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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______________ TO _____________
COMMISSION FILE NUMBER 33-63078
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
EZCORP, INC. 401(k) PLAN AND TRUST
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
EZCORP, INC.
1901 CAPITAL PARKWAY
AUSTIN, TEXAS 78746
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INFORMATION FURNISHED
1. Audited financial statements and supplemental schedules of the
EZCORP, Inc. 401(k) Plan and Trust (the "Plan").
2. The written consent of the independent registered public accounting
firm for the Plan, filed as an exhibit to this annual report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the 401(k)
Administrative Committee has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
EZCORP, INC. 401(k) PLAN AND TRUST
Signature Date
By: /s/ Dan N. Tonissen May 27, 2005
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Dan N. Tonissen
EZCORP, Inc. 401(k) Plan and Trust
Administrative Committee
EZCORP, INC. 401(k) PLAN AND TRUST
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
September 30, 2003 and 2002 and year ended September 30, 2003
CONTENTS
Page
Report of Independent Registered Public Accounting Firm. . . . . . . . . . . . . . . 1
Audited Financial Statements:
Statements of Net Assets Available for Benefits. . . . . . . . . . . . . . . 3
Statement of Changes in Net Assets Available for Benefits. . . . . . . . . . 4
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . 5
Supplemental Schedules:
Schedule H, Line 4a - Schedule of Delinquent Participant Contributions . . . 10
Schedule H, Line 4i - Schedule of Assets (Held at End of Year).. . . . . . . 11
Exhibit Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Consent of Independent Registered Public Accounting Firm.. . . . . . . . . . . . . . 13
Note: Other schedules required by Section 2520.103-10 of the Department of Labor
Rules and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act ("ERISA") of 1974 have been omitted because they are not
applicable.
Report of Independent Registered Public Accounting Firm
Administrative Committee
EZCORP, Inc. 401(k) Plan and Trust
We have audited the accompanying statements of net assets available for benefits
of the EZCORP, Inc. 401(k) Plan and Trust as of September 30, 2003 and 2002, and
the related statement of changes in net assets available for benefits for the
year ended September 30, 2003. These financial statements are the responsibility
of the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
Except as explained in the following paragraph, we conducted our audits in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. We were not engaged to perform an audit of the Company's
internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
As permitted by 29 CFR 2520.103-8 of the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, investment assets held by The Charles Schwab Trust
Company, the trustee of the Plan, and transactions in those assets were excluded
from the scope of our audit of the Plan's 2002 financial statements, except for
comparing the information provided by the trustee, which is summarized in Note
3, with the related information included in the financial statements.
Because of the significance of the information that we did not audit, we are
unable to, and do not, express an opinion on the Plan's financial statements as
of September 30, 2002. The form and content of the information included in the
2002 financial statements, other than that derived from the investment
information certified by the trustee, have been audited by us and, in our
opinion, are presented in compliance with the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974.
1
In our opinion, the financial statements referred to above present fairly, in
all material aspects, the net assets available for benefits of the Plan at
September 30, 2003, and changes in its net assets available for benefits for the
year then ended in conformity with U.S. generally accepted accounting
principles.
Our audit of the Plan's financial statements as of and for the year ended
September 30, 2003, was made for the purpose of forming an opinion on the
financial statements taken as a whole. The supplemental schedules of assets
(held at end of year) as of September 30, 2003 and delinquent participant
contributions for the year then ended are presented for the purpose of
additional analysis and are not a required part of the financial statements but
are supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of the
Plan's management. The supplemental schedules have been subjected to the
auditing procedures applied in the audit of the financial statements for the
year ended September 30, 2003, and, in our opinion, are fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ ERNST & YOUNG LLP
Austin, Texas
August 18, 2004
2
EZCORP, INC. 401(k) PLAN AND TRUST
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
SEPTEMBER 30,
2003 2002
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ASSETS
Cash $ 12,151 $ 8,495
Investments, at fair value 2,940,922 2,007,422
Receivables:
Employer contributions 60,693 63,567
Employee contribution 14,004 15,272
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Total receivables 74,697 78,839
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Total assets 3,027,770 2,094,756
LIABILITIES
Fees payable 1,201 -
Excess contribution refunds and other payables 60,271 98,700
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Total liabilities 61,472 98,700
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Net assets available for benefits $2,966,298 $1,996,056
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See accompanying notes.
