Replies to post #131 on Xponential Inc (fka XPOI)

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Hmmm... These guys have no Georgia or North Carolina pawn stores.

XPOI...PawnMart operates 26 pawn shops in Georgia and North Carolina...

AUSTIN, Texas, May 17, 2011 /PRNewswire/ -- EZCORP, Inc. (Nasdaq:EZPW - News) announced today that it has completed the previously announced acquisition of fifteen Mister Money pawn stores located in Iowa, Wisconsin, and Illinois. The purchase price was paid in cash.

"With the addition of these stores, we continue to solidify and expand our presence in new and underserved areas," said Eric Fosse, President of the company's North American Operations. "Eleven of the acquired stores are in Iowa, which is an entirely new state for us and one we see as attractive for further expansion. Three stores are in Wisconsin and will complement our 35 EZMONEY loan stores in that state. The remaining store is in an area of Illinois in which we did not previously have a presence."

"This acquisition brings the number of states in which we operate pawn stores to 16, compared to 12 at this time last year," continued Mr. Fosse. "Strengthening our U.S. pawn presence, both through opportunistic acquisitions and new store expansion, remains an important component of our growth strategy."

About EZCORP

EZCORP is a leading provider of specialty consumer financial services. It provides collateralized non-recourse loans, commonly known as pawn loans, and a variety of short-term consumer loans, including payday loans, installment loans and auto title loans, or fee-based credit services to customers seeking loans. At its pawn stores, the company also sells merchandise, primarily collateral forfeited from its pawn lending operations.

EZCORP operates more than 1,000 stores, including over 500 pawn stores in the U.S. and Mexico and over 500 short-term consumer loan stores in the U.S. and Canada. The company also has significant investments in Cash Converters International Limited (CCV.L and CCV.ASX), which franchises and operates a worldwide network of over 600 stores in 21 countries that provide financial services and sell pre-owned merchandise, and Albemarle & Bond Holdings PLC (ABM.L), one of the U.K.'s largest pawnbroking businesses with over 140 stores.

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From Yahoo... I would guess this is someone that works for the company that posted this.

$7 a share valuation?? Common hasn't seen this price for years, but I'm sure they are watching the consolidation activity going on right now in the sector...

Pawn Mart Valuation
mrpanick
9-May-11 05:55 am

Pawn shops are a high margin business and are typically valued at a higher enterprise value / revenu multiple than most other retailers. You can check the enterrpise revenue multiples of XPOI competitors in yahoo finance key statistics for each company. EZPW is trading at 1.8X revenues. CSH is trading at 1.2X revenues. FCFS is probably the best match to XPOI in terms of business model and is trading at 2.4X revenues.

Pawn Mart should do at least 35 mil in revenues for 2011. If they sold the stores for 1.5X revenues that would value the company at close to 65 mil including 2 mil for the CPFH stake and almost 10 mil in pawn loans receivable, cash and notes receivable. The company has about 47 mil in total liabilities including paying off the pref A & pref B with back dividends, the notes and the bank credit line.

That leaves about 18 mil left for the 2.5 mil shares of common stock (about $7 / share) if they liquidated this with a decent sale of Pawn Mart.

Alternately management could use improving cash flow from Pawn Mart to pay off the pref A stock over time. What they really need to do is refinance Pawn Mart and pay off the 8% notes, bank credit line and Series A pref stock. Since they appear to be technically in default on the series A stock mandatory redemption, a refinancing is necessary to clean up their balance sheet and put the company back on a normal footing.