EZCORP, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations is intended to inform the reader about matters affecting the financial condition and results of operations ofEZCORP, Inc. and its subsidiaries (collectively, "we," "us", "our", "EZCORP" or the "Company"). The following discussion should be read together with our condensed consolidated financial statements and related notes included elsewhere within this report. This discussion contains forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements. See "Part I, Item 1A - Risk Factors" of our Annual Report on Form 10-K for the year endedSeptember 30, 2020 , as supplemented by the information set forth in "Part I, Item 3 - Quantitative and Qualitative Disclosures about Market Risk" and "Part II, Item 1A - Risk Factors" of this Report, for a discussion of certain risks, uncertainties and assumptions associated with these statements. Business OverviewEZCORP is aDelaware corporation headquartered inAustin, Texas . We are a leading provider of pawn loans inthe United States andLatin America . Pawn loans are nonrecourse loans collateralized by personal property. We also sell merchandise, primarily collateral forfeited from unpaid loans or goods purchased directly from customers. We exist to serve our customers' short-term cash needs, helping them to live and enjoy their lives. We are focused on three strategic pillars: Strengthen the Core Renewed focus on the unique and
essential elements of our pawn
business
Cost Reduction and Significant and sustained adjustment of cost base through
Simplification ongoing simplification
Innovate and Grow Broaden customer engagement to service more customers more
frequently in more locations
Pawn Activities
At our pawn stores, we offer pawn loans, which are typically small, nonrecourse
loans collateralized by tangible personal property. We earn pawn service charges
on our pawn loans, which varies by state and loan size. Collateral for our pawn
loans consists of tangible personal property, generally jewelry, consumer
electronics, tools, sporting goods and musical instruments. Security for our
pawn loans is provided via the estimated resale value of the collateralized
personal property and the perceived probability of the loans' redemption.
Our ability to offer quality pre-owned goods at prices significantly lower than
original retail prices attracts value-conscious customers. The gross profit on
sales of inventory depends primarily on our assessment of the loan or purchase
value at the time the property is either accepted as loan collateral or
purchased and our ability to sell that merchandise in a timely manner. As a
significant portion of our inventory and sales involve gold and jewelry, our
results can be influenced by the market price of gold and diamonds.
Growth and Expansion
Our strategy is to expand the number of locations we operate through opening new
("de novo") locations and through acquisitions in both Latin America and the
United States and potential new markets. Our ability to add new stores is
dependent on several variables, such as projected achievement of internal
investment hurdles, the availability of acceptable sites or acquisition
candidates, the alignment of acquirer/seller price expectations, the regulatory
environment, local zoning ordinances, access to capital and the availability of
qualified personnel. We see opportunity for further expansion through
acquisitions and de novo openings in Latin America and acquisitions in the
United States .
Seasonality and Quarterly Results
In the United States , pawn service charges are historically highest in our
fourth fiscal quarter (July through September) due to a higher average loan
balance during the summer lending season and lowest in our third fiscal quarter
(April through June) following the tax refund season and merchandise sales are
highest in our first and second fiscal quarters (October through March) due to
the holiday season, jewelry sales surrounding Valentine's Day and the
availability of tax refunds. In Latin America , most of our customers receive
additional compensation from their employers in December, and many receive
additional compensation in June or July, applying downward pressure on loan
balances and fueling some merchandise sales in those periods. As a net effect of
these and other factors and excluding discrete charges, our consolidated profit
before tax is generally highest in our first fiscal quarter (October through
December) and lowest in our third
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fiscal quarter (April through June). These historical trends have been impacted
by COVID-19. However, we expect these historical trends to return in the future.
Financial Highlights
We remain focused on optimizing our balance of pawn loans outstanding ("PLO")
and the resulting higher pawn service charges ("PSC"). The following chart
presents sources of net revenues, including PSC, merchandise sales gross profit
("Merchandise sales GP") and jewelry scrapping gross profit ("Jewelry Scrapping
GP") for the three and nine months ended June 30, 2021 and 2020:
[[Image Removed: ezpw-20210630_g2.jpg]]
The following chart presents sources of net revenues by geographic disbursement
for the three and nine months ended
[[Image Removed: ezpw-20210630_g3.jpg]]
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Business Developments
COVID-19
The COVID-19 pandemic continues to affect the U.S. and global economies, and as
disclosed in our 2020 Annual Report on Form 10-K, the pandemic also affected our
business in a variety of ways beginning in the second quarter of fiscal 2020 and
continuing into fiscal 2021. The full extent and duration of the COVID-19 impact
on the global economy generally, and on our business specifically, is currently
unknown. We expect the impact of the pandemic, and the recovery therefrom, will
continue to adversely affect net revenues and earnings in fiscal 2021. A
prolonged pandemic and recovery may have an adverse effect on our results of
operations, financial position and liquidity in future periods.
