taxes | 51,719 |  |  | (7,897 | ) |  | 43,822 |
Income tax expense | 16,616 |  |  | (2,349 | ) |  | 14,267 |
Income from continuing operations, net of tax | 35,103 |  |  | (5,548 | ) |  | 29,555 |
Loss from discontinued operations, net of tax | (2,948 | ) |  | 386 |  |  | (2,562 | )
Net income | 32,155 |  |  | (5,162 | ) |  | 26,993 |
Net income from continuing operations attributable to redeemable noncontrolling interest | 1,547 |  |  | (1,521 | ) |  | 26 |
Loss from discontinued operations attributable to redeemable noncontrolling interest | (109 | ) |  | 3 |  |  | (106 | )
Net income attributable to EZCORP, Inc. | $ | 30,717 |  |  | $ | (3,644 | ) |  | $ | 27,073 |
Basic earnings (loss) per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 0.64 |  |  | $ | (0.07 | ) |  | $ | 0.57 |
Discontinued operations | (0.05 | ) |  | — |  |  | (0.05 | )
Basic earnings per share | $ | 0.59 |  |  | $ | (0.07 | ) |  | $ | 0.52 |
Diluted earnings (loss) per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 0.64 |  |  | $ | (0.07 | ) |  | $ | 0.57 |
Discontinued operations | (0.05 | ) |  | — |  |  | (0.05 | )
Diluted earnings per share | $ | 0.59 |  |  | $ | (0.07 | ) |  | $ | 0.52 |
Net income from continuing operations attributable to EZCORP, Inc. | $ | 33,556 |  |  | $ | (4,027 | ) |  | $ | 29,529 |
Loss from discontinued operations attributable to EZCORP, Inc. | (2,839 | ) |  | 383 |  |  | (2,456 | )
Net income attributable to EZCORP, Inc. | $ | 30,717 |  |  | $ | (3,644 | ) |  | $ | 27,073 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| Three Months Ended December 31, 2012
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands)
Net income | $ | 32,155 |  |  | $ | (5,162 | ) |  | $ | 26,993 |
Other comprehensive income: |  |  |  |  |
Foreign currency translation gain | 3,468 |  |  | 124 |  |  | 3,592 |
Loss on effective portion of cash flow hedge: |  |  |  |  |
Amounts reclassified from accumulated other comprehensive income | (43 | ) |  | — |  |  | (43 | )
Income tax expense | (1,980 | ) |  | (41 | ) |  | (2,021 | )
Other comprehensive income, net of tax | 1,445 |  |  | 83 |  |  | 1,528 |
Comprehensive income | $ | 33,600 |  |  | $ | (5,079 | ) |  | $ | 28,521 |
Attributable to redeemable noncontrolling interest: |  |  |  |  |
Net (loss) income | 1,438 |  |  | (1,518 | ) |  | (80 | )
Foreign currency translation loss | (651 | ) |  | 34 |  |  | (617 | )
Comprehensive (loss) income attributable to redeemable noncontrolling interest | 787 |  |  | (1,484 | ) |  | (697 | )
Comprehensive income attributable to EZCORP, Inc. | $ | 32,813 |  |  | $ | (3,595 | ) |  | $ | 29,218 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF CASH FLOWS
| Three Months Ended December 31, 2012
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands)
Operating activities: |  |  |  |  |
Net income | $ | 32,155 |  |  | $ | (5,162 | ) |  | $ | 26,993 |
Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |  |  |
Depreciation and amortization | 7,652 |  |  | — |  |  | 7,652 |
Accretion of debt premium and consumer loan discount, net | — |  |  | (8,627 | ) |  | (8,627 | )
Consumer loan loss provision | 7,990 |  |  | 130 |  |  | 8,120 |
Deferred income taxes | 2,214 |  |  | (1 | ) |  | 2,213 |
Amortization of deferred financing costs | — |  |  | 764 |  |  | 764 |
Amortization of prepaid commissions | — |  |  | 649 |  |  | 649 |
Other | — |  |  | 8,087 |  |  | 8,087 |
Loss on sale or disposal of assets | 29 |  |  | — |  |  | 29 |
Stock compensation expense | 925 |  |  | (126 | ) |  | 799 |
Income from investments in unconsolidated affiliates | (5,038 | ) |  | — |  |  | (5,038 | )
Changes in operating assets and liabilities, net of business acquisitions: |  |  |  |  |
Service charges and fees receivable, net | (5,192 | ) |  | 7,428 |  |  | 2,236 |
Inventory, net | (11,908 | ) |  | — |  |  | (11,908 | )
Receivables, prepaid expenses, other current assets and other assets, net | (17,727 | ) |  | (616 | ) |  | (18,343 | )
Accounts payable and other accrued expenses | 9,323 |  |  | 1,891 |  |  | 11,214 |
Customer layaway deposits | (1,077 | ) |  | — |  |  | (1,077 | )
Deferred gains and other long-term liabilities | 83 |  |  | 490 |  |  | 573 |
Tax benefit from stock compensation | (346 | ) |  | — |  |  | (346 | )
Prepaid income taxes | 9,830 |  |  | (1,216 | ) |  | 8,614 |
Dividends from unconsolidated affiliates | 1,595 |  |  | — |  |  | 1,595 |
Net cash provided by operating activities | 30,508 |  |  | 3,691 |  |  | 34,199 |
Investing activities: |  |  |  |  |
Loans made | (231,067 | ) |  | — |  |  | (231,067 | )
Loans repaid | 142,250 |  |  | (2,109 | ) |  | 140,141 |
Recovery of pawn loan principal through sale of forfeited collateral | 73,264 |  |  | — |  |  | 73,264 |
Additions to property and equipment | (8,906 | ) |  | — |  |  | (8,906 | )
Acquisitions, net of cash acquired | (12,278 | ) |  | — |  |  | (12,278 | )
Investments in unconsolidated affiliates | (11,018 | ) |  | — |  |  | (11,018 | )
Net cash used in investing activities | (47,755 | ) |  | (2,109 | ) |  | (49,864 | )
Financing activities: |  |  |  |  |
Tax provision from stock compensation | 346 |  |  | — |  |  | 346 |
Taxes paid related to net share settlement of equity awards | (3,431 | ) |  | — |  |  | (3,431 | )
