EZCORP, Inc. (EZPW) Earnings Call Transcript & Summary

Good afternoon, everyone. Welcome to the EZCORP Investor Day. As a reminder, this call may be recorded. I'm Jeff Elliott with Investor Relations, Three Part Advisors. During our prepared remarks, we will be referring to slides, which are available for viewing or download from our website, investors.ezcorp.com. Before we begin, I'd like to remind everyone that this conference call as well as the presentation slides contains certain forward-looking statements regarding the company's expected operating and financial performance for future periods. These statements are based on the company's current expectations. Actual results for future periods may differ materially from those expressed or implied in these forward-looking statements due to a number of risks and other factors that are discussed within our annual report, quarterly reports or other reports filed with the Securities and Exchange Commission. And as noted in our presentation materials, and unless otherwise identified, results are presented on an adjusted basis to remove the effect of foreign currency fluctuations and other discrete items. Joining us on the call today are EZCORP's Chief Executive Officer; Lachie Given; Chief Operating Officer, Blair Powell; Chief Financial Officer, Tim Jugmans; and Chief Revenue Officer, Nicki Swies. With that, I'd like to turn it over to Lachie.

Thank you, Jeff. Everyone hear me? Is that connected? Okay. Okay. Guys, welcome to the EZCORP 2022 Investor Day. On behalf of all of us, it's great to have you guys here in person and those of you on the phone, thank you for joining. It's been since before COVID that we've done this. So hopefully, you find it helpful, insightful and depending on your feedback after today, we'll try and do this on a regular cadence. So before we get started, for those on the phone who weren't at our store visits this morning, I just might ask the EZCORP team just to briefly introduce each of you while you're here. Starting with me. Lachie Given, I'm the Chief Executive, joined the company in 2014 as Executive Chairman. Since then, I have played the role of Head of M&A, Head of Strategy, and now I'm Chief Executive and have worked with the people who are in this room for that whole time. And so I'm really excited about the team that we've got today and where we're positioned to go forward. So I think this should be a really good couple of hours for everyone. But why don't we go to each of you really quickly, starting with Blair.

I'm Blair Powell, Chief Operating Officer. I've been with EZCORP since 1989. Started in the field as a sales person in the stores, just like we saw and talked about today and have held virtually every operating position up to my current one as Chief Operating Officer.

Timothy?

Tim Jugmans, CFO. I joined the company about 5.5 years ago as the VP of M&A and Treasury. Became CFO, September 2020. Been working with Lachie for about 10 years on various things. And really been enjoying seeing the turnaround that we've been able to achieve.

Good afternoon. My name is Nicki Swies, I'm Chief Revenue Officer. I have now been with EZCORP for almost 20 years, working side-by-side with Blair that whole time and love this executive team that we're part of. I started as a financial analyst and grew through several different roles in the company to where I am today. It's nice to meet all of you.

And then just to Tom and Neelima.

Thanks. Hi, I'm Tom Welch. I'm the Chief Legal Officer, joined in 2009 in that role. And I, too, am delighted to see kind of the direction the company is headed these days. I've worked with probably -- clearly Blair and Nicki since I've been here and Lockheed almost as long. So that's been a pleasure, and it's fun every day.

Good afternoon. I'm Neelima Gullapalli. I've been with EZCORP for 15 years since 2007. Had a variety of roles in the organization and new products and services development, operations and strategy and M&A. I'm VP of Strategy currently. Thank you. Nice to meet you all.

Thank you guys. The last person I'll introduce has just walked in the room because he doesn't trust that I'm going to do a good job as our former Chief Executive, Jason Kulas, who is also on our Board of Directors, a wonderful partner for all of us and was clearly running the company up until the last few months, and he's still a director, and he's just a fabulous person to have as part of our team. So welcome to you as well mate. Okay. So our purpose for bringing you all together today, we're trying to do a few things. First was to get as many of you as we could into a store. I know John has been into a store a lot of times, but hopefully, those of you who hadn't, it made clear what we do and it's that we're a really a unique and essential part of our consumers' lives. Hopefully, you saw a really engaged team. That's Blair's probably biggest focus, and he'll take you through that today. And I think before was there any more questions, issues out of the store visits that anyone wanted to raise or ask anyone about? I thought it was a really good fluid session. So I don't think so, but I thought I'd ask. No. Okay, good. Okay. So that was the first thing to get you into a store. The second thing is really to get your access to a broader part of the management team. You get to see Tim and I on a fairly regular basis, but today is for you to meet the other really critical parts of our team, in particular, Blair and Nicki where we can sort of drill down further into their operating strategies into their metrics and sort of how they think about the business. And then lastly, I just wanted to make clear too, that let's make today a bit more interactive than normal, a bit more informal than the earnings calls and the investor -- the Analyst Day. So look, if you want to stop us, stop us, we can talk through each slide. So please feel free to speak up and ask anything you'd like. Okay. So if we get into the presentation, parts of mine you've seen before. So on the slides that you guys have seen I'm not going to spend too much time, but this is one you have seen. Very quickly, we've been listed on NASDAQ for 30 years. We're one of the world's leading pawn brokers and secondhand goods sales companies. We've got 516 stores in the U.S. We've got 508 stores in Mexico. And then in Guatemala, we've got 91, El Salvador 18 and Honduras we've got 16 stores. So that's a total of 1,149 stores. We've got 6,500 staff. I think probably no questions there. Okay. This one you've seen too where -- now these -- a lot of the categories that we have in our stores. You saw them this morning, Blair was pretty clear with you all that we will actually take anything of value. But these are the main -- these are our main categories. To give you a few numbers in the U.S., approximately 60% of our PLO is jewelry and you flip that and its the other way in Latin America, where approximately 67% of PLO is general merchandise down there. Over to the next page, you can see here to the left, last year's revenue mix. 61% was retail sales, 36% pawn fees and then a small proportion of other revenue. I've spoken about this one before on earnings calls. But quickly here again, essentially, this is why a customer comes into our stores. They either come in for 1 of 2 reasons. On the right, you can see they come in with a personal asset that they need cash for, 15% of them sell that asset to us and the other 85% get a pawn loan. You can see down each -- sort of each decision tree here down to the right, you can see that if a customer pays us, that will generate a yield of somewhere between 12% and 13% per month. If they do not pay us, we then retail that good. And historically, we've looked at margins between 35% and 38%. I think any -- that's the sort of the basic pawn operating model. Does anyone have any questions on that? Okay. This can be quick. Okay, brands. So you can see in the U.S., our main 2 brands are EZPAWN and value pawn in jewelry. The other ones are all much smaller and have usually come from -- or always come from acquisitions. In Mexico, you can see that the majority of our stores operate under the EMPEÑO FÁCIL brand. Again, a few more through acquisition. And then down the bottom, in Guatemala, you can see that all of our stores in Guatemala operate under the GuatePrenda brand and in Honduras and El Salvador under MaxiEfectivo. Nicki is going to speak a little bit more later about branding and how that impacts us digitally. Here is -- let's spend a bit of time on this page because hopefully, it sort of crystallizes for everyone what we're trying to do on 1 page. We haven't put this in the market before. We actually use this internally for our team because we think it just graphically represents what we're trying to get done. But let me start on the left. You can see the mission across the top. Our mission is to be the first and best choice for customers' short-term needs. And then down to the left, you can see our purpose, which I'll read because it's important. So our purpose is to -- we exist to serve our customers' short-term cash needs, helping them to live and enjoy their lives. We're driven by a diverse team, which is important to us, with a passion for pawn who are motivated to be their best because our customers, families, stakeholders and the communities and environment in which we live, deserve it. That took a lot of work internally to get that done under Jason's leadership actually. And we think it represents many of the things that we're trying to do for our stakeholders. And so we start with that purpose. And out of that has come the rest of this page. Starting with the operating principles, Blair penned this whole concept or branded this concept of people, pawn and passion. You hear us talk about it a lot. I won't talk about it because that's what Blair is going to do. But it really has rallied our 6,500 staff behind this catch cry of these 3 things. And Blair, you heard him talk this morning about simplicity. The way he thinks is that get these 3 things right, we're going to do a great job for our team, our shareholders, our customers. So Blair will talk to you about that. Coming over to the strategy house. Hopefully, you find this interesting. So we start at the roof, and you can see our mission up there that we've spoken about already, our mission and our purpose. That's kind of the roof of the house. Beneath that is our customer approach, which is what we start, we start with a lot of the time is what we're trying to do for our customers. We're providing fast and easy access to cash. We are doing it in a friendly and respectful way. We've been competitive and fair. We're passionate. We build enduring relationships and we recognize and reward customer loyalty. So that kind of sits at the top of our house. In the middle is really the strategy that Jason, Blair, me, Tim, Nicki and the team and Neelima of course, about 18 months ago announced to the market that these 3 pillars in the middle of the house is essentially the strategy that's holding everything up. And we've gone through it in the market, obviously, these 3 pillars, but I would like to cover them today. The first one sounds simple, which is strengthening the core. Strengthening the core means complete like razor focus, laser focus on the pawnshop, its people, it's how we incent those people. And under Blair, it is -- it's our really core strategy. It's let's get back to basics in our pawn shop, do it simply and do it really well and he talks of operational excellence, superior execution. And so 18 months ago, we started on this journey to just make the store, the absolute focus. So that's sort of the first central piece, and we'll talk more about that. The second one was cost efficiency and simplification. Tim came into the role as CFO and really focused the company on a culture of cost consciousness but also process simplification. We had lots of reports that were at times unnecessary and those sorts of things. So we said to each other, let's bring this organization back into a really simple focused process format. And I think 18 months in, we've done a really good job of that. So we took cost out to begin with. We reduced costs along the way, and we've really simplified processes. And then the third one, which everyone loves to talk about is the innovation and grow pillar. Innovations is -- it happens in the store, but it's also all about digital initiatives, everything from customer loyalty to online showcase to digital loan walks. It's all of this digital innovation it sits in that pillar, together with the growth pillar. And that is growing our customer base first. So we are trying to expand this customer base significantly in all that we're doing and then just growing the store footprint. So that's acquisitions, pawnshop acquisitions in all of our existing markets as well as looking at new geographic regions. So those are the sort of the 3 key things, probably the last 1.5 years we've focused on. We said it was a 3-year plan, so we're halfway through it. We think it's going really well. Hopefully, you saw that in our Q1 numbers that these things really are taking hold. And then to finish this house, it's sort of like the building blocks we call them the foundational capabilities. The building blocks of this entire strategy are our team members. Blair will talk about, we've got all sorts of initiatives around making them happy to work at EZ, well incentivized. We've got our IT and data monetization that we spoke a little bit about in the stores this morning. And then something Jason actually also added to our thinking was just a culture of compliance, risk management, which is really important to this whole foundation as well. So that's how we present to our team. It's trying to get this into 1 page so that everyone is totally on point as to what we're trying to do at EZCORP, and we thought sharing it with you guys today would be interesting. So why don't I stop there and see if anyone's got any questions. Do you think we're missing anything? Do you find anything surprising? Yes, Brian?