Reinvestment of Dividends
On February 21, 2021 , Cash Converters International announced that its board of
directors declared an interim dividend of AUD $0.01 per share, which was payable
on April 14, 2021 to ordinary shareholders of record as of the close of business
on March 25, 2021 . We elected to receive our dividend entitlement in the form of
additional ordinary shares pursuant to Cash Converters International's
pre-existing Dividend Reinvestment Plan. Under that plan, on April 14, 2021 , we
received an additional 9,519,277 shares, bringing our total ownership to
223,702,991 shares, representing 35.65% of Cash Converters International's total
outstanding ordinary shares.
Acquisitions
On June 9, 2021 , we completed the acquisition of 100% of the common shares of
PLO del Bajio S. de R.L. de C.V. ("Bajio") and gained control of the entity,
further expanding our geographic footprint within Mexico with the addition of
128 pawn stores. These stores, operating under the name "Cash Apoyo Efectivo,"
are located principally in the Mexico City metropolitan area and have strong
brand recognition in that market. This is our largest acquisition to date in
terms of store-count. The total consideration paid for Bajio was $23.6 million ,
consisting of cash of $17.4 million , of which $11.6 million was paid in cash at
closing and the remaining $5.8 million is accrued and held as restricted cash to
be paid out per the acquisition agreement, and 212,870 shares of our Class A
Non-Voting Common Stock valued at $1.6 million . In addition, the sellers may be
entitled to additional payments of up to $4.6 million over the next two years,
contingent on the performance of the acquired stores with growing its loan
portfolio. We also repaid $14.9 million of Bajio's existing debt assumed in the
acquisition.
In May 2021 , we acquired 11 pawn stores in the Houston, Texas area, providing an
immediate market-leading position in the South Houston area and enhancing our
already strong position in the strategically important Houston metro market.
Strategic Initiatives
During the fourth quarter of fiscal 2020, we began to implement strategic
initiatives to refocus on our core pawn business and optimize our cost structure
in order to improve our bottom line performance and position us for sustainable
growth. During the third quarter of fiscal 2021, due to uneconomic rate caps and
limited synergies across our platform, we finalized our decision for the closure
of our 11 stores in Peru and incurred costs of $0.5 million related to the
closure.
Results of Operations
Non-GAAP Constant Currency Financial Information
To supplement our condensed consolidated financial statements, which are
prepared and presented in accordance with GAAP, we provide certain other
non-GAAP financial information on a constant currency basis ("constant
currency"). We use constant currency results to evaluate our Latin America Pawn
operations, which are denominated primarily in Mexican pesos, Guatemalan
quetzales and other Latin American currencies. We believe presentation of
constant currency results is meaningful and useful in understanding the
activities and business metrics of our Latin America Pawn operations and reflect
an additional way of viewing aspects of our business that, when viewed with GAAP
results, provide a better understanding and evaluation of factors and trends
affecting our business. We provide non-GAAP financial information for
informational purposes and to enhance understanding of our GAAP consolidated
financial statements. We use this non-GAAP financial information to evaluate and
compare operating results across accounting periods. Readers should consider the
information in addition to, but not rather than or superior to, our financial
statements prepared in accordance with GAAP. This non-GAAP financial information
may be determined or calculated differently by other companies, limiting the
usefulness of those measures for comparative purposes.
Constant currency results reported herein are calculated by translating
consolidated balance sheet and consolidated statement of operations items
denominated in local currency to U.S. dollars using the exchange rate from the
prior-year comparable period, as opposed to the current period, in order to
exclude the effects of foreign currency rate fluctuations. We used the
end-of-period rate for balance sheet items and the average closing daily
exchange rate on a monthly basis during the appropriate period for statement of
operations items. Our statement of operations constant currency results reflect
the monthly exchange rate fluctuations and are not directly calculable from the
rates below.
