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EZCORP Announces Fiscal 2008 First Quarter Results

Jan 24, 2008

EZCORP, Inc. (NASDAQ: EZPW) announced today results for its fiscal first quarter, which ended December 31, 2007.

For the quarter ended December 31, 2007, EZCORP's net income increased 29% to $12,555,000 ($0.29 per share) compared to $9,761,000 ($0.23 per share) for the quarter ended December 31, 2006. Total revenues for the quarter increased 22% over the prior year period to $112,306,000 with signature loan revenues (payday loan and credit service fees) up 37%, pawn service charges up 28% and total sales (merchandise and jewelry scrapping) up 13%.

Store level operating income improved 27% to $20,714,000 in our U.S. EZPAWN operations and 31% to $10,690,000 in our EZMONEY operations. The 25 store Mexico EZPAWN operations contributed $620,000 compared to a slight loss in the prior year period. After administrative expense and depreciation and amortization, consolidated operating income for the quarter improved 32% to $19,292,000 (24% of net revenue) compared to $14,623,000 (24% of net revenue) for the prior year quarter.

Commenting on these results, President and Chief Executive Officer, Joe Rotunda, stated, "Our December quarter was a strong start to our 2008 fiscal year. While our stock price has been challenged by what has happened in the finance sector and the larger economy, we continued to do what we said we would do and delivered our 22nd consecutive quarter of year over year net income growth."

Rotunda continued, "Once again, we saw each of our business segments contribute to our strong result. Our U.S. pawn operation increased store level operating income year over year by $4.3 million, with pawn net revenues improving 16%. Our EZMONEY operation increased store level operating income year over year $2.6 million, with the signature loan contribution, or fees less bad debt, up 32%. Our newest segment, our Mexico pawn operations, also contributed to our results with store level operating income of $620,000."

Rotunda concluded, "Looking ahead at our March quarter, I believe we are well positioned for another solid result. For the March quarter, we expect earnings per share of approximately $0.29, compared to $0.23 for the same period a year ago. For our 2008 fiscal year, which will end on September 30th, we are raising our earnings guidance to $1.13 per share, compared to $0.88 per share for our fiscal 2007. We believe we are still on target to open approximately 100 new EZMONEY locations, including the 15 net additions in the December quarter. In Mexico, we will open seven to ten pawn locations, including the one opened in the December quarter."

EZCORP is primarily a lender or provider of credit services to individuals who do not have cash resources or access to credit to meet their short-term cash needs. In 294 U.S. and four Mexico EZPAWN locations and 21 Mister Money Mexico locations open on December 31, 2007, the Company offers non-recourse loans collateralized by tangible personal property, commonly known as pawn loans. At these locations, the Company also sells merchandise, primarily collateral forfeited from its pawn lending operations, to consumers looking for good value. In 448 EZMONEY locations and 74 EZPAWN locations open on December 31, 2007, the Company offers short-term non-collateralized loans, often referred to as payday loans, or fee based credit services to customers seeking loans.

This announcement contains certain forward-looking statements regarding the Company's expected performance for future periods including, but not limited to, new store expansion, anticipated benefits of acquisitions and investments and expected future earnings. 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 the regulatory environment, and other factors periodically discussed in the Company's annual, quarterly and other reports filed with the Securities and Exchange Commission.

You are invited to listen to a conference call discussing these results on January 24, 2008 at 3:30pm Central Time. The conference call can be accessed over the Internet or replayed at your convenience at the following address.

  http://www.videonewswire.com/event.asp?id=44899

  For additional information, contact Dan Tonissen at (512) 314-2289.



                               EZCORP, Inc.
     Highlights of Consolidated Statements of Operations (Unaudited)
                  (in thousands, except per share data)

                                             Three Months Ended December 31,
                                                  2007              2006
   1  Revenues:
   2      Merchandise sales                      $40,499           $37,879
   3      Jewelry scrapping sales                 15,008            11,101
   4      Pawn service charges                    22,908            17,962
   5      Signature loan fees                     33,528            24,395
   6      Other                                      363               350
   7          Total revenues                     112,306            91,687
   8  Cost of goods sold:
   9      Cost of merchandise sales               24,251            22,582
   10     Cost of jewelry scrapping sales          9,290             7,241
   11         Total cost of goods sold            33,541            29,823
   12 Net revenues                                78,765            61,864
   13
   14 Operations expense                          37,071            31,388
   15 Signature loan bad debt                      9,670             6,028
   16 Administrative expense                       9,905             7,527
   17 Depreciation and amortization                2,827             2,298
   18     Operating income                        19,292            14,623
   19
   20 Interest income                                (57)             (314)
   21 Interest expense                                81                64
   22 Equity in net income of unconsolidated
       affiliate                                  (1,047)             (645)
   23 Loss on sale/disposal of assets                162                24
   24 Income before income taxes                  20,153            15,494
   25 Income tax expense                           7,598             5,733
   26 Net income                                 $12,555            $9,761
   27
   28 Net income per share, diluted                $0.29             $0.23
   29
   30 Weighted average shares, diluted            43,273            43,306