[indiscernible].

I think it's different for each pillar. It's a really good question. This pillar, the grow pillar. M&A is how long the pieces string. So if you ignore M&A, what I'd say about M&A is that pawnbroking is a gargantuan global industry. So it is -- there is M&A opportunity all over the world. I think we keep saying this, but we're only going to do that in a disciplined way. We're not going to go and buy stuff that's either not high returning for our shareholders or is not strategically relevant. We are going to be really focused on that. But in terms of capital for that, it's a pretty steep runway. There's a big, big opportunity. In the innovation side in digital, look, we could go and spend a lot of money now on digital innovation. I just don't think we're going to do that. We're doing that in a focused, disciplined way as well. But it's not $50 million, for example. So the -- I think the capital need there is very manageable each year in digital. We were saying this morning we've just hired a new CMO who we're all really excited about who's got digital as part of his remit. So we're going to spend the next 3 to 6 months really working out what we're going to do there. But I'd say to you from a capital perspective, it's not scary, but it's important. In the middle one, we're obviously taking cost out. So -- or trying to take cost out. It's we're sort of now -- Tim got all the low-hanging fruit. Now it's much more a cultural thing where we're just watching dollars every day. And then on strengthening the core, I think the capital required is it's actually not really capital, it's operating excellence and superior execution. So look, I think most of the capital is over here, and it's mainly M&A dependent. And I think there's a lot of capital that could be put to work in pawnbroking M&A. You guys would you -- Tim, would you add anything to that?

No, that's -- I will actually going to go through on one of my slides. One one of my slides I'm going to go through is just a little bit of how we've spent cash recently and going from highs of where our cash balance is today. And you'll see that a lot of it is going into working capital from a very low PLO balance back up is going back up and also into M&A.

I think that's a good point I missed, working capital into loans and into inventories. You obviously got capital needs depending on how quickly it comes back. Okay. This is a new slide, which is -- it's an entitled our journey starting off down on the bottom left, which was in Q4 2020 when essentially, this management team, including Jason took over, and we put this strategy into place. I think the most important thing -- well, one of the most important things that we have done, which was led by Blair and Nicki was in strengthening the core pawn operations was this business model transformation. And it started start of 2021. We're now halfway through 2022. And I think that business model transformation is all around people pawn and passion, which Blair will take you through. But it's really about better management of inventory, lending better at the counter. But again, he will take you through this stuff. But I think on our journey, this model transformation you are now seeing is driving some pretty stronger results. Moving across the page, I've already mentioned on the cost reduction front, we took $14 million out early on, and now it's about an ongoing simplification and optimization process. On the team members front, we just have a fabulous HR leader who works closely with Blair and really enhanced everything we do on the HR front. It's become our -- probably our #1 focus as an organization is the people. So there's examples on the page of all of these initiatives that we've -- that we're going through like career path, competency framework, recognition rewards programs stuff that we've done a little of, but it's just now become a real focus. And I think it's really paying off in the results. On the Innovate and Grow. I've spoken about acquisitions. We bought 143 stores last year. We added 143 stores mainly through acquisition, opened 15 de novo stores. We're rolling out our inventory showcase, which we spoke about this morning in the stores, and Nicki will speak more about the EZ+ Loyalty Program, which has also been a really strong initiative for our customers. On the IT data modernization. I think that's come along leaps and bounds in the last 2 years as well. And we've got examples there of what we're doing. Really bringing us to now the first quarter, which hopefully you have seen the numbers that we are producing just a steadily growing and I think it's the result of all of this strategy over the last 18 months and that we're continuing building on. Tim will take you through those numbers. I won't do that. Does anyone have any questions on the journey. [ Dave ]?

Question on Innovate and Grow. Could you give us some specific initiatives that are in the pipeline in terms of innovation and digitization?

I think that is pretty much the focus of -- once Nick is up here, we will talk about that. If you don't mind. I knew that would happen. But yes, we'll absolutely. It's a big focus for today. Okay. Moving through, this is 2022. So I think it's important for everyone that our strategy is not changing. This is a 3-year plan. We're halfway through it. You can see these the same pillars, the same foundational capabilities that we spoke about for last year, we are doing this year. So I think you can see the team members up to the top left. We are working to make this team the most passionate and productive and tenured team in the industry with those initiatives. We are continuing to strengthen the core as you move down the page. Blair spoke in the stores this morning about the importance of turning our inventory in the first 90 days. That's been a big change in Blair's operating model. We're continuing to do that to reduce that inventory. Tim will talk about financial performance. Up to the top right, Nicki will cover our customer focus on the EZ+ points-based loyalty program and how that's going and online payments. And from the first quarter you guys saw in the Innovate and Grow the company that owns pawnshops in the Caribbean. That was a management team that we bought stores from in Florida, so we know them well. We think that the Caribbean could be a fantastic opportunity. We're not there. And so we thought -- the best way to get there is to back a management team that we know well. We're opening more stores in Latin America. And obviously, the EZ+ digital experience is coming along. So I think the message on this page for everyone is that it's -- we are continuing with what we've been doing. There's nothing radical here. We're having a lot of success with this strategy. So this year is about continuing on and building on the success we had last year. In thinking through expansion and growth, to the top left here, we've spoken about the stores we acquired. I think the important thing for everyone is we're successfully integrating those. I think everyone in the room knows that M&A is much more about your execution after the deal and your ability to grow that business, and that's where our focus is now. We all get excited by the deal pipeline but really, it's about integrating these businesses and integrating the people. And so far, we've integrated all of those stores onto our easy point-of-sale system, which was not a small feat. But that's done. And hopefully, you'll see some really increased performance with that. And then out to the right, we announced we've increased our stake in cash converters slightly from 36% to 38%. I can talk about that in a minute. We invested in, obviously, the Caribbean stores. And then we invested in a small business called The Cobblers which we think while it might -- it should be a good investment on its own, while it's a modest amount of money. We think it could really help in our pawnshops. We spoke about this in the last earnings call. This is a company that upgrades -- it has a young demographic customer base, mainly on Instagram, social media, you send in your luxury shoes or your luxury bags, they upgrade them and send them back to you and they are worth sort of double or triple what they used to be worth. So that got us interested that we could use this business in our pawnshops, but what they're doing and they're really smart sort of digital people are going to build a buy-sell marketplace on the top of that. So we thought that, that might be kind of disintermediating us. So why to work with them to help drive our pawnshops as well as it might be a successful investment. On Cash Converters, we often get questions on this one. Cash Converters is obviously Australia's leading lending business for this customer demographic. They're very -- they've got 18 countries franchised. But what we love about Cash Converters is it's a similar business to us. It's not identical, but it's got a super strong management team. It's trading at a very low multiple. And we think that this management team has significantly cleaned it up so that it's got this sort of positioning for real growth. So it's -- it's a core part of what we do, and we're excited about that and particularly about the management team. So I might stop there. I know people might have questions. Any questions on deals or acquisitions, new stores. [ Dave ]?

So my question is on the stores that were acquired in the Caribbean. What is the -- how many stores did we get? What percentage do we own? And can we get an approximation of multiple of EBITDA that we paid. It seems like on the surface, a lot of money, $15 million. But if you could just take us through that transaction, I'd appreciate it.

