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spk03: Further, we have continued to modernize our backend POS, enhancing the scalability across our systems and processes. In the US, we have expanded the availability of third-party payment programs, driving higher retail sales, and reinforcing our commitment to servicing customers. Growing deeper relationships with our customer base is also reflected by the continued growth of easy plus rewards members, which grew 51% to five million members globally. Our CorpHorn website also experienced a 50% boost in traffic. We continue to believe in fostering a culture that empowers and recognizes our team members, as they are the foundation of our success. We completed our annual company-wide engagement survey that serves as a scorecard of how our culture is transforming. With robust participation of over 80% of our team members this year, we scored 84 points, 10 points above the external benchmark. This quarter, we also introduced a new tenure reward program to recognize and reward long-term team member commitment. Turning to innovation and growth, we experienced close to a 50% increase in US online payment collections during the quarter, as well as a notable rise in the adoption of online payments in Mexico, with 10% of extensions and layaways now managed online. We also grew MaxCorn luxury commerce sales by seven times, primarily driven through eBay. On slide seven, we highlight our sustainable and customer-centric approach. By selling 1.2 million pre-owned items, we extended the life cycle of these goods and contributed to a more sustainable future. At the same time, we provided access to critical financial services to hundreds of local communities. At EZCorp, we're building a diverse and inclusive workplace through a range of initiatives. Our commitment to a positive team member experience extends beyond the job. We actively support employee resource groups as a platform for connection, professional development, and celebrating diversity. Outside the walls of EZCorp, we actively contribute to the communities we serve. We continue to partner with charities tackling critical issues like financial literacy, food insecurity, youth development, and poverty reduction, aligning with our commitment to make a positive social impact. I would now like to turn the call over to Tim Jugmans, our Chief Financial Officer, to provide more details on our financial results. Tim?
spk04: Thanks, Lachie. Slide nine, details on consolidated financial results for the third quarter. As Lachie mentioned earlier, we ended the quarter with record PLO of $265 million, up 15%, and up 13% on a same-store basis. PC revenue was up 14% over last year, with growth primarily driven by same-store PLO growth. Inventory turnover was 2.7 times, with HGM inventory at 3.2%. Merchandise sales were up 6% to $157.1 million, and merchandise gross profit increased 7%. The company delivered another strong quarter of profitability, with adjusted EBITDA rising 15% to $31.6 million, and adjusted EBITDA margin expanding to 11%. This increase was primarily driven by higher PSE, partially offset by a 10% increase in expenses. Turning to our US porn segment on slide 10, we delivered record third quarter total revenue of $199.1 million, up 8% -over-year, and earning assets increased 9%, driven by a PLO increase of about 11% and 6% in inventory. Slide 11 provides a map showing US states in which we operate. Our US store count has grown to 541 stores, with five stores acquired and the opening of one de novo store in the quarter. Average loan size grew 8% driven by PLO jewellery composition, which was up 100 basis points due to continued operational focus on this category. Inventory general merchandise composition is up 200 basis points, driven by an increase in handbags, shrooms, and tools. Slide 12 provides a financial overview of our US segment. Total PLO balance increased 11%, with 10% on a same store basis, driving PSE increase of 13% -over-year. On the US retail side of the business, merchandise sales were up 6%, while merchandise sales growth profit was up 3%. The imputed lower gross margin reflects our focus on inventory turnover. US porn EBITDA for the quarter was $38.5 million, growing 11% due to higher PSE, partially offset by an 8% increase in US expenses. US EBITDA margin improved 49 basis points to 19%, reflecting our focus on driving the bottom line. Turning to our Latin American segment on slide 13. Total revenues increased 13% to $80.7 million, which is a record high for the third quarter. Earning assets increased 30%, driven by a PLO increase of 30%, and inventory increase of 32%. We increased our presence in Latin America to 717 stores this quarter, opening six stores in three countries. PLO jewelry composition is up 500 basis points, with an operational focus on growing this category, especially in Mexico. High jewelry PLO composition has also driven average loan size up 10% on a constant currency basis. Turning to slide 15. As I mentioned, our Latam region experienced significant PLO growth of 30%. This was primarily driven by our team's operational performance and the region's higher porn demand. PSE was up 19%, driven by same-store PLO growth. On the retail side of the business, merchandise sales were up 8%, while