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EZCORP Announces First Quarter Results

Jan 30, 2001

EZCORP, Inc. (NASDAQ: EZPW) announced today the results for its 2001 first fiscal quarter, which ended December 31, 2000.

For the first fiscal 2001 quarter, operating income before depreciation and amortization increased 21% to $6.2 million compared to pro forma operating income before depreciation and amortization of $5.1 million for the prior year period. Net income for the quarter was $1.1 million ($0.09 per share). This compares to the 2000 first fiscal quarter pro forma net income of $0.9 million ($0.07 per share), excluding the gain on sale of assets and the cumulative effect of the accounting change.

During the Company's second fiscal 2000 quarter, the Company changed its method of revenue recognition on pawn loans effective the start of the Company's 2000 fiscal year. The pro forma figure reflects the impact of this accounting method change as though it had occurred at the start of the fiscal year.

Commenting on these results, Joseph L. Rotunda, President and Chief Executive Officer, said, "The significant improvement in operating income before depreciation and amortization is the result of closing under performing stores, reducing our overhead expenses, improved margins, and a strong turnaround in our loan portfolio. While our net revenues are down 7% largely due to fewer stores, our store level operating expense and administrative expense, or overhead, declined 13% and 10% compared to the same period a year ago."

Mr. Rotunda went on to add, "We are pleased with the improvement we have seen in our lending practices. At the end of December, our same store loans were 1% above the prior year. This is a strong turnaround when compared to the 12% deficit that existed at the end of our September quarter. At the same time, our redemption rate has improved substantially. Sales on the other hand were disappointing, as they were with most retailers. Same store sales for the quarter declined 9% from last year while per store inventories were 5% below a year ago. Improved margins, up four percentage points, partially offset the negative impact of the sales decline. In the second fiscal quarter we will be introducing several new marketing programs which we expect to favorably impact sales."

Concluding, Rotunda stated, "I believe these results indicate that the foundation has been laid for future profitable growth. The initiatives we have worked on have begun to take hold with improvements in costs, consistency in execution, and customer satisfaction. We are now focusing on continuous improvement in our operations as we simultaneously begin to explore how we can better serve and satisfy the needs and demands our customer base. The possibilities for the future are unlimited."

EZCORP offers consumers convenient, non-recourse loans collateralized by tangible personal property. A secondary, but related, business activity is the selling of previously owned merchandise consisting primarily of forfeited collateral. At December 31, 2000, the Company operated 291 stores in twelve states.

This announcement contains certain forward-looking statements regarding the Company's expected performance for future periods. Actual results for these periods may materially differ from these statements. Such forward- looking statements involve risks and uncertainties such as changing market conditions in the overall economy and the industry, consumer demand for the Company's services and merchandise, changes in regulatory environment, new store openings and other factors periodically discussed in the Company's annual, quarterly and other reports filed with the Securities and Exchange Commission.

If you would like to hear a recording of this earnings announcement, call (877) 690-2096. This recording will be available for replay from 5:00 pm CST on January 30th through 5:00 pm CST on February 2nd. For further information, contact Dan Tonissen, Sr. Vice President and Chief Financial Officer at (512) 314-2200.

                                 EZCORP, Inc.
         Highlights of Consolidated Results of Operations (Unaudited)
            (in thousands, except per share data and store count)

                                          Three Months Ended December 31,
                                             A             B           C
                                                         1999         1999
                                            2000      Pro Forma  As Reported

      Total revenues                       $47,241      $53,940     $64,229
      Cost of goods sold                    18,098       22,683      34,170
      Net revenues                          29,143       31,257      30,059
      Operating Expenses                    22,955       26,134      26,134
       Operating income before depreciation
         and amortization                    6,188        5,123       3,925
      Depreciation and amortization          2,434        2,522       2,522
        Operating income                     3,754        2,601       1,403
      Interest expense, net                  2,188        1,332       1,332
      Equity in net income of
       unconsolidated affiliate                (27)         (64)        (64)
      Gain on sale of assets                    (3)        (580)       (580)
      Restructuring Charge                     ---          ---         ---
      Income before income taxes             1,596        1,913         715
      Income tax expense                       543          650         265
      Income before cumulative effect
       of a change in accounting principle   1,053        1,263         450
      Cumulative effect of changing to a
       different revenue recognition method    ---      (14,344)        ---
      Net income (loss)                     $1,053     $(13,081)       $450

        Per share income before cumulative
         effect of a change in accounting
         principle                           $0.09        $0.11       $0.04
        Per share cumulative effect of
         changing to a different revenue
         recognition method                   $---       $(1.19)       $---
        Per share net income (loss)          $0.09       $(1.08)      $0.04

    Weighted average shares _ fully
      diluted                               12,087       12,012      12,012
    Store count - average for period           302          333         333

                                 EZCORP, Inc.
            Highlights of Consolidated Balance Sheets (Unaudited)
                      (in thousands, except store count)

                                              December 31,
                                         A         B         C          D
                                                 1999      1999    Sept. 30,
                                       2000    Pro Forma  Reported    2000

        Current assets:
        Cash and cash equivalents      $5,218    $3,263    $3,263    $3,126
        Pawn loans                     45,257    46,923    46,923    46,916
        Service charges receivable      9,213     9,405    14,660     8,629
        Inventory, net                 37,898    45,751    61,032    35,660
        Deferred tax asset              7,154     8,806     1,824     9,636
        Federal income tax receivable   5,045       ---       ---     5,045
        Prepaid expenses and other
         assets                         1,565     3,781     3,781     1,565
            Total current assets      111,350   117,929   131,483   110,577

        Investment in unconsolidated
         affiliates                    13,872    13,292    13,292    14,021
        Property and equipment, net    61,388    62,028    62,028    61,130
        Other assets                   18,138    21,134    21,134    18,065
      Total assets                   $204,748  $214,383  $227,937  $203,793

      Liabilities and stockholders'
        Current liabilities:
        Current maturities of long-
         term debt                    $84,312       $11       $11   $22,087
        Accounts payable and other
         accrued expenses              11,750    12,065    12,065    12,011
        Restructuring reserve             758       ---       ---     1,649
        Customer layaway deposits       2,280     2,492     2,492     2,332
        Income taxes payable              ---        33        54       ---
            Total current liabilities  99,100    14,601    14,622    38,079

        Long-term debt, less current
         maturities                        98    75,109    75,109    59,025
        Deferred tax liability          1,622     1,696     1,696     3,639
        Other long-term liabilities       379       492       492       379
            Total long-term liabilities 2,099    77,297    77,297    63,043

        Total stockholders' equity    103,549   122,485   136,018   102,671
      Total liabilities and
       stockholders' equity          $204,748  $214,383  $227,937  $203,793

        Loan balance per ending store    $156      $140      $140      $150
        Inventory per ending store       $130      $137      $183      $114
        Store count - end of period       291       334       334       313

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Contact: Dan Tonissen, Sr. Vice President and Chief Financial Officer of
EZCORP, Inc., 512-314-2200


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