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, 2022 , 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 Overview
EZCORP is aDelaware corporation headquartered inAustin, Texas . We are a leading provider of pawn services 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 Relentless focus on superior execution and operational excellence in our core pawn business Cost Efficiency and Shape a culture of cost efficiency through ongoing Simplification focus on simplification and optimization Innovate and Grow Broaden customer engagement to service more customers more frequently in more locations Pawn Activities At our pawn stores, we advance cash against the value of collateralized tangible personal property. We earn pawn service charges ("PSC") for those cash advances, and the PSC rate varies by state and transaction size. At the time of the transaction, we take possession of the pawned collateral, which consists of tangible personal property, generally jewelry, consumer electronics, tools, sporting goods or musical instruments. If the customer chooses to redeem their pawn, they will repay the amount advanced plus any accrued PSC. If the customer chooses not to redeem their pawn, the pawned collateral becomes our inventory, which we sell in our retail merchandise sales activities or, in some cases, scrap for its inherent gold or precious stone content. Consequently, the success of our pawn business is largely dependent on our ability to accurately assess the probability of pawn redemption and the estimated resale or scrap value of the collateralized personal property. Our ability to offer quality second-hand 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 estimated resale or scrap value at the time the property is either accepted as pawn 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 and investments in both Latin
America , the United States and potential new markets. Our ability to open de
novo stores, acquire new stores and make other related investments 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.
Seasonality and Quarterly Results
Inthe United States , PSC is historically highest in our fourth fiscal quarter (July through September) due to a higher average loan balance during the summer lending season. PSC is historically 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 23
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surroundingValentine's Day and the availability of tax refunds. InLatin 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 income/loss before tax is generally highest in our first fiscal quarter (October through December) and lowest in our third fiscal quarter (April through June).
Financial Highlights
We remain focused on optimizing our balance of pawn loans outstanding ("PLO")
and the resulting higher PSC. The following chart presents sources of gross
profit, including PSC, merchandise sales gross profit ("Merchandise sales GP")
and jewelry scrapping gross profit ("Jewelry Scrapping GP") for the three and
six months ended March 31, 2023 and 2022:
[[Image Removed: 353]]
The following chart presents sources of gross profit by geographic disbursement
for the three and six months ended
[[Image Removed: 470]]
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Results of Operations
Non-GAAP Constant Currency and Same Store 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") and "same store" basis. 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 analyze
results on a same store basis (which is defined as stores open during the
entirety of the comparable periods) to better understand existing store
performance without the influence of increases or decreases resulting solely
from changes in store count. We believe presentation of constant currency and
same store 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. In addition, we have
an equity method investment that is denominated in Australian dollars and is
translated into U.S. dollars. 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. 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 six
months ended March 31, 2023 and March 31, 2022 were as follows:
Three Months Ended Six Months Ended
March 31, March 31, March 31,
2023 2022 2023 2022 2023 2022
Mexican peso 18.1 19.9 18.7 20.5 19.2 20.6
Guatemalan quetzal 7.6 7.5 7.6 7.5 7.6 7.5
Honduran lempira 24.4 24.1 24.3 24.2 24.3 24.0
Australian dollar 1.5 1.3 1.5 1.4 1.5 1.4
Operating Results
Segments
We manage our business and report our financial results in three reportable segments:
•U.S. Pawn - Represents all pawn activities in
•Latin America Pawn - Represents all pawn activities in
•Other Investments - Represents our equity interest in the net income of Cash Converters along with our investment in Founders and RDC.
