The senior notes were offered in a private offering, and initial purchasers were given the opportunity to buy up to an additional $30 million aggregate principal amount of senior notes.
EZCORP expects net proceeds of about $193 million from the offering. The company will use $11.9 million to repurchase chafes in privately negotiated transactions, about $115 million to pay off existing borrowings, and about $18.5 million "to fund the cost of entering into the cash convertible note hedge transactions." The rest of the proceeds will be used for general corporate purposes.
TheStreet Ratings team rates EZCORP INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate EZCORP INC (EZPW) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- EZPW's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.19, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for EZCORP INC is rather high; currently it is at 67.67%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, EZPW's net profit margin of 3.07% significantly trails the industry average.
- EZPW, with its decline in revenue, slightly underperformed the industry average of 1.4%. Since the same quarter one year prior, revenues slightly dropped by 3.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Consumer Finance industry. The net income has significantly decreased by 76.5% when compared to the same quarter one year ago, falling from $33.98 million to $7.99 million.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 34.50%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 77.27% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- You can view the full analysis from the report here: EZPW Ratings Report