Yes, of course. So look, I think we can only do what we've disclosed, but it's 20 stores. What I'd say to you before we -- before Tim will remind me what we disclosed. But what I would say to you is we did not do this for 20 stores. We've done this to back a management team that we think could do 120 stores. So it is -- this acquisition is about a genuine building of a pawnshop business outside of a geography that we currently operate that's pretty close to home. And we're genuinely excited about the operators because we bought that business. It's probably our best-performing ever acquisition. It was our Florida acquisition called Value Pawn, and proven operator we bought it, love it. And so we've said, okay, let's try and do this again. And the aim is not 20 stores with this business. The aim is 100 stores with this business or more. In terms of the actual deal metrics that we've disclosed, I don't think we haven't done EBITDA or revenue, it's...

What percent did we get of the Caribbean company?

We didn't buy equity, but yes...

Yes. So the investment is not in -- the investment is into a platform that owned those crew in. So we don't -- the investment is not directly in the stores. And so there's a level of investment above that. So there's not a direct correlation that you're looking for that I can give you.

We thought of a preferred structure where we're without a return first, but it's -- look, again, it's not for this 20 stores that you're seeing now, and we haven't done a direct investment. I can't remember what we actually disclosed on financials. I don't think anything Tom right? No.

But as Lachie said, the $15 million was in the platform, not just to buy the 20 stores. So the $15 million has gone into the company to do other things, not just the initial 20 stores. So there's still capital in the business.

To buy more stuff.

I'm sorry?

To buy more things.

To build de novos, buy more acquisitions, those kind of things.

So just sort of think because you guys have been for -- you've got organic growth, PLO growth. Obviously, that's accelerating because things are loosening up for the pawn business and then you've got a pipeline. And just sort of thinking at a high level, at the beginning of any financial period, whether it's a year or even a quarter, how do you allocate? Do you always have a pipeline that you're kind of putting money aside for from an acquisition perspective? Or is it more like we're going to grow organically and all the stuff is just opportunistic on the side?

Exactly that. It's exactly that. We maintain a very specific robust pipeline that we think we know rough valuation for but it is opportunistic. That is the problem with M&A. We just don't know when it rains and pause. So we try to keep an amount of capital that's conservative knowing that any one time, we're working on a lot of M&A, some of it comes, some of it doesn't. So we're very rigid in our other capital allocation around PLO, annual budgeting on PLO inventory, people. So we're very robust on that capital allocation. But when it comes to M&A, it's much more broad and opportunistic where we just try to stay liquid to take advantage of one of those deals.

The last couple that we've done they've been in the pipeline for years, literally, with relationships with the owners and getting them to a good spot and getting them ready to exit, et cetera. So it's just -- it's very much just being ready when the time is right and keeping them getting the relationship close to get there.

Right. Just my quote to that one. But I mean is there going to be a point at which -- I mean just as you're talking to the investment community that you articulate more clearly the growth you expect from acquisitions, recognizing that it's going to be episodic, but also to what multiples are you paying now for? I don't recall EZCORP saying that. I mean are there typical multiples you're paying out there from the targets?

It depends on a few things. It depends firstly on the region. And even -- just take the U.S., for example, it depends on the state because that is what defines regulation. So in Florida or Texas, where yields are higher, growth is usually higher. You're going to be paying a higher multiple than another state that's got regulations that are stifling all sorts of initiatives. Look, we don't really say publicly what we like to pay. But I think it's roughly in the U.S., you would like to be paying in the -- I actually shouldn't say it because then all of the owners of pawnshops are going to hold me to this, but it's -- I think you guys would know. You -- it's certainly middle of the low single digits to -- and we're trying to stay in that kind of area. In the last few years, it's become more difficult to be in that region. Down in Mexico, there's more risk, but there's more growth. So yes, it's difficult to say because they're just very different depending on the acquisition, and it's also a bit competitively confidential because all of a sudden, I'll have people calling from some regions. You said that you pay 8x EBITDA.

Okay. To that point, also really like in the U.S., for example, there are certain states that have licensed moratoriums on it or restrictions on licensing in Texas as such. And so those are obviously going to produce different valuations in the states that you can go in easier with the de novo type of program just because there's more liability in those other states.

Right. The other thing, Brian, is you look at it at your price going in but really what you care about is what you can do with that business. So how does that multiple look in 1 year or in 2 years? Because it's usually very different because we bring -- what we usually see is mom-and-pops or small chains who have got limited capital, all of a sudden, we come in, we upgrade the system, we upgrade, we have capital. And so what might sound like an expensive acquisition upfront, within 2 years, under our ownership, it looks like a very attractive acquisition. We don't like to pay away for what we're bringing to it. But it is a -- it's not your normal kind of add-on and it stays like in a sort of a small growth path, for us, we really try to change that business, upgrade earnings, making the multiple look a lot more attractive.

So just to go back to my I guess the first question is we're seeing here 3 to 5 years from now, we have a similar median and presumably EZCORP will be a much larger company by then. Will that be largely driven or I guess to what extent will that have been driven by M&A versus organic growth?

I think there's still a lot of way to go in organic. But we're looking for a step change. We're looking to be a multibillion-dollar company. And so to do that, that can't just come from organic. No, we still think we've got a lot to do in organic. But really, for a step change to make this a multibillion-dollar company, it's got to come from M&A. And so we've got to get really good at it. Hopefully, you've all seen in the last few years, we've been very disciplined. We haven't gone out and done silly things. We've paid prices that are -- that can -- that we can support. But the robust -- the pipeline is robust. There's plenty to do out there for us. We just don't want to do it in a way that risks what everyone in this room has got. We don't want to add too much risk profile to our business, but it's a really robust pipeline and still stuff to do in organic. Down the bottom here. I think we've spoken about a lot of this. You can see the strategies here out to the left. So in growing the core pawn business, what Brian is talking about, which is the organic, we need to grow our PLO balance. We need to drive superior retail management, improve our each store and increase team member engagement. So those initiatives have got many, many things associated with them, but we've tried to summarize for you what the key things are here that we're trying to do. Nicki will spend a bit of time on expanding our digital offerings. I think there's just so much to do here. And you can see on the page, the various things that we're looking to do. We've spoken about increasing the store footprint. That's all opportunistic acquisitions. We're looking at new markets. But again, we are also cognizant of risk. So we're not going to race out into markets that we think a difficult from a regulatory perspective or from a people perspective. So in that area, we're trying to stay disciplined. We're going to continue to open de novo stores where they make sense and focused on integrating these acquisitions in a really, really efficient, robust way. The last piece out to the right, we've spoken about here our investments and partnerships. We're not trying to race out there and do so many of these to derail our existing core platform, but we are going to do ones that we think can help us grow our core. We're testing and learning about adjacent products for our pawnshops. We're looking at expanding the global footprint of our stores. And really, the most important thing that we speak about is that we want to invest in businesses with strong management teams, and I think we've done a really good job of that so far. So I'm coming towards...

Lachie, we've got 1 question from online just in regards to I think you talked about a little bit there just about the acquisition pipeline internationally and our appetite to expand to the rest of LatAm in other places.

Yes. So it's definitely a pipeline internationally. I think we are focused on both our existing markets. So Mexico, Guatemala, the U.S., obviously. But yes, there is a -- we have a pipeline of M&A in other countries as well, probably in the early stage. But what I'd say is that we don't want to race out into new markets and blow this thing up because I think we've done such great work in the U.S. and Latin America. There's still plenty to do in those markets. But we are looking at some international markets that we feel are similar to our markets that won't significantly heighten our risk of execution. My last couple of pages relate to the ESG side of what we're doing, which people are starting to get really interested in EZCORP around these topics. I think the easiest way to think about it is that we've recycled millions and millions of products. So I think people immediately get attracted to that about us. I think young people -- the young customer demographic is getting very attractive to us because that's what we do. We do secondhand goods and we -- and that is obviously good for the environment. But there are many, many other issues that we are -- by way of what we do promote sustainability, social responsibility we know it is a unique essential, sustainable business for our customer demographic. We have stores that are located inside local communities. So there's no real travel. There's no warehousing. There's no distribution facilities. There's no delivery. So our -- and stores have a relatively low carbon footprint. We provide an essential simple regulated financial services -- financial service for those who are underserved by other traditional sources, which is attracting a lot of ESG attention as well. Protecting the privacy and integrity and security of our customers' data and our enterprise network is also a top priority here, which is overseen by our Board of Directors. And lastly, we maintain a separate IT security system that's responsible for cyber risk strategy. And then final page, just sort of digging into a little bit on our sort of ESG metrics. We're actually really upping our game in this area now because we feel like we haven't really told the story very well to the investor base about how well our business is suited to this. So sort of watch this space and Neelima, particularly is working on becoming much more data-driven around this. But on this slide, you can see that we procured over 7 million pre-owned items last year and resold over 5 million of them contributing to the circular economy. Other things we've done, we retrofitted 65% of U.S. stores with energy-efficient LED lighting. We recycled over 1.8 million pounds of paper in the U.S., and we responsibly dispose of our end-of-life computers, electronics and accessories through recycling and other e-waste processing practices. In the first quarter, I'll be relatively brief here because we've covered this before, but you can see in the first quarter, we procured over 1.7 million pre-owned items through pawn forfeitures and purchasing from customers and sold more than 1.4 million pre-owned items. Lastly, down the bottom here, you can see our health, safety, diversity and inclusion. I think what's particularly pleasing, as you can see our agenda is really is looking good. We're working on it, where you can see that 52% of our employees are male, 48% female. So we're working on lots and lots of initiatives around that area, particularly in management as well. And you can see the race and ethnicity numbers there. So I think that comes to the end of sort of the intro to what we're doing. We've got Blair to speak, Nicki to speak, Tim to speak where we're going to sort of drill down a bit more into some of the strategies that hopefully, you guys find really interesting that we don't really speak about at the earnings calls or the analyst presentations. So with that, BP, why don't you take us away.

