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Restatement of Consolidated Financial Statements | 12 Months Ended
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Sep. 30, 2014 | Sep. 30, 2012
Accounting Changes and Error Corrections [Abstract] |  |
Restatement of Consolidated Financial Statements | NOTE 2: RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS Correction of Accounting Errors Subsequent to the filing of our Annual Report on Form 10-K for the fiscal year ended September 30, 2014, management identified the following accounting errors relating to the Company’s Grupo Finmart loan portfolio:
• | During fiscal 2014, Grupo Finmart completed five structured asset sales pursuant to which a portion of Grupo Finmart’s consumer loan portfolio was sold to special purpose trusts for the benefit of third parties. These transactions were previously accounted for as sales. Management has now concluded that the special purpose trusts should be consolidated variable interest entities and the transactions should be accounted for as transfers of financial assets to those consolidated variable interest entities. See Note 25.
• | Management has also concluded that the Company has incorrectly accounted for interest revenue and bad debt expense on loans with respect to which Grupo Finmart was not currently receiving payments (“non-performing” loans). Specifically:
◦ | Management determined that the non-performing loans included out-of-payroll loans that had not been correctly classified and recognized as such, causing an understatement of bad debt expense and an overstatement of interest revenue;
◦ | Management determined it was appropriate to (1) accrue and recognize interest income over the period that payments are expected to be received rather than over the stated term of the loan and (2) apply a 100% reserve policy on in-payroll loans that have been in non-performing status for 180 consecutive days; and
◦ | Management determined it was appropriate to expense certain brokerage and other commission costs as incurred rather than amortize those costs over future periods.
Other Restatement Adjustments In addition to correcting the accounting errors discussed above, our restated financial statements for the affected periods include adjustments for certain other accounting errors. When the financial statements were originally issued, we assessed the impact of these errors and concluded that they were not material to the financial statements for the affected periods. However, in conjunction with the restatement of our financial statements to correct the errors described above, we have determined that it is appropriate to make adjustments for all such previously unrecorded errors. These adjustments are primarily to correct for immaterial timing differences related to revenue recognition, impairment charges, inventory reserve estimates and other items. The other adjustments for fiscal 2013 include a balance sheet adjustment that corrects a $7.2 million error between cash and cash equivalents and restricted cash to correctly classify certain bank accounts restricted for use to service Grupo Finmart’s third party debt obligation s, and an adjustment of $2.7 million to reclassify income tax benefit previously reflected in continuing operations to discontinued operations. Impact of Restatement Adjustments on Audited Annual Financial Statements This section includes summary information regarding the impact of the restatement on our consolidated financial statements for the fiscal years ended September 30, 2014, September 30, 2013 and September 30, 2012, as well as the restated consolidated financial statements as of and for each of such fiscal years. For a description of the impact of the restatement on each of the quarters within those fiscal years (other than the first quarter of fiscal 2012, which was not restated), see Note 19. Summary Impact Tables The following tables summarize the impact of the restatement on our consolidated financial statements for the fiscal years ended September 30, 2014, September 30, 2013 and September 30, 2012:
| Fiscal 2014
|  |  | Restatement Adjustments |  |
| As Previously Reported |  | Asset Sale Impact |  | Portfolio Review Impact |  | Other Impacts* |  | As Restated
| (in thousands, except per share amounts)
Total revenues | $ | 988,532 |  |  | $ | (16,714 | ) |  | $ | (16,932 | ) |  | $ | 2,760 |  |  | $ | 957,646 |
Net revenues | 615,097 |  |  | (18,692 | ) |  | (25,658 | ) |  | (518 | ) |  | 570,229 |
Operating expenses | 518,480 |  |  | 57 |  |  | 2,241 |  |  | (5,305 | ) |  | 515,473 |
Non-operating expenses | 23,917 |  |  | 6,527 |  |  | — |  |  | (882 | ) |  | 29,562 |
Income from continuing operations before income taxes | 72,700 |  |  | (25,276 | ) |  | (27,899 | ) |  | 5,669 |  |  | 25,194 |
Income tax expense | 20,806 |  |  |  |  |  |  | (15,550 | ) |  | 5,256 |
Income from continuing operations, net of tax | $ | 51,894 |  |  |  |  |  |  | $ | (31,956 | ) |  | $ | 19,938 |
Net loss attributable to EZCORP, Inc. | $ | (45,740 | ) |  |  |  |  |  | $ | (18,959 | ) |  | $ | (64,699 | )
Basic loss per share attributable to EZCORP, Inc. | $ | (0.84 | ) |  |  |  |  |  | $ | (0.36 | ) |  | $ | (1.20 | )
Diluted loss per share attributable to EZCORP, Inc. | $ | (0.84 | ) |  |  |  |  |  | $ | (0.35 | ) |  | $ | (1.19 | )
* | Amounts in this column pertaining to Income tax expense, Income from continuing operations, net of tax, Net loss attributable to EZCORP, Inc., and Diluted loss per share attributable to EZCORP, Inc. are aggregate impacts for all restatement adjustments.
| Fiscal 2013
|  |  | Restatement Adjustments |  |
| As Previously Reported |  | Asset Sale Impact |  | Portfolio Review Impact |  | Other Impacts* |  | As Restated
| (in thousands, except per share amounts)
Total revenues | $ | 980,121 |  |  | $ | — |  |  | $ | (7,935 | ) |  | $ | (2,018 | ) |  | $ | 970,168 |
Net revenues | 624,704 |  |  | — |  |  | (19,762 | ) |  | (2,018 | ) |  | 602,924 |
Operating expenses | 474,562 |  |  | — |  |  | 3,231 |  |  | (2,552 | ) |  | 475,241 |
Non-operating expenses | 47,683 |  |  | — |  |  | (1,642 | ) |  | 1,162 |  |  | 47,203 |
Income from continuing operations before income taxes | 102,459 |  |  | — |  |  | (21,351 | ) |  | (628 | ) |  | 80,480 |
Income tax expense | 29,582 |  |  |  |  |  |  | (3,384 | ) |  | 26,198 |
Income from continuing operations, net of tax | $ | 72,877 |  |  |  |  |  |  | $ | (18,595 | ) |  | $ | 54,282 |
Net income attributable to EZCORP, Inc. | $ | 34,077 |  |  |  |  |  |  | $ | (11,769 | ) |  | $ | 22,308 |
Basic earnings per share attributable to EZCORP, Inc. | $ | 0.64 |  |  |  |  |  |  | $ | (0.23 | ) |  | $ | 0.41 |
Diluted earnings per share attributable to EZCORP, Inc. | $ | 0.63 |  |  |  |  |  |  | $ | (0.22 | ) |  | $ | 0.41 |
* | Amounts in this column pertaining to Income tax expense, Income from continuing operations, net of tax, Net income attributable to EZCORP, Inc., and Diluted earnings per share attributable to EZCORP, Inc. are aggregate impacts for all restatement adjustments.
| Fiscal 2012
|  |  | Restatement Adjustments |  |
| As Previously Reported |  | Asset Sale Impact |  | Portfolio Review Impact |  | Other Impacts* |  | As Restated
| (in thousands, except per share amounts)
Total revenues | $ | 964,502 |  |  | $ | — |  |  | $ | (921 | ) |  | $ | (2,864 | ) |  | $ | 960,717 |
Net revenues | 607,511 |  |  | — |  |  | (8,723 | ) |  | (2,864 | ) |  | 595,924 |
Operating expenses | 400,263 |  |  | — |  |  | (37 | ) |  | 54 |  |  | 400,280 |
Non-operating income | (19,837 | ) |  | — |  |  | — |  |  | 1,362 |  |  | (18,475 | )
Income from continuing operations before income taxes | 227,085 |  |  | — |  |  | (8,686 | ) |  | (4,280 | ) |  | 214,119 |
Income tax expense | 71,165 |  |  |  |  |  |  | (3,500 | ) |  | 67,665 |
Income from continuing operations, net of tax | $ | 155,920 |  |  |  |  |  |  | $ | (9,466 | ) |  | $ | 146,454 |
Net income attributable to EZCORP, Inc. | $ | 143,708 |  |  |  |  |  |  | $ | (6,863 | ) |  | $ | 136,845 |
Basic earnings per share attributable to EZCORP, Inc. | $ | 2.82 |  |  |  |  |  |  | $ | (0.13 | ) |  | $ | 2.69 |
Diluted earnings per share attributable to EZCORP, Inc. | $ | 2.81 |  |  |  |  |  |  | $ | (0.14 | ) |  | $ | 2.67 |
* | Amounts in this column pertaining to Income tax expense, Income from continuing operations, net of tax, Net income attributable to EZCORP, Inc., and Diluted earnings per share attributable to EZCORP, Inc. are aggregate impacts for all restatement adjustments.