                               EZCORP, Inc.
          Highlights of Consolidated Balance Sheets (Unaudited)
          (in thousands, except per share data and store counts)

                                                    As of December 31,
                                                  2007              2006
   1  Assets:
   2    Current assets:
   3      Cash and cash equivalents              $13,651           $39,964
   4      Pawn loans                              63,270            47,793
   5      Payday loans, net                        6,169             3,273
   6      Pawn service charges receivable, net    10,710             8,434
   7      Signature loan fees receivable, net      7,217             5,141
   8      Inventory, net                          41,788            35,235
   9      Deferred tax asset                       9,005             7,150
   10     Prepaid expenses and other assets        8,121             5,786
   11       Total current assets                 159,931           152,776
   12
   13   Investment in unconsolidated affiliate    37,294            20,317
   14   Property and equipment, net               37,308            29,881
   15   Deferred tax asset, non-current            5,023             3,950
   16   Goodwill                                  24,591               768
   17   Other assets, net                          5,089             2,979
   18       Total assets                        $269,236          $210,671
   19 Liabilities and stockholders' equity:
   20   Current liabilities:
   21     Accounts payable and other accrued
           expenses                              $25,164           $19,689
   22     Customer layaway deposits                2,144             2,103
   23     Federal income taxes payable             9,063             4,305
   24       Total current liabilities             36,371            26,097
   25
   26   Deferred gains and other long-term
         liabilities                               3,096             3,158
   27   Total stockholders' equity               229,769           181,416
   28       Total liabilities and stockholders'
             equity                             $269,236          $210,671
   29
   30 Pawn loan balance per ending pawn store       $198              $170
   31 Inventory per ending pawn store               $131              $125
   32 Book value per share                         $5.56             $4.47
   33 Tangible book value per share                $4.87             $4.40
   34 EZPAWN store count - end of period             319               281
   35 EZMONEY signature loan store count - end
       of period                                     448               340
   36 Shares outstanding - end of period          41,343            40,580



                               EZCORP, Inc.
                  Operating Segment Results (Unaudited)
                   (in thousands, except store counts)

                                 EZPAWN
                                 United     EZPAWN
                                 States     Mexico    EZMONEY
                               Operations Operations Operations Consolidated
     Three months ended
      December 31, 2007:
   1   Revenues:
   2     Sales                  $54,200     $1,307         $-      $55,507
   3     Pawn service charges    21,990        918          -       22,908
   4     Signature loan fees        809          -     32,719       33,528
   5     Other                      361          2          -          363
   6         Total revenues      77,360      2,227     32,719      112,306
   7
   8   Cost of goods sold        32,768        773          -       33,541
   9         Net revenues        44,592      1,454     32,719       78,765
  10
  11   Operating expenses:
  12     Operations expense      23,506        834     12,731       37,071
  13     Signature loan bad
          debt                      372          -      9,298        9,670
  14         Total direct
              expenses           23,878        834     22,029       46,741
  15         Store operating
              income            $20,714       $620    $10,690      $32,024
  16
  17   EZPAWN store count -
        end of period               294         25          -          319
  18   EZMONEY signature loan
        store count - end of
        period                        6          -        442          448
  19
  20 Three months ended December 31,
      2006:
  21   Revenues:
  22     Sales                  $48,979         $1         $-      $48,980
  23     Pawn service charges    17,960          2          -       17,962
  24     Signature loan fees        912          -     23,483       24,395
  25     Other                      350          -          -          350
  26         Total revenues      68,201          3     23,483       91,687
  27
  28   Cost of goods sold        29,823          -          -       29,823
  29         Net revenues        38,378          3     23,483       61,864
  30
  31   Operating expenses:
  32     Operations expense      21,670         57      9,661       31,388
  33     Signature loan bad
          debt                      336          -      5,692        6,028
  34         Total direct
              expenses           22,006         57     15,353       37,416
  35         Store operating
              income            $16,372       $(54)    $8,130      $24,448
  36
  37   EZPAWN store count -
        end of period               280          1          -          281
  38   EZMONEY signature loan
        store count - end of
        period                        6          -        334          340

First Call Analyst:
FCMN Contact: Sharon_Lemond@ezcorp.com

SOURCE: EZCORP, Inc.

CONTACT: Dan Tonissen of EZCORP, Inc., +1-512-314-2289

Web site: http://www.ezcorp.com/
http://www.videonewswire.com/event.asp?id=44899

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