Thank you, Lachie. So thanks, everyone, for attending and at the risk of being repetitive for those of you who attended the store visit this morning, I'm going to go into really some details on kind of the overall operations and some really -- some specific actions around our cultural transition. But I want to start with the fact that I know the results have been a bit hard to look at over the past kind of 2 years with COVID and stimulus and everything else has affected everyone, including our industry. But I want to say that our teams have done a fantastic job of really serving our customers and staying positive and staying focused. And our whole [ MO ] is let's focus on what we can control. We can't control the stimulus packages that hit our customers and how we deal with that on a macro basis, but we can focus on how we deal with that on a store-by-store, customer-by-customer basis. And I'm very, very proud of the team and the results that they've accomplished. And I think, in my opinion, the 2 things that really have converged that have driven that success and the recovery have been really the adoption of our new operating culture of people, pawn and passion. When Jason came to me, and we're talking about what do we need to do. This just kind of really was bred out of that whole thought process of we need to really spend a lot of time focusing on our teams. We need to simplify the business, and we need to get passionate about what we do. So it's kind of who we are, what we do and how we do it. And that evolution is not just in the U.S., it's in Latin America as well [Foreign Language] as what is referred to down there, but it is an overall movement across all our businesses. And then finally, when you combine that with the effective execution of the business model, and Nicki will give some more color to you, which is really a fancy way of saying we're going to control on making quality loan and getting the best return out of that loan than we can, no matter what that looks like. We still tightening up the approach to business, and I'll talk about some specifics around that as well. And then finally, we're looking to really kind of merge what we do with the people and then the signs of technology side behind that. And as you saw in the stores this morning, you saw the point-of-sale system as an example on how we use that system to give our pawn brokers a better start point as we move through it. But those 2 things combined also are helping move the business forward. To start with on people. We talked a bit about it in a store visit about the great resignation and the challenges around staffing. And we've been very dynamic in our approach to that. We haven't set stagnant and hope for the best. We've made a lot of changes to doing things. First off, retain our people. We've got a very intense focus on knowing which of our team members are at risk for leaving, staying close to them and really working them through, planning to help retain them. But if you look at the overall activities from a hiring standpoint, we've added recruiters, we now have a recruiter for every region in the United States. We've added sign-on bonuses. We've increased referral bonuses. And in January, we started a new program around a welcome bonus and essentially, today, the team member starts for us within the first week, 7 days of their employment, we give them a cash incentive for coming onboard with us to help get them through the first 2 week period until they get a paycheck. And the response has been overwhelming. Just some great stories from new hires that I didn't know how it was going to get to work, put gas in my car, get a bus ticket in cold and just, et cetera, et cetera. So it's been really, really well received overall. So the point being there is that I really want everyone to understand we are trying to staff our stores. Everyone sees the staffing challenges. As you go out to dinners or the service industry or wherever you -- everyone sees it day in, day out, and we're working very hard to continue to staff our stores in a manner that coincides with our business recovery. The second piece around development, the talent succession reviews has been critical for us. We've implemented this. This is a process that is now in Latin America as well as the U.S., whereas every single member of our management team, whether it's wage, the wage manager, our salary manager is evaluated. They're assessed on by their district manager on 6 core competencies and scored. We calibrate that across geographies to make sure that nothing is out of balance there. And we use that as an identifier to assess our bench strength, how well we're doing to develop the teams and also as a tool for who's going to be the next manager of a store, who's going to be the next lead pawn broker in the store and really how we're going to evolve the staffing and management teams across the board. So it's been a very powerful tool that we'll continue to evolve, but we do twice a year in every store across the company. The competency guide and career path around that has been very well received. One of the highest responses we've got on the engagement survey as you'll see as I know what I can achieve, and I understand my career path here at EZCORP. I think it was in the 86% range, if I'm not mistaken. So it's very clear as to what can be achieved here's organization and we want to build that and instill that in our teams at all the stores. On a reward standpoint, we're working very hard to kind of change the culture there by pay for performance culture and incentive plans. In Latin America, I was explaining some of the incentive plans here in the U.S. where each individual is really incentivized on their personal contribution to the store and then the store overall, how they perform against their monthly and quarterly operating goals is incentivized. So we're moving really towards that. There's a lot of excitement and energy around it. It's been very rewarding obviously with some of the results that we produced. Inside of that, we inject various seasonal rewards contest and contest to -- for different aspects of the business. And again, just to really rally the troops and get them engaged and incentivized in everything that we're doing. The retention piece is the final plank in the people that I'll add a little bit of color on. And this year, as you can see the top point, we introduced a long-term cash incentive program for our store managers and district managers. Someone had mentioned the stock earlier on the store visit. And this is a program, as such, that really recognizes our store managers. We typically classify them based on the size of the store they run. And now with this program, we're recognizing their tenure, we're recognizing their performance, and we're giving them a cash vesting over a 3-year period that's theirs to keep as long as they perform. So it's really a fantastic step in the right direction to continue to grow and increase that tenure. Which you can see in the U.S., our average manager is 9 years, and our average manager in Latin America is 5.5 years, 5.2 years. So we're really focused on people, all in all, of retaining them and developing them and growing them and letting them be successful. There are several other points in there. The total reward statement that we rolled out that's actually being rolled out as we speak in the U.S. is a tool where we're sitting down with each individual team member, to say, here's your total compensation. Don't just look at your hourly wage, look at it in your total compensation in terms of your benefits and your bonuses and all your incentives. So before you move down the street for an extra dollar per hour, ensure that you're looking at the whole picture here and that's underway right now as well. So -- and then finally, on the global engagement survey. This is -- you can see the results. We had some very good responses. This is last year, kind of about 1 year in to our cultural transition. So we're excited and looking forward to seeing the results of how this is going to change as we move into 2022 and have another survey out. From the pawn side, again, it's about simplifying our approach. We really don't want to keep it simple with all the stores. We've done a number of things. We kind of talk about 4 things we do. We develop our team, serve our customers, write loans and sell recycled goods. And that's as simple as we can make it for the stores, and it's been very well received in terms of just keeping it pure for them. But I won't go through all the numbers, but the story is this. I mean we're getting tremendous leverage out of our earning asset base. You see that the portfolio in terms of overall dollars has outpaced the inventory growth. And then the total revenue growth in terms of overall percentage has outpaced earning asset growth. So I think it's a really good story about a quality recovery, as you can see, coming from kind of the stimulus period all the way back across. And this is really at the crux of it is our new operating model, right, a new business model. A portion of that, that you saw in the stores as well is really staying focused on our inventory management. Not only to flush our inventory in terms of driving sales and sales gross profit and turning it back into cash, but also getting back into the customers' hands in the stores in the neighborhoods that we operate in, but also really keeping inventory levels in check so that we can continue the loan. The worst thing you can do in this business is have too much inventory in the store and get inventory paralysis as we have a term part, which really stifles the portfolio growth. So this is a very, very, very critical point in our terms of our overall strategy of continuing to grow our PLO and getting some superior ROAs out of it. And it starts with price. This is the same image you saw in a store which I think is good to connect dots. So these aren't just words on pages here, these are real-life actions in the stores. And pricing seems simple. But when you're dealing with the diversity of product and conditions that we deal with every day, it's important to get it right. So that's our first point. The second point is we changed our tagging strategy just over a year ago. They went from a progressive discount tag to a single price point tag and give our team members back to negotiation, the haggling, if you will, of interaction with the customers in the stores to help move the product as well and it's been very well received and again, it continues to drive the velocity that you saw in the stores and the results today. And then finally, if something does it sell across those first 2, we're going to take it and apply discounts to it in our supersavings centers, or market down and get rid of it to ensure that we don't have any buildup of aged inventory, which again slows our overall loan portfolio growth down. So very, very critical point for the pawn growth. And finally, I'll close with passion and then open up for questions. This is really about making everyone feel a part of something bigger. We have 1,149 stores, as Lachie pointed out. A lot of them are spread across geographies, and we're trying to make everyone to feel a part of something bigger. We want to really say thank you. There's a list of all the acknowledgments that we do, but the call outs, the shout-outs to we do the communication that we're going to talk about in a second is very, very critical. Communication was one of our lower scores on our engagement surveys. And so we're putting a lot of emphasis around communications. And the goal board that we saw in the store today will be replaced with the digital communication center. So all the information on that goal board will be provided digitally to the store as well as communication videos, messages of days, et cetera, from the leadership, either local or from our support center. So we're really working hard to communicate better with the team members and keep them engaged in our overall business. Okay. And with that, any questions on the evolution. Brian?

I guess just a question on the stores. Just how across the chain, particularly if you're looking just at the United States, how variable is the store performance? Do you have -- is the spread between your real high performers and real low performance wide? Or is it relatively steady?