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Constant currency results, where presented, also exclude the foreign currency
gain or loss. The end-of-period and approximate average exchange rates for each
applicable currency as compared to U.S. dollars as of and for the three and nine
months ended June 30, 2021 and June 30, 2020 were as follows:
Three Months Ended Nine Months Ended
June 30, June 30, June 30,
2021 2020 2021 2020 2021 2020
Mexican peso 19.9 23.1 20.0 23.3 20.3 20.8
Guatemalan quetzal 7.6 7.5 7.6 7.5 7.6 7.5
Honduran lempira 23.6 24.4 23.7 24.4 23.8 24.3
Peruvian sol 3.9 3.5 3.8 3.4 3.7 3.4
Operating Results
Segments
We manage our business and report our financial results in three reportable
operating segments;
•U.S. Pawn - Represents all pawn activities in the United States ;
•Latin America Pawn - Represents all pawn activities in Mexico and other parts
of Latin America ; and
•Other International - Represents our equity interest in the net income of Cash
Converters International and Rich Data Corporation and our financial services
stores in Canada , operating under the CASHMAX brand. In the fourth quarter of
fiscal 2020, we closed our stores in Canada , and closing activities related to
CASHMAX in fiscal year 2021 are not material.
See Note 14 (Segment Information) for information regarding changes in
reportable segments. Our historical segment results have been recast to conform
to current presentation.
Store Data by Segment
Three Months Ended
U.S. Pawn Latin America Pawn Consolidated
As of March 31, 2021 505 506 1,011
New locations opened - 4 4
Locations acquired 11 128 139
Locations sold, combined or closed - (11) (11)
As of June 30, 2021 516 627 1,143
Three Months Ended June 30, 2020
U.S. Pawn Latin America Pawn Other International Consolidated
As of March 31, 2020 512 493 22 1,027
New locations opened - 3 - 3
Locations sold, combined or closed (1) - - (1)
As of June 30, 2020 511 496 22 1,029
Nine Months Ended
U.S. Pawn Latin America Pawn Consolidated
As of September 30, 2020 505 500 1,005
New locations opened - 10 10
Locations acquired 11 128 139
Locations sold, combined or closed - (11) (11)
As of June 30, 2021 516 627 1,143
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Nine Months Ended
U.S. Pawn Latin America Pawn Other International Consolidated
As of September 30, 2019 512 480 22 1,014
New locations opened - 16 - 16
Locations sold, combined or closed (1) - - (1)
As of June 30, 2020 511 496 22 1,029
25-------------------------------------------------------------------------------- Table of Contents Three Months EndedJune 30, 2021 vs. Three Months EndedJune 30, 2020 These tables, as well as the discussion that follows, should be read in conjunction with the accompanying condensed consolidated financial statements and related notes.U.S. Pawn The following table presents selected summary financial data for ourU.S. Pawn segment: Three Months Ended June 30, (in thousands) 2021 2020 Change Net revenues: Pawn service charges$ 44,039 $ 41,069 7% Merchandise sales 84,465 116,258 (27)% Merchandise sales gross profit 39,155 40,420 (3)% Gross margin on merchandise sales 46 % 35 % 1,100bps Jewelry scrapping sales 1,908 17,129 (89)% Jewelry scrapping sales gross profit 30 4,254 (99)% Gross margin on jewelry scrapping sales 2 % 25 % (2,300)bps Other revenues 32 40 (20)% Net revenues 83,256 85,783 (3)% Segment operating expenses: Store expenses 62,507 66,243 (6)% Depreciation and amortization 2,600 2,749 (5)% Loss on sale or disposal of assets and other - 234 (100)% Segment contribution$ 18,149 $ 16,557 10% Other data: Net earning assets (a)$ 186,322 $ 176,866 5% Inventory turnover 2.8 3.2 (13)%
Average monthly ending pawn loan balance per store (b) $ 206
$ 172 20% Monthly average yield on pawn loans outstanding 14 % 14 % -bps Pawn loan redemption rate 88 % 88 % -bps
* Represents a percentage computation that is not mathematically meaningful. (a) Balance includes pawn loans and inventory. (b) Balance is calculated based upon the average of the monthly ending balances during the
applicable period.