Restated Annual Financial Statements The effects of the restatement on our consolidated financial statements as of and for the fiscal year ended September 30, 2014 are set forth below.
EZCORP, Inc. CONSOLIDATED BALANCE SHEET (in thousands, except share and per share amounts)
| September 30, 2014
| As Previously Reported |  | Restatement Adjustments |  | As Restated
Assets: |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 56,329 |  |  | $ | (1,004 | ) |  | $ | 55,325 |
Restricted cash | 62,406 |  |  | 1,089 |  |  | 63,495 |
Pawn loans | 162,444 |  |  | — |  |  | 162,444 |
Consumer loans, net | 67,594 |  |  | (3,599 | ) |  | 63,995 |
Pawn service charges receivable, net | 31,044 |  |  | — |  |  | 31,044 |
Consumer loan fees and interest receivable, net | 30,653 |  |  | (18,006 | ) |  | 12,647 |
Inventory, net | 139,419 |  |  | (1,244 | ) |  | 138,175 |
Deferred tax asset | 20,858 |  |  | (3,286 | ) |  | 17,572 |
Prepaid income taxes | 28,655 |  |  | 28,414 |  |  | 57,069 |
Prepaid expenses and other assets | 76,959 |  |  | (43,862 | ) |  | 33,097 |
Total current assets | 676,361 |  |  | (41,498 | ) |  | 634,863 |
Investments in unconsolidated affiliates | 91,098 |  |  | 683 |  |  | 91,781 |
Property and equipment, net | 105,900 |  |  | — |  |  | 105,900 |
Restricted cash, non-current | 4,257 |  |  | 813 |  |  | 5,070 |
Goodwill | 346,577 |  |  | — |  |  | 346,577 |
Intangible assets, net | 64,624 |  |  | 1,462 |  |  | 66,086 |
Non-current consumer loans, net | 40,442 |  |  | 44,562 |  |  | 85,004 |
Deferred tax asset | 13,154 |  |  | (1,012 | ) |  | 12,142 |
Other assets, net | 61,058 |  |  | 2,063 |  |  | 63,121 |
Total assets | $ | 1,403,471 |  |  | $ | 7,073 |  |  | $ | 1,410,544 |
Liabilities and stockholders’ equity: |  |  |  |  |
Current liabilities: |  |  |  |  |
Current maturities of long-term debt | $ | 10,673 |  |  | $ | 25,438 |  |  | $ | 36,111 |
Current capital lease obligations | 418 |  |  | — |  |  | 418 |
Accounts payable and other accrued expenses | 97,213 |  |  | (2,220 | ) |  | 94,993 |
Other current liabilities | 8,595 |  |  | — |  |  | 8,595 |
Customer layaway deposits | 8,097 |  |  | — |  |  | 8,097 |
Total current liabilities | 124,996 |  |  | 23,218 |  |  | 148,214 |
Long-term debt, less current maturities | 356,430 |  |  | 35,624 |  |  | 392,054 |
Deferred gains and other long-term liabilities | 11,359 |  |  | 3,813 |  |  | 15,172 |
Total liabilities | 492,785 |  |  | 62,655 |  |  | 555,440 |
Commitments and contingencies |  |  |  |  |  |
Temporary equity: |  |  |  |  |
Redeemable noncontrolling interest | 35,498 |  |  | (12,698 | ) |  | 22,800 |
Stockholders’ equity: |  |  |  |  |
Class A Non-voting Common Stock, par value $.01 per share; shares authorized: 100 million at September 30, 2014; issued and outstanding: 50,614,767 at September 30, 2014 | 506 |  |  | — |  |  | 506 |
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 | 339,666 |  |  | (7,402 | ) |  | 332,264 |
Retained earnings | 547,177 |  |  | (37,591 | ) |  | 509,586 |
Accumulated other comprehensive loss | (12,191 | ) |  | 2,109 |  |  | (10,082 | )
EZCORP, Inc. stockholders’ equity | 875,188 |  |  | (42,884 | ) |  | 832,304 |
Total liabilities and stockholders’ equity | $ | 1,403,471 |  |  | $ | 7,073 |  |  | $ | 1,410,544 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF OPERATIONS
| Fiscal Year Ended September 30, 2014
| (in thousands, except per share amounts)
| As Previously Reported |  | Restatement Adjustments |  | As Restated
Revenues: |  |  |  |  |
Merchandise sales | $ | 387,331 |  |  | $ | 691 |  |  | $ | 388,022 |
Jewelry scrapping sales | 96,243 |  |  | — |  |  | 96,243 |
Pawn service charges | 248,378 |  |  | — |  |  | 248,378 |
Consumer loan fees and interest | 219,535 |  |  | 606 |  |  | 220,141 |
Other revenues | 37,045 |  |  | (32,183 | ) |  | 4,862 |
Total revenues | 988,532 |  |  | (30,886 | ) |  | 957,646 |
Merchandise cost of goods sold | 247,393 |  |  | 1,244 |  |  | 248,637 |
Jewelry scrapping cost of goods sold | 72,836 |  |  | — |  |  | 72,836 |
Consumer loan bad debt | 53,206 |  |  | 12,738 |  |  | 65,944 |
Net revenues | 615,097 |  |  | (44,868 | ) |  | 570,229 |
Operating expenses: |  |  |  |  |
Operations | 420,350 |  |  | (3,284 | ) |  | 417,066 |
Administrative | 61,819 |  |  | 277 |  |  | 62,096 |
Depreciation | 29,801 |  |  | — |  |  | 29,801 |
Amortization | 5,475 |  |  | — |  |  | 5,475 |
Gain on sale or disposal of assets | (5,629 | ) |  | — |  |  | (5,629 | )
Restructuring | 6,664 |  |  | — |  |  | 6,664 |
Total operating expenses | 518,480 |  |  | (3,007 | ) |  | 515,473 |
Operating income | 96,617 |  |  | (41,861 | ) |  | 54,756 |
Interest expense, net | 22,832 |  |  | 4,258 |  |  | 27,090 |
Equity in net income of unconsolidated affiliates | (5,948 | ) |  | — |  |  | (5,948 | )
Impairment of investments | 7,940 |  |  | — |  |  | 7,940 |
Other expense (income) | (907 | ) |  | 1,387 |  |  | 480 |
Income from continuing operations before income taxes | 72,700 |  |  | (47,506 | ) |  | 25,194 |
Income tax expense | 20,806 |  |  | (15,550 | ) |  | 5,256 |
Income from continuing operations, net of tax | 51,894 |  |  | (31,956 | ) |  | 19,938 |
Loss from discontinued operations, net of tax | (93,426 | ) |  | 1,402 |  |  | (92,024 | )
Net loss | (41,532 | ) |  | (30,554 | ) |  | (72,086 | )
Net (loss) income from continuing operations attributable to redeemable noncontrolling interest | 4,208 |  |  | (11,595 | ) |  | (7,387 | )
Net loss attributable to EZCORP, Inc. | $ | (45,740 | ) |  | $ | (18,959 | ) |  | $ | (64,699 | )
Basic (loss) earnings per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 0.88 |  |  | $ | (0.38 | ) |  | $ | 0.50 |
Discontinued operations | (1.72 | ) |  | 0.02 |  |  | (1.70 | )
Basic loss per share | $ | (0.84 | ) |  | $ | (0.36 | ) |  | $ | (1.20 | )
Diluted (loss) earnings per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 0.88 |  |  | $ | (0.38 | ) |  | $ | 0.50 |
Discontinued operations | (1.72 | ) |  | 0.03 |  |  | (1.69 | )
Diluted loss per share | $ | (0.84 | ) |  | $ | (0.35 | ) |  | $ | (1.19 | )
Net income from continuing operations attributable to EZCORP, Inc. | $ | 47,686 |  |  | $ | (20,361 | ) |  | $ | 27,325 |
Loss from discontinued operations attributable to EZCORP, Inc. | (93,426 | ) |  | 1,402 |  |  | (92,024 | )
Net loss attributable to EZCORP, Inc. | $ | (45,740 | ) |  | $ | (18,959 | ) |  | $ | (64,699 | )
EZCORP, Inc. CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
| Fiscal Year Ended September 30, 2014
| (in thousands)
| As Previously Reported |  | Restatement Adjustments |  | As Restated
Net loss | $ | (41,532 | ) |  | $ | (30,554 | ) |  | $ | (72,086 | )
Other comprehensive loss: |  |  |  |  |
Foreign currency translation loss | (5,812 | ) |  | 1,747 |  |  | (4,065 | )
Foreign currency translation reclassification adjustment realized upon impairment | 375 |  |  | — |  |  | 375 |
Loss on effective portion of cash flow hedge: |  |  | — |  |  |
Other comprehensive loss before reclassifications | (453 | ) |  | — |  |  | (453 | )
Amounts reclassified from accumulated other comprehensive income | 49 |  |  | — |  |  | 49 |
Amounts reclassified from accumulated other comprehensive income | 540 |  |  | — |  |  | 540 |
