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Strategic Investments
12 Months Ended
Sep. 30, 2019
Equity Method Investments and Joint Ventures [Abstract]  
Strategic Investments
NOTE 4: STRATEGIC INVESTMENTS
As of September 30, 2019, we owned 214,183,714 shares, or approximately 34.75%, of Cash Converters International, which is, as a result, our unconsolidated affiliate. Our total investment in Cash Converters International was acquired between November 2009 and June 2018 for approximately $96.1 million, including the acquisition of 57,631,230 shares in June 2018 for $14.0 million (increasing our ownership by three percentage points) in connection with an underwritten placement of 123.3 million shares by Cash Converters International for AUD $39.5 million, excluding related costs.
Our equity in Cash Converters International’s net income was $0.1 million, $5.5 million and $4.9 million in fiscal 2019, 2018 and 2017, respectively. Cash Converters International did not declare or pay a dividend in fiscal 2019. We recorded dividends from Cash Converters International of $1.2 million in fiscal 2017, which were reinvested. Cash Converters International’s accumulated undistributed after-tax earnings included in our consolidated retained earnings were $15.9 million as of September 30, 2019.
The following tables present summary financial information for Cash Converters International’s most recently reported results as of September 30, 2019, 2018 and 2017 as applicable after translation to U.S. dollars:
 
June 30,
 
2019
 
2018
 
 
 
 
 
(in thousands)
Current assets
$
173,826

 
$
229,105

Non-current assets
152,483

 
148,195

Total assets
$
326,309

 
$
377,300

 
 
 
 
Current liabilities
$
77,434

 
$
122,924

Non-current liabilities
26,163

 
15,449

Shareholders’ equity
222,712

 
238,927

Total liabilities and shareholders’ equity
$
326,309

 
$
377,300

 
Fiscal Year Ended June 30,
 
2019
 
2018
 
2017
 
 
 
 
 
 
 
(in thousands)
Gross revenues
$
201,365

 
$
201,800

 
$
204,509

Gross profit
111,932

 
128,366

 
130,943

Net (loss) profit
(1,210
)
 
17,443

 
15,546


Through fiscal 2019, the fair value of our investment in Cash Converters International, as estimated by reference to its quoted market price per share and the applicable foreign currency exchange rate, declined from its value at September 30, 2018 and ended each quarter below its carrying value. For the first and second quarters of fiscal 2019, we determined that our investment was impaired and that such impairment was "other-than-temporary." In reaching this conclusion, we considered all available evidence, including evidence in existence as of September 30, 2018 as discussed below. Additionally, we noted the following developments subsequent to September 30, 2018: (i) continued decline in Cash Converters International's share price; and (ii) ongoing uncertainty around the Queensland, Australia class action lawsuit regarding historical lending practices by Cash Converters International, for which a settlement agreement was reached subsequent to September 30, 2019. As a result, we recognized "other-than-temporary" impairments in Cash Converters International of $13.3 million ($10.3 million, net of taxes) and $6.5 million ($5.0 million, net of taxes) during the first and second quarters of fiscal 2019, respectively. The fair value of our investment in Cash Converters International was $6.2 million below its carrying value as of September 30, 2019, which we determined was not other-than temporary primarily as a result of the subsequent settlement of the remaining Queensland, Australia class action lawsuit and recovery of share price. See Note 18 for discussion of resolution of the Queensland, Australia class action lawsuit.
During fiscal 2018, the fair value of our investment in Cash Converters International, as estimated by reference to its quoted market price per share, declined from September 30, 2017 and ended below its carrying value as of September 30, 2018. As of September 30, 2018, we determined that our investment was impaired and that such impairment was other-than-temporary. In reaching this conclusion, we considered all available evidence, including the following: (i) positive earnings reported for the previous two years; (ii) resolution of Australian Securities and Investment Commission Enforceable Undertaking in May 2018;
(iii) executive turnover including announcement of its chief executive officer’s departure in August 2018; (iv) outstanding Queensland class action litigation; (v) ongoing uncertainty around Australian legislative action; (vi) continued cessation of dividend payments; (vii) available analyst reports including associated future earnings and cash flow forecasts; and (viii) the prolonged drop in Cash Converters International’s stock price. As a result, we recognized an other-than-temporary impairment in Cash Converters International of $11.7 million ($9.2 million, net of taxes) in fiscal 2018.
The above impairments increased the difference between the amount at which our investment was carried and the amount of underlying equity in net assets of Cash Converters International as discussed in Note 1 and were recorded under “Impairment of investment” in our consolidated statements of operations in the “Other International” segment. We will continue to monitor the fair value of our investment in Cash Converters International for other-than-temporary impairments in future reporting periods and may record additional impairment charges should the fair value of our investment in Cash Converters International further decline below its carrying value for an extended period of time. See Note 5 for the fair value and carrying value of our investment in Cash Converters International.