Store Count by Segment
Three Months Ended March 31, 2023
U.S. Pawn Latin America Pawn Consolidated
As of December 31, 2022 525 661 1,186
New locations opened 2 11 13
As of March 31, 2023 527 672 1,199
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Three Months Ended March 31, 2022
U.S. Pawn Latin America Pawn Consolidated
As of December 31, 2021 516 633 1,149
New locations opened - 3 3
As of March 31, 2022 516 636 1,152
Six Months Ended March 31, 2023
U.S. Pawn Latin America Pawn Consolidated
As of September 30, 2022 515 660 1,175
New locations opened 2 13 15
Locations acquired 10 - 10
Locations sold, combined or closed - (1) (1)
As of March 31, 2023 527 672 1,199
Six Months Ended March 31, 2022
U.S. Pawn Latin America Pawn Consolidated
As of September 30, 2021 516 632 1,148
New locations opened - 4 4
As of March 31, 2022 516 636 1,152
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Three Months Ended
U.S. Pawn The following table presents selected summary financial data for ourU.S. Pawn segment: Three Months Ended March 31, (in thousands) 2023 2022 Change Gross profit: Pawn service charges$ 69,945 $ 58,772 19% Merchandise sales 108,740 100,064 9% Merchandise sales gross profit 41,097 41,451 (1)% Gross margin on merchandise sales 38 % 41 % (300)bps Jewelry scrapping sales 9,814 3,480 182% Jewelry scrapping sales gross profit 1,264 682 85% Gross margin on jewelry scrapping sales 13 % 20 % (700)bps Other revenues 32 24 33% Gross profit 112,338 100,929 11% Segment operating expenses: Store expenses 71,946 64,492 12% Depreciation and amortization 2,560 2,625 (2)% Loss on sale or disposal of assets and other 81 - * Segment operating contribution 37,751 33,812 12% Other segment (income) expense (1) - * Segment contribution$ 37,752 $ 33,812 12% Other data: Net earning assets (a)$ 269,190 $ 226,835 19% Inventory turnover 2.6 2.6 -%
Average monthly ending pawn loan balance per store (b) $ 310
$ 270 15% Monthly average yield on pawn loans outstanding 14 % 14 % -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.
Total revenue was up 16% and gross profit increased 11%, reflecting increased PSC and higher merchandise sales..
PSC increased 19% as a result of higher average
Merchandise sales increased 9% and gross margin decreased to 38% from 41%, reflecting a more normalized operating environment. Aged general merchandise increased to 1.4% of total general merchandise inventory, primarily driven by recent acquisitions.
Net inventory increased 20% reflecting a return towards normalized inventory levels. Inventory turnover remained flat at 2.6x.
Store expenses increased 12%, primarily due to increased labor in-line with store activity, higher store count and, to a lesser extent, expenses related to our loyalty program.
Segment contribution increased 12% to
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Segment store count increased by two de novo stores during this quarter.
Latin America Pawn
The following table presents selected summary financial data for the Latin
America Pawn segment, including constant currency results, after translation to
Three Months Ended
2023 (Constant Change (Constant
(in thousands) 2023 (GAAP) 2022 (GAAP) Change (GAAP) Currency) Currency)
Gross profit:
Pawn service charges $ 23,085 $ 17,911 29% $ 21,674 21%
Merchandise sales 43,767 33,492 31% 40,694 22%
Merchandise sales gross profit 14,071 9,859 43% 13,012 32%
Gross margin on merchandise sales 32 % 29 % 300bps 32 % 300bps
Jewelry scrapping sales 3,011 2,210 36% 2,846 29%
Jewelry scrapping sales gross profit (341) 200 (271)% (314) (257)%
Gross margin on jewelry scrapping sales (11) % 9 % * (11) % *
Other revenues, net 19 - * 17 *
Gross profit 36,834 27,970 32% 34,389 23%
Segment operating expenses:
Store expenses 29,323 21,251 38% 27,399 29%
Depreciation and amortization 2,332 1,891 23% 2,160 14%
Other (2,465) - * (2,336) *
Segment operating contribution 7,644 4,828 58% 7,166 48%
Other segment income (352) 70 (603)% (429) (713)%
Segment contribution $ 7,996 $ 4,758 68% $ 7,595 60%
Other data:
Net earning assets (a) $ 87,203 $ 66,673 31% $ 81,237 22%
Inventory turnover 3.5 3.8 (8)% 3.5 (8)%
Average monthly ending pawn loan balance
per store (b) $ 71 $ 60 18% $ 71 18%
Monthly average yield on pawn loans
outstanding 17 % 16 % 100bps 17 % 100bps
* 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.
2023 Change 2023 Change
(GAAP) (Constant Currency)
Same Store data:
PLO 19% 12%
PSC 26% 18%
Merchandise Sales 25% 16%
Merchandise Sales Gross Profit 61% 49%
Store Expenses 32% 24%
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Total revenue was up 30% (22% on constant currency basis), while gross profit increased 32% (23% on a constant currency basis), reflecting increased PSC, higher merchandise sales and improved merchandise sales gross profit.
PSC increased 29% (21% on a constant currency basis) as a result of higher
average
Merchandise sales gross margin increased from 29% to 32%. Aged general merchandise inventory increased to 3.2% from 1.0% of total merchandise inventory.