Yes, it's -- there is some spread. I have the average. I don't have the beat on it. But I would tell you that our focus is every store every day, which I didn't speak to, but is all in one of the slides there. But we have stores, we have them in different tiers. We have tiers 1 through 4. And our -- obviously, our highest volume stores, we kind of say it's the top 10% and the lowest in the bottom 10% and the other 80% is in between. So there is a spread on the stores. But we're working really hard on consistency of those stores and their performance. So an average district in the U.S. has -- district manager has 8 stores, and we're looking at trying to get scale, obviously, evened out. But more importantly than the scale making sure that each store lands their individual operating targets.

Can you delve into unit economics, for example, in the U.S., what is your average unit volume and store level EBITDA? And then in comparison, Caribbean, Latin America, what is average unit volume, along with store level EBITDA? And then can you also talk about greenfield opportunity. What does it cost to open up a box and when does it turn profitable?

Yes. I don't have the EBITDA in front of me, [ Dave ], but I do have the portfolio, which will be kind of directional for that. Ending the quarter in the U.S., we had about USD 273,000 outstanding portfolio per store. Mexico was about USD 55,000 and our stores in GPMX or Guatemala primarily were about $80,000 a store. So still some scale opportunities with those. As you -- as Tim talked about or Lachie talked about what's percentage of jewelry and general merchandise, that varies that a bit as does the size and the footprint of the stores. But the U.S. ending Q1 was $273,000 a store. And the Mexico was $55,000 and Guatemala was $80,000. On the de novo front, it kind of varies by country. As we said in the U.S., those are opportunistic for us. They have to be the right infill strategy. in states like Texas, where there's a show need requirement in any county over 250,000 people, you have to have a -- be a certain distance from an existing pawnshop. Obviously, if you get a pocket is kind of where we'll refer to it if you get a pocket, the demographics seem to make sense in the pocket and then you have to get a side in the pocket. So it's a bit of a difficult process for de novos in U.S. in most of the markets that we're in already. The U.S. was primarily built on acquisitions, and those are -- that's our primary growth vehicle here in the U.S. De novos is kind of going to be a bit of both in Latin America where there aren't some of those licensings and zoning and SUP restrictions. And obviously, the cost and the ramp-up is faster as well. So we'll do a bit more de novos in Latin America than we would do it in the U.S.

One of the things that we've noticed about pawn over time is the remarkable consistency with if you go back to years redemption rates, the types of merchandise that were used as collateral. Obviously, we went through a dynamic environment during COVID, but are you seeing anything as we come out that represents a trend change of the why consumers are using it, how they're using it? Or do you think we're going right back to where we were.

That's a good question. I think from a seasonality standpoint, we're seeing it start to recover back to more seasonal trends last April was around similar. So we saw the bottom fall out of the portfolio, obviously, and now we're seeing -- we think it's going to be a more consistent growth of going back to normal seasonality. As everything occurs with inflation, we're going to watch our redemption rates that even through these times have been pretty consistent. I think we have better information now than we did when we managed through some of these periods in the past in terms of getting in front of how we're lending and what those dispositions and forfeitures and looked like overall. So I think that a lot of what Nicki is working on with her team in the analytics around the business will give us better insights and faster insights. And now we have the point-of-sale system that if we see something that we need to change, it's a very, very fluid dynamic change in terms of getting it out into the system, whereas past periods when like 2008 or so or that was just word of mouth, let me train on what we need to do. Now we just we flip to switch in a system for lack of better words, and at least we're getting the pawn brokers to a better start point that more -- that aligns closer with our strategy, if we want to make a change. So I think the combination of really leveraging that technology will help us manage through that a lot faster and differently than we did in the past.

[indiscernible] bags, shoes given there's not a huge trend change, but we are seeing new categories start to emerge and grow.

Yes. I mean that's definitely true. I mean, you've been to quite a few stores. I mean, I think the sneaker business, for example, is one that looks pretty dominant in the stores, and it's a great category for us, and it's something that we're continuing to evolve with. And the luxury side of things as well, you saw several bags in there, and we talked about we've actually procured some new to us, but used product to put in the stores to really kind of kick-start that pawn cycle in each of those stores in each in each of the neighborhoods. So we're doing a very, very methodical way at which stores we put it in, but we're seeing some good early success of those type of programs as well.

[indiscernible] so when looking at luxury products at times appeal to some of our customer base. But we're trying to attract people who have never come to a pawnshop before and these new emerging categories is starting to do that.

Yes, I think it's a -- in terms of overall customer growth, and stole Nicki has done -- and I'll answer this and then turn it over to her. It's about how do we increase both share wallet and market share. So it's each neighborhood is given the customer choices how they want to interact, how they want to pay. It's making sure we serve their needs based on the category that they have. And then, obviously, it's our teams in our stores that are really doing a great job of serving these to the customers and establish those relationships as you saw this morning. So okay. All right. Thank you. With that, I'll turn it over to Nicki.

Thank you, Blair. Good afternoon, everyone. Can you hear me? Okay. Great. So to start with, what I really want to go back to is what Lachie spoke about at the very beginning, which was the strategy. So one thing that's really important is that every activity that we do when we're talking about our digital journey, when we're talking about how we move forward with the marketing strategy, it all has to fit into what we're trying to accomplish as an organization. And I think that the activities do really well fit in, and that's what I've represented here. And we'll go into most of these items in more detail on subsequent slides. So I'll keep it at a high level and really just concentrate on the essence here, which is the digital strategy as a tool for simplifying the business. We've talked about that a lot. It's a big focus area. And for those of you that were able to go to the stores today, you probably saw that there's a lot of physical, manual work that goes into this business. And there's a lot of manual processes that would be better conducted with digital tools. So we'll talk a little bit about some of those tools that we're developing and starting to roll out across the stores. It's also really important to focus on people. That's true for both the team member and the customer. I'm one that firmly believes that your customers get treated -- how they get treated is a reflection of how our employees are treated. And so we focused really hard on making this a rewarding position for our team members as well as the rewarding experience for our customers to do business with us. On the customer focus side, of course, we're also looking to acquire new customers really looking to the younger generations who are becoming adults and now entering into the financial world at a pretty difficult time, let's be honest about that. And we're able to provide them something different that they cannot get elsewhere as well as, I think, a proposition that we haven't talked much about, which is really appealing to that environmentally conscious consumer. We talk about ESG quite a bit. I have a daughter in her early 20s. And she will thrift almost every weekend. She gets great enjoyment out of finding previously loved items and bringing them new life. And I think that as customers become more aware that you can do that same thing with fine jewelry, with electronics, I think it will really open up a group of consumers who engage with us to buy and sell their goods independence of true financial need at that moment in time. So that may be a big opportunity for us going forward. I'll wrap up my discussion today talking about the business model, so I'm going to skip through that piece as well. So let's start with the customer. I don't know that we spoke about this very much in the store, but we broke up into group. So apologies if I'm repeating myself. Just a couple of years ago, if you were a customer who has a pawn loan with us, and you like to come in once your loan is due to extend it until your next paycheck. In the past, you had to transport yourselves physically to the store and you had to make that transaction in the store almost always waiting in line because that typically occurs on Friday afternoon after everyone's received their paychecks. It's not a very convenient experience for our customers. So we've brought it online. And what we've done is created an experience that we call EZ+. And for Latin America, it's EZ [Foreign Language], but the way we say it is [Foreign Language], which means it's more. And it's really resonated with the consumer in every geography that we operate in. So we're very excited about this. So I'll go into more detail about the EZ Rewards program in just a moment. I know everyone is excited to hear about that. And the mobile payments is really what I want to talk a little bit more about today. If you looked at our previous investor or our quarterly earnings presentation, that is, we had about $5 million of our PSC collected online in the quarter, and that was triple what we did in the prior year same quarter, of course, as a brand-new program. So this is being really well adopted. It's actually part of our communications to customers when they have payments due. Here's a link, you can go pay online. They can make the choice. They can create an account, make that easy or they can just use their loan ticket number and some identifying information and just do a payment as a guest, really creating a great opportunity there for our customers to stay current, to not have to travel into the store when it's inconvenient or as we've experienced over the last few years, at times unsafe to do so. They can do layaway payments as well. Most of our layaways are 3 months in duration and they're paid on a monthly basis. This prevents the customer from needing to come into the store every time just to make that payment. A side effect of that, a side benefit, I should say, is that we're able to, over time, we believe, improve team member productivity because there's a lot of payment transactions that occur. I just mentioned for 1 layaway, you've got 3 transactions that happen before you get to the end of that layaway, some are even 6 months. So all those payment transactions leads to a situation where we may have to rush the interaction with that customer there to take out a new loan or to purchase something from us, when you really need to build those relationships with your customer, identify their need and help meet that need. So by freeing up space from the tedious small-dollar payment transactions, we give our pawn brokers much more time to focus on their customer in the store. The inventory showcase, I don't have a lot on here. We did speak about this in the store as well. But what's really important to understand is that this is really an operational test. Some of you may know we have gone into the e-commerce space in the past. We sold on Amazon for a period of time and found that there was a strong appetite for purchasing secondhand goods online. However, operationally, it didn't work for us. It was too labor-intensive. It was too costly. And at the end of the day, most of the products we sell online were the same things that we're going to move really fast inside our stores without all the incremental cost of commissions to the third party as well as the shipping costs that go along with that. So a key part of what we're trying to do is figure out how to make e-commerce work for us so that it's not something that requires people that sit in the backroom of our stores and never interact with our live customers, just processing e-commerce transactions. So to start with the showcase what we did is just provide basically a list of what's available on our website. Lachie showed a picture actually of the top categories that are there, you can search by location. You can see what the price is and you have the option to either call or get directions to the store to go pick up that item, which I think is really helpful. It's also proven to be a decent tool for our team members and that they can see what the other stores have as the customer is looking for a very specific item. And then on omnichannel customer engagement, we're still very early in our marketing journey. Lachie mentioned that back in 2020, I was made responsible for our digital operations as well as marketing. I'm not an expert in either of these areas. What I'm an expert in is pawn. And it required a real business understanding to get the strategy right, to figure out what was working, what wasn't working and make the hard decisions on what we keep doing, what we stop doing and what we start doing. And I have an amazing team that's helped us accomplish all this. And in the spirit of a global company, my team is split between I mean we have a few people in Austin. I have people in Miami, I have people in Toronto, I have people in Guatemala City, Querétaro and Mexico City, just to name a few. And it's a group of team members that I think really have bought in to the people, pawn and passion concept. I think it's important to take note that as much as we've spoken about and as important as it is, it's fundamentally important to have that strong people culture in our stores. That was absent for a period of time from the support group. It was a bit of us and them kind of thinking it was a lot of what we want is important and what the store needs isn't important, and that's a huge cultural breakdown. And going back to when Jason came onboard really as a management team, we focus very hard on changing that perception. There's no they, we are we. And we are 1 company. We have 1 mission, and we're all in this together. And I believe we've got a team now that buys into that and advocates for it on a daily basis, which is really exciting to be a part of. All right. So back to the fun stuff, EZ Rewards. This has been just beyond my wildest expectations to be perfectly honest with you. So giving you a little bit of a sneak peek because Tim said I could since it's not a financial number. We are up to nearly 500,000 members enrolled in our loyalty program. And over 70% of those individuals have done active transactions with us as members of the program and earned points. That was far beyond what we were advised to expect as we built out this program. We also went from start to finish of vendor selection to launching the first test store in 6 months, which was an incredible feat. For those of you that understand our technology journey, something like this 5 years ago would have been absolutely impossible. There's no way we could have done it. It dovetails right in with our micro services strategy that you've probably heard about in the past because we didn't build any of this in legacy point of sale, except what's necessary for the user interface. Everything else is built as a micro service so that it's got APIs, modern technology, we'll be able to leverage things for future use in other ways. We're now live in all of the U.S., we're live in all of Mexico except for the Cash Apoyo stores that we recently acquired. They've just finished converting to our point of sale. It's a big deal. We didn't want to overwhelm them operationally. So now that they are all online, we're going to start rolling that product out to them as well. We also just began our rollout in Guatemala. We're still only in the first group of, I guess, the beta test stores up to 15 now and starting to roll out soon. Everything has gone smoothly there, very well received. The customers love their cards. I meant to bring mine with me, but I don't have it on me. But you do have a physical card. And it's cool looking, it's black. It looks like a VIP-type thing, and that's something our customers don't receive very often. Any questions on EZ+ on the rewards?

