EZCORP Announces Restructuring, Cuts Q4 Earnings View; Stock Down

(RTTNews) - EZCORP, Inc. (EZPW), a provider of instant cash solutions, said it is refining its strategy to focus on an integrated, customer-centric financial services model, and would discontinue its stand-alone online lending businesses in the U.S. and U.K. that do not link into its integrated financial services model. The company also reduced its earnings expectations for the fourth quarter.

According to the company, it would exit its current online lending business in the U.K. and discontinue its online lending operations in the U.S., while assessing opportunities to more effectively integrate online lending products and services with its core storefront financial services business.

Additionally, the company has implemented certain measures aimed at streamlining the organization to put greater focus on the customer. These actions will result in aggregate charges of $105 million after-tax in the fourth quarter of fiscal 2014.

These actions are the result of a comprehensive review of the company's businesses.

CEO Mark Kuchenrither said, "Our comprehensive review and evaluation showed that the two online lending businesses, in their present form, are not efficiently serving our customers' needs. To continue on this path would require a further significant investment of resources, and the standalone nature of these businesses is at odds with the integrated, customer-centric direction the company is now headed."

Kuchenrither added that the firm has more attractive opportunities in the businesses it knows well - its core pawn and financial services businesses in the home geographies.

Further, citing the restructuring activities, as well as less-than-projected operating results from each of its business units, the company said its earnings for the fourth quarter of fiscal 2014 would be less than its previous guidance range.

In late July, the company expected earnings of $0.40 to $0.42 per share for the fourth quarter. On average, 9 analysts polled by Thomson Reuters currently expect the company to earn $0.37 per share for the fourth quarter.

The company expects to provide more clarity on its fourth quarter results later this month.

The stock, which closed up 1.6 percent at $9.95, fell 11.52 percent in the extended trade.