Net inventory increased 44% (33% on a constant currency basis), reflecting a return towards normalized inventory levels. Inventory turnover remains strong at 3.5x.
Store expenses increased 38% (29% on a constant currency basis), primarily due to increased labor in line with store activity and higher store count. Same-store expenses increased 32% (24% on a constant currency basis).
Segment contribution increased 68% (60% on a constant currency basis) to$8.0 million , this increase was primarily due to the reversal of a contingent consideration liability in connection with a previously completed acquisition, which was recorded to "Other," and the changes in revenue and store expenses described above..
Segment store count increased by 11 de novo stores during the quarter.
Other Investments
The following table presents selected financial data for our Other Investments segment after translation toU.S. dollars from its functional currency of primarily Australian dollars: Three Months Ended March 31, (in thousands) 2023 2022 Change Gross profit: Consumer loan fees, interest and other$ 10 $ 29 (66)% Gross profit 10 29 (66)%
Segment operating expenses:
Equity in net loss of unconsolidated affiliates 32,501 1,439 2,159% Segment operating loss (32,491) (1,410) 2,204% Other segment expense 6 8 (25)% Segment loss$ (32,497) $ (1,418) 2,192% Segment loss was$32.5 million , a decrease of$31.1 million due to the net loss on our share of Cash Converters related to their non-cash goodwill impairment charge taken during the quarter endedMarch 31, 2023 . Additionally, See "Part II, Item 1A - Risk Factors" of this Report. A decline in future operating results of Cash Converters, if any, resulting from the change of law could adversely affect our investment. 29
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Other Items
The following table reconciles our consolidated segment contribution discussed above to net income attributable toEZCORP, Inc. , including items that affect our consolidated financial results but are not allocated among segments: Three Months Ended March 31, (in thousands) 2023 2022 Percentage Change Segment contribution$ 13,251 $ 37,152 (64)% Corporate expenses (income): General and administrative 15,609 12,227 28% Depreciation and amortization 3,071 2,934 5% (Gain) loss on sale or disposal of assets and other - (688) * Interest expense 3,390 2,527 34% Interest income (1,599) - * Other expense 120 29 * (Loss) income before income taxes (7,340) 20,123 (136)% Income tax (benefit) expense (550) 5,236 (111)% Net (loss) income$ (6,790) $ 14,887 (146)%
* Represents a percentage computation that is not mathematically meaningful.
Segment contribution decreased$23.9 million or 64% over the prior year quarter primarily due to the decrease in Other Investments segment due to the net loss on our share of Cash Converters, offset by improved operating results of theU.S. Pawn and Latin America Pawn segments above. General and administrative expense increased$3.4 million or 28%, primarily due to the impact related to the reversal of incentive compensation for the departed CEO in the prior period and to a lesser extent, an overall increase in incentive-based compensation. Interest income increased$1.6 million , due primarily to our treasury management with increased market interest rates, and, to a lesser extent, loans to certain strategic investees. Income tax expense decreased$5.8 million primarily due to a decrease in income before income taxes of$27.5 million this quarter compared to the prior year associated with the net loss on our share of Cash Converters, offset by the improved operating results within theU.S. Pawn segment and the Latin American Pawn segment. Income tax expense includes other items that do not necessarily correspond to pre-tax earnings and create volatility in our effective tax rate. These items include the net effect of state taxes, non-deductible items and changes in valuation allowances for certain foreign operations. See Annual Report on Form 10-K for the year endedSeptember 30, 2022 Note 11: Income Taxes of Notes to Consolidated Financial Statements included in "Part II, Item 8 - Financial Statements and Supplemental Data" for quantification of these items. 30
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Six Months Ended
The tables below and discussion that follows should be read in conjunction with the accompanying condensed consolidated financial statements and related notes.
The following table presents selected summary financial data for theU.S. Pawn segment: Six Months Ended March 31, (in thousands) 2023 2022 Change Gross profit: Pawn service charges$ 139,255 $ 115,329 21% Merchandise sales 227,054 202,142 12% Merchandise sales gross profit 86,155 85,697 1% Gross margin on merchandise sales 38 % 42 % (400)bps Jewelry scrapping sales 16,990 8,460 101% Jewelry scrapping sales gross profit 2,224 1,687 32% Gross margin on jewelry scrapping sales 13 % 20 % (700)bps Other revenues 57 46 24% Gross profit 227,691 202,759 12% Segment operating expenses: Store expenses 145,250 129,181 12% Depreciation and amortization 5,315 5,295 -% Loss on sale or disposal of assets and other 84 * Segment operating contribution 77,042 68,283 13% Other segment (income) expense (1) - * Segment contribution$ 77,043 $ 68,283 13% Other data: Average monthly ending pawn loan balance per store (a) $ 312$ 270 16% Monthly average yield on pawn loans outstanding 14 % 14 % -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 increased 21% as a result of higher average
Merchandise sales increased 12% compared to the prior year. Merchandise sales increase was driven primarily by our continued focus on customer engagement and pricing merchandise to maintain strong inventory turnover. Offsetting the sales increase, merchandise sales gross margin decreased 400 bps reflecting a return toward more normalized margins.