I'm just going to ask one basic -- I'm sorry, that was a real basic question. But I mean as you've rolled this out, what's been the, I guess, probably the most significant impact upon the way consumers interact with your stores? I mean are you seeing more frequent transactions? Are they more likely to cross over to make a retail purchase, I mean?

So it's still very early for us to have too much analytics on it. We've rolled out the U.S. -- we completed that rollout in early November. We completed Mexico middle of December, and we're just rolling out Guatemala now. And I do have a selfish benefit from this program that I should point out, which is data. We don't always know everything the customer does with us. The best example of that is a retail sale. If I'm a customer going into a place to buy a secondhand item, and I go up to the counter with my cell phone with a cell phone that I want to buy. And they say, "Oh, can I see your ID?", before you even start the transaction, it's not going to sit well with me. But if you tell me, "Do you have your loyalty program cards so that you can earn points on this transaction?", I'll give you that. And now all the customers that are using the program, we have the entire visibility of their transactions with us and can start testing programs, promotional events, things like that and see how that impacts the business. I also want to put the 491,000 customers in context. In the U.S., we serve, on average, somewhere between 200,000 and 300,000 unique customers a month. So 500,000 is a huge number. And we think it will continue to grow. Of course, we do have the joy of serving some of our customers on a frequent basis. So once they're enrolled, they're enrolled, but we really do believe that customers benefit. You earn coins on everything you do with us. If you take out a loan or if we purchase an item from you, we don't distinguish between those 2. You get the same amount of points either way. If you take out a loan, when you come to redeem your loan, you're going to get credit for all of the pawn service charges that you paid along the way. If you buy from us, whether it's a sale or whether it's a layaway, you get points for that as well. And then to use those points you simply go to the counter, they know who you are, they know how many points you have, how much that's worth, and you can apply it towards a sale. We had a story of a customer who had come in to redeem a fairly large -- a much larger than typical loan with us. And this was fairly early on in the program. They signed up for the loyalty rewards. So they actually got the credit on that entire loan going back to the beginning because that was the twist we made was through award customers who are already part of our system and does not just reward for new transactions going forward. Turns out this customer ended up with enough points that they turned around and bought a piece of jewelry from us because it was enough to put the item down on layaway, and then they just completed out their payments on their EZ+ app and come back to the store a few months later to pick it up. So EZ+ can get a little bit confusing because the rewards program is named EZ+ Rewards, but it's really the first piece of our overall digital experience. When Lachie showed the page with all of our different brands, it makes me cringe. It's been a big pain point for us over the last few years. But the reality is, from an employee standpoint, everyone knows we're EZCORP. Everyone knows we're EZ. And so it was not a difficult thing to get people behind that. And we co-brand in most of our communications. So if you're at a USA pawnshop in Arizona, it will say U.S.A. Pawn and you still see EZ+ everywhere. So we're bringing that together for the customer without having to make really quick decisions around how we carry forward our brand strategy before Scott, our CMO, has time to get onboarded and really understand what's necessary here. What you're seeing here is just the scroll through of the app. It's not really -- it's not a native app. It is just a website that's mobile optimized. You can put the link on your homepage and it behaves just like an app for the consumer. It's been an evolution. We reached a major milestone in the month of March. We shut down our Lana card program. So that came to an end. All accounts were closed as of March 15 and on March 16, that entire platform that we invested quite a lot of money in was transitioned to the EZ+ platform. You'll notice that the branding is all EZ+. But if you did any interaction Lana in the past, you'll see it still has the colors, et cetera. We're not going to change any of that until we have a clear branding strategy for it. So until then, it's nice and pink and purple like the Lana brand was. Customers can get to their digital card there as well. So if I don't have my physical card. You just pull up the bar code on your screen. You're still going to get credit for that transaction. And by the way, like the ID scanning, it helps our store members get that person's information up on the point of sale a whole lot faster. They can see the promotions as we start getting into those, which we will be doing very soon, but I can't let the cat out of the bag on those just yet. And it also allows them to see their -- all their activity, the pawn loans that are outstanding, when are they due, the layaways that I have, what's my next payment due. And then again, you can simply make a payment right there in the app. So a lot of this all designs to increase customer engagement, right? We want to acquire new customers. The payment convenience, the loyalty program for me, those are things to drive retention of our customers, more so than new customer acquisition, although I will say I think they are huge differentiators for us in this space. I don't believe anybody is doing anything like this, and it will be difficult to replicate, especially for smaller organizations. The other pieces of customer engagement are around the showcase, which we spoke about a little bit. And we're also spending some money, investing in SEO. We're in the top 3 for pawnshop near me and almost every major market that we're in. Many of them were #1. And the investment to get there has been a lot smaller than I would have expected. So based on what we've seen, we're now, again, setting forth our strategy going forward, looking to increase our investment in this area and really get far more local and specific to the stores. As Blair said, it's a neighborhood business. We serve the people near our stores, and we really want them to be engaged with us in a meaningful way. We're also looking to find ways to really, I don't want to say, monetize it to take full advantage of the data that we've accumulated. Just Blair and I together have watched the last 19 years of economics and trends in this business and have learned that there's lots of things that are predictable. There are lots of things that take too much time for a human being to do at the counter, but the system can figure out how to replicate that logic and do it for them and then again, give them more time to interact with and build a relationship with their customers. Any questions on marketing. It's not my area of expertise, but I'm happy to address anything you would like to know. So going again to the inventory showcase. This video is actually showing you a homegrown app. We built in Microsoft Power Apps, for practically 0 money and in a very short amount of time because what we found is that stores are doing all kinds of creative things to grow their business. Some use OfferUp, some use Craigslist, some use Facebook Marketplace. Different people are doing different things, but one thing was the same across the board, taking pictures, getting the item descriptions, time-consuming, and you're having to do it individually on each platform and more often than not, store managers are using their personal cell phones to do this, which isn't what we really want. So we built this app. And this field loves it. It's really easy. We bought them these little photography boxes that provide better lighting, things like that, so that it's more Internet worthy than what we would otherwise get. You can see them doing this here. And that's as much as it is. Now what it doesn't show here very well is that the first step is simply scanning the bar code it's not data entry, which is a big step forward for us. And data entry has been a major pain point for us in terms of data quality over the past years. Again, with the inventory showcase. We've had a lot of interest it's driven up our website traffic quite considerably in the time that it's been in place. But we still only have it in roughly 150 stores in the U.S. So we made the decision to pause the rollout because, one, we think we still have work to do to get the process right. Two, we're going to have to invest in a real e-commerce platform if we're going to take this any further, and we think the potential is there. So we're going to step back, look at what that platform looks like and when is the appropriate time to make those investments. We also are learning about what customers are interested in, right? We can see what items are clicked, learn from that what they really want to see from us online and allow us to post fewer items that make a bigger impact with the items that we post. A couple of early observations, which are not surprising, the most frequently clicked on items are jewelry and electronics. None of this matters if our customers aren't behind what we're doing and find it valuable and useful in their lives. The best measurement we have today of that is Google Reviews. And we started really encouraging our customers to leave us reviews on Google a little over 18 months ago. As you can see in that time, we've gotten over 90,000 reviews that's U.S. only, by the way. And with that many -- we have so many great reviews. It was very difficult. So what we tried to do is provide the typical things we're hearing most often. And one of the things I love, and I know Blair really appreciate hearing is the staff. These are the best people. I love doing business here. I would never go anywhere else but to Joe at the store to take out a pawn. Team member experience. So this has been an interesting part of the digital journey. At the beginning, it was really all about the consumer digital experience, which should be the priority. But as we really started looking at things, what we've found is that there is possibly even more opportunity in improving the employees' experience. Like I said, heavy products to carry around, a lot of manual work to do. We want them to spend as much time as possible with their customer. The first thing that we have been working on is what we call the loan walk. And I think we talked about this a little bit in the store, but I want to kind of explain this in a tangible way. If I'm a store manager, one of my big tasks I do every single day is walk every loan and purchase that was made the prior day. This was partly compliance-related. It helps us ensure that we have the assets