Change in restricted cash | 2,298 |  |  | 3,456 |  |  | 5,754 |
Proceeds from revolving line of credit | 80,125 |  |  | — |  |  | 80,125 |
Payments on revolving line of credit | (61,852 | ) |  | — |  |  | (61,852 | )
Proceeds from borrowings | 1,159 |  |  | — |  |  | 1,159 |
Payments on borrowings and capital lease obligations | (3,023 | ) |  | — |  |  | (3,023 | )
Net cash provided by financing activities | 15,622 |  |  | 3,456 |  |  | 19,078 |
Effect of exchange rate changes on cash and cash equivalents | (184 | ) |  | 160 |  |  | (24 | )
Net increase in cash and cash equivalents | (1,809 | ) |  | 5,198 |  |  | 3,389 |
Cash and cash equivalents at beginning of period | 48,477 |  |  | (8,653 | ) |  | 39,824 |
Cash and cash equivalents at end of period | $ | 46,668 |  |  | $ | (3,455 | ) |  | $ | 43,213 |
Non-cash investing and financing activities: |  |  |  |  |
Pawn loans forfeited and transferred to inventory | $ | 69,370 |  |  | $ | — |  |  | $ | 69,370 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF CASH FLOWS
Issuance of common stock due to acquisitions | 38,647 |  |  | — |  |  | 38,647 |
Deferred consideration | 24,000 |  |  | — |  |  | 24,000 |
Contingent consideration | 4,792 |  |  | — |  |  | 4,792 |
Stock issued for additional investment in subsidiary | 7,981 |  |  | — |  |  | 7,981 |
Change in accrued additions to property and equipment | 2,100 |  |  | — |  |  | 2,100 |
EZCORP, Inc. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
| Common Stock |  | Additional Paid-in Capital |  |  |  | Accumulated Other Comprehensive Income (Loss) |  | EZCORP, Inc. Stockholders' Equity
| Shares |  | Par Value |  |  | Retained Earnings |  |
| (Unaudited, except balances as of September 30, 2012)
| (in thousands)
| As Previously Reported
Balances at September 30, 2012 | 51,226 |  |  | $ | 512 |  |  | $ | 268,626 |  |  | $ | 565,803 |  |  | $ | (113 | ) |  | $ | 834,828 |
Stock compensation | — |  |  | — |  |  | 925 |  |  | — |  |  | — |  |  | 925 |
Issuance of common stock due to acquisitions | 1,965 |  |  | 20 |  |  | 38,685 |  |  | — |  |  | — |  |  | 38,705 |
Issuance of common stock due to purchase of subsidiary shares from noncontrolling interest | 592 |  |  | 6 |  |  | 10,398 |  |  | — |  |  | — |  |  | 10,404 |
Purchase of subsidiary shares from noncontrolling interest | — |  |  | — |  |  | (2,423 | ) |  | — |  |  | 85 |  |  | (2,338 | )
Release of restricted stock | 384 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Tax benefit of stock compensation | — |  |  | — |  |  | 346 |  |  | — |  |  | — |  |  | 346 |
Taxes paid related to net share settlement of equity awards | — |  |  | — |  |  | (3,431 | ) |  | — |  |  | — |  |  | (3,431 | )
Unrealized loss on available-for-sale securities | — |  |  | — |  |  | — |  |  | — |  |  | (28 | ) |  | (28 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | 2,039 |  |  | 2,039 |
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | 30,717 |  |  | — |  |  | 30,717 |
Balances at December 31, 2012 | 54,167 |  |  | $ | 538 |  |  | $ | 313,126 |  |  | $ | 596,520 |  |  | $ | 1,983 |  |  | $ | 912,167 |
| Restatement Adjustments
Balances at September 30, 2012 | — |  |  | $ | — |  |  | $ | (54 | ) |  | $ | (6,863 | ) |  | $ | (120 | ) |  | $ | (7,037 | )
Stock compensation | — |  |  | — |  |  | (126 | ) |  | — |  |  | — |  |  | (126 | )
Issuance of common stock due to acquisitions | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | 49 |  |  | 49 |
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | (3,644 | ) |  | — |  |  | (3,644 | )
Balances at December 31, 2012 | — |  |  | $ | — |  |  | $ | (180 | ) |  | $ | (10,507 | ) |  | $ | (71 | ) |  | $ | (10,758 | )
| As Restated
Balances at September 30, 2012 | 51,226 |  |  | $ | 512 |  |  | $ | 268,572 |  |  | $ | 558,940 |  |  | $ | (233 | ) |  | $ | 827,791 |
Stock compensation | — |  |  | — |  |  | 799 |  |  | — |  |  | — |  |  | 799 |
Issuance of common stock due to acquisitions | 1,965 |  |  | 20 |  |  | 38,685 |  |  | — |  |  | — |  |  | 38,705 |
Issuance of common stock due to purchase of subsidiary shares from noncontrolling interest | 592 |  |  | 6 |  |  | 10,398 |  |  | — |  |  | — |  |  | 10,404 |
Purchase of subsidiary shares from noncontrolling interest | — |  |  | — |  |  | (2,423 | ) |  | — |  |  | 85 |  |  | (2,338 | )
Release of restricted stock | 384 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Tax benefit of stock compensation | — |  |  | — |  |  | 346 |  |  | — |  |  | — |  |  | 346 |
Taxes paid related to net share settlement of equity awards | — |  |  | — |  |  | (3,431 | ) |  | — |  |  | — |  |  | (3,431 | )
Unrealized loss on available-for-sale securities | — |  |  | — |  |  | — |  |  | — |  |  | (28 | ) |  | (28 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | 2,088 |  |  | 2,088 |
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | 27,073 |  |  | — |  |  | 27,073 |
Balances at December 31, 2012 | 54,167 |  |  | $ | 538 |  |  | $ | 312,946 |  |  | $ | 586,013 |  |  | $ | 1,912 |  |  | $ | 901,409 |
Year Ended September 30, 2012 (Fiscal 2012) The following tables summarize the impact of the restatement adjustments for each quarterly period within fiscal 2012.
