XML 25 R10.htm IDEA: XBRL DOCUMENT
v3.5.0.2

Discontinued Operations and Restructuring | 9 Months Ended
--- | ---
Jun. 30, 2016
Discontinued Operations and Disposal Groups [Abstract] |
DISCONTINUED OPERATIONS AND RESTRUCTURING | NOTE 2: DISCONTINUED OPERATIONS AND RESTRUCTURING Fiscal 2016 On February 8, 2016 in conjunction with ongoing evaluation of our strategic direction, we announced that we were conducting a comprehensive review of strategic options for Grupo Finmart to be completed by the end of the third quarter of fiscal 2016. In April 2016, a special committee of our board of directors comprised entirely of independent directors, after reviewing a variety of strategic alternatives with management and the company's financial advisors, concluded that a sale of the business was the preferred alternative and authorized management to proceed with a process to solicit proposals from interested buyers. See Note 18 for discussion of the definitive agreement to sell the business entered into effective July 1, 2016. As a result of the decision to sell the Grupo Finmart business, the Company has classified Grupo Finmart as held for sale as of June 30, 2016 and recast all segment operations of Grupo Finmart as discontinued operations. We recognized no loss on classification as held for sale during the three-months ended June 30, 2016. All assets and liabilities of Grupo Finmart have been presented as current as of June 30, 2016 due to anticipated sale within one year. All historical assets and liabilities of Grupo Finmart have been presented as current or non-current based on their historical presentation. We have ceased depreciation and amortization of all long-lived assets classified as held for sale under FASB ASC 350-10-35-43 as of April 2016. The following table presents the reconciliation of the major line items constituting "Loss from discontinued operations, net of tax" of Grupo Finmart that are presented in the condensed consolidated statements of operations:
| Three Months Ended June 30, |  | Nine Months Ended June 30,
| 2016 |  | 2015 |  | 2016 |  | 2015
| (in thousands)
Revenues | $ | 11,762 |  |  | $ | 17,015 |  |  | $ | 36,345 |  |  | $ | 49,826 |
Consumer loan bad debt | (6,200 | ) |  | (2,835 | ) |  | (26,444 | ) |  | (14,685 | )
Operations expense | (9,506 | ) |  | (8,205 | ) |  | (27,120 | ) |  | (23,602 | )
Impairment of goodwill | — |  |  | — |  |  | (73,921 | ) |  | — |
Interest expense, net | (3,944 | ) |  | (5,617 | ) |  | (13,255 | ) |  | (19,370 | )
Depreciation, amortization and other expenses | (4,580 | ) |  | (1,488 | ) |  | (6,216 | ) |  | (4,126 | )
Loss from discontinued operations before income taxes of Grupo Finmart | $ | (12,468 | ) |  | $ | (1,130 | ) |  | $ | (110,611 | ) |  | $ | (11,957 | )
Income tax benefit | 2,746 |  |  | 512 |  |  | 10,439 |  |  | 4,138 |
Income (loss) from discontinued operations, net of tax of operations discontinued prior to the adoption of ASU 2014-08 | 589 |  |  | (8,836 | ) |  | (744 | ) |  | 2,772 |
Loss from discontinued operations, net of tax | $ | (9,133 | ) |  | $ | (9,454 | ) |  | $ | (100,916 | ) |  | $ | (5,047 | )
Loss from discontinued operations, net of tax of Grupo Finmart | $ | (9,722 | ) |  | $ | (618 | ) |  | $ | (100,172 | ) |  | $ | (7,819 | )
Loss from discontinued operations, net of tax of Grupo Finmart attributable to noncontrolling interest | 540 |  |  | 290 |  |  | 4,674 |  |  | 2,348 |
Loss from discontinued operations, net of tax of Grupo Finmart attributable to EZCORP, Inc. | $ | (9,182 | ) |  | $ | (328 | ) |  | $ | (95,498 | ) |  | $ | (5,471 | )
The following table presents the reconciliation of the carrying amounts of major classes of assets and liabilities of Grupo Finmart that are classified as held for sale presented in the condensed consolidated balance sheets:
| June 30, 2016 |  | June 30, 2015 |  | September 30, 2015
| (in thousands)
Cash and cash equivalents | $ | 1,728 |  |  | $ | 982 |  |  | $ | 2,880 |
Restricted cash (1) | 11,654 |  |  | 27,797 |  |  | 14,993 |
Consumer loans, net (1) | 19,905 |  |  | 36,719 |  |  | 31,824 |
Consumer loan fees and interest receivable, net (1) | 11,390 |  |  | 13,595 |  |  | 19,105 |
Prepaid expenses, income taxes and other current assets | 5,004 |  |  | 3,752 |  |  | 4,056 |
Restricted cash, non-current (1) | 2,226 |  |  | 2,978 |  |  | 2,883 |
Goodwill, intangible assets, and property and equipment, net | 10,304 |  |  | 101,083 |  |  | 92,391 |
Non-current consumer loans, net (1) | 51,504 |  |  | 82,739 |  |  | 75,824 |
Deferred tax and other assets, net | 42,872 |  |  | 45,177 |  |  | 55,525 |
Total assets classified as held for sale | $ | 156,587 |  |  | $ | 314,822 |  |  | $ | 299,481 |
Current maturities of long-term debt | $ | 80,248 |  |  | $ | 69,054 |  |  | $ | 74,345 |
Accounts payable, accrued expenses and other current liabilities | 14,098 |  |  | 12,194 |  |  | 13,380 |
Long-term debt, less current maturities, net and other long-term liabilities (2) | 36,281 |  |  | 125,378 |  |  | 101,644 |
Total liabilities classified as held for sale | $ | 130,627 |  |  | $ | 206,626 |  |  | $ | 189,369 |
(1) These amounts include the following assets of Grupo Finmart's securitization trust that can only be used to settle its liabilities (see Note 16):
| June 30, 2016 |  | June 30, 2015 |  | September 30, 2015
| (in thousands)
Restricted cash | $ | 5,505 |  |  | $ | 17,398 |  |  | $ | 12,033 |
Consumer loans* | 32,472 |  |  | 37,288 |  |  | 36,845 |
Consumer loan fees and interest receivable, net | 6,974 |  |  | 5,614 |  |  | 6,067 |
Restricted cash, non-current | 182 |  |  | 117 |  |  | 197 |
Total assets of Grupo Finmart's securitization trust | $ | 45,133 |  |  | $ | 60,417 |  |  | $ | 55,142 |
* | These amounts include the current and non-current portions of active consumer loans considered to be performing under the terms of the Grupo Finmart securitization trust. These balances, which represent the total collateral that can be used to settle the liabilities of the securitization trust, exclude loan loss allowances as described in Note 13, and are presented on a net basis in the condensed consolidated balance sheets including allowances.