we believe we have, everything is valued reasonably and we don't have any bad behaviors going on. But it could be so much more. The reality is new team members take a decent amount of time to become fully effective as pawn brokers. They're going to make mistakes and that's okay. And they're going to have to learn and grow. This will give managers a way to be able to look at how employees are lending over time, something we've never been able to do before. And rather than carrying around a piece of paper and looking at item numbers to match up to item numbers on a tag, again, scan the tag, all the information comes up, you can see everything about what the system presented to the team member at the time of loan and what the team member actually did in terms of the price and the loan amount on the item. Also, you can click through to get more product information, to get more information on a customer, you name it, and it's just a couple of clicks on a tablet rather than paper. I can't get any value out of their insights when they're written on a piece of paper. So when they're making notes and they're making corrections on a digital app, we can start seeing, okay, something's going on here because 10% of the time, they're changing the price on an Xbox 360, for example. You can't do that today. We only see it when we're physically in the store and that's not the easiest way to run a chain of 1,100 stores. We're also implementing task scheduling tools, which is going to be a huge thing that I think our team members will greatly appreciate. Just having a schedule on your phone. I mean it's such a simple thing that we take for granted that everybody has today because it's still manual. They're still writing them down on a piece of paper and posting them on the backroom wall. Communications tools is a huge, huge thing. If we want to have a consistent engaged workforce, we have to give them consistent messaging. And right now, we play a game of telephone. Blair instructs the divisional Vice Presidents who instruct the RDOs who instructs the district managers, who instructs the store managers, who instructs the team members. The of the message being given in its entirety to every team member, including exactly what we're doing and more importantly, why we're doing it. We're not going to get strong execution, it's just the way the world works. So it's a big, big thing for us. We also want to create a community within our company. We want our team members to be able to engage with each other. Blair used the example in of that person that has some Rolex watch come in, they don't really know how to tell that's a real Rolex watch. But they know that Christie over the store across the city she knows everything about Rolex. You give Christie a call, she can help you out with that. Right now, they don't have a way to connect unless they just happen to know each other. We want to get more visual. We really want to be able to provide videos to provide fun content, and we're doing that through a project we call EZ portal, which is simply a television in the back room and the system that's going to stream a few things. Number one, those goal boards, that's such an important piece of managing the performance of the team members in the store will be digitized. Power BI dashboard is all presented there, more visual way, easy to understand, no time spent, going out to find reports and write those numbers down. Pricing, pricing, pricing has been a big focus for me for quite some time because it is the foundation of the economics of everything you do. We'll talk about kind of the fundamental way the business model works in a minute. So I won't get him too much of that right now. But the key is, regardless of the customer and regardless of their intention, the product is worse when the product is worse. When it's on a sales floor, it doesn't matter who brought it to us, it doesn't matter how much we want them. All that matters is that is priced correctly to sell in the first 90 days. We're really trying hard to get our pricing right systemically to minimize the amount of research that has to be done and ensure consistency of pricing. One of the things that will make us go crazy when we're in stores seeing 2 televisions seem to be exactly the same TV and have completely different prices. Those are the types of issues that we're trying to resolve, and the kind of thing that's going to be important for us when we get into e-commerce. So a lot of this is about creating foundations that will support us in an omnichannel environment as well as get things better within the 4 walls of our store. To help with pricing, we're implementing a decision engine. We have a really active business model management program. We meet every single week on the quality of our earning assets, and we have a team of experienced people in both U.S. and in Mexico that help support the business on a daily basis. We're also seeking all kinds of improvements to POS. My friend, [ Keith ] in IT is hearing from me on a daily basis about we should do this or that. But we're also looking at third-party data. I'm not sure if we spoke about entropy, but entropy is a tool that we're testing that authenticates luxury handbags. So that's a big risk to take, right? Somebody comes in with a Louis Vuitton bag that looks brand new. Now we can sell that for $1,000. But if it's fake, we just made a really big mistake, and this prevents that from happening as well as gives the consumer on the sales floor confidence that they know they're buying something real. I was in a store in Arizona. And saw a gorgeous Louis bag and thought I really want to buy this if it's still here tomorrow, I'm going to get. It wasn't there. Sold that fast. And it was certified. So I knew it was authentic, and I kick myself every day for not buying that bag. On the process improvement side, I mean, everything we've talked about is also supposed to drive process improvements, but there's things that we can do that aren't technology-based. Just identifying the best practices and applying those everywhere is a key first step. It's a lot of what we're doing when we spend our time in stores across the various geographies is to identify what's working well, what are we doing differently and which way is the right way to go. We also want to reduce the transaction times. I mean speed of service is key. We have customers with very busy lives, getting in and out is really important. And we really want to do everything we can to increase the speed of that service, get them in and out with the cash they need and a smile on their face. Last but not least is reporting, and I'll talk about this more again in a minute, but accountability is really important to us all. We set challenges for ourselves to achieve, and we want to measure our progress along the way. And historically, that's been a very difficult thing for our stores and for our field leaders to do. So just to recap real fast on the team member experience side. We talked about the manager loan review app, which we call loan walks. It's going to save the manager's time. We've seen savings as much as 30 minutes to an hour per day per store manager who is testing this program out. Huge, huge time savings. It improves data selection. We talked about that quite a bit and the other benefits as well. Again, going back to ESG. Saves us a lot of paper, tons and tons of paper that we don't want to be printing. We're automating the staff schedules, that's going to give us better visibility, make sure we're scheduling the right people at the right time to serve our customers as well as improve the accountability to be able to ensure that people are working the appropriate schedules and give them more flexibility in terms of asking for a shift change and those types of things. And then again, the showcase item of loan app took a process that was very time consuming, tedious and different in every store to a single, quick application stored on our cloud servers accessible to everybody. We really need to talk a little bit more about the loan walk. I mentioned that they print out a piece of paper. Every single day, check every single item. We've, over the years, given them all kinds of guidance on different ways to approach it, on different numbers to write down on that sheet of paper. And then they have to store it all this documentation because as I mentioned, it is an internal control for us. What we're doing now takes away almost all of those challenges. So the manager has all the information. They don't have to go back to POS to look anything up. They can correct the errors that they find. We can know what corrections are being made. We can understand how effectively team members are using the system. And when we may need to make changes to the system. All of those are a huge step forward for us. Any questions on this? It would be unfair to not spend a little bit of time just talking about our BI journey. So we have had this as a pain point for quite some time. It has personally been the vein of my existence for most of the last 20 years. The reality of it is that it doesn't look like any other business. If you bring in people with a retail background to implement BI, it doesn't work very well on the learning side. If we bring in people on the consumer finance side, they don't get the retail side. And none of it is mutually exclusive in this business. It's all part of 1 life cycle. So we have tried and failed several times in the past to implement a BI solution. So enough was enough. I said I'm just going to do it. I'm just going to take this over, and we're going to get it done. I had an individual on my team who I've been personally mentoring and coaching for the last 5 years. He basically is indoctrinated in the pawn business model and looks at the business the same way that we do as a management team. And he was able to very quickly get the team aligned. We combined the teams that were working independently in different countries, and we've now implemented a completely new BI infrastructure with a really robust data warehouse, have moved most of our field reporting now into Power BI and reduced from maybe 100 reports down to less than 10. We're focusing more on exception-based reports. You don't need a list of every one loan you wrote, but you should be visible to the ones that don't make sense. It's much more consistent and it's much more reliable. We had a period of time a few years ago where our legacy environment a change was made that shouldn't have been made, and we had no reporting, no daily reporting of business results for 6 weeks. That was painful. And we're never letting that happen again. So we have redundancies, we're in Azure, everything is managed, running really well. We have our reports accessible to us when we first wake up in the morning and a lot more flexibility to see what's happening in the business. It's also providing me the information I need to continue to refine the business model, make sure that our pricing is the best it can be and that we're learning as effectively as we can to ultimately drive ROEA.

