Good morning, ladies and gentlemen. Welcome to the EZCORP Fourth Quarter and Full Year Fiscal 2022 Earnings Call. [Operator Instructions] As a reminder, this call may be recorded. I'd now like to turn the conference call over to Jean Marie Young, Investor Relations with Three Part Advisors. Please go ahead, Jean.

Thank you, and good morning, everyone. During our prepared remarks, we will be referring to slides, which are available for viewing or download from our website at investors.ezcorp.com. Before we begin, I’d like to remind everyone that this conference call as well as the presentation slides contain 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 due to a number of risks or other factors that are discussed in our annual, quarterly and 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, Lachlan Given and Tim Jugmans, Chief Financial Officer. Now I’d like to turn the call over to Lachlan Given. Lachie?

Thanks, Jean, and good morning, everyone. Our team continues to consistently execute on the strategic plan put in place at the end of fiscal 2020. We ended fiscal 2022 with an excellent fourth quarter. I want to thank our passionate and productive team members for their continued focus on operational excellence, which has driven our consistently very strong financial results. Pawn loans outstanding, the key driver of our business was $210 million at quarter end, a 19% year-over-year increase. PLO is once again at a past level ever. Merchandise sales gross profit margin was 37%, which is within our targeted range, with aged general merchandise continuing to be less than 1% and of total GM inventory. Beginning on Slide 3. We are a global leader in form broking and pre-owned and recycled retail. We operate 1,175 stores in the U.S. and Latin America, with strategic investments in adjacent businesses, which expand our geographic footprint lines. Across our diverse store base, the 2 core products of our consumers. We made pawn loans, second-hand goods. The macroeconomic environment continues to be a challenge for our customer base. Inflationary pressures, increasing interest rates, high gas prices and the tightening of credit from alternative lenders drive increased demand for pawn price. The demand for second-hand goods increases as consumers increasingly seek value for money eventually responsible alternatives. Our goal is to provide the best, most continued experience for our customers through continuous innovation, while positively impacting the environment and the communities in which we serve. Moving on to Slide 4. We continue to embrace people point and passion as our core operating team. We know that our engaged team drives our success, so we are committed to investing in recruitment, retention and incentivization. We strive to be the best option for our customers by…

Thanks, Lachie. Slide 12 details our consolidated financial results for the fourth quarter. PLO ended the period at $209.5 million, up 19% on a year-over-year basis, which is our highest in EZCORP’s history. PSC revenue was up 21% over last year, with growth driven by both increased same-store PLO growth and acquisitions. Merchandise sales was up 20%, but as expected, margins fell back to 37%, which is within our normal range. Our focus on selling inventory in the first 90 days has kept inventory turnover strong at 2.6x. It was another great quarter with consolidated EBITDA of $24.6 million, up 33%. For the full year, consolidated EBITDA improved to $112.9 million, up 66%. Turning to our U.S. pawn operations on Slide 13. PLO rose 20%, driven by the continued focus on our enhanced pawn operating model and better serving our customers’ needs. PSC was up 25% year-over-year, primarily driven by same-store PLO growth. On the retail side of the business, merchandise sales were up 18%, with merchandise sales gross profit up 8% with a 300 basis point drop in sales margin as expected. Store expenses increased 9% due to the labor in line with store activity as well as an increasing rental expense. U.S. pawn EBITDA for the quarter was $33.7 million, up 43% on the prior year. For the full year, U.S. pawn EBITDA improved to $139.6 million, up 45%. Slide 14 focuses on our Latin American pawn operations. Segment PLO grew 15% for the fourth quarter or 13% on a same-store basis, with resulting PSC up 9%. Merchandise sales was up 22% and up 20% on a same-store basis. Merchandise sales gross profit was up 10% due to increased sale offset by margins down 300 basis points. Store expenses were up 10% and up 5% on a same-store…

Thanks, Tim. Congratulations to our EZCORP team for another outstanding quarter and full year. We are consistently delivering very strong operating and financial results for our shareholders, driving growth through de novo store build-out and disciplined acquisitions, all while maintaining a strong liquid balance sheet and returning capital to our shareholders. Every day, we continue to work tirelessly toward improving the experience of our employees and our customers in an environmentally responsible way and to deliver enhanced value for our shareholders. And with that, we’ll open the call for questions. Operator?

[Operator Instructions] Our first question comes from Brian Nagel of Oppenheimer.