merchandise gross profit increased 18%, reflecting 200 basis points of margin expansion. Evidar grew an impressive 29% to $11.9 million, with Evidar margin coming in at 15%, up 189 basis points. The Evidar improvement was due to higher PSE, partially offset by a 16% increase in expenses, with same-store expenses increasing 12%. From a consolidated perspective, we anticipate that we will continue to see PLO growth year on year and expect PSE to mirror this trend. Our ongoing emphasis on optimizing inventory turnover and minimizing age-general merchandise remains a core component to our retail strategy. While we still operate in an inflationary environment, we are committed to prudent expense management and perceive the sequential same-store expense growth easing. Additionally, the strategic expansion of our store footprint necessitates increased staffing levels, which contribute to higher operating costs. A quick word on our capital stack and allocation priorities. We continue to have a robust liquidity position with $218 million of cash and $368 million of gross convertible notes on our balance sheet as of June 30, 2024. We believe the most effective uses of cash to drive shareholder value include reinvestment in our business to drive organic growth, acquisitions, shared buybacks and debt repayments. As Lachie mentioned earlier, the 2024 notes were retired in early July. We have $103 million of convertible notes that come due in May 2025. We continue to explore a series of options to retire or refinance that note, including by use of existing cash, traditional debt or other equity-linked instruments. Looking ahead, we believe that our focus on cultivating PLO coupled with our commitment to inventory management, streamlined systems and exceptional customer service will continue to be the driving forces behind our strong financial performance. I will now turn it over to Lachie for a few closing remarks.
spk03: Thanks Tim. In closing, I'd like to express my gratitude to the EZ Corp team for once again delivering outstanding operating and financial results to our stakeholders this quarter. Our record results are a testament to the team's dedication and hard work. The company has demonstrated robust performance throughout the first three fiscal quarters of 2024 and we remain well positioned to sustain this momentum and deliver returns for our shareholders as we close out the fiscal year. And with that, we will open the call for questions.
spk02: Operator? Operator Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To with a dryer question, please press star 1-1 again. One moment for questions. Our first question comes from Brian McNamara with Canaccord Genuity. You may proceed.
spk01: Brian McNamara Hey, good morning guys. Congrats on the results. Thanks for taking the questions here.
spk02: Tim
spk01: First off, it was great to see you settled the $34 million in 2024 convertible notes in cash and it's also great to hear you'll consider maybe a host of refinancing options for the $100 million plus that's due next year. It's also a bit of a tone change, I guess, relative to kind of what we've heard in the past, or maybe, you know, absent of like maybe starting June in the conference circuit. But I'm just curious what's driving that because I think these converts are obviously on top of mind for investors so it's great to hear.
spk03: Tim Thanks. Thank you, Brian. Yeah, it was certainly a fantastic quarter. Look on the financing, I don't think we've changed the tone. I just think we deliberately wanted to continue to address that through Tim's comments today. And really, it's the same as we've always said. We are, the board and the team are constantly reviewing all financing alternatives. As I've said in the past, the very good news is that given our operational performance, which continues to get stronger and stronger, our alternatives and options grow, our terms improve. So I think, you know, all options are on the table, we've got time. But the best news is we've also got cash. So I think we're in a very strong liquidity position. The balance sheet is very strong. And we've got, you know, our scale opportunities continue to grow. So there's a lot to do in the existing business organically, there's a lot to do on the acquisitions front. But, you know, we're very, I think we're in a real position of privilege here to have such a strong balance sheet from which to operate. And as you said, we've paid back the 24s, we've got the 25s to deal with, and all options there on the table, whether it's paying with cash, using debt instruments, all sorts of different debt instruments, or some form of equity linked product or a mix, I think we will over the coming, you know, six to 12 months, work out the best way to go there. But it's certainly an incredibly exciting time for the company. I'm very, very happy with the Latam growth. I think if you look deeply at those results, you can see that that momentum is really accelerating. And what we've said from the outset here is that when this team took over, and Blair, you know, Blair got so much done in the US and was able to then turn his mind to Latin America, you're seeing very similar things happen down there with in terms of earnings momentum. So look, it was a really fantastic quarter.