3
EZCORP, INC. 401(k) PLAN AND TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED SEPTEMBER 30, 2003
Additions:
Employee contributions $ 350,525
Employer matching contributions 60,605
Investment income 29,144
Net appreciation in fair value of investments 815,810
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Total additions 1,256,084
Deductions:
Distributions to participants 230,755
Administrative expenses 200
Excess contribution refunds 54,652
Deemed distributions 235
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Total deductions 285,842
Net increase 970,242
Net assets available for benefits at beginning of year 1,996,056
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Net assets available for benefits at end of year $ 2,966,298
============
See accompanying notes.
4
EZCORP, INC. 401(k) PLAN AND TRUST
NOTES TO AUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2003
1. DESCRIPTION OF THE PLAN
The EZCORP, Inc. 401(k) Plan and Trust (the "Plan") is a defined contribution
plan covering substantially all eligible employees of EZCORP, Inc. and its
subsidiaries (the "Company"). The Plan became effective October 1, 1991 and is
subject to the provisions of the Employee Retirement Income Security Act of 1974
("ERISA"). All Plan assets are held by Security Trust Company, the trustee of
the Plan. Prior to October 21, 2002, the trustee was The Charles Schwab Trust
Company. Complete information regarding the Plan is included in the plan
agreement. Significant Plan provisions are summarized below.
ELIGIBILITY
Employees are eligible to participate in the Plan upon the attainment of 21
years of age and completion of six months of service. Under the enrollment
provisions of the Plan, eligible employees are allowed to enter the Plan on the
first day of each quarter of any fiscal year following the completion of six
months of service.
CONTRIBUTIONS
Participants are allowed to make voluntary contributions to the Plan up to the
maximum allowed under the Internal Revenue Code (the "Code"). The Company makes
contributions to the Plan of amounts determined and authorized by the Company's
Board of Directors up to the maximum amounts permitted by the Internal Revenue
Service ("IRS"). The Company's matching contributions are based on each
participant's contribution, up to 6% of the participant's compensation and made
in the form of EZCORP Class A Non-Voting Common Stock. The participants can
transfer the vested matching contribution to other investment funds at their
discretion.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contribution, the
Company's contribution, and Plan earnings. Employees are given a choice of
fifteen investment options in which to invest their contributions. Plan earnings
in each of these funds are allocated based on each employee's fund account
balance relative to the aggregate of all employees' fund account balances.
Effective October 21, 2002, participants can elect to invest in the Company
stock fund.
VESTING PROVISIONS
Participants are immediately vested in their contributions and earnings thereon.
The Company's contributions vest according to the following schedule:
YEARS OF SERVICE VESTING PERCENTAGE
---------------- ------------------
1 0%
2 25%
3 50%
4 75%
5 100%
PARTICIPANT LOANS
Participants are allowed to borrow a maximum amount of the lesser of 50% of the
participant's vested amount or $50,000. Loans are amortized over a maximum of 60
months, unless the purpose of the loan is for the purchase of the principal
residence of the participant in which case the maximum period may be 20 years.
Repayment is made through payroll deductions with equal installments made each
pay period. The loans are collateralized by the vested balance in the
participant's account, not to exceed 50% of the vested balance, and bear
interest at a rate commensurate with local prevailing rates as determined by the
Plan administrator.
5
PAYMENT OF BENEFITS
Upon termination of service, death, disability, or retirement, a participant is
entitled to receive an amount equal to the value of his or her account, payable
in lump-sum form or in periodic installments.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA.
