Take Away from EZCorp F2Q13 Earnings Call:

Regarding consumer demand:
“The customers’ need for short-term cash is growing. Nearly every study we see, every empirical set of data that we look at agrees that our consumer is terribly under-served. What we also know to be true is that our customers are sophisticated in their choices. They correctly see us as the cheapest and best alternative. They’re well-educated, hard-working people that appreciate the product and services we provide…”

Regarding smart phone penetration:
“In the first half of this year, roughly 6% of our retail sales came from online transactions and over $6 million of our current loan balance was generated online. We expect both of these penetrations to more than double in the next 12 months and grow exponentially in the coming years. Their preferred method of communication with us is quickly moving to their smartphone. That is why we are investing in the technologies that will support our ability to be at the forefront of that communication for years to come.”

Regarding the U.S.:
“Moving to U.S. financial services, we now provide financial services in 490 storefront locations in 16 states and online loan products in five states. The planned expansion in U.S. financial services is on track that we intend to open a total of 65 to 75 locations this fiscal year and intend to offer online products in 12 to 15 states by the end of the year. Most of these states will be where we already operate storefronts successfully and the remaining states will be based on customer need and financial opportunities.”

Regarding Revenue:
“Inside our base business, we are growing our revenues. Total loan balances were $38 million, up 13% from the prior year quarter, of which the online lending portfolio balance represented over $1 million. Our balances inside of Texas grew 7% and our balances outside of Texas grew 17% driven by both new locations and new products in existing stores.”

Regarding product evolution:
“Customers continue to shift from first generation loan products, traditional payday and installment loans to second generation single payment, multiple payment and auto title loan products. Balances related to these products increased 57% driven by auto title loans. Loan fees were $42 million, up 3% from prior year quarter reflecting the shift to lower yielding products.”

Regarding Texas:
“The profitability of the financial services business was negatively impacted by over $1 million during the quarter as a result of ordinances enacted in Dallas, Austin, San Antonio.”

Latin America kicking ass…

U.K biz killed by lower gold prices.

Regarding Australia:
“Cash Converters International Limited, our strategic affiliate in Australia announced that it had achieved a 39% increase in net income during the first half of its fiscal year. Cash Converters’ outstanding performance resulted in a 43% contribution increase at EZCORP.”

You can access the entire earnings call here: EZCorp and here: Seeking Alpha.