Store expenses increased 12%, primarily due to increased labor in-line with store activity, higher store count and expenses associated with our loyalty program.
Segment contribution increased
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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 Constant Currency and Same Store Financial Information" above.
Six Months Ended
2023 (Constant Change (Constant
(in thousands) 2023 (GAAP) 2022 (GAAP) Change (GAAP) Currency) Currency)
Gross profit:
Pawn service charges $ 46,368 $ 37,379 24% $ 44,153 18%
Merchandise sales 89,240 69,134 29% 84,289 22%
Merchandise sales gross profit 27,923 20,222 38% 26,300 30%
Gross margin on merchandise sales 31 % 29 % 200bps 31 % 200bps
Jewelry scrapping sales 3,719 4,174 (11)% 3,518 (16)%
Jewelry scrapping sales gross profit (370) 367 (201)% (343) (193)%
Gross margin on jewelry scrapping sales (10) % 9 % (1,900)bps (10) % (1,900)bps
Other revenues, net 35 240 * 32 *
Gross profit 73,956 58,208 27% 70,142 21%
Segment operating expenses:
Store expenses 56,822 43,333 31% 53,836 24%
Depreciation and amortization 4,547 3,871 17% 4,285 11%
Other (2,465) - * (2,336) *
Segment operating contribution 15,052 11,004 37% 14,357 30%
Other segment income (a) (473) (241) 96% (723) 200%
Segment contribution $ 15,525 $ 11,245 38% $ 15,080 34%
Other data:
Average monthly ending pawn loan balance
per store (a) $ 71 $ 60 18% $ 71 18%
Monthly average yield on pawn loans
outstanding 17 % 16 % 100bps 17 % 100bps
* 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.
2023 Change 2023 Change
(GAAP) (Constant Currency)
Same Store data:
PLO 19% 12%
PSC 22% 16%
Merchandise Sales 24% 17%
Merchandise Sales Gross Profit 56% 47%
Store Expenses 20% 14%
During the six months ended
PSC increased 24% to
Merchandise sales increased 29% (22% on a constant currency basis) and 24% on a
same store basis (17% on a constant currency basis). Merchandise sales increase
was driven primarily by our continued focus on customer engagement, pricing
merchandise to maintain strong inventory turnover and increase in stores.
Merchandise sales gross margin increased 200 bps from 29% to 31% and on a
constant currency basis, reflecting a return to more normalized margins.
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Store expenses increased by 31% (24% on a constant currency basis) primarily due to higher store count and increased labor in-line with store activity. On a same-store basis, store expenses increased 20% (14% on a constant currency basis) due to rising labor costs resulting from growing transaction volume.
Segment contribution increased
Other Investments The following table presents selected financial data for our Other Investments segment after translation toU.S. dollars from its functional currency of primarily Australian dollars: Six Months Ended March 31, (in thousands) 2023 2022 Change Gross profit: Consumer loan fees, interest and other 32 72 (56)% Gross profit 32 72 (56)%
Segment operating expenses:
Equity in net loss of unconsolidated affiliates 30,917 301 * Segment operating loss (30,885) (229) * Other segment loss (income) 10
(4) (350)%
Segment loss $ (30,895) $ (225) *
* Represents a percentage computation that is not mathematically meaningful.