Reclassification adjustment for gain on available-for-sale securities included in net income | (540 | ) |  | — |  |  | (540 | )
Income tax benefit (expense) | (598 | ) |  | (559 | ) |  | (1,157 | )
Other comprehensive loss, net of tax | (6,439 | ) |  | 1,188 |  |  | (5,251 | )
Comprehensive loss | $ | (47,971 | ) |  | $ | (29,366 | ) |  | $ | (77,337 | )
Attributable to redeemable noncontrolling interest: |  |  |  |  |
Net (loss) income | 4,208 |  |  | (11,595 | ) |  | (7,387 | )
Foreign currency translation loss | (768 | ) |  | (692 | ) |  | (1,460 | )
Loss on effective portion of cash flow hedge | (154 | ) |  | — |  |  | (154 | )
Comprehensive (loss) income attributable to redeemable noncontrolling interest | 3,286 |  |  | (12,287 | ) |  | (9,001 | )
Comprehensive loss attributable to EZCORP, Inc. | $ | (51,257 | ) |  | $ | (17,079 | ) |  | $ | (68,336 | )
EZCORP, Inc. CONSOLIDATED STATEMENT OF CASH FLOWS
| Fiscal Year Ended September 30, 2014
| (in thousands)
| As Previously Reported |  | Restatement Adjustments |  | As Restated
Operating activities: |  |  |  |  |
Net loss | $ | (41,532 | ) |  | $ | (30,554 | ) |  | $ | (72,086 | )
Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |  |  |
Depreciation and amortization | 38,627 |  |  | — |  |  | 38,627 |
Amortization of debt discount and consumer loan premium, net | 2,611 |  |  | — |  |  | 2,611 |
Consumer loan loss provision | 42,501 |  |  | 2,513 |  |  | 45,014 |
Deferred income taxes | (11,973 | ) |  | 5,798 |  |  | (6,175 | )
Impairment of goodwill | 84,158 |  |  | — |  |  | 84,158 |
Reversal of contingent consideration | (4,792 | ) |  | — |  |  | (4,792 | )
Impairment of intangibles | 11,908 |  |  | (1,600 | ) |  | 10,308 |
Restructuring | 6,121 |  |  | — |  |  | 6,121 |
Amortization of deferred financing costs | 5,137 |  |  | — |  |  | 5,137 |
Amortization of prepaid commissions | 16,893 |  |  | (2,368 | ) |  | 14,525 |
Other | (2,453 | ) |  | 202 |  |  | (2,251 | )
Gain on sale or disposal of assets | (5,371 | ) |  | — |  |  | (5,371 | )
Gain on sale of loan portfolio | (33,000 | ) |  | 33,000 |  |  | — |
Stock compensation | 7,341 |  |  | (496 | ) |  | 6,845 |
Income from investments in unconsolidated affiliates | (5,948 | ) |  | — |  |  | (5,948 | )
Impairment of investments | 7,940 |  |  | — |  |  | 7,940 |
Changes in operating assets and liabilities, net of business acquisitions: |  |  |  |  |
Service charges and fees receivable, net | (2,967 | ) |  | 755 |  |  | (2,212 | )
Inventory, net | (898 | ) |  | 1,244 |  |  | 346 |
Prepaid expenses, other current assets and other assets, net | (29,294 | ) |  | 487 |  |  | (28,807 | )
Accounts payable and other accrued expenses | 12,109 |  |  | (2,973 | ) |  | 9,136 |
Customer layaway deposits | (499 | ) |  | — |  |  | (499 | )
Deferred gains and other long-term liabilities | 11 |  |  | (195 | ) |  | (184 | )
Tax provision from stock compensation | 609 |  |  | — |  |  | 609 |
Prepaid income taxes | (13,124 | ) |  | (20,356 | ) |  | (33,480 | )
Dividends from unconsolidated affiliates | 5,129 |  |  | — |  |  | 5,129 |
Net cash provided by operating activities | 89,244 |  |  | (14,543 | ) |  | 74,701 |
Investing activities: |  |  |  |  |
Loans made | (959,540 | ) |  | — |  |  | (959,540 | )
Loans repaid | 628,710 |  |  | 30,276 |  |  | 658,986 |
Recovery of pawn loan principal through sale of forfeited collateral | 246,053 |  |  | — |  |  | 246,053 |
Additions to property and equipment | (22,964 | ) |  | — |  |  | (22,964 | )
Acquisitions, net of cash acquired | (13,226 | ) |  | — |  |  | (13,226 | )
Proceeds from sale of assets | 86,129 |  |  | (75,498 | ) |  | 10,631 |
Net cash used in investing activities | (34,838 | ) |  | (45,222 | ) |  | (80,060 | )
Financing activities: |  |  |  |  |
Tax benefit from stock compensation | (609 | ) |  | — |  |  | (609 | )
Taxes paid related to net share settlement of equity awards | (1,982 | ) |  | — |  |  | (1,982 | )
Debt issuance costs | (14,017 | ) |  | — |  |  | (14,017 | )
Payout of deferred and contingent consideration | (23,000 | ) |  | — |  |  | (23,000 | )
Proceeds from issuance of convertible notes | 230,000 |  |  | — |  |  | 230,000 |
Purchase of convertible notes hedges | (46,454 | ) |  | — |  |  | (46,454 | )
Proceeds from issuance of warrants | 25,106 |  |  | — |  |  | 25,106 |
Purchase of subsidiary shares from noncontrolling interest | (29,775 | ) |  | — |  |  | (29,775 | )
Change in restricted cash | (63,207 | ) |  | 5,316 |  |  | (57,891 | )
Proceeds from revolving line of credit | 359,900 |  |  | — |  |  | 359,900 |
Payments on revolving line of credit | (500,800 | ) |  | — |  |  | (500,800 | )
Proceeds from borrowings | 103,178 |  |  | 72,835 |  |  | 176,013 |
Payments on borrowings and capital lease obligations | (60,299 | ) |  | (11,774 | ) |  | (72,073 | )
Repurchase of common stock | (11,903 | ) |  | — |  |  | (11,903 | )
Net cash provided by (used in) financing activities | (33,862 | ) |  | 66,377 |  |  | 32,515 |
Effect of exchange rate changes on cash and cash equivalents | (532 | ) |  | (399 | ) |  | (931 | )
Net increase in cash and cash equivalents | 20,012 |  |  | 6,213 |  |  | 26,225 |
Cash and cash equivalents at beginning of period | 36,317 |  |  | (7,217 | ) |  | 29,100 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF CASH FLOWS
Cash and cash equivalents at end of period | $ | 56,329 |  |  | $ | (1,004 | ) |  | $ | 55,325 |
Cash paid during the period for: |  |  |  |  |
Interest | $ | 16,361 |  |  | $ | — |  |  | $ | 16,361 |
Income taxes | 30,194 |  |  | — |  |  | 30,194 |
Non-cash investing and financing activities: |  |  |  |  |
Pawn loans forfeited and transferred to inventory | $ | 241,696 |  |  | $ | — |  |  | $ | 241,696 |
Deferred consideration | 2,674 |  |  | — |  |  | 2,674 |
Change in accrued additions to property and equipment | (420 | ) |  | — |  |  | (420 | )
Issuance of common stock to 401(k) plan | 557 |  |  | — |  |  | 557 |
Equity adjustment due to noncontrolling interest purchase | 6,609 |  |  | — |  |  | 6,609 |
Receivable from sale of portfolio | 43,780 |  |  | (43,780 | ) |  | — |
Deferred finance cost payable related to convertible notes | 1,092 |  |  | — |  |  | 1,092 |
EZCORP, Inc. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
| Common Stock |  | Additional Paid-in Capital |  |  |  | Accumulated Other Comprehensive (Loss) Income |  | Treasury Stock |  | EZCORP, Inc. Stockholders' Equity
| Shares |  | Par Value |  |  | Retained Earnings |  |  | Shares |  | Par Value |
| (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 |  |  | — |  |  | 557 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 557 |
Stock compensation | — |  |  | — |  |  | 7,341 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 7,341 |
Purchase of subsidiary shares from noncontrolling interest | — |  |  | — |  |  | (6,594 | ) |  | — |  |  | (15 | ) |  | — |  |  | — |  |  | (6,609 | )
Release of restricted stock | 300 |  |  | 3 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3 |
Tax deficiency of stock compensation | — |  |  | — |  |  | (609 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (609 | )
Taxes paid related to net share settlement of equity awards | — |  |  | — |  |  | (1,982 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,982 | )