Pawn service charges increased by 7% as a result of higher average PLO for the
quarter. Same stores pawn service charges also increased by 7%.
Merchandise sales decreased 27% on both a total and same store basis resulting
from the increased demand in the prior year quarter due to the impact of federal
economic stimulus. Merchandise sales gross profit decreased 3% to $39.2 million
offset by a 1,100 bps improvement in merchandise sales gross profit margin,
primarily due to reduced aged inventory levels. (There was a 900 bps improvement
when excluding a loss from looting of $2.2 million from merchandise cost of
goods sold in the prior year).
Store expenses decreased by 6% driven by a reduction in labor expense.
Segment contribution increased $1.6 million or 10%. When excluding the looting
charge taken in the prior year quarter, segment contribution decreased $0.6
million ,
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Latin America Pawn
The following table presents selected summary financial data for the Latin
America Pawn segment, including constant currency results, after translation to
U.S. dollars from its functional currencies noted above under "Results of
Operations - Non-GAAP Financial Information."
Three Months Ended
2021 (Constant Change (Constant
(in thousands) 2021 (GAAP) 2020 (GAAP) Change (GAAP) Currency) Currency)
Net revenues:
Pawn service charges $ 16,392 $ 11,391 44% $ 14,829 30%
Merchandise sales 23,343 20,279 15% 20,844 3%
Merchandise sales gross profit 8,114 4,258 91% 7,179 69%
Gross margin on merchandise sales 35 % 21 % 1,400bps 34 % 1,300bps
Jewelry scrapping sales 3,765 3,174 19% 3,429 8%
Jewelry scrapping sales gross profit 170 (109) (256)% 165 (251)%
Gross margin on jewelry scrapping sales 5 % (3) % 800bps 5 % 800bps
Other revenues, net - (32) (100)% - (100)%
Net revenues 24,676 15,508 59% 22,173 43%
Segment operating expenses:
Store Expenses 19,296 15,041 28% 17,276 15%
Depreciation and amortization 1,806 1,647 10% 1,622 (2)%
Other Charges 497 - * 491 *
Segment operating contribution 3,077 (1,180) 361% 3,275 378%
Other segment income (a) (489) (442) 11% 65 (115)%
Segment contribution $ 3,566 $ (738) 583% $ 3,210 535%
Other data:
Net earning assets (b) $ 63,075 $ 59,441 6% $ 56,453 (5)%
Inventory turnover 4.0 2.2 82% 4.0 82%
Average monthly ending pawn loan balance
per store (c) $ 65 $ 59 10% $ 59 -%
Monthly average yield on pawn loans
outstanding 16 % 12 % 400bps 16 % 400bps
Pawn loan redemption rate (d) 79 % 77 % 200bps 79 % 200bps
* Represents a percentage computation that is not mathematically meaningful. (a) Fiscal 2021 constant currency amount excludes a nominal net GAAP basis foreign currency
transaction adjustment resulting from movement in exchange rates. The net foreign
currency transaction adjustment for fiscal 2020 was nominal and are included in the
above results. (b) Balance includes pawn loans and inventory. (c) Balance is calculated based upon the average of the monthly ending balances during the
applicable period.
(d) Rate is solely inclusive of results from Mexico Pawn.
In the current quarter, we acquired 128 stores and opened four de novo stores,
bringing total segment store-count to 627 at the end of the quarter (net of the
closure of 11 stores in Peru ).
Pawn service charges increased 44% (30% on a constant currency basis). Same
store pawn service charges increased by 38% (24% on a constant currency basis)
as a result of higher average PLO for the quarter.
Merchandise sales increased 15% (3% on a constant currency basis) and 8% on a
same store basis (4% decrease on a constant currency basis). Merchandise sales
gross profit increased 91% to $8.1 million (69% to $7.2 million on a constant
currency basis) driven by a 1,400 basis points improvement in merchandise sales
gross profit margin primarily due to reduced aged inventory levels and improved
inventory turnover.
Store expenses increased by 28% (15% on a constant currency basis) primarily due
to an increase in transaction volume and costs resulting from the re-opening of
stores impacted by the COVID-19 pandemic last year.
