Boston, MA 06/18/2014 (wallstreetpr) – EZCORP Inc (NASDAQ:EZPW) will return about $11.9 million to shareholders through the repurchase of common stock. However, the repurchase will be through privately negotiated transactions, which may involve some of the initial purchases in the announced debt offering. The amount will enable the company to acquire about 1 million shares of its outstanding Class A common stock.
Choosing debt
It appears the company favors debt instead of diluting shares. It intends to raise $200 million or even additional $30 million if underwriters exercise the opportunity to purchase more debts. The declared debt offering matures in 2019 and attracts interest in the rate of $2.125 percent annually. The debt is being offered private to qualified institutional buyers.
EZCORP Inc (NASDAQ:EZPW) will obtain about $193 million in net proceeds from the debt offering or about $222 million in the event that initial purchases take advantage of the option to acquire additional notes in full.
In addition to repurchasing some of its common stock, the company intends to use a portion of the net proceeds to repay the outstanding borrowing under its revolving credit kitty. The company expects the repayment of the revolving credit facility to consume $115 million. It will spend about $18.5 million in costs related to entering into hedge transactions.
Coming soon
The company is expected to report its 3Q2014 financial performance later in July. The company expects to earn between $0.20 and $0.22 per share in 3Q. It also recently moved to update on its 4Q earnings expectation. It expects to earn between $0.40 and $0.42 per share in the quarter. Analysts expect earnings of $0.37 per share.
EZCORP Inc (NASDAQ:EZPW) earned $0.36 per share on $260 million, yet analysts estimated $0.35 per share on revenue of $264.44 million in the lastly issued reporting. The quarter saw the company exceeding bottom line expectation but missing revenue estimate. Revenue in the quarter also fell short of a year earlier quarter by 3 percent.