Effective portion of cash flow hedge | — |  |  | — |  |  | — |  |  | — |  |  | (250 | ) |  | — |  |  | — |  |  | (250 | )
Net proceeds from sale of warrants | — |  |  | — |  |  | 25,106 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 25,106 |
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | (5,627 | ) |  | — |  |  | — |  |  | (5,627 | )
Foreign currency translation reclassification adjustment realized upon impairment | — |  |  | — |  |  | — |  |  | — |  |  | 375 |  |  | — |  |  | — |  |  | 375 |
Purchase of treasury stock | (1,000 | ) |  | (10 | ) |  | (4,930 | ) |  | (6,963 | ) |  | — |  |  | 1,000 |  |  | — |  |  | (11,903 | )
Retirement of treasury stock | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,000 | ) |  | — |  |  | — |
Net loss attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | (45,740 | ) |  | — |  |  | — |  |  | — |  |  | (45,740 | )
Balances at September 30, 2014 | 53,585 |  |  | $ | 536 |  |  | $ | 339,666 |  |  | $ | 547,177 |  |  | $ | (12,191 | ) |  | — |  |  | $ | — |  |  | $ | 875,188 |
| Restatement Adjustments
Balances at September 30, 2013 | $ | — |  |  | $ | — |  |  | $ | (240 | ) |  | $ | (18,632 | ) |  | $ | 229 |  |  | $ | — |  |  | $ | — |  |  | $ | (18,643 | )
Stock compensation | — |  |  | — |  |  | (496 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (496 | )
Purchase of subsidiary shares from noncontrolling interest | — |  |  | — |  |  | (6,666 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (6,666 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | 1,880 |  |  | — |  |  | — |  |  | 1,880 |
Net loss attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | (18,959 | ) |  | — |  |  | — |  |  | — |  |  | (18,959 | )
Balances at September 30, 2014 | $ | — |  |  | $ | — |  |  | $ | (7,402 | ) |  | $ | (37,591 | ) |  | $ | 2,109 |  |  | $ | — |  |  | $ | — |  |  | $ | (42,884 | )
| 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 |  |  | — |  |  | 557 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 557 |
Stock compensation | — |  |  | — |  |  | 6,845 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 6,845 |
Purchase of subsidiary shares from noncontrolling interest | — |  |  | — |  |  | (13,260 | ) |  | — |  |  | (15 | ) |  | — |  |  | — |  |  | (13,275 | )
Release of restricted stock | 300 |  |  | 3 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3 |
Tax deficiency of stock compensation | — |  |  | — |  |  | (609 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (609 | )
Taxes paid related to net share settlement of equity awards | — |  |  | — |  |  | (1,982 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,982 | )
Effective portion of cash flow hedge | — |  |  | — |  |  | — |  |  | — |  |  | (250 | ) |  | — |  |  | — |  |  | (250 | )
Net proceeds from sale of warrants | — |  |  | — |  |  | 25,106 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 25,106 |
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | (3,747 | ) |  | — |  |  | — |  |  | (3,747 | )
Foreign currency translation reclassification adjustment realized upon impairment | — |  |  | — |  |  | — |  |  | — |  |  | 375 |  |  | — |  |  | — |  |  | 375 |
Purchase of treasury stock | (1,000 | ) |  | (10 | ) |  | (4,930 | ) |  | (6,963 | ) |  | — |  |  | 1,000 |  |  | — |  |  | (11,903 | )
Retirement of treasury stock | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,000 | ) |  | — |  |  | — |
Net loss attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | (64,699 | ) |  | — |  |  | — |  |  | — |  |  | (64,699 | )
Balances at September 30, 2014 | 53,585 |  |  | $ | 536 |  |  | $ | 332,264 |  |  | $ | 509,586 |  |  | $ | (10,082 | ) |  | — |  |  | $ | — |  |  | $ | 832,304 |
The effects of the restatement on our consolidated financial statements as of and for the fiscal year ended September 30, 2013 are set forth below.
EZCORP, Inc. CONSOLIDATED BALANCE SHEET (in thousands, except share and per share amounts)
| September 30, 2013
| As Previously Reported |  | Restatement Adjustments |  | As Restated
Assets: |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 36,317 |  |  | $ | (7,217 | ) |  | $ | 29,100 |
Restricted cash | 3,312 |  |  | 5,864 |  |  | 9,176 |
Pawn loans | 156,637 |  |  | — |  |  | 156,637 |
Consumer loans, net | 64,683 |  |  | (7,803 | ) |  | 56,880 |
Pawn service charges receivable, net | 30,362 |  |  | — |  |  | 30,362 |
Consumer loan fees and interest receivable, net | 36,292 |  |  | (17,243 | ) |  | 19,049 |
Inventory, net | 145,200 |  |  | — |  |  | 145,200 |
Deferred tax asset | 13,825 |  |  | 1,477 |  |  | 15,302 |
Prepaid income taxes | 16,105 |  |  | 8,008 |  |  | 24,113 |
Prepaid expenses and other assets | 34,217 |  |  | (3 | ) |  | 34,214 |
Total current assets | 536,950 |  |  | (16,917 | ) |  | 520,033 |
Investments in unconsolidated affiliates | 97,085 |  |  | — |  |  | 97,085 |
Property and equipment, net | 116,281 |  |  | — |  |  | 116,281 |
Restricted cash, non-current | 2,156 |  |  | 1,353 |  |  | 3,509 |
Goodwill | 433,300 |  |  | — |  |  | 433,300 |
Intangible assets, net | 63,805 |  |  | 1,586 |  |  | 65,391 |
Non-current consumer loans, net | 70,294 |  |  | (4,806 | ) |  | 65,488 |
Deferred tax asset | 8,214 |  |  | 23 |  |  | 8,237 |
Other assets, net | 24,105 |  |  | (461 | ) |  | 23,644 |
Total assets | $ | 1,352,190 |  |  | $ | (19,222 | ) |  | $ | 1,332,968 |
Liabilities and stockholders’ equity: |  |  |  |  |
Current liabilities: |  |  |  |  |
Current maturities of long-term debt | $ | 30,436 |  |  | $ | — |  |  | $ | 30,436 |
Current capital lease obligations | 533 |  |  | — |  |  | 533 |
Accounts payable and other accrued expenses | 79,967 |  |  | 890 |  |  | 80,857 |
Other current liabilities | 22,337 |  |  | 882 |  |  | 23,219 |
Customer layaway deposits | 8,628 |  |  | — |  |  | 8,628 |
Total current liabilities | 141,901 |  |  | 1,772 |  |  | 143,673 |
Long-term debt, less current maturities | 215,939 |  |  | — |  |  | 215,939 |
Long-term capital lease obligations | 391 |  |  | — |  |  | 391 |
Deferred gains and other long-term liabilities | 24,040 |  |  | 5,745 |  |  | 29,785 |
Total liabilities | 382,271 |  |  | 7,517 |  |  | 389,788 |
Commitments and contingencies |  |  |  |  |  |
Temporary equity: |  |  |  |  |
Redeemable noncontrolling interest | 55,393 |  |  | (8,096 | ) |  | 47,297 |
Stockholders’ equity: |  |  |  |  |
Class A Non-voting Common Stock, par value $.01 per share; shares authorized: 56 million at September 30, 2013; issued and outstanding: 51,269,434 at September 30, 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 | 320,777 |  |  | (240 | ) |  | 320,537 |
Retained earnings | 599,880 |  |  | (18,632 | ) |  | 581,248 |
Accumulated other comprehensive loss | (6,674 | ) |  | 229 |  |  | (6,445 | )
EZCORP, Inc. stockholders’ equity | 914,526 |  |  | (18,643 | ) |  | 895,883 |
Total liabilities and stockholders’ equity | $ | 1,352,190 |  |  | $ | (19,222 | ) |  | $ | 1,332,968 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF OPERATIONS
| Fiscal Year Ended September 30, 2013
| (in thousands, except per share amounts)
| As Previously Reported |  | Restatement Adjustments |  | As Restated
Revenues: |  |  |  |  |
Merchandise sales | $ | 368,766 |  |  | $ | (681 | ) |  | $ | 368,085 |