| Fiscal 2012
| First Quarter |  | Second Quarter |  | Third Quarter |  | Fourth Quarter |  | Fiscal Year
| December 31, 2011 |  | March 31, 2012 |  | June 30, 2012 |  | September 30, 2012 |  | September 30, 2012
| (in thousands)
Income from continuing operations before income taxes (as previously reported) | $ | 61,054 |  |  | $ | 58,106 |  |  | $ | 43,938 |  |  | $ | 63,987 |  |  | $ | 227,085 |
Asset sale impact | — |  |  | — |  |  | — |  |  | — |  |  | — |
Portfolio review impact | — |  |  | (3,258 | ) |  | (1,993 | ) |  | (3,435 | ) |  | (8,686 | )
Other impacts | — |  |  | — |  |  | — |  |  | (4,280 | ) |  | (4,280 | )
Net impact of adjustments | — |  |  | (3,258 | ) |  | (1,993 | ) |  | (7,715 | ) |  | (12,966 | )
Income from continuing operations before income taxes (as restated) | $ | 61,054 |  |  | $ | 54,848 |  |  | $ | 41,945 |  |  | $ | 56,272 |  |  | $ | 214,119 |
| Fourth Quarter of Fiscal 2012 |  | Third Quarter of Fiscal 2012
| As Previously Reported |  | Restatement Adjustments |  | As Restated |  | As Previously Reported |  | Restatement Adjustments |  | As Restated
| (in thousands, except per share amounts) |  | (in thousands, except per share amounts)
Results of Operations: |  |  |  |  |  |  |  |  |  |  |
Total revenues | $ | 247,959 |  |  | $ | 385 |  |  | $ | 248,344 |  |  | $ | 220,670 |  |  | $ | (2,068 | ) |  | $ | 218,602 |
Net revenues | 157,194 |  |  | (6,386 | ) |  | 150,808 |  |  | 140,282 |  |  | (1,977 | ) |  | 138,305 |
Operating expenses | 103,970 |  |  | (33 | ) |  | 103,937 |  |  | 99,160 |  |  | 16 |  |  | 99,176 |
Non-operating income | (10,763 | ) |  | 1,362 |  |  | (9,401 | ) |  | (2,816 | ) |  | — |  |  | (2,816 | )
Income from continuing operations before income taxes | 63,987 |  |  | (7,715 | ) |  | 56,272 |  |  | 43,938 |  |  | (1,993 | ) |  | 41,945 |
Income tax expense | 18,501 |  |  | (2,311 | ) |  | 16,190 |  |  | 12,717 |  |  | 960 |  |  | 13,677 |
Income from continuing operations, net of tax | $ | 45,486 |  |  | $ | (5,405 | ) |  | $ | 40,081 |  |  | $ | 31,221 |  |  | $ | (2,953 | ) |  | $ | 28,268 |
Net income attributable to EZCORP, Inc. | $ | 38,572 |  |  | $ | (4,347 | ) |  | $ | 34,225 |  |  | $ | 28,523 |  |  | $ | (2,694 | ) |  | $ | 25,829 |
Diluted earnings per share attributable to EZCORP, Inc. | $ | 0.75 |  |  | $ | (0.08 | ) |  | $ | 0.67 |  |  | $ | 0.56 |  |  | $ | (0.06 | ) |  | $ | 0.50 |
Cash Flow Data (year-to-date): |  |  |  |  |  |  |  |  |  |  |
Net cash provided by operating activities | $ | 140,917 |  |  | $ | (1,802 | ) |  | $ | 139,115 |  |  | $ | 109,692 |  |  | $ | (5,115 | ) |  | $ | 104,577 |
Net cash used in investing activities | (216,765 | ) |  | 2,002 |  |  | (214,763 | ) |  | (167,590 | ) |  | 4,926 |  |  | (162,664 | )
Net cash provided by financing activities | 99,266 |  |  | (8,653 | ) |  | 90,613 |  |  | 84,404 |  |  | (9,593 | ) |  | 74,811 |
Net increase in cash and cash equivalents | 24,508 |  |  | (8,653 | ) |  | 15,855 |  |  | 26,805 |  |  | (9,593 | ) |  | 17,212 |
| Second Quarter of Fiscal 2012
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (in thousands, except per share amounts)
Results of Operations: |  |  |  |  |
Total revenues | $ | 251,338 |  |  | $ | (2,102 | ) |  | $ | 249,236 |
Net revenues | 158,512 |  |  | (3,224 | ) |  | 155,288 |
Operating expenses | 101,935 |  |  | 34 |  |  | 101,969 |
Non-operating income | (1,529 | ) |  | — |  |  | (1,529 | )
Income from continuing operations before income taxes | 58,106 |  |  | (3,258 | ) |  | 54,848 |
Income tax expense | 19,862 |  |  | (2,149 | ) |  | 17,713 |
Income from continuing operations, net of tax | $ | 38,244 |  |  | $ | (1,109 | ) |  | $ | 37,135 |
Net income attributable to EZCORP, Inc. | $ | 37,261 |  |  | $ | 178 |  |  | $ | 37,439 |
Diluted income per share attributable to EZCORP, Inc. | $ | 0.73 |  |  | $ | — |  |  | $ | 0.73 |
Cash Flow Data (year-to-date): |  |  |  |  |
Net cash provided by operating activities | $ | 95,094 |  |  | $ | (472 | ) |  | $ | 94,622 |
Net cash used in investing activities | (74,446 | ) |  | 456 |  |  | (73,990 | )
Net cash (used in) provided by financing activities | 2,483 |  |  | (11,006 | ) |  | (8,523 | )
Net increase in cash and cash equivalents | 22,705 |  |  | (11,006 | ) |  | 11,699 |
The effects of the restatement on our unaudited condensed consolidated financial statements as of and for the quarter ended June 30, 2012 (the third quarter of fiscal 2012) are set forth below.