[indiscernible].

Okay. Good deal. We'll be able to read this online. So I'm going to skip to the last page on the business model evolution. We've talked about it a lot. It starts with the retail price. Once we established that retail price, it's based on what that customer's intention is, and we determine how much we should loan to them based on the value of their items. And then if it becomes our inventory to sell, we have to move it in 90 days. That's really as simple as it is. I'm going to steal a phrase from Blair because it's really been helpful for the business and focusing. We only do 4 things. We develop our people, we take care of our customers, we write loans and we sell stuff. And we're trying to keep it as simple as that for our team members every day, with the digital journey that we're on and the continued advancements that we're pursuing into the future. Last round for questions. Great. Thank you all very much.

[indiscernible] we have to be relatively quick [indiscernible].

All right, thank you, Nicki. Everyone would have seen all these numbers, maybe not presented this way, but I thought just go through some of the important things that I'd just like to point out, especially on the journey that we've gone through, effects of COVID and seasonality and how we're coming out of it. Definitely, as we always do, start with the PLO. You definitely see in -- as Blair mentioned in Q3 FY '20, you can definitely see an unusual event there where our loan balance has significantly decreased because of the money being handed out in the U.S., especially through our customer base, and you definitely saw loan balances really get to the lowest level at that stage. And then since then, you can see the steady climb that we've been on to get it back up to the FY '19 levels. Q2, as normally occurs, which you've seen in Q2 FY '21 and the other Q2s are the lowest month which is where tax season occurs and our customer comes with a lot of cash to our stores to redeem their loans. And then soon after that, those loan balances start rising again. The big things that Blair talked about and Lachie what he talked about was improving inventory management. You can see all the way to Q3 FY '20 a very large inventory balances in our stores. And you see that dramatically drop. Now a few people have asked the question, is the inventory level you have enough? And I think Blair's slide where he showed the PLO to inventory ratios is a great slide where PLO should be much higher than the inventory balance for a very well-run store. And that's what we're seeing now. We don't expect -- unless inventory levels will only go back up there if PLO levels are significantly higher than we have ever had before. And so we're happy with the way that PLO is -- with PLO growth and how that's being reflected in rising inventory. Some of the other things on the business model, you can see this HGM number significantly come down when we focused on selling what we own and selling -- trying to concentrate on selling in the first 90 days. These are the numbers that produce. Those turns are the same thing. You can see that a change in the business model and changing what we're focused on, getting turns around that 3x level, much higher than historically what we've been able to achieve. Some of that is better sales strategy. We're selling at higher margins than we ever used to and the merchandise sales is relatively the same amount even higher. So we're producing historically a record sales gross profit in Q1 this year, like they're looking at the last couple of years and just definitely a great result. As we've said many times, we did see those merchandise margins increased up to 44%, and you can see them slowly coming back down. We do see that as inventory levels rise and our customer does have a little bit less cash, there will be more negotiation on in stores. And we do expect those margins to come down to the range of about 35% to 38%, but you can see that is going to be higher than historically we've done. This really all flows down through to the bottom line. PLO is a leading indicator, and that slowly feeds into EBITDA and net income. As you would have heard on our earnings calls, I've been talking for a while now saying earnings are coming back, PLO is leading, and you'll see it. I think definitely it has come through in quarter 1 this year. And you can see that is also one of the best quarters we've had in recent past and a great result. Things that we do get questions on are on inflationary pressures. So we do think that's going to have a positive effect on our PLO and on revenue as time goes on and our customer does need extra cash. But it will it also will put pressure on expenses. So we do expect that with increasing transaction volume and inflation, we do expect our expenses continue to rise. As Lachie talked about as well and also a lot of investors have questions on this is how much you have a lot of cash on the balance sheet. Since the beginning of FY '21, we've invested about $70 million in earning assets. You've seen that rise in PLO and inventory. We acquired the 128 stores the largest acquisition by store count last year and 11 stores in the U.S., continue to build de novo stores, and we've built 16 since the beginning of FY '21 and continue to try and build stores throughout LatAm. And then we also made some other strategic investments that Lachie went through already.

Tim, could you remind us what the total capital that was deployed into CCV was? And then on the income statement, the unconsolidated equity loss of $3.8 million, is that 100% attributable to CCV. Or if not, could you explain that to us?

So the -- I don't have that number in my notes right now, but I can give you that later. But on the unconsolidated is a combination of CCV and RDC, both of those fit into that section. So not 100% of it, but part is.

What is the breakdown percentage wise?

It's -- I'd have to go -- in the Q it's fully explained in there. So I'd have to look that up. Otherwise, that's the end of my presentation on the financials, if there are any other questions or generally, if you've got any questions for any of us, happy to take them. Sorry. Sorry.

Well, I think this is where the sort of the slide is why invest in EZCORP. But I think you guys, [ Dave ] could come up and present this himself it's -- this is sort of a summary as to why you guys are here or why we think you should be here. And I think we spoke about it at the last conference, but there's a bit more than this, but I'll quickly -- very quickly finish with. But firstly, this is a -- I think you can all see at the global scale opportunity. Growth here is not a problem. It's a gargantuan international global sector. So long-term growth here is not a challenge. So it's a global scale opportunity. I think you can see in the last 18 months, we're making significant strides on the organic front. So these new initiatives that we're speaking about are driving much better returns, you're seeing better financial metric, you are seeing better, higher margin, better turns, expense reduction. So I think we're really proving to everybody that this strategy is returning strongly in terms of financial performance. To the right there, you can see we're kind of coming out of the bottom of the cycles of pawn after this huge government stimulus that occurred over the last couple of years. So we're seeing our inventory will turn. So I think the timing is good from that perspective. We've got a very strong balance sheet. Obviously, people think too strong. We're highly liquid. We have a lot of cash to both invest in our earning assets, which we hope are going to continue to grow as well as inorganic opportunities around the world. Our view is that it's a very attractive valuation. If you take Brian or John's numbers I can't do it off the top of my head, but it's something like 5x EBITDA, if you take their EBITDA multiples. So it's trading at a massive discount to our competitor, it is trading at a discount to the market. So we think anyone coming in now is coming in at a very attractive valuation, particularly if we can continue to put this score on the board. And then lastly, as I said to you, I think we've done job of telling you this ESG story, and Nicki touched on it as well. I think this is a genuine ESG play, just by fact that we are recycling secondhand boots company, and now people love that. So I think we've got a really interesting ESG story to tell as well. So look, I think on 1 page, I think it's a really attractive story. I know we have got issues, I've sat with [ Dave ] on today around how we allocate capital, issues on buybacks, for example. I understand that. The Board understands that. And it's again, a very large part of the agenda at the board level, and I know the jury is out for everyone on that. But I think all in all, that's a really attractive time to get involved in EZCORP. First one to clap. Okay. So Q&A guys. I know we've asked questions to it. We're all going to have a drink in a minute. But for those on the phone, do we have any more questions at least online? We do? Guys, do we have any online? No. awesome. Okay. Brian, you've got a question.

I mean, obviously, you spent a lot of time talking about all the internal initiatives. Just from an environment standpoint, now that you're coming out of COVID, I guess the question is it points to that up in the corner, I think, how normalized is this environment? I mean -- so I guess what I'm asking is, if you look at the backdrop for EZCORP right now, is what we're seeing how the company is reflective of what the company would do in a normal backdrop? Or is there still some type of COVID effect there?

Well, I think Blair touched on it. I think we're seeing more normal trends start to emerge. I think we're seeing more seasonality starting to emerge. We're seeing loan book recovery to levels that we'd be more expecting to see. So I think it's not -- we're not totally done, but everything is moving in that direction to becoming a more normalized operating environment.

The one thing you would have seen in stores is what was the highest PLO the store has ever had and that's definitely a push for us is to say, okay, well, now we're going back to more normal times and customers are starting to act more normally and really putting stores to get to that highest PLO they've ever had and push us to where we'll beat the earnings that we've had before, but there are some negatives that I talked about with gross margins will come down a little bit. There are expense pressures on the business. But there is a lot of positive side as well. So it's definitely got to take both into account, but very excited.

Tim, you partially answered my question, which is on PLO peak. Maybe Blair knows the answer to that. Could you tell -- share with us percentage-wise how far below we are from the past peak of PLO per store.

Back to quarter end, which was -- was it 14%?

On a same-store basis, we're behind FY '19 by about 14%.

[indiscernible].

Yes.

Still a lot of upside.

Yes. Definitely pushing as a conversation piece that Blair and I have every single month. Tell me when it's going to cross and make it shorter. So definitely a push. But management team is here because we can see it. We can -- the reason that we're here is the same reasons that we talk to investors about investing...

Wait just 1 second, we're about to lose everyone on the line in 30 seconds. So we can keep talking here, but just thanking everyone on the line, you're about to get cut off, we're right up to the minute. So thank you all for joining. We look forward to talking to you all at earnings time and looking forward to the feedback from today as to whether we continue this on a more regular -- on a regular basis. So thank you, everyone, on the line.