Segment loss was$30.9 million , a decrease of$30.7 million from the prior-year six months endedMarch 31, 2022 , primarily due to the net loss on our share of Cash Converters related to their non-cash goodwill impairment charge. 33
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Other Items
The following table reconciles our consolidated segment contribution discussed above to net income attributable toEZCORP, Inc. , including items that affect our consolidated financial results but are not allocated among segments: Six Months Ended March 31, (in thousands) 2023 2022 Percentage Change Segment contribution$ 61,673 $ 79,303 (22)%
Corporate expenses (income):
General and administrative 31,088 27,772 12% Depreciation and amortization 6,089 5,858 4% (Gain) loss on sale or disposal of assets - (688) * Interest expense 9,580 4,958 93% Interest income (2,094) (122) * Other (income) expense (188) 55 (442)% Income from continuing operations before income taxes 17,198 41,470 (59)% Income tax expense 7,210 10,862 (34)% Net income$ 9,988 $ 30,608 (67)%
* Represents a percentage computation that is not mathematically meaningful.
Segment contribution decreased
General and administrative expenses increased$3.3 million or 12%, primarily due to the impact related to the reversal of incentive compensation for the departed CEO in the prior period and to a lesser extent, an overall increase in incentive-based compensation. Interest expense increased$4.6 million , primarily driven by the net loss recorded on the partial extinguishments of the 2024 convertible notes and 2025 convertible notes, and higher average total debt outstanding at overall higher average effective interest rates due to the issuance of the 2029 convertible notes duringDecember 2022 . See Note 7: Debt to the consolidated financials for further discussion. Income tax expense decreased$3.7 million , primarily due to a decrease in income before income taxes of$24.3 million for the six months endedMarch 31, 2022 compared to the same prior year six month period. 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. See Annual Report on Form 10-K for the year endedSeptember 30, 2022 Note 11: Income Taxes of Notes to Consolidated Financial Statements included in "Part II, Item 8 - Financial Statements and Supplemental Data" for quantification of these items.
Liquidity and Capital Resources
Cash and Cash Equivalents
Our cash and equivalents balance was$243.1 million atMarch 31, 2023 compared to$206.0 million atSeptember 30, 2022 . AtMarch 31, 2023 , our cash and equivalents were held in cash depository accounts with major banks or invested in high quality, short-term liquid investments. 34
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Cash Flows
The table and discussion below presents a summary of the selected sources and
uses of our cash:
Six Months Ended
March 31, Percentage
(in thousands) 2023 2022 Change
Net cash provided by operating activities $ 46,827 $ 30,575 53%
Net cash used in investing activities (40,649) (31,887) 27%
Net cash provided by (used in) financing activities 29,976 (792) *
Effect of exchange rate changes on cash, cash equivalents and restricted cash
1,056 2,157 (51)%
Net increase in cash, cash equivalents and restricted cash
$ 53 *
* Represents a percentage computation that is not mathematically meaningful.
The increase in cash flows provided by operating activities year-over-year was primarily due to an increase in net income (when considering adjustments for non-cash items affecting net income) as well as changes in working capital primarily related to the timing of payments of accounts payable. The$8.8 million increase in cash flows used in investing activities year-over-year was primarily due to$24.5 million higher outgoing cash flows used to fund acquisitions and strategic investments and an increase of$18.5 million in net pawn lending, partially offset by an$42.2 million increase in the sale of forfeited collateral. Of the$24.5 million increase year-over-year used to fund other investments, the largest amount is$15.0 million related to a note receivable from Founders, as discussed in Note 5: Strategic Investments in Part I, Item 1 - Notes to Interim Condensed Consolidated Financial Statements. The$30.8 million increase in cash flows provided by financing activities was primarily related to theDecember 2022 financing of the 2029 Convertible Notes, in which we issued$230.0 million (less issuance costs) principal amount of 3.750% Convertible Senior Notes Due 2029 offset by the extinguishment of approximately$109.4 million aggregate principal amount of our 2024 Convertible Notes for approximately$117.5 million plus accrued interest and approximately$69.1 million aggregate principal amount of our 2025 Convertible Notes for approximately$62.9 million plus accrued interest. In addition, we used approximately$5.0 million of the net proceeds from the 2029 Convertible Notes offering to repurchase 578,703 shares of our Class A common stock from purchasers of the notes in privately negotiated transactions. The net effect of these changes was a$37.2 million increase in cash on hand during the current year to date period, resulting in a$251.6 million ending cash and restricted cash balance.