In the event of the termination of the Plan, the individual accounts of all
members shall become fully vested. After deducting all charges and expenses, the
balances of all individual accounts will be adjusted and the remaining assets
distributed to participants.
2. SIGNIFICANT ACCOUNTING POLICIES
METHOD OF ACCOUNTING
The financial statements of the Plan are prepared on the accrual basis of
accounting in accordance with accounting principles generally accepted in the
United States.
VALUATION OF INVESTMENTS
The Plan's investments in mutual funds and common stock are stated at fair value
based primarily on quoted prices in active markets. Participant loans are stated
at cost, which approximates fair value. Purchases and sales of securities are
recorded on a trade-date basis. Interest income is recorded on the accrual
basis. Dividends are recorded on the ex-dividend date.
DISTRIBUTIONS
Distributions to participants are recorded by the Plan when actual payment is
made. Distributions not paid, as of the end of the plan year, are included in
investments in the statement of net assets available for benefits.
EXPENSES
Substantially all expenses incident to the administration of the Plan are paid
by the Company.
FORFEITED NON-VESTED ACCOUNTS
At September 30, 2003, forfeited non-vested accounts totaled $4,950. These
accounts will be used to reduce future employer contributions.
EXCESS CONTRIBUTIONS
Contributions in excess of maximum limits allowed by the IRS are accrued as
liabilities to be refunded to participants. At September 30, 2003 and 2002,
excess contributions were $57,112 and $91,457, respectively.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the amounts reported in the financial statements and accompanying
notes and schedules. Actual results could differ from those estimates.
RISKS AND UNCERTAINTIES
The Plan provides for investments in various investment securities which, in
general, are exposed to various risks, such as interest rate, credit, and
overall market volatility risks. Due to the level of risk associated with
certain investment securities, it is reasonably possible that changes in the
values of investment securities will occur in the near term and that such
changes could materially affect the amounts reported in the statements of net
assets available for benefits and participant account balances.
3. INVESTMENTS
All 2002 investment information disclosed in the accompanying financial
statements and schedules, including investments held at September 30, 2002, was
obtained or derived from information supplied to
6
the plan administrator and certified as complete and accurate by The Charles
Schwab Trust Company, the predecessor trustee of the Plan.
The following presents individual investments that represent 5% or more of the
Plan's net assets at September 30, 2003 or 2002.
SEPTEMBER 30,
2003 2002
-------- ----------
Janus Worldwide Fund $ - $ 284,192
Warburg Pincus Emerging Growth Fund - 108,198
Kaufmann Fund - 190,360
Fidelity Growth & Income Fund - 383,270
Northeast Investors Trust - 132,685
Loomis Sayles Bond Fund - 162,089
Schwab Institutional Advantage Money Fund - 180,786
Goldman Sachs Prime Obligations Fund 175,522 -
Pimco Total Return Admin Fund 188,190 -
Davis New York Venture A Fund 462,203 -
T. Rowe Price Mid Cap Growth Fund 361,014 -
American Funds Europacific A Fund 351,790 -
EZCORP Class A Non-Voting Common Stock 866,503 347,201
During 2003, the Plan's investments (includes investments purchased, sold, as
well as held during the year) appreciated in fair value as follows:
Mutual funds $ 329,830
Common stock 485,980
----------
$ 815,810
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4. INCOME TAX STATUS
The underlying non-standardization prototype plan has received an opinion letter
from the Internal Revenue Service ("IRS") dated November 19, 2001 stating that
the form of the plan is qualified under Section 401(a) of the Internal Revenue
Code (the "Code"), and therefore, the related trust is tax-exempt. In accordance
with Revenue Procedure 2002-6 and Announcement 2001-77, the Plan Sponsor has
determined that it is eligible to and has chosen to rely on the current IRS
prototype plan opinion letter. Once qualified, the Plan is required to operate
in conformity with the Code to maintain its qualification. The plan
administrator believes the Plan is being operated in compliance with the
applicable requirements of the Code and, therefore, believes that the Plan is
qualified and the related trust is tax exempt.