Jewelry scrapping sales | 131,702 |  |  | — |  |  | 131,702 |
Pawn service charges | 251,354 |  |  | — |  |  | 251,354 |
Consumer loan fees and interest | 219,752 |  |  | (8,127 | ) |  | 211,625 |
Other revenues | 8,547 |  |  | (1,145 | ) |  | 7,402 |
Total revenues | 980,121 |  |  | (9,953 | ) |  | 970,168 |
Merchandise cost of goods sold | 218,617 |  |  | — |  |  | 218,617 |
Jewelry scrapping cost of goods sold | 96,133 |  |  | — |  |  | 96,133 |
Consumer loan bad debt | 40,667 |  |  | 11,827 |  |  | 52,494 |
Net revenues | 624,704 |  |  | (21,780 | ) |  | 602,924 |
Operating expenses: |  |  |  |  |  |
Operations | 389,386 |  |  | 814 |  |  | 390,200 |
Administrative | 52,474 |  |  | (135 | ) |  | 52,339 |
Depreciation | 27,858 |  |  | — |  |  | 27,858 |
Amortization | 3,485 |  |  | — |  |  | 3,485 |
Loss on sale or disposal of assets | 1,359 |  |  | — |  |  | 1,359 |
Total operating expenses | 474,562 |  |  | 679 |  |  | 475,241 |
Operating income | 150,142 |  |  | (22,459 | ) |  | 127,683 |
Interest expense, net | 15,168 |  |  | — |  |  | 15,168 |
Equity in net income of unconsolidated affiliates | (11,878 | ) |  | (1,362 | ) |  | (13,240 | )
Impairment of investments | 44,598 |  |  | (1,400 | ) |  | 43,198 |
Other income | (205 | ) |  | 2,282 |  |  | 2,077 |
Income from continuing operations before income taxes | 102,459 |  |  | (21,979 | ) |  | 80,480 |
Income tax expense | 29,582 |  |  | (3,384 | ) |  | 26,198 |
Income from continuing operations, net of tax | 72,877 |  |  | (18,595 | ) |  | 54,282 |
Loss from discontinued operations, net of tax | (34,452 | ) |  | 1,180 |  |  | (33,272 | )
Net income | 38,425 |  |  | (17,415 | ) |  | 21,010 |
Net (loss) income from continuing operations attributable to redeemable noncontrolling interest | 4,424 |  |  | (5,646 | ) |  | (1,222 | )
Net loss from discontinued operations attributable to redeemable noncontrolling interest | (76 | ) |  | — |  |  | (76 | )
Net income attributable to EZCORP, Inc. | $ | 34,077 |  |  | $ | (11,769 | ) |  | $ | 22,308 |
Basic earnings (loss) per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 1.28 |  |  | $ | (0.25 | ) |  | $ | 1.03 |
Discontinued operations | (0.64 | ) |  | 0.02 |  |  | (0.62 | )
Basic earnings per share | $ | 0.64 |  |  | $ | (0.23 | ) |  | $ | 0.41 |
Diluted earnings (loss) per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 1.27 |  |  | $ | (0.24 | ) |  | $ | 1.03 |
Discontinued operations | (0.64 | ) |  | 0.02 |  |  | (0.62 | )
Diluted earnings per share | $ | 0.63 |  |  | $ | (0.22 | ) |  | $ | 0.41 |
Net income from continuing operations attributable to EZCORP, Inc. | $ | 68,453 |  |  | $ | (12,949 | ) |  | $ | 55,504 |
Loss from discontinued operations attributable to EZCORP, Inc. | (34,376 | ) |  | 1,180 |  |  | (33,196 | )
Net income attributable to EZCORP, Inc. | $ | 34,077 |  |  | $ | (11,769 | ) |  | $ | 22,308 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| Fiscal Year Ended September 30, 2013
| (in thousands)
| As Previously Reported |  | Restatement Adjustments |  | As Restated
Net income | $ | 38,425 |  |  | $ | (17,415 | ) |  | $ | 21,010 |
Other comprehensive income: |  |  |  |  |
Foreign currency translation loss | (11,614 | ) |  | 869 |  |  | (10,745 | )
Foreign currency translation reclassification adjustment realized upon impairment | 221 |  |  | — |  |  | 221 |
Loss on effective portion of cash flow hedge: |  |  |  |  |
Other comprehensive gain before reclassifications | 2,388 |  |  | — |  |  | 2,388 |
Amounts reclassified from accumulated other comprehensive income | (2,536 | ) |  | — |  |  | (2,536 | )
Amounts reclassified from accumulated other comprehensive income | (1,721 | ) |  | — |  |  | (1,721 | )
Reclassification adjustment for gain on available-for-sale securities included in net income | 992 |  |  | — |  |  | 992 |
Income tax benefit | 3,633 |  |  | (287 | ) |  | 3,346 |
Other comprehensive loss, net of tax | (8,637 | ) |  | 582 |  |  | (8,055 | )
Comprehensive income | $ | 29,788 |  |  | $ | (16,833 | ) |  | $ | 12,955 |
Attributable to redeemable noncontrolling interest: |  |  |  |  |
Net (loss) income | 4,348 |  |  | (5,646 | ) |  | (1,298 | )
Foreign currency translation loss | (2,017 | ) |  | 233 |  |  | (1,784 | )
Loss on effective portion of cash flow hedge | (59 | ) |  | — |  |  | (59 | )
Comprehensive (loss) income attributable to redeemable noncontrolling interest | 2,272 |  |  | (5,413 | ) |  | (3,141 | )
Comprehensive income attributable to EZCORP, Inc. | $ | 27,516 |  |  | $ | (11,420 | ) |  | $ | 16,096 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF CASH FLOWS
| Fiscal Year Ended September 30, 2013
| (in thousands)
| As Previously Reported |  | Restatement Adjustments |  | As Restated
Operating activities: |  |  |  |  |
Net income | $ | 38,425 |  |  | $ | (17,415 | ) |  | $ | 21,010 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |
Depreciation and amortization | 34,918 |  |  | — |  |  | 34,918 |
Accretion of debt premium and consumer loan discount, net | (248 | ) |  | — |  |  | (248 | )
Consumer loan loss provision | 30,740 |  |  | 3,406 |  |  | 34,146 |
Deferred income taxes | (14,854 | ) |  | (29 | ) |  | (14,883 | )
Impairment of intangibles | — |  |  | 1,600 |  |  | 1,600 |
Amortization of deferred financing costs | 3,208 |  |  | — |  |  | 3,208 |
Amortization of prepaid commissions | 4,182 |  |  | 391 |  |  | 4,573 |
Other | 3,713 |  |  | 1,149 |  |  | 4,862 |
Loss on sale or disposal of assets | 7,043 |  |  | — |  |  | 7,043 |
Stock compensation | 7,314 |  |  | (186 | ) |  | 7,128 |
Income from investments in unconsolidated affiliates | (11,878 | ) |  | (1,362 | ) |  | (13,240 | )
Impairment of investments | 44,598 |  |  | (1,400 | ) |  | 43,198 |
Changes in operating assets and liabilities, net of business acquisitions: |  |  |  |  |
Service charges and fees receivable, net | (7,143 | ) |  | 10,555 |  |  | 3,412 |
Inventory, net | (9,722 | ) |  | — |  |  | (9,722 | )
Prepaid expenses, other current assets and other assets, net | (17,671 | ) |  | — |  |  | (17,671 | )
Accounts payable and other accrued expenses | 16,766 |  |  | 4,517 |  |  | 21,283 |
Customer layaway deposits | 1,416 |  |  | — |  |  | 1,416 |
Deferred gains and other long-term liabilities | (8,898 | ) |  | (1,352 | ) |  | (10,250 | )
Tax benefit from stock compensation | (293 | ) |  | — |  |  | (293 | )
Prepaid income taxes | (5,775 | ) |  | (5,880 | ) |  | (11,655 | )
Dividends from unconsolidated affiliates | 10,632 |  |  | — |  |  | 10,632 |
Net cash provided by operating activities | 126,473 |  |  | (6,006 | ) |  | 120,467 |
Investing activities: |  |  |  |  |
Loans made | (923,103 | ) |  | — |  |  | (923,103 | )
Loans repaid | 597,528 |  |  | 5,184 |  |  | 602,712 |
Recovery of pawn loan principal through sale of forfeited collateral | 237,717 |  |  | — |  |  | 237,717 |
Additions to property and equipment | (46,698 | ) |  | — |  |  | (46,698 | )
Acquisitions, net of cash acquired | (14,810 | ) |  | — |  |  | (14,810 | )
Investments in unconsolidated affiliates | (11,018 | ) |  | — |  |  | (11,018 | )
Net cash used in investing activities | (160,384 | ) |  | 5,184 |  |  | (155,200 | )
Financing activities: |  |  |  |  |