EZCORP, Inc. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
| Three Months Ended June 30, 2012
| As Previously Reported |  | Effect of Restatement |  | As Restated
| (Unaudited)
| (in thousands, except per share amounts)
Revenues: |  |  |  |  |
Merchandise sales | $ | 75,286 |  |  | $ | — |  |  | $ | 75,286 |
Jewelry scrapping sales | 40,530 |  |  | — |  |  | 40,530 |
Pawn service charges | 55,656 |  |  | — |  |  | 55,656 |
Consumer loan fees and interest | 47,877 |  |  | (2,068 | ) |  | 45,809 |
Other revenues | 1,321 |  |  | — |  |  | 1,321 |
Total revenues | 220,670 |  |  | (2,068 | ) |  | 218,602 |
Merchandise cost of goods sold | 43,842 |  |  | — |  |  | 43,842 |
Jewelry scrapping cost of goods sold | 27,115 |  |  | — |  |  | 27,115 |
Consumer loan bad debt | 9,431 |  |  | (91 | ) |  | 9,340 |
Net revenues | 140,282 |  |  | (1,977 | ) |  | 138,305 |
Operating expenses: |  |  |  |  |
Operations | 82,252 |  |  | 16 |  |  | 82,268 |
Administrative | 9,857 |  |  | — |  |  | 9,857 |
Depreciation | 5,755 |  |  | — |  |  | 5,755 |
Amortization | 1,206 |  |  | — |  |  | 1,206 |
Loss on sale or disposal of assets | 90 |  |  | — |  |  | 90 |
Total operating expenses | 99,160 |  |  | 16 |  |  | 99,176 |
Operating income | 41,122 |  |  | (1,993 | ) |  | 39,129 |
Interest expense, net | 898 |  | — |  | — |  | — |  | 898 |
Equity in net income of unconsolidated affiliates | (4,197 | ) |  | — |  |  | (4,197 | )
Other loss | 483 |  |  | — |  |  | 483 |
Income from continuing operations before income taxes | 43,938 |  |  | (1,993 | ) |  | 41,945 |
Income tax expense | 12,717 |  |  | 960 |  |  | 13,677 |
Income from continuing operations, net of tax | 31,221 |  |  | (2,953 | ) |  | 28,268 |
Loss from discontinued operations, net of tax | (1,510 | ) |  | — |  |  | (1,510 | )
Net income | 29,711 |  |  | (2,953 | ) |  | 26,758 |
Net income from continuing operations attributable to redeemable noncontrolling interest | 1,169 |  |  | (259 | ) |  | 910 |
Net income from discontinued operations attributable to redeemable noncontrolling interest | 19 |  |  | — |  |  | 19 |
Net income attributable to EZCORP, Inc. | $ | 28,523 |  |  | $ | (2,694 | ) |  | $ | 25,829 |
Basic earnings (loss) per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 0.59 |  |  | $ | (0.06 | ) |  | $ | 0.53 |
Discontinued operations | (0.03 | ) |  | — |  |  | (0.03 | )
Basic earnings per share | $ | 0.56 |  |  | $ | (0.06 | ) |  | $ | 0.50 |
Diluted earnings (loss) per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 0.59 |  |  | $ | (0.06 | ) |  | $ | 0.53 |
Discontinued operations | (0.03 | ) |  | — |  |  | (0.03 | )
Diluted earnings per share | $ | 0.56 |  |  | $ | (0.06 | ) |  | $ | 0.50 |
Net income from continuing operations attributable to EZCORP, Inc. | $ | 30,052 |  |  | $ | (2,694 | ) |  | $ | 27,358 |
Loss from discontinued operations attributable to EZCORP, Inc. | (1,529 | ) |  | — |  |  | (1,529 | )
Net income attributable to EZCORP, Inc. | $ | 28,523 |  |  | $ | (2,694 | ) |  | $ | 25,829 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| Three Months Ended June 30, 2012
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands)
Net income | $ | 29,711 |  |  | $ | (2,953 | ) |  | $ | 26,758 |
Other comprehensive income: |  |  |  |  |
Foreign currency translation loss | (8,513 | ) |  | 191 |  |  | (8,322 | )
Loss on effective portion of cash flow hedge: |  |  |  |  |
Amounts reclassified from accumulated other comprehensive income | (108 | ) |  | — |  |  | (108 | )
Income tax expense | (948 | ) |  | — |  |  | (948 | )
Other comprehensive loss, net of tax | (9,569 | ) |  | 191 |  |  | (9,378 | )
Comprehensive income | $ | 20,142 |  |  | $ | (2,762 | ) |  | $ | 17,380 |
Attributable to redeemable noncontrolling interest: |  |  |  |  |
Net income | 1,188 |  |  | (259 | ) |  | 929 |
Foreign currency translation loss | (2,789 | ) |  | 76 |  |  | (2,713 | )
Comprehensive loss attributable to redeemable noncontrolling interest | (1,601 | ) |  | (183 | ) |  | (1,784 | )
Comprehensive income attributable to EZCORP, Inc. | $ | 21,743 |  |  | $ | (2,579 | ) |  | $ | 19,164 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF CASH FLOWS
| Nine Months Ended June 30, 2012
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands)
Operating activities: |  |  |  |  |
Net income | $ | 106,436 |  |  | $ | (4,062 | ) |  | $ | 102,374 |
Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |  |  |
Depreciation and amortization | 19,891 |  |  | — |  |  | 19,891 |
Accretion of debt premium and consumer loan discount, net | — |  |  | (3,324 | ) |  | (3,324 | )
Consumer loan loss provision | 12,136 |  |  | 1,906 |  |  | 14,042 |
Deferred income taxes | (644 | ) |  | — |  |  | (644 | )
Amortization of prepaid commissions | — |  |  | 2,886 |  |  | 2,886 |
Other | — |  |  | 3,324 |  |  | 3,324 |
Loss on sale or disposal of assets | 138 |  |  | — |  |  | 138 |
Stock compensation expense | 5,191 |  |  | — |  |  | 5,191 |
Income from investments in unconsolidated affiliates | (12,935 | ) |  | — |  |  | (12,935 | )
Changes in operating assets and liabilities, net of business acquisitions: |  |  |  |  |
Service charges and fees receivable, net | 1,150 |  |  | (1,818 | ) |  | (668 | )
Inventory, net | (874 | ) |  | — |  |  | (874 | )
Receivables, prepaid expenses, other current assets and other assets, net | (4,845 | ) |  | (2,838 | ) |  | (7,683 | )
Accounts payable and other accrued expenses | (12,100 | ) |  | — |  |  | (12,100 | )
Customer layaway deposits | (182 | ) |  | — |  |  | (182 | )
Deferred gains and other long-term liabilities | 722 |  |  | — |  |  | 722 |
Tax benefit from stock compensation | (1,582 | ) |  | — |  |  | (1,582 | )
Income taxes receivable/payable | (8,370 | ) |  | (1,189 | ) |  | (9,559 | )
Dividends from unconsolidated affiliates | 5,560 |  |  | — |  |  | 5,560 |
Net cash provided by operating activities | 109,692 |  |  | (5,115 | ) |  | 104,577 |
Investing activities: |  |  |  |  |
Loans made | (571,683 | ) |  | — |  |  | (571,683 | )
Loans repaid | 382,854 |  |  | 4,926 |  |  | 387,780 |
Recovery of pawn loan principal through sale of forfeited collateral | 179,681 |  |  | — |  |  | 179,681 |
Additions to property and equipment | (33,193 | ) |  | — |  |  | (33,193 | )
Acquisitions, net of cash acquired | (125,249 | ) |  | — |  |  | (125,249 | )
Net cash used in investing activities | (167,590 | ) |  | 4,926 |  |  | (162,664 | )
Financing activities: |  |  |  |  |
Proceeds from exercise of stock options | 647 |  |  | — |  |  | 647 |
Tax provision from stock compensation | 1,582 |  |  | — |  |  | 1,582 |
Taxes paid related to net share settlement of equity awards | (1,153 | ) |  | — |  |  | (1,153 | )
Change in restricted cash | (1,085 | ) |  | (9,593 | ) |  | (10,678 | )
Proceeds from revolving line of credit | 594,809 |  |  | — |  |  | 594,809 |
Payments on revolving line of credit | (502,575 | ) |  | — |  |  | (502,575 | )
Proceeds from borrowings | 343 |  |  | — |  |  | 343 |
Payments on borrowings and capital lease obligations | (8,164 | ) |  | — |  |  | (8,164 | )
Net cash provided by financing activities | 84,404 |  |  | (9,593 | ) |  | 74,811 |
Effect of exchange rate changes on cash and cash equivalents | 299 |  |  | 189 |  |  | 488 |
Net increase in cash and cash equivalents | 26,805 |  |  | (9,593 | ) |  | 17,212 |
Cash and cash equivalents at beginning of period | 23,969 |  |  | — |  |  | 23,969 |
Cash and cash equivalents at end of period | $ | 50,774 |  |  | $ | (9,593 | ) |  | $ | 41,181 |
Non-cash investing and financing activities: |  |  |  |  |
Pawn loans forfeited and transferred to inventory | $ | 177,490 |  |  | $ | — |  |  | $ | 177,490 |
Issuance of common stock due to acquisitions | 17,984 |  |  | — |  |  | 17,984 |
Deferred consideration | 916 |  |  | — |  |  | 916 |
Contingent consideration | 23,000 |  |  | — |  |  | 23,000 |
Change in accrued additions to property and equipment | 177 |  |  | — |  |  | 177 |
EZCORP, Inc. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
| Common Stock |  | Additional Paid-in Capital |  |  |  | Accumulated Other Comprehensive (Loss) Income |  | EZCORP, Inc. Stockholders' Equity
| Shares |  | Par Value |  |  | Retained Earnings |  |
| (Unaudited, except balances as of September 30, 2011)
| (in thousands)
| As Previously Reported
Balances at September 30, 2011 | 50,199 |  |  | $ | 501 |  |  | $ | 242,398 |  |  | $ | 422,095 |  |  | $ | (746 | ) |  | $ | 664,248 |
Stock compensation | — |  |  | — |  |  | 5,191 |  |  | — |  |  | — |  |  | 5,191 |
Stock options exercised | 201 |  |  | 2 |  |  | 645 |  |  | — |  |  | — |  |  | 647 |
Issuance of common stock due to acquisitions | 635 |  |  | 7 |  |  | 17,992 |  |  | — |  |  | — |  |  | 17,999 |
Release of restricted stock | 159 |  |  | 2 |  |  | — |  |  | — |  |  | — |  |  | 2 |