7
5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
SEPTEMBER 30,
2003 2002
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Net assets available for benefits per the financial
statements $ 2,966,298 $ 1,996,056
Less: Amounts allocated to withdrawing participants (7,071) -
Plus: Deemed distributions of participant loans - 3,524
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Net assets available for benefits per the Form 5500 $ 2,959,227 $ 1,999,580
=========== ===========
The following is a reconciliation of net increase in net assets available for
benefits per the financial statements to the Form 5500 for the year ended
September 30, 2003:
Net increase in net assets available for
benefits per the financial statements $ 970,242
Less: Current year amounts allocated to
withdrawing participants (7,071)
Less: Prior year deemed distributions of
participant loans (3,524)
----------
Net increase in net assets available for
benefits per the Form 5500 $ 959,647
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6. SUBSEQUENT EVENTS
On November 6, 2003, the Company's 401(k) Committee elected to change the Plan
year from a fiscal year ending September 30th to a calendar year ending December
31st.
Effective January 1, 2004, the trustee changed from Security Trust Company to
Reliance Trust Company.
8
EZCORP, INC. 401(k) PLAN AND TRUST
YEAR ENDED SEPTEMBER 30, 2003
SUPPLEMENTAL SCHEDULES
9
EZCORP, INC. 401(k) PLAN AND TRUST
SCHEDULE H, LINE 4a - SCHEDULE OF DELINQUENT PARTICIPANT CONTRIBUTIONS
EIN: 74-2540145 PN: 001
YEAR ENDED SEPTEMBER 30, 2003
PARTICIPANT CONTRIBUTIONS TOTAL THAT CONSTITUTE NONEXEMPT
YEAR ENDED TRANSFERRED LATE TO PLAN PROHIBITED TRANSACTIONS
---------- ------------------------- -------------------------------
1999 $ 115,994 $ 115,994
2002 $ 5,014 $ 5,014
2003 $ 123,893 $ 123,893
Delinquent participant contributions in 1999, 2002 and 2003 were corrected
outside of the Voluntary Fiduciary Compliance Program in 2004. The total amount
of accrued interest on late remittances for contributions made in 1999, 2002 and
2003 was determined to be $1,798 and this amount was paid to the Plan in 2004.
10
EZCORP, INC. 401(k) PLAN AND TRUST
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS
(HELD AT END OF YEAR)
EIN: 74-2540145 PN: 001
SEPTEMBER 30, 2003
CURRENT
IDENTITY OF ISSUE DESCRIPTION OF INVESTMENT VALUE
--------------------------------------- --------------------------------------- ----------
Goldman Sachs Prime Obligations Fund Money Market $ 175,522
Vanguard Short Term Federal Fund Mutual fund 8,001
Pimco Total Return Admin Fund Mutual fund 188,190
Columbia High Yield Fund Mutual fund 136,807
Dodge & Cox Stock Fund Mutual fund 25,671
Davis New York Venture A Fund Mutual fund 462,203
Vanguard Index 500 Fund Mutual fund 20,561
Growth Fund of America A Fund Mutual fund 22,408
Pimco Renaissance Admin Fund Mutual fund 11,359
T. Rowe Price Mid Cap Growth Fund Mutual fund 361,014
Turner Small Cap Value Fund Mutual fund 12,067
Columbia Acorn Z Fund Mutual fund 31,791
American Funds Europacific A Fund Mutual fund 351,790
American Funds Am Balanced A Fund Mutual fund 102,351
*EZCORP Class A Non-Voting Common Stock Common stock 866,503
*Participant loans With varying maturity dates and
interest rates ranging from 5%
to 10.5% 164,684
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$2,940,922
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* Indicates a party-in-interest to the Plan.
11
EXHIBIT INDEX
EXHIBIT 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
12