Proceeds from exercise of stock options | 45 |  |  | — |  |  | 45 |
Tax benefit from stock compensation | 293 |  |  | — |  |  | 293 |
Taxes paid related to net share settlement of equity awards | (3,640 | ) |  | — |  |  | (3,640 | )
Debt issuance costs | (1,283 | ) |  | — |  |  | (1,283 | )
Payout of deferred and contingent consideration | (13,277 | ) |  | — |  |  | (13,277 | )
Purchase of subsidiary shares from noncontrolling interest | (627 | ) |  | — |  |  | (627 | )
Contributions from noncontrolling interest | 5,839 |  |  | — |  |  | 5,839 |
Change in restricted cash | (110 | ) |  | 1,436 |  |  | 1,326 |
Proceeds from revolving line of credit | 510,680 |  |  | — |  |  | 510,680 |
Payments on revolving line of credit | (470,000 | ) |  | — |  |  | (470,000 | )
Proceeds from borrowings | (15,432 | ) |  | — |  |  | (15,432 | )
Payments on borrowings and capital lease obligations | 9,725 |  |  | — |  |  | 9,725 |
Net cash provided by financing activities | 22,213 |  |  | 1,436 |  |  | 23,649 |
Effect of exchange rate changes on cash and cash equivalents | (462 | ) |  | 822 |  |  | 360 |
Net decrease in cash and cash equivalents | (12,160 | ) |  | 1,436 |  |  | (10,724 | )
Cash and cash equivalents at beginning of period | 48,477 |  |  | (8,653 | ) |  | 39,824 |
Cash and cash equivalents at end of period | $ | 36,317 |  |  | $ | (7,217 | ) |  | $ | 29,100 |
Cash paid during the period for: |  |  |  |  |
Interest | $ | 12,553 |  |  | $ | — |  |  | $ | 12,553 |
Income taxes | 47,108 |  |  | — |  |  | 47,108 |
Non-cash investing and financing activities: |  |  |  |  |
Pawn loans forfeited and transferred to inventory | $ | 261,837 |  |  | $ | — |  |  | $ | 261,837 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF CASH FLOWS
Issuance of common stock due to acquisitions | 38,705 |  |  | — |  |  | 38,705 |
Deferred consideration | 25,872 |  |  | — |  |  | 25,872 |
Contingent consideration | 248 |  |  | — |  |  | 248 |
Change in accrued additions to property and equipment | 492 |  |  | — |  |  | 492 |
Issuance of common stock due to purchase of subsidiary shares from noncontrolling interest | 10,404 |  |  | — |  |  | 10,404 |
Purchase of shares from noncontrolling interest | (788 | ) |  | — |  |  | (788 | )
Issuance of common stock to 401(k) plan | 556 |  |  | — |  |  | 556 |
EZCORP, Inc. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
| Common Stock |  | Additional Paid-in Capital |  |  |  | Accumulated Other Comprehensive (Loss) Income |  | Treasury Stock |  | EZCORP, Inc. Stockholders' Equity
| Shares |  | Par Value |  |  | Retained Earnings |  |  | Shares |  | Par Value |
| (in thousands)
| As Previously Reported
Balances at September 30, 2012 | 51,226 |  |  | $ | 512 |  |  | $ | 268,626 |  |  | $ | 565,803 |  |  | $ | (113 | ) |  | — |  |  | $ | — |  |  | $ | 834,828 |
Issuance of common stock related to 401(k) match | 30 |  |  | 1 |  |  | 556 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 557 |
Stock compensation | — |  |  | — |  |  | 7,314 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 7,314 |
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 | — |  |  | — |  |  | (1,500 | ) |  | — |  |  | 85 |  |  | — |  |  | — |  |  | (1,415 | )
Release of restricted stock | 409 |  |  | 4 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 4 |
Excess tax benefit from stock compensation | — |  |  | — |  |  | 293 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 293 |
Taxes paid related to net share settlement of equity awards | — |  |  | — |  |  | (3,640 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (3,640 | )
Effective portion of cash flow hedge | — |  |  | — |  |  | — |  |  | — |  |  | (89 | ) |  | — |  |  | — |  |  | (89 | )
Unrealized loss on available-for-sale securities | — |  |  | — |  |  | — |  |  | — |  |  | (1,119 | ) |  | — |  |  | — |  |  | (1,119 | )
Reclassification adjustment for loss on available-for-sale securities included in net income | — |  |  | — |  |  | — |  |  | — |  |  | 992 |  |  | — |  |  | — |  |  | 992 |
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | (6,651 | ) |  | — |  |  | — |  |  | (6,651 | )
Foreign currency translation reclassification adjustment realized upon impairment | — |  |  | — |  |  | — |  |  | — |  |  | 221 |  |  | — |  |  | — |  |  | 221 |
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | 34,077 |  |  | — |  |  | — |  |  | — |  |  | 34,077 |
Balances at September 30, 2013 | 54,240 |  |  | $ | 543 |  |  | $ | 320,777 |  |  | $ | 599,880 |  |  | $ | (6,674 | ) |  | — |  |  | $ | — |  |  | $ | 914,526 |
| Restatement Adjustments
Balances at September 30, 2012 | — |  |  | $ | — |  |  | $ | (54 | ) |  | $ | (6,863 | ) |  | $ | (120 | ) |  | — |  |  | $ | — |  |  | $ | (7,037 | )
Stock compensation | — |  |  | — |  |  | (186 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (186 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | 349 |  |  | — |  |  | — |  |  | 349 |
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | (11,769 | ) |  | — |  |  | — |  |  | — |  |  | (11,769 | )
Balances at September 30, 2013 | — |  |  | $ | — |  |  | $ | (240 | ) |  | $ | (18,632 | ) |  | $ | 229 |  |  | — |  |  | $ | — |  |  | $ | (18,643 | )
| As Restated
Balances at September 30, 2012 | 51,226 |  |  | $ | 512 |  |  | $ | 268,572 |  |  | $ | 558,940 |  |  | $ | (233 | ) |  | — |  |  | $ | — |  |  | $ | 827,791 |
Issuance of common stock related to 401(k) match | 30 |  |  | 1 |  |  | 556 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 557 |
Stock compensation | — |  |  | — |  |  | 7,128 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 7,128 |
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 | — |  |  | — |  |  | (1,500 | ) |  | — |  |  | 85 |  |  | — |  |  | — |  |  | (1,415 | )
Release of restricted stock | 409 |  |  | 4 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 4 |
Excess tax benefit from stock compensation | — |  |  | — |  |  | 293 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 293 |
Taxes paid related to net share settlement of equity awards | — |  |  | — |  |  | (3,640 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (3,640 | )
Effective portion of cash flow hedge | — |  |  | — |  |  | — |  |  | — |  |  | (89 | ) |  | — |  |  | — |  |  | (89 | )
Unrealized loss on available-for-sale securities | — |  |  | — |  |  | — |  |  | — |  |  | (1,119 | ) |  | — |  |  | — |  |  | (1,119 | )
Reclassification adjustment for loss on available-for-sale securities included in net income | — |  |  | — |  |  | — |  |  | — |  |  | 992 |  |  | — |  |  | — |  |  | 992 |
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | (6,302 | ) |  | — |  |  | — |  |  | (6,302 | )
Foreign currency translation reclassification adjustment realized upon impairment | — |  |  | — |  |  | — |  |  | — |  |  | 221 |  |  | — |  |  | — |  |  | 221 |
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | 22,308 |  |  | — |  |  | — |  |  | — |  |  | 22,308 |
Balances at September 30, 2013 | 54,240 |  |  | $ | 543 |  |  | $ | 320,537 |  |  | $ | 581,248 |  |  | $ | (6,445 | ) |  | — |  |  | $ | — |  |  | $ | 895,883 |
| The effects of the restatement on our consolidated financial statements for the fiscal year ended September 30, 2012 are set forth below.