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Segment contribution increased$4.3 million primarily due to the shutdown of stores related to the COVID-19 pandemic last year. Other International The following table presents selected financial data for our Other International segment after translation toU.S. dollars from its functional currency of primarily Australian and Canadian dollars: Three Months Ended June 30, (in thousands) 2021 2020 Change Net revenues: Consumer loan fees, interest and other $ 89$ 884 (90)% Consumer loan debt - - * Net revenues 89 884 (90)% Segment operating expenses: Store expenses - 1,057 * Depreciation and amortization - 3 * Gain on sale or disposal of assets - (20) * Equity in net (income) loss of unconsolidated affiliates (643) 1,183 (154)% Segment operating contribution 732 (1,339) 155% Other segment expense 18 135 (87)% Segment contribution (loss)$ 714 $ (1,474) 148%
* Represents a percentage computation that is not mathematically meaningful.
Segment contribution was$0.7 million , an increase of$2.2 million from the prior-year quarter primarily due to the increase in equity income for our unconsolidated affiliates. We operated 22 financial services stores inCanada under the CASHMAX brand during fiscal year 2020. During the fourth quarter of fiscal year 2020, we closed our CASHMAX business and are no longer operating stores inCanada . Other Items The following table reconciles our consolidated segment contribution discussed above to net income attributable toEZCORP, Inc. , including items that affect our consolidated financial results but are not allocated among segments: Three Months Ended June 30, (in thousands) 2021 2020 Percentage Change Segment contribution$ 22,429 $ 14,345 56% Corporate expenses (income): General and administrative 14,589 16,176 (10)% Depreciation and amortization 3,013 3,280 (8)% Gain on sale or disposal of assets and other - 18 (100)% Interest expense 5,569 5,239 6% Interest income (28) (224) (88)% Other expense 52 94 * Loss before income taxes (766) (10,238) 93% Income tax expense (benefit) 1,804 (4,751) (138)% Net loss$ (2,570) $ (5,487) 53%
* Represents a percentage computation that is not mathematically meaningful.
Segment contribution increased$8.1 million over the prior-year quarter or 56% primarily due to the increase in the Latin America Pawn segment contribution resulting from the re-opening of stores impacted by COVID-19 last year. 28 -------------------------------------------------------------------------------- Table of Contents General and administrative expenses decreased$1.6 million or 10% due to strategic initiatives implemented in the fourth quarter of fiscal year 2020 to optimize our cost structure at the corporate level. Income tax expense increased$6.6 million for the quarter primarily due to an increase in income taxes for the current year due to an approximately$9.5 million increase in income before income taxes. Income tax expense includes other items that do not necessarily correspond to pre-tax earnings and create volatility in our effective tax rate. These items include the net effect of state taxes, non-deductible items and changes in valuation allowances for certain foreign operations. Nine Months EndedJune 30, 2021 vs. Nine Months EndedJune 30, 2020 The tables below and discussion that follows should be read in conjunction with the accompanying condensed consolidated financial statements and related notes.U.S. Pawn The following table presents selected summary financial data for theU.S. Pawn segment: Nine Months Ended June 30, (in thousands) 2021 2020 Change Net revenues: Pawn service charges$ 143,836 $ 166,859 (14)% Merchandise sales 260,545 314,059 (17)% Merchandise sales gross profit 115,364 111,571 3% Gross margin on merchandise sales 44 % 36 % 800bps Jewelry scrapping sales 9,493 32,905 (71)% Jewelry scrapping sales gross profit 1,622 7,475 (78)% Gross margin on jewelry scrapping sales 17 % 23 % (600)bps Other revenues 83 107 (22)% Net revenues 260,905 286,012 (9)% Segment operating expenses: Store expenses 188,256 201,921 (7)% Impairment of goodwill, intangibles and other assets - 10,000 * Depreciation and amortization 7,972 8,325 (4)% Segment operating contribution 64,677 65,766 (2)% Other segment expense 27 234 * Segment contribution$ 64,650 $ 65,532 (1)% Other data: Average monthly ending pawn loan balance per store (a) $ 218$ 248 (12)% Monthly average yield on pawn loans outstanding 14 % 14 % -bps Pawn loan redemption rate 87 % 87 % -bps
* Represents a percentage computation that is not mathematically meaningful. (a) Balance is calculated based upon the average of the monthly ending balances during the
applicable period.