spk01: Hey, you took the word out of my mouth on Latam. I was really impressed to see the 30% PLO growth there. I'm just like, what's, I think Blair took over early last year, I'm just curious, like, I know it takes time to, you know, train and all this stuff. But I'm assuming this is a direct function of him kind of, you know, his influence given his, you know, vast experiences and palm broking.
spk03: Look, I think it certainly has started with Blair, but he you know, he had built, we have all built, you know, a really fantastic leadership team across Latin America now. And, with Blair leading operations, I think it all starts there. And as you say, it does take time. You know, it's been a matter of, you know, a real training effort down there as to the 101 of palm broking, which is all negotiation at the loan counter. And I think, you know, he led that transformation in the US through people, and through, you know, the people, porn and passion mantra, and was able to then turn his efforts to Latin America and do very similar things. As you know, as we've said to everyone, you know, we're in an industry that is very similar across these different geographies. So it's very similar metrics, very similar people issues. So we're able to do much of the stuff that we did in the US down in Latin America, and it just takes time. And I think the team are incredibly excited and engaged about, you know, finally seeing the last couple of quarters gain such strong momentum. And in particular, this quarter, the numbers are just, you know, very, very strong.
spk04: I'd add to that, that the investment that we've made into improving pricing in Latin America is really coming through. And also the focus on building the jewelry part of the business, especially in Mexico, is starting to come through in the numbers. So that all does take time and the execution from the stores has been improving all the time. And the combination of all those things we just talked about is driving these great results.
spk01: And I just can comment on, I mean, PLO hitting, I think, at all time and Q3 is unusual. Usually Q4 is the big seasonal quarter for PLO. And I think we've talked a lot about the lack of pay down during tax season for a couple of years in a row now. Any way to explain that in terms of like how sustainable that is? Is it just a sense of the fact that paying back upon loans, maybe not on the top of people's lists, at least in terms of your core low income segment here? Any comment on that would be helpful?
spk03: Look, I think there's a lot of literature out there trying to work out why the last two years has been this way. But it seems to be a trend. And we can only talk anecdotally here. But I think your hypothesis is probably part of the issue that our customers have got other things to pay ahead of their porn loan. And look, we're again, we're trying to do our best to forecast the year out for next year. But look, it does seem to be a trend in the last two years.
spk04: The other thing I'd add to that is what we've seen from the literature is that the dollars that people are receiving year on year hasn't really moved, but inflation has. And so everything is a loans, nevermind porn loans or any other things they do have is less than they used to as a percentage. And so we think that is some of the driver.
spk01: And then we've seen a whole host of consumer focused companies over the last three months talk about low income weakness, middle to high income trade down, things like I mean, the big banks were talking about it a couple weeks ago in terms of low income pressure. Are you guys benefiting from this? Are you seeing new faces in stores? You know, we have big retailers rolling back prices. Any sense for that?
spk03: Look, we're certainly seeing some new faces in the stores. But you know, did you look at the sales results? We are still seeing pretty strong sales results across the board. So I think yeah, there is this trade down going on. But I think really our customer service just gets better and better. And I think that's a big driver here. It's our people in our stores doing a much better job with customers to drive what we're seeing, obviously super strong results on the PLO. But on the sales side, you know, we are still generating margins that we think are very strong. And we're seeing sales growth, as I said, across all geographies. So I think that in our situation, it's really coming down to fantastic customer service and engagement from our people in our stores.
spk01: Great. And then I think last quarter costs are a little bit of a surprise. Tim, any thoughts on maybe a directional color for Q4 and maybe how we should start thinking about preliminarily 2025?
spk04: Yes, I think we definitely seen a lot of that inflationary pressure come through. What we do see is from a sequential perspective that that growth in expenses is going to slow down in the next few quarters.
spk01: Okay, that's all for me. Thanks a lot, guys. Congrats.
spk02: Thanks, Brian. Thank you. I would now like to turn the call back over to Lockie Evan for any closing remarks.
spk03: Look, thank you very much, everyone, for joining the call today. We're very proud of the results. And again, I want to thank our team for their tireless efforts to deliver these results for our stakeholders. We look forward to talking to a lot of you guys throughout the course of today and next week and look forward to producing another set of strong results in the coming quarter. Thanks, guys.
spk02: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.
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