Sources and Uses of Cash
InDecember 2022 , we issued$230.0 million aggregate principal amount of 2029 Convertible Notes. In conjunction with the issuance of the 2029 Convertible Notes, we extinguished approximately$109.4 million aggregate principal amount of our 2024 Convertible Notes for approximately$117.5 million plus accrued interest and approximately$69.1 million aggregate principal amount of our 2025 Convertible Notes for approximately$62.9 million plus accrued interest. In addition, we used approximately$5.0 million of the net proceeds from the 2029 Convertible Notes offering to repurchase 578,703 shares of our Class A common stock from purchasers of the notes in privately negotiated transactions. See Note 7 of Notes to Interim Condensed Consolidated Financial Statements included in "Part I, Item 1 - Financial Statements". The shares repurchased in conjunction with the transactions discussed above were authorized separately from, and not considered part of, the publicly announced share repurchase program referred to below. OnMay 3, 2022 , our Board authorized the repurchase of up to$50 million of our Class A Common Stock over three years. As ofMarch 31, 2023 , we have repurchased 929,336 shares of our Class A Common Stock under the program for$8.0 million . Execution of the program will be responsive to fluctuating market conditions and valuations, liquidity needs and the expected return on investment compared to other opportunities. Under the stock repurchase program, we may purchase Class A Non-Voting common stock from time to time at management's discretion in accordance with applicable securities laws, including through open market transactions, block or privately negotiated transactions, or any combination thereof. In addition, we may purchase shares pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934. 35
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The amount and timing of purchases will be dependent on a variety of factors, including stock price, trading volume, general market conditions, legal and regulatory requirements, general business conditions, the level of cash flows and corporate considerations determined by management and the Board, such as liquidity and capital needs and the availability of attractive alternative investment opportunities. The Board of Directors has reserved the right to modify, suspend or terminate the program at any time. See Note 8 of Notes to Interim Condensed Consolidated Financial Statements included in "Part I, Item 1 - Financial Statements." We anticipate that cash flows from operations and cash on hand will be adequate to fund ongoing operations, debt service requirements, tax payments, any future stock repurchases, strategic investments, our contractual obligations, planned de novo store growth, capital expenditures and working capital requirements through fiscal 2023. We continue to explore acquisition opportunities, both large and small, and may choose to pursue additional debt, equity or equity-linked financings in the future should the need arise. Depending on the level of acquisition activity and other factors, our ability to repay our longer-term debt obligations, including the convertible debt maturing in 2024, 2025 and 2029, may require us to refinance these obligations through the issuance of new debt securities, equity securities, convertible securities or through new credit facilities.
Contractual Obligations
In "Part II, Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year endedSeptember 30, 2022 , we reported that we had$608.0 million in total contractual obligations as ofSeptember 30, 2022 . There have been no material changes to this total obligation sinceSeptember 30, 2022 , other than the convertible debt refinancing and lease liabilities changes as further discussed in Note 7: Debt and Note 4: Leases, respectively, of Notes to Interim Condensed Consolidated Financial Statements included in "Part I, Item 1 - Financial Statements." We are responsible for the maintenance, property taxes and insurance at most of our locations. In the fiscal year endedSeptember 30, 2022 , these collectively amounted to$15.2 million .
Recently Adopted Accounting Policies and Recently Issued Accounting Pronouncements
We reviewed all recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a material impact on our Condensed Consolidated Financial Statements.
Cautionary Statement Regarding Risks and Uncertainties that May Affect Future Results
This Quarterly Report on Form 10-Q, including Management's Discussion and Analysis of Financial Condition and Results of Operations, includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend that all forward-looking statements be subject to the safe harbors created by these laws. All statements, other than statements of historical facts, regarding our strategy, future operations, financial position, future revenues, projected costs, prospects, plans and objectives are forward-looking statements. These statements are often, but not always, made with words or phrases like "may," "should," "could," "will," "predict," "anticipate," "believe," "estimate," "expect," "intend," "plan," "projection" and similar expressions. Such statements are only predictions of the outcome and timing of future events based on our current expectations and currently available information and, accordingly, are subject to substantial risks, uncertainties and assumptions. Actual results could differ materially from those expressed in the forward-looking statements due to a number of risks and uncertainties, many of which are beyond our control. In addition, we cannot predict all of the risks and uncertainties that could cause our actual results to differ from those expressed in the forward-looking statements. Accordingly, you should not regard any forward-looking statements as a representation that the expected results will be achieved. Important risk factors that could cause results or events to differ from current expectations are identified and described in "Part I, Item 1A - Risk Factors" of our Annual Report on Form 10-K for the year endedSeptember 30, 2022 and "Part II, Item 1A - Risk Factors" of this Report. We specifically disclaim any responsibility to publicly update any information contained in a forward-looking statement except as required by law. All forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary statement.
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