Tax benefit of stock compensation | — |  |  | — |  |  | 1,580 |  |  | — |  |  | — |  |  | 1,580 |
Taxes paid related to net share settlement of equity awards | — |  |  | — |  |  | (1,153 | ) |  | — |  |  | — |  |  | (1,153 | )
Unrealized loss on available-for-sale securities | — |  |  | — |  |  | — |  |  | — |  |  | (550 | ) |  | (550 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | (7,327 | ) |  | (7,327 | )
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | 105,136 |  |  | — |  |  | 105,136 |
Balances at June 30, 2012 | 51,194 |  |  | $ | 512 |  |  | $ | 266,653 |  |  | $ | 527,231 |  |  | $ | (8,623 | ) |  | $ | 785,773 |
| Restatement Adjustments
Balances at September 30, 2011 | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | 124 |  |  | 124 |
Net income (loss) attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | (2,516 | ) |  | — |  |  | (2,516 | )
Balances at June 30, 2012 | — |  |  | $ | — |  |  | $ | — |  |  | $ | (2,516 | ) |  | $ | 124 |  |  | $ | (2,392 | )
| As Restated
Balances at September 30, 2011 | 50,199 |  |  | $ | 501 |  |  | $ | 242,398 |  |  | $ | 422,095 |  |  | $ | (746 | ) |  | $ | 664,248 |
Stock compensation | — |  |  | — |  |  | 5,191 |  |  | — |  |  | — |  |  | 5,191 |
Stock options exercised | 201 |  |  | 2 |  |  | 645 |  |  | — |  |  | — |  |  | 647 |
Issuance of common stock due to acquisitions | 635 |  |  | 7 |  |  | 17,992 |  |  | — |  |  | — |  |  | 17,999 |
Release of restricted stock | 159 |  |  | 2 |  |  | — |  |  | — |  |  | — |  |  | 2 |
Tax benefit of stock compensation | — |  |  | — |  |  | 1,580 |  |  | — |  |  | — |  |  | 1,580 |
Taxes paid related to net share settlement of equity awards | — |  |  | — |  |  | (1,153 | ) |  | — |  |  | — |  |  | (1,153 | )
Unrealized loss on available-for-sale securities | — |  |  | — |  |  | — |  |  | — |  |  | (550 | ) |  | (550 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | (7,203 | ) |  | (7,203 | )
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | 102,620 |  |  | — |  |  | 102,620 |
Balances at June 30, 2012 | 51,194 |  |  | $ | 512 |  |  | $ | 266,653 |  |  | $ | 524,715 |  |  | $ | (8,499 | ) |  | $ | 783,381 |
The effects of the restatement on our unaudited condensed consolidated financial statements as of and for the quarter ended March 31, 2012 (the second quarter of fiscal 2012) are set forth below.
EZCORP, Inc. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
| Three Months Ended March 31, 2012
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands, except per share amounts)
Revenues: |  |  |  |  |
Merchandise sales | $ | 94,495 |  |  | $ | — |  |  | $ | 94,495 |
Jewelry scrapping sales | 51,672 |  |  | — |  |  | 51,672 |
Pawn service charges | 55,925 |  |  | — |  |  | 55,925 |
Consumer loan fees and interest | 48,427 |  |  | (2,102 | ) |  | 46,325 |
Other revenues | 819 |  |  | — |  |  | 819 |
Total revenues | 251,338 |  |  | (2,102 | ) |  | 249,236 |
Merchandise cost of goods sold | 55,594 |  |  | — |  |  | 55,594 |
Jewelry scrapping cost of goods sold | 31,233 |  |  | — |  |  | 31,233 |
Consumer loan bad debt | 5,999 |  |  | 1,122 |  |  | 7,121 |
Net revenues | 158,512 |  |  | (3,224 | ) |  | 155,288 |
Operating expenses: |  |  |  |  |
Operations | 83,011 |  |  | 34 |  |  | 83,045 |
Administrative | 11,998 |  |  | — |  |  | 11,998 |
Depreciation | 5,220 |  |  | — |  |  | 5,220 |
Amortization | 1,692 |  |  | — |  |  | 1,692 |
Loss gain on sale or disposal of assets | 14 |  |  | — |  |  | 14 |
Total operating expenses | 101,935 |  |  | 34 |  |  | 101,969 |
Operating income | 56,577 |  |  | (3,258 | ) |  | 53,319 |
Interest expense, net | 2,246 |  | — |  | — |  |  | 2,246 |
Equity in net income of unconsolidated affiliates | (4,577 | ) |  | — |  |  | (4,577 | )
Other loss | 802 |  |  | — |  |  | 802 |
Income from continuing operations before income taxes | 58,106 |  |  | (3,258 | ) |  | 54,848 |
Income tax expense | 19,862 |  |  | (2,149 | ) |  | 17,713 |
Income from continuing operations, net of tax | 38,244 |  |  | (1,109 | ) |  | 37,135 |
Loss from discontinued operations, net of tax | (871 | ) |  | — |  |  | (871 | )
Net income | 37,373 |  |  | (1,109 | ) |  | 36,264 |
Net (loss) income from continuing operations attributable to redeemable noncontrolling interest | 112 |  |  | (1,287 | ) |  | (1,175 | )
Net income attributable to EZCORP, Inc. | $ | 37,261 |  |  | $ | 178 |  |  | $ | 37,439 |