Congratulations guys. Nice quarter, nice year. The first question I have, I guess, maybe a little bit longer term in nature. But just from a positioning standpoint, I mean, you’ve clearly taken significant strides here to position the business better. We’re seeing the results of that. What still needs to happen? What are the opportunities, either from an investment standpoint or just an ongoing kind of repositioned restructuring type opportunities?

I think, look, we look at it in 2 ways. As the organic stuff, the organic improvements that we work on every single day. And if you look at the 3 different regions, I think there’s opportunities in all 3 regions on a store level basis, so we can still attract more customers to retain more customers organically in all of our stores. So I think there’s the organic side of it that we just need to continue to operate better, and we see real opportunities there. And then you’ve got the inorganic stuff, which is broken up by de novos and acquisitions. And I think on the de novo side, there is just significant opportunity in LatAm to build more stores and get superior returns doing it. And then as we said on the call, I think there is significant pipeline still for acquisitions. So look, I think all in all, it’s both organic and inorganic opportunities here. But we have challenges, as all companies do around cost and inflation. And so we’re doing our best to manage that. But Brian, still plenty of opportunity out there for us.

That’s helpful. And then my second question, just a PLO. So we talk a lot about that, and it’s obviously been trending quite well. You highlight that as a real key measure of the health of the business. Is there any – how should we think about the growth in that? Does it grow with the business? Or is there some type of like penetration number we should look at that when it gets even healthier – Determine when that figure gets even healthier?

Look, we’re at record levels at the moment as we say on the call. This is the best PLO the company has ever had. So we’re in uncharted territory. But our objective is to continue to grow that. We’ve come off clearly an outstanding year where we’ve grown beyond all expectations of the analysts. And as I said, our objective is to continue to improve that. In Latin America, I think there is genuine scope for real step change growth down there. In the U.S., that’s a more mature market. And as I said, we’re seeing the highest level in – on a store basis. So look, it’s tough to say. It’s tough to give you an exact number, but I would say that our objective is to continue to grow it more significantly in Latin America, I would expect, than in the U.S. given it’s a more mature market.

[Operator Instructions] Our next question comes from John Hecht of Jefferies.

Congratulations on good quarter. I guess just -- I guess a little bit of a follow-up on the last question. The PLOs, obviously, they've been strong and trending positively for a while. They've been trending a little better in LATAM. And is that just a function of similar trends in the U.S., meaning inflationary pressures and kind of the lapping of either social welfare stimulus -- or is there other things going on in LatAm that are driving that as well?

I think you're right. I think there's -- there are macro factors at play here. But I think we've also done great things internally down in Latin America to improve our business. And we've got really strong leadership in place down there. And I think still a long way to go. But yes, I think you diagnose this is right.

Okay. And then there's -- we've seen some of the bigger retailers domestically announced that they've seen customers changing their kind of purchasing behavior, you talked about bargain shopping driving some of your results. I mean, any comments there, are you seeing changes in either the borrower or the retailer behavior, the customers' behavior at this point either for macro trends or certain things you're doing from an execution perspective.

Look, we're seeing the same -- all of the same commentary from the big retailers that they're really seeing a shift in demand from their customers. Our sales continue to be quite robust. It's -- I think more people are coming to buy secondhand because it's tough out there and our margins holding up really nicely. So while we're seeing the big box retailers every week announcing downgrades and difficult conditions. We're just seeing particularly down Latin America as well, we're seeing really robust sales and maintaining our margins in that target rate. So I think what's happening is people are buying second-hand and looking for a bargain and there are also particularly young people becoming really environmentally conscious. And so buying second-hand is not only value for money, they actually think it's cool because you are doing what's good for the environment. So we're quite pleased with what we're seeing from a sales perspective.

Okay. And then -- that's very helpful. And then last question. I mean, your store retail margin has been very strong. I mean obviously, migrating just as kind of things normalize, but very strong. The scrap margins are a little bit more volatile. I'm sure there's some reasons behind that, and I'm wondering if you can you talk about what are the factors that move the scrap margins on a near-term basis?

John, the scrap margins, yes, they have moved about a little bit. Definitely diamond market has moved up and down on the scrapping side. As you've seen over the years, we are trying to sell much more of that jewelry in store and do much less scrapping. And so that has shifted towards probably the lower grade stuff being scrapped and the higher-grade stuff now being sold in the stores. And so those margins have come down over time and are likely to remain quite low because of that change.

[Operator Instructions] We currently have no further questions, and therefore, this concludes today's call. Thank you for joining. You may now disconnect your lines.