EZCORP, Inc. CONSOLIDATED STATEMENT OF OPERATIONS
| Fiscal Year Ended September 30, 2012
| (in thousands, except per share amounts)
| As Previously Reported |  | Restatement Adjustments |  | As Restated
Revenues: |  |  |  |  |
Merchandise sales | $ | 333,064 |  |  | $ | — |  |  | $ | 333,064 |
Jewelry scrapping sales | 202,481 |  |  | — |  |  | 202,481 |
Pawn service charges | 233,538 |  |  | — |  |  | 233,538 |
Consumer loan fees and interest | 190,746 |  |  | (2,998 | ) |  | 187,748 |
Other revenues | 4,673 |  |  | (787 | ) |  | 3,886 |
Total revenues | 964,502 |  |  | (3,785 | ) |  | 960,717 |
Merchandise cost of goods sold | 190,637 |  |  | — |  |  | 190,637 |
Jewelry scrapping cost of goods sold | 130,715 |  |  | — |  |  | 130,715 |
Consumer loan bad debt | 35,639 |  |  | 7,802 |  |  | 43,441 |
Net revenues | 607,511 |  |  | (11,587 | ) |  | 595,924 |
Operating expenses: |  |  |  |  |  |
Operations | 328,793 |  |  | 56 |  |  | 328,849 |
Administrative | 47,912 |  |  | (39 | ) |  | 47,873 |
Depreciation | 21,851 |  |  | — |  |  | 21,851 |
Amortization | 1,956 |  |  | — |  |  | 1,956 |
Gain on sale or disposal of assets | (249 | ) |  | — |  |  | (249 | )
Total operating expenses | 400,263 |  |  | 17 |  |  | 400,280 |
Operating income | 207,248 |  |  | (11,604 | ) |  | 195,644 |
Interest income, net | (1,549 | ) |  | — |  |  | (1,549 | )
Equity in net income of unconsolidated affiliates | (17,400 | ) |  | 1,362 |  |  | (16,038 | )
Other income | (888 | ) |  | — |  |  | (888 | )
Income from continuing operations before income taxes | 227,085 |  |  | (12,966 | ) |  | 214,119 |
Income tax expense | 71,165 |  |  | (3,500 | ) |  | 67,665 |
Income from continuing operations, net of tax | 155,920 |  |  | (9,466 | ) |  | 146,454 |
Loss from discontinued operations, net of tax | (5,343 | ) |  | — |  |  | (5,343 | )
Net income | 150,577 |  |  | (9,466 | ) |  | 141,111 |
Net income from continuing operations attributable to redeemable noncontrolling interest | 6,722 |  |  | (2,603 | ) |  | 4,119 |
Net income from discontinued operations attributable to redeemable noncontrolling interest | 147 |  |  | — |  |  | 147 |
Net income attributable to EZCORP, Inc. | $ | 143,708 |  |  | $ | (6,863 | ) |  | $ | 136,845 |
Basic earnings (loss) per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 2.93 |  |  | $ | (0.13 | ) |  | $ | 2.80 |
Discontinued operations | (0.11 | ) |  | — |  |  | (0.11 | )
Basic earnings per share | $ | 2.82 |  |  | $ | (0.13 | ) |  | $ | 2.69 |
Diluted earnings (loss) per share attributable to EZCORP, Inc.: |  |  |  |  |
Continuing operations | $ | 2.92 |  |  | $ | (0.14 | ) |  | $ | 2.78 |
Discontinued operations | (0.11 | ) |  | — |  |  | (0.11 | )
Diluted earnings per share | $ | 2.81 |  |  | $ | (0.14 | ) |  | $ | 2.67 |
Net income from continuing operations attributable to EZCORP, Inc. | $ | 149,198 |  |  | $ | (6,863 | ) |  | $ | 142,335 |
Loss from discontinued operations attributable to EZCORP, Inc. | (5,490 | ) |  | — |  |  | (5,490 | )
Net income attributable to EZCORP, Inc. | $ | 143,708 |  |  | $ | (6,863 | ) |  | $ | 136,845 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| Fiscal Year Ended September 30, 2012
| (in thousands)
| As Previously Reported |  | Restatement Adjustments |  | As Restated
Net income | $ | 150,577 |  |  | $ | (9,466 | ) |  | $ | 141,111 |
Other comprehensive income: |  |  |  |  |
Foreign currency translation loss | (7 | ) |  | (294 | ) |  | (301 | )
Unrealized holding loss on available-for-sale securities arising during period | (735 | ) |  | — |  |  | (735 | )
Income tax benefit | 2,330 |  |  | 94 |  |  | 2,424 |
Other comprehensive income, net of tax | 1,588 |  |  | (200 | ) |  | 1,388 |
Comprehensive income | $ | 152,165 |  |  | $ | (9,666 | ) |  | $ | 142,499 |
Attributable to redeemable noncontrolling interest: |  |  |  |  |
Net income | 6,869 |  |  | (2,603 | ) |  | 4,266 |
Foreign currency translation gain | 955 |  |  | (80 | ) |  | 875 |
Comprehensive income attributable to redeemable noncontrolling interest | 7,824 |  |  | (2,683 | ) |  | 5,141 |
Comprehensive income attributable to EZCORP, Inc. | $ | 144,341 |  |  | $ | (6,983 | ) |  | $ | 137,358 |
EZCORP, Inc. CONSOLIDATED STATEMENT OF CASH FLOWS
| Fiscal Year Ended September 30, 2012
| (in thousands)
| As Previously Reported |  | Restatement Adjustments |  | As Restated
Operating activities: |  |  |  |  |
Net income | $ | 150,577 |  |  | $ | (9,466 | ) |  | 141,111 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |
Depreciation and amortization | 25,268 |  |  | — |  |  | 25,268 |
Accretion of debt premium and consumer loan discount, net | (15,091 | ) |  | — |  |  | (15,091 | )
Consumer loan loss provision | 17,833 |  |  | 2,407 |  |  | 20,240 |
Deferred income taxes | 2,761 |  |  | (1,471 | ) |  | 1,290 |
Amortization of deferred financing costs | 2,478 |  |  | — |  |  | 2,478 |
Amortization of prepaid commissions | 396 |  |  | 71 |  |  | 467 |
Gain on sale or disposal of assets | (1 | ) |  | — |  |  | (1 | )
Stock compensation | 6,714 |  |  | (54 | ) |  | 6,660 |
Income from investments in unconsolidated affiliates | (17,400 | ) |  | 1,362 |  |  | (16,038 | )
Changes in operating assets and liabilities, net of business acquisitions: |  |  |  |  |
Service charges and fees receivable, net | (5,359 | ) |  | 6,689 |  |  | 1,330 |
Inventory, net | (4,017 | ) |  | — |  |  | (4,017 | )
Prepaid expenses, other current assets and other assets, net | (15,196 | ) |  | — |  |  | (15,196 | )
Accounts payable and other accrued expenses | 4,347 |  |  | (2,751 | ) |  | 1,596 |
Customer layaway deposits | 218 |  |  | — |  |  | 218 |
Deferred gains and other long-term liabilities | (8,782 | ) |  | 3,539 |  |  | (5,243 | )
Tax benefit from stock compensation | (1,602 | ) |  | — |  |  | (1,602 | )
Prepaid income taxes | (7,787 | ) |  | (2,128 | ) |  | (9,915 | )
Dividends from unconsolidated affiliates | 5,560 |  |  | — |  |  | 5,560 |
Net cash provided by operating activities | 140,917 |  |  | (1,802 | ) |  | 139,115 |
Investing activities: |  |  |  |  |
Loans made | (802,896 | ) |  | — |  |  | (802,896 | )
Loans repaid | 520,193 |  |  | 2,002 |  |  | 522,195 |
Recovery of pawn loan principal through sale of forfeited collateral | 240,381 |  |  | — |  |  | 240,381 |
Additions to property and equipment | (45,796 | ) |  | — |  |  | (45,796 | )