Basic earnings (loss) per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 0.75 |  |  | $ | — |  |  | $ | 0.75 |
Discontinued operations | (0.02 | ) |  | — |  |  | (0.02 | )
Basic earnings per share | $ | 0.73 |  |  | $ | — |  |  | $ | 0.73 |
Diluted earnings (loss) per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 0.75 |  |  | $ | — |  |  | $ | 0.75 |
Discontinued operations | (0.02 | ) |  | — |  |  | (0.02 | )
Diluted earnings per share | $ | 0.73 |  |  | $ | — |  |  | $ | 0.73 |
Net income from continuing operations attributable to EZCORP, Inc. | $ | 38,132 |  |  | $ | 178 |  |  | $ | 38,310 |
Loss from discontinued operations attributable to EZCORP, Inc. | (871 | ) |  | — |  |  | (871 | )
Net income attributable to EZCORP, Inc. | $ | 37,261 |  |  | $ | 178 |  |  | $ | 37,439 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| Three Months Ended March 31, 2012
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands)
Net income | $ | 37,373 |  |  | $ | (1,109 | ) |  | $ | 36,264 |
Other comprehensive income: |  |  |  |  |
Foreign currency translation gain | 6,394 |  |  | 16 |  |  | 6,410 |
Loss on effective portion of cash flow hedge: |  |  |  |  |
Amounts reclassified from accumulated other comprehensive income | (179 | ) |  | — |  |  | (179 | )
Income tax expense | (75 | ) |  | — |  |  | (75 | )
Other comprehensive income, net of tax | 6,140 |  |  | 16 |  |  | 6,156 |
Comprehensive income | $ | 43,513 |  |  | $ | (1,093 | ) |  | $ | 42,420 |
Attributable to redeemable noncontrolling interest: |  |  |  |  |
Net (loss) income | 112 |  |  | (1,287 | ) |  | (1,175 | )
Foreign currency translation gain | 496 |  |  | 7 |  |  | 503 |
Comprehensive (loss) income attributable to redeemable noncontrolling interest | 608 |  |  | (1,280 | ) |  | (672 | )
Comprehensive income attributable to EZCORP, Inc. | $ | 42,905 |  |  | $ | 187 |  |  | $ | 43,092 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF CASH FLOWS
| Six Months Ended March 31, 2012
| As Previously Reported |  | Restatement Adjustments |  | As Restated
| (Unaudited)
| (in thousands)
Operating activities: |  |  |  |  |
Net income | $ | 76,725 |  |  | $ | (1,109 | ) |  | $ | 75,616 |
Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |  |  |
Depreciation and amortization | 12,514 |  |  | — |  |  | 12,514 |
Accretion of debt premium and consumer loan discount, net | — |  |  | (1,612 | ) |  | (1,612 | )
Consumer loan loss provision | 6,761 |  |  | 1,267 |  |  | 8,028 |
Deferred income taxes | 465 |  |  | — |  |  | 465 |
Amortization of prepaid commissions | — |  |  | 1,399 |  |  | 1,399 |
Other | — |  |  | 1,612 |  |  | 1,612 |
Gain on sale or disposal of assets | (174 | ) |  | — |  |  | (174 | )
Stock compensation expense | 3,238 |  |  | — |  |  | 3,238 |
Income from investments in unconsolidated affiliates | (8,738 | ) |  | — |  |  | (8,738 | )
Changes in operating assets and liabilities, net of business acquisitions: |  |  |  |  |
Service charges and fees receivable, net | 6,551 |  |  | 1,486 |  |  | 8,037 |
Inventory, net | 1,446 |  |  | — |  |  | 1,446 |
Receivables, prepaid expenses, other current assets and other assets, net | 2,644 |  |  | (1,366 | ) |  | 1,278 |
Accounts payable and other accrued expenses | (18,718 | ) |  | — |  |  | (18,718 | )
Customer layaway deposits | 206 |  |  | — |  |  | 206 |
Deferred gains and other long-term liabilities | 10,856 |  |  | — |  |  | 10,856 |
Tax benefit from stock compensation | (1,521 | ) |  | — |  |  | (1,521 | )
Income taxes receivable / payable | (1,949 | ) |  | (2,149 | ) |  | (4,098 | )
Dividends from unconsolidated affiliates | 4,788 |  |  | — |  |  | 4,788 |
Net cash provided by operating activities | 95,094 |  |  | (472 | ) |  | 94,622 |
Investing activities: |  |  |  |  |
Loans made | (360,354 | ) |  | — |  |  | (360,354 | )
Loans repaid | 260,289 |  |  | 456 |  |  | 260,745 |
Recovery of pawn loan principal through sale of forfeited collateral | 129,518 |  |  | — |  |  | 129,518 |
Additions to property and equipment | (20,842 | ) |  | — |  |  | (20,842 | )
Acquisitions, net of cash acquired | (83,057 | ) |  | — |  |  | (83,057 | )
Net cash used in investing activities | (74,446 | ) |  | 456 |  |  | (73,990 | )
Financing activities: |  |  |  |  |
Proceeds from exercise of stock options | 634 |  |  | — |  |  | 634 |
Tax provision from stock compensation | 1,521 |  |  | — |  |  | 1,521 |