Pawn service charges decreased 14% in total and on a same store basis. This decrease reflects a substantial decline in new loans activity and associated loan balances as customer borrowing behaviors were impacted by COVID-19. Merchandise sales decreased 17% in total and on a same store basis due to lower inventory levels. Merchandise sales gross profit increased 3% to$115.4 million driven by a 800 bps improvement in merchandise sales gross profit margin, primarily driven by reduced aged inventory levels and improved inventory turnover. Store expenses decreased by 7% due to a reduction in labor expense. 29 -------------------------------------------------------------------------------- Table of Contents Segment contribution decreased$0.9 million primarily due to the changes in revenue and store expenses described above, offset by the$10.0 million goodwill impairment charge recorded during the prior year quarter. Excluding the goodwill impairment charge, segment contribution decreased$10.9 million , or 14%, to$64.7 million . Latin America Pawn The following table presents selected summary financial data ourLatin America Pawn segment, including constant currency results, after translation toU.S. dollars from functional currencies. See "Results of Operations - Non-GAAP Financial Information" above.
Nine Months Ended
2021 (Constant Change (Constant
(in thousands) 2021 (GAAP) 2020 (GAAP) Change (GAAP) Currency) Currency)
Net revenues:
Pawn service charges $ 43,520 $ 50,548 (14)% $ 42,873 (15)%
Merchandise sales 70,271 79,036 (11)% 69,431 (12)%
Merchandise sales gross profit 24,580 19,813 24% 24,191 22%
Gross margin on merchandise sales 35 % 25 % 1,000bps 35 % 1,000bps
Jewelry scrapping sales 9,014 8,804 2% 8,757 (1)%
Jewelry scrapping sales gross profit 809 705 15% 833 18%
Gross margin on jewelry scrapping sales 9 % 8 % 100bps 10 % 200bps
Other revenues, net 7 (19) (137)% 6 (132)%
Net revenues 68,916 71,047 (3)% 67,903 (4)%
Segment operating expenses:
Store expenses 54,005 53,493 1% 53,395 -%
Depreciation and amortization 5,459 5,476 -% 5,407 (1)%
Impairment of goodwill, intangibles and
other assets - 35,936 (100)% - (100)%
Other Charges 497 - * 491 *
Segment operating contribution (loss) 8,955 (23,858) 138% 8,610 136%
Other segment income (a) (2,194) (1,106) 98% (2,110) 91%
Segment contribution (loss) $ 11,149 $ (22,752) 149% $ 10,720 147%
Other data:
Average monthly ending pawn loan balance
per store (b) $ 58 $ 77 (25)% $ 57 (26)%
Monthly average yield on pawn loans
outstanding 16 % 15 % 100bps 16 % 100bps
Pawn loan redemption rate 81 % 77 % 400bps 81 % 400bps
* Represents a percentage computation that is not mathematically meaningful. (a) Fiscal 2021 constant currency amount excludes a nominal net GAAP basis foreign currency
transaction adjustment resulting from movement in exchange rates. The net foreign
currency transaction adjustment for fiscal 2020 was nominal and are included in the
above results. (b) Balance is calculated based upon the average of the monthly ending balances during the
applicable period.