Acquisitions, net of cash acquired | (128,647 | ) |  | — |  |  | (128,647 | )
Net cash used in investing activities | (216,765 | ) |  | 2,002 |  |  | (214,763 | )
Financing activities: |  |  |  |  |
Proceeds from exercise of stock options | 649 |  |  | — |  |  | 649 |
Tax provision from stock compensation | 1,602 |  |  | — |  |  | 1,602 |
Taxes paid related to net share settlement of equity awards | (1,184 | ) |  | — |  |  | (1,184 | )
Debt issuance costs | (3,225 | ) |  | — |  |  | (3,225 | )
Change in restricted cash | (5,482 | ) |  | (8,653 | ) |  | (14,135 | )
Proceeds from revolving line of credit | 792,927 |  |  | — |  |  | 792,927 |
Payments on revolving line of credit | (679,986 | ) |  | — |  |  | (679,986 | )
Proceeds from borrowings | 2,461 |  |  | — |  |  | 2,461 |
Payments on borrowings and capital lease obligations | (8,496 | ) |  | — |  |  | (8,496 | )
Net cash provided by financing activities | 99,266 |  |  | (8,653 | ) |  | 90,613 |
Effect of exchange rate changes on cash and cash equivalents | 1,090 |  |  | (200 | ) |  | 890 |
Net increase in cash and cash equivalents | 24,508 |  |  | (8,653 | ) |  | 15,855 |
Cash and cash equivalents at beginning of period | 23,969 |  |  | — |  |  | 23,969 |
Cash and cash equivalents at end of period | $ | 48,477 |  |  | $ | (8,653 | ) |  | $ | 39,824 |
Cash paid during the period for: |  |  |  |  |
Interest | $ | 2,480 |  |  | $ | — |  |  | $ | 2,480 |
Income taxes | 83,010 |  |  | — |  |  | 83,010 |
Non-cash investing and financing activities: |  |  |  |  |
Pawn loans forfeited and transferred to inventory | $ | 248,090 |  |  | $ | — |  |  | $ | 248,090 |
Issuance of common stock due to acquisitions | 17,984 |  |  | — |  |  | 17,984 |
Deferred consideration | 938 |  |  | — |  |  | 938 |
Contingent consideration | 23,432 |  |  | — |  |  | 23,432 |
Issuance of common stock to 401(k) plan | 459 |  |  | — |  |  | 459 |
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 |  |
| (in thousands)
| As Previously Reported
Balances at September 30, 2011 | 50,199 |  |  | $ | 501 |  |  | $ | 242,398 |  |  | $ | 422,095 |  |  | $ | (746 | ) |  | $ | 664,248 |
Issuance of common stock related to 401(k) match | 19 |  |  | — |  |  | 459 |  |  | — |  |  | — |  |  | 459 |
Stock compensation | — |  |  | — |  |  | 6,714 |  |  | — |  |  | — |  |  | 6,714 |
Stock options exercised | 201 |  |  | 2 |  |  | 647 |  |  | — |  |  | — |  |  | 649 |
Issuance of common stock due to acquisitions | 635 |  |  | 6 |  |  | 17,992 |  |  | — |  |  | — |  |  | 17,998 |
Release of restricted stock | 172 |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | 1 |
Excess tax benefit from stock compensation | — |  |  | 2 |  |  | 1,600 |  |  | — |  |  | — |  |  | 1,602 |
Taxes paid related to net share settlement of equity awards | — |  |  | — |  |  | (1,184 | ) |  | — |  |  | — |  |  | (1,184 | )
Unrealized loss on available-for-sale securities | — |  |  | — |  |  | — |  |  | — |  |  | (478 | ) |  | (478 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | 1,111 |  |  | 1,111 |
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | 143,708 |  |  | — |  |  | 143,708 |
Balances at September 30, 2012 | 51,226 |  |  | $ | 512 |  |  | $ | 268,626 |  |  | $ | 565,803 |  |  | $ | (113 | ) |  | $ | 834,828 |
| Restatement Adjustments
Balances at September 30, 2011 | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Stock compensation | — |  |  | — |  |  | (54 | ) |  | — |  |  | — |  |  | (54 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | (120 | ) |  | (120 | )
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | (6,863 | ) |  | — |  |  | (6,863 | )
Balances at September 30, 2012 | — |  |  | $ | — |  |  | $ | (54 | ) |  | $ | (6,863 | ) |  | $ | (120 | ) |  | $ | (7,037 | )
| As Restated
Balances at September 30, 2011 | 50,199 |  |  | $ | 501 |  |  | $ | 242,398 |  |  | $ | 422,095 |  |  | $ | (746 | ) |  | $ | 664,248 |
Issuance of common stock related to 401(k) match | 19 |  |  | — |  |  | 459 |  |  | — |  |  | — |  |  | 459 |
Stock compensation | — |  |  | — |  |  | 6,660 |  |  | — |  |  | — |  |  | 6,660 |
Stock options exercised | 201 |  |  | 2 |  |  | 647 |  |  | — |  |  | — |  |  | 649 |
Issuance of common stock due to acquisitions | 635 |  |  | 6 |  |  | 17,992 |  |  | — |  |  | — |  |  | 17,998 |
Release of restricted stock | 172 |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | 1 |
Excess tax benefit from stock compensation | — |  |  | 2 |  |  | 1,600 |  |  | — |  |  | — |  |  | 1,602 |
Taxes paid related to net share settlement of equity awards | — |  |  | — |  |  | (1,184 | ) |  | — |  |  | — |  |  | (1,184 | )
Unrealized loss on available-for-sale securities | — |  |  | — |  |  | — |  |  | — |  |  | (478 | ) |  | (478 | )
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | — |  |  | 991 |  |  | 991 |
Net income attributable to EZCORP, Inc. | — |  |  | — |  |  | — |  |  | 136,845 |  |  | — |  |  | 136,845 |
Balances at September 30, 2012 | 51,226 |  |  | $ | 512 |  |  | $ | 268,572 |  |  | $ | 558,940 |  |  | $ | (233 | ) |  | $ | 827,791 |
See Note 19 for the restated unaudited financial statements for each of the fiscal quarters within fiscal 2014, 2013 and 2012 (other than the first quarter of fiscal 2012, which was not restated).

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- Definition The entire disclosure for reporting accounting changes and error corrections. It includes the conveyance of information necessary for a user of the Company's financial information to understand all aspects and required disclosure information concerning all changes and error corrections reported in the Company's financial statements for the period. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=56949863&loc=d3e22644-107794 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 45 -Paragraph 23 -URI http://asc.fasb.org/extlink&oid=6368906&loc=d3e21914-107793 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=56949863&loc=d3e22595-107794 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=56949863&loc=d3e22499-107794 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB TOPIC 1.N.Q3) -URI http://asc.fasb.org/extlink&oid=26874127&loc=d3e30840-122693 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 1 -Section N + Details
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