Taxes paid related to net share settlement of equity awards | (1,071 | ) |  | — |  |  | (1,071 | )
Change in restricted cash | (935 | ) |  | (11,006 | ) |  | (11,941 | )
Proceeds from revolving line of credit | 321,617 |  |  | — |  |  | 321,617 |
Payments on revolving line of credit | (318,227 | ) |  | — |  |  | (318,227 | )
Payments on borrowings and capital lease obligations | (1,056 | ) |  | — |  |  | (1,056 | )
Net cash (used in) provided by financing activities | 2,483 |  |  | (11,006 | ) |  | (8,523 | )
Effect of exchange rate changes on cash and cash equivalents | (426 | ) |  | 16 |  |  | (410 | )
Net increase in cash and cash equivalents | 22,705 |  |  | (11,006 | ) |  | 11,699 |
Cash and cash equivalents at beginning of period | 23,969 |  |  | — |  |  | 23,969 |
Cash and cash equivalents at end of period | $ | 46,674 |  |  | $ | (11,006 | ) |  | $ | 35,668 |
Non-cash investing and financing activities: |  |  |  |  |
Pawn loans forfeited and transferred to inventory | $ | 123,587 |  |  | $ | — |  |  | $ | 123,587 |
Issuance of common stock due to acquisitions | 11,615 |  |  | — |  |  | 11,615 |
Deferred consideration | 5,785 |  |  | — |  |  | 5,785 |
Contingent consideration | 23,000 |  |  | — |  |  | 23,000 |
Change in accrued additions to property and equipment | 1,404 |  |  | — |  |  | 1,404 |
EZCORP, Inc. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
| Common Stock |  | Additional Paid-in Capital |  |  |  | Accumulated Other Comprehensive (Loss) Income |  | EZCORP, Inc. Stockholders' Equity
| Shares |  | Par Value |  |  | Retained Earnings |  |
| (Unaudited, except balances as of September 30, 2011)
| (in thousands)
| As Previously Reported
Balances at September 30, 2011 | 50,199 |  |  | $ | 501 |  |  | $ | 242,398 |  |  | $ | 422,095 |  |  | $ | (746 | ) |  | $ | 664,248 |
Stock compensation | — |  |  | — |  |  | 3,238 |  |  | — |  |  | — |  |  | 3,238 |
Stock options exercised | 196 |  |  | 2 |  |  | 632 |  |  | — |  |  | — |  |  | 634 |
Issuance of common stock due to acquisitions | 427 |  |  | 5 |  |  | 11,625 |  |  | — |  |  | — |  |  | 11,630 |
Release of restricted stock | 150 |  |  | 2 |  |  | — |  |  | — |  |  | — |  |  | 2 |
Tax benefit of stock compensation | — |  |  | — |  |  | 1,521 |  |  | — |  |  | — |  |  | 1,521 |
Taxes paid related to net share settlement of equity awards | — |  |  | — |  |  | (1,071 | ) |  | — |  |  | — |  |  | (1,071 | )
Unrealized loss on available-for-sale securities | — |  |  | — |  |  | — |  |  | — |  |  | (480 | ) |  | (480 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | (617 | ) |  | (617 | )
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | 76,613 |  |  | — |  |  | 76,613 |
Balances at March 31, 2012 | 50,972 |  |  | $ | 510 |  |  | $ | 258,343 |  |  | $ | 498,708 |  |  | $ | (1,843 | ) |  | $ | 755,718 |
| Restatement Adjustments
Balances at September 30, 2011 | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | 9 |  |  | 9 |
Net income (loss) attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | 178 |  |  | — |  |  | 178 |
Balances at March 31, 2012 | — |  |  | $ | — |  |  | $ | — |  |  | $ | 178 |  |  | $ | 9 |  |  | $ | 187 |
| As Restated
Balances at September 30, 2011 | 50,199 |  |  | $ | 501 |  |  | $ | 242,398 |  |  | $ | 422,095 |  |  | $ | (746 | ) |  | $ | 664,248 |
Stock compensation | — |  |  | — |  |  | 3,238 |  |  | — |  |  | — |  |  | 3,238 |
Stock options exercised | 196 |  |  | 2 |  |  | 632 |  |  | — |  |  | — |  |  | 634 |
Issuance of common stock due to acquisitions | 427 |  |  | 5 |  |  | 11,625 |  |  | — |  |  | — |  |  | 11,630 |
Release of restricted stock | 150 |  |  | 2 |  |  | — |  |  | — |  |  | — |  |  | 2 |
Tax benefit of stock compensation | — |  |  | — |  |  | 1,521 |  |  | — |  |  | — |  |  | 1,521 |
Taxes paid related to net share settlement of equity awards | — |  |  | — |  |  | (1,071 | ) |  | — |  |  | — |  |  | (1,071 | )
Unrealized loss on available-for-sale securities | — |  |  | — |  |  | — |  |  | — |  |  | (480 | ) |  | (480 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | (608 | ) |  | (608 | )
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | 76,791 |  |  | — |  |  | 76,791 |
Balances at March 31, 2012 | 50,972 |  |  | $ | 510 |  |  | $ | 258,343 |  |  | $ | 498,886 |  |  | $ | (1,834 | ) |  | $ | 755,905 |

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