During the nine months endedJune 30, 2021 , ourLatin America pawn segment acquired 128 stores and opened ten de novo stores. The change in net revenue attributable to same stores and new stores added since the prior-year is summarized as follows: Pawn service charges decreased 14% (15% on a constant currency basis). Same stores pawn service charges also decreased by 16% (17% on a constant currency basis). The average ending monthly pawn loan balance outstanding during the nine month period was down 25% (26% on a constant currency basis). During most of this period, we have experienced a substantial decline in new loans activity and associated loan balances as the result of the impact of constrained traffic, limited operating hours and increased remittances from theU.S. Merchandise sales decreased 11% (12% on a constant currency basis) and 14% on a same store basis due to lower inventory levels. This decrease in merchandise sales was offset by an increase in merchandise sales gross profit of 24% to$24.6 million (22% to$24.2 million on a 30 -------------------------------------------------------------------------------- Table of Contents constant currency basis) driven by a 1,000 bps improvement in merchandise sales gross profit margin primarily due to reduced aged inventory levels and improved inventory turnover. Store expenses decreased by 1% (flat on a constant currency basis) driven by a reduction in labor expense. Segment contribution increased$33.9 million primarily due to the impairment charges of$35.9 million recorded during the prior year quarter. Excluding the impairment charges, segment contribution decreased$2.0 million , or 15%, to$11.1 million . This decrease was primarily due to the changes in revenue and store expenses described above. Other International The following table presents selected financial data for our Other International segment after translation toU.S. dollars from its functional currency of primarily Australian and Canadian dollars: Nine Months Ended June 30, (in thousands) 2021 2020 Change Net revenues: Consumer loan fees, interest and other $ 338$ 3,570 (91)% Consumer loan debt - 1,024 (100)% Net revenues 338 2,546 (87)% Segment operating expenses: Store expenses - 3,850 (100)% Impairment of goodwill, intangible and other assets - 1,124 (100)% Gain on sale or disposal of assets - (20) (100)% Equity in net (income) loss on unconsolidated affiliates (2,409) 5,896 141% Segment operating contribution 2,747 (8,304) 133% Other segment (income) expense (183) 538 134% Segment contribution (loss)$ 2,930 $ (8,842) 133% Segment contribution was$2.9 million , an increase of$11.8 million from the prior-year quarter primarily due to a an increase of$5.0 million of net segment operating contribution resulting from the closure of ourCanada operations and a$7.1 million charge, ($10.1 million , net of a$3.0 million tax benefit) in the first quarter of fiscal 2020 for the our share of the Cash Converters International settlement of a class action lawsuit. During the fourth quarter of fiscal year 2020, we closed our CASHMAX business and are no longer operating stores inCanada . Other Items The following table reconciles our consolidated segment contribution discussed above to net income attributable toEZCORP, Inc. , including items that affect our consolidated financial results but are not allocated among segments: Nine Months Ended June 30, (in thousands) 2021 2020 Percentage Change Segment contribution$ 78,729 $ 33,938 132% Corporate expenses (income): General and administrative 40,870 50,355 (19)% Depreciation and amortization 9,649 9,313 4% Loss on sale or disposal of assets 63 1,118 (94)% Interest expense 16,542 15,695 5% Interest income (99) (1,251) (92)% Other expense 169 74 128%
Income (loss) from continuing operations before income taxes 11,535
(41,366) 128%
Income tax expense 4,476 3,757 19%
Net income (loss) attributable to EZCORP, Inc. $ 7,059 $ (45,123) 116%
Segment contribution increased $44.8 million or 132% over the prior-year period,
primarily due to a $47.1 million impairment charge of certain long-lived assets
in the second quarter of fiscal 2020. Excluding the impairment charges, segment
contribution decreased by $2.3 million or
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Table of Contents 3% primarily due to reduced pawn service charges from a decline in new loan activity and associated loan balances as a result of a change in customer borrowing behaviors due to COVID-19, partially offset by increased merchandise sales gross profit and decreased store expenses. General and administrative expenses decreased$9.5 million due to strategic initiatives implemented in the fourth quarter of fiscal year 2020 to optimize our cost structure at the corporate level. Income tax expense increased$0.7 million primarily due to an increase in income taxes for the current year due to an approximately$52.9 million increase in income before income taxes offset by a decrease in income tax expense of approximately$14.0 million due to non-deductible goodwill impairments booked in the quarter endedMarch 31, 2020 . Income tax expense includes other items that do not necessarily correspond to pre-tax earnings and create volatility in our effective tax rate. These items include the net effect of state taxes, non-deductible items and changes in valuation allowances for certain foreign operations. Liquidity and Capital Resources We currently believe that, based on available capital resources and projected operating cash flow, we have adequate capital resources to fund working capital needs, currently anticipated capital expenditures, currently anticipated business growth and expansion, tax payments, and current and projected debt service requirements. Cash and Cash Equivalents Our cash and equivalents balance was$283.7 million atJune 30, 2021 compared to$304.5 million atSeptember 30, 2020 . AtJune 30, 2021 , our cash and equivalents were held in cash depository accounts with major banks or invested in high quality, short-term liquid investments. Cash Flows The table and discussion below presents a summary of the selected sources and uses of our cash:
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