(2) This amount includes the following liabilities for which the creditors of Grupo Finmart's securitization trust do not have recourse to the general credit of EZCORP, Inc. (see Note 16):
| June 30, 2016 |  | June 30, 2015 |  | September 30, 2015
| (in thousands)
Long-term debt, less current maturities | $ | 25,669 |  |  | $ | 43,900 |  |  | $ | 40,493 |
Assets and liabilities classified as held for sale and presented above are exclusive of net intercompany liabilities totaling $49.2 million, $3.4 million and $19.9 million as of June 30, 2016 and 2015 and September 30, 2015, respectively. Fiscal 2015 During the fourth quarter of fiscal 2015, in the context of a transformational change in strategy following an intensive six-month review of all Company activities, we implemented a plan that included exiting our U.S. financial services business ("USFS"). We further streamlined our structure and operating model to improve overall efficiency and reduce costs. The costs of streamlining our structure and operating model are included under "Restructuring" expenses in our condensed consolidated statements of operations and are allocated to certain of our segments as presented in Note 12. Total revenue included in "Loss from discontinued operations, net of tax" in our condensed consolidated statements of operations for the three and nine-months ended June 30, 2016, exclusive of Grupo Finmart revenue presented in our fiscal 2016 action above, was nil and $2.1 million, respectively, and $31.5 million and $109.3 million, respectively, for the three and nine-months ended June 30, 2015. All revenue, expense and income reported in these condensed consolidated financial statements have been adjusted to reflect reclassification of all discontinued operations. The following table summarizes the pre-tax restructuring charges of the fiscal 2015 restructuring action, inclusive of the charges presented in the changes in the balance of restructuring costs rollforward below:
| Three Months Ended June 30, 2016 |  | Nine Months Ended June 30, 2016
| (in thousands)
Other (a) | $ | — |  |  | $ | 768 |
Asset disposals | — |  |  | 323 |
Lease termination costs | — |  |  | 819 |
| $ | — |  |  | $ | 1,910 |
(a) | Includes costs related to employee severance and other.
Accrued lease termination costs, severance costs and other costs related to restructuring are included under "Accounts payable, accrued expenses and other current liabilities" in our condensed consolidated balance sheets. Changes in these amounts attributable to the fiscal 2015 restructuring action during the three and nine-months ended June 30, 2016 are summarized as follows:
| Three Months Ended June 30, 2016 |  | Nine Months Ended June 30, 2016
| (in thousands)
Beginning balance | $ | 5,178 |  |  | $ | 8,076 |
Charged to expense | — |  |  | 1,594 |
Cash payments | (1,666 | ) |  | (5,466 | )
Other (a) | 1,716 |  |  | 1,024 |
Ending balance | $ | 5,228 |  |  | $ | 5,228 |
(a) | Includes other individually immaterial adjustments as well as adjustments to our estimate of lease termination costs.
The above ending balance includes accrued lease termination costs of $5.1 million that we expect to be partially offset by future sublease payments through 2029. The remaining other amounts accrued are expected to be paid during fiscal 2016. Fiscal 2014 During the fourth quarter of fiscal 2014, we conducted a company-wide operational review to realign our organization to streamline operations and create synergies and efficiencies. Restructuring charges related to this action were considered corporate costs and therefore are not allocated to specific segments. Changes in these amounts during the three and nine-months ended June 30, 2016 and 2015 are summarized as follows:
| Three Months Ended June 30, |  | Nine Months Ended June 30,
| 2016 |  | 2015 |  | 2016 |  | 2015
| (in thousands)
Beginning balance | $ | — |  |  | $ | 3,885 |  |  | $ | 2,901 |  |  | $ | 6,121 |
Charged to expense | — |  |  | 37 |  |  | — |  |  | 763 |
Cash payments | — |  |  | (706 | ) |  | (2,901 | ) |  | (3,668 | )
Ending Balance | $ | — |  |  | $ | 3,216 |  |  | $ | — |  |  | $ | 3,216 |

X
- References No definition available. + Details
Name: | us-gaap_DiscontinuedOperationsAndDisposalGroupsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=65878427&loc=SL51721533-107759 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721665-107760 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5C -URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721675-107760 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3A -URI http://asc.fasb.org/extlink&oid=64862545&loc=SL51724579-110230 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721663-107760 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=64862545&loc=d3e2941-110230 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=64827811&loc=d3e1361-107760 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5B -URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721673-107760 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3A -URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721659-107760 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5A -URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721671-107760 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5D -URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721677-107760 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=64827811&loc=d3e1474-107760 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721683-107760 + Details
Name: | us-gaap_DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration