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EZCORP Announces Fiscal 2008 Second Quarter Results

Apr 24, 2008

EZCORP, Inc. (NASDAQ: EZPW) announced today results for its fiscal second quarter and six-month period, which ended March 31, 2008.

EZCORP's net income for the quarter ended March 31, 2008 increased 28% to $13,016,000 ($0.30 per share) compared to $10,196,000 ($0.23 per share) for the quarter ended March 31, 2007. Total revenues for the quarter increased 27% over the prior year period to $113,625,000 with signature loan revenues (payday loan and credit service fees) up 33%, pawn service charges up 32% and total sales (merchandise and jewelry scrapping) up 23%.

In our U.S. EZPAWN operations, store level operating income improved 40% to $22,008,000; and, in our EZMONEY operations store level operating income improved 3% to $9,918,000. Our 26 store EZPAWN Mexico operations contributed $815,000 compared to a slight loss in the prior year period. After administrative expense and depreciation and amortization, consolidated operating income for the quarter improved 33% to $19,793,000 (26% of net revenue) compared to $14,880,000 (25% of net revenue) for the prior year quarter.

EZCORP's net income for the six-month period ended March 31 2008 increased 28% to $25,571,000 ($0.59 per share) compared to $19,957,000 ($0.46 per share) for the prior year six-month period. Operating income for the six-months improved 33% to $39,085,000 (25% of net revenues) compared to $29,503,000 (24% of net revenues) for the prior year six-month period.

Commenting on these results, President and Chief Executive Officer, Joe Rotunda, stated, "Our second quarter was another strong quarter for us, exceeding our earnings guidance and increasing our earnings per share by 30% over the prior year. This is our twenty-third consecutive quarter of year over year earnings growth. Our pawn operation was particularly robust while our payday loan operation was challenged with bad debt. To varying degrees and in different directions, I believe both segments are impacted by the stress our customers are feeling in this economic environment."

Rotunda continued, "We believe each of our business segments can contribute to our growth. In our pawn operation, same store, store level operating income growth of 33% was complemented with $1.1 million from our Jumping Jack Cash acquisition. Our EZMONEY operation continues with de novo growth in the U.S. and we have the prospect of expanding into Canada. We believe our Mexico pawn operation, which is in its infancy, represents a substantial growth opportunity."

Rotunda concluded, "We are increasing our earnings per share guidance for our 2008 fiscal year to $1.14. We expect earnings per share for our June quarter to be approximately $0.21 and our September quarter to be approximately $0.34. We are lowering our expected EZMONEY store openings from 100 this fiscal year to between 70 and 80, as we have become more cautious in this economic environment. We are increasing the number of Mexico pawn locations we expect to open this fiscal year to a range of ten to twelve from our earlier estimate of seven to ten."

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. EZPAWN and 26 Mexico Empano Facil locations open on March 31, 2008, 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 462 EZMONEY locations and 73 EZPAWN locations open on March 31, 2008, 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 April 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=47316

  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 March 31,
                                                  2008              2007
   1  Revenues:
   2      Merchandise sales                      $44,675           $39,507
   3      Jewelry scrapping sales                 16,655            10,525
   4      Pawn service charges                    21,785            16,556
   5      Signature loan fees                     30,166            22,713
   6      Other                                      344               342
   7          Total revenues                     113,625            89,643
   8  Cost of goods sold:
   9      Cost of merchandise sales               27,165            23,576
   10     Cost of jewelry scrapping sales          9,566             6,798
   11         Total cost of goods sold            36,731            30,374
   12 Net revenues                                76,894            59,269
   13
   14 Operations expense                          37,521            31,104
   15 Signature loan bad debt                      6,632             2,916
   16 Administrative expense                       9,829             7,968
   17 Depreciation and amortization                3,119             2,401
   18     Operating income                        19,793            14,880
   19
   20 Interest income                               (137)             (567)
   21 Interest expense                                75                83
   22 Equity in net income of
       unconsolidated affiliate                   (1,118)             (820)
   23 Loss on sale/disposal of assets                 81                 -
   24 Income before income taxes                  20,892            16,184
   25 Income tax expense                           7,876             5,988
   26 Net income                                 $13,016           $10,196
   27
   28 Net income per share, diluted                $0.30             $0.23
   29
   30 Weighted average shares, diluted            43,228            43,445



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


                                                Six Months Ended March 31,
                                                  2008              2007
   1  Revenues:
   2      Merchandise sales                      $85,174           $77,386
   3      Jewelry scrapping sales                 31,663            21,626
   4      Pawn service charges                    44,693            34,518
   5      Signature loan fees                     63,694            47,108
   6      Other                                      707               692
   7          Total revenues                     225,931           181,330
   8  Cost of goods sold:
   9      Cost of merchandise sales               51,416            46,158
   10     Cost of jewelry scrapping sales         18,856            14,039
   11         Total cost of goods sold            70,272            60,197
   12 Net revenues                               155,659           121,133
   13
   14 Operations expense                          74,592            62,492
   15 Signature loan bad debt                     16,302             8,944
   16 Administrative expense                      19,734            15,495
   17 Depreciation and amortization                5,946             4,699
   18     Operating income                        39,085            29,503
   19
   20 Interest income                               (194)             (881)
   21 Interest expense                               156               147
   22 Equity in net income of
       unconsolidated affiliate                   (2,165)           (1,465)
   23 Gain on sale/disposal of assets                243                24
   24 Income before income taxes                  41,045            31,678
   25 Income tax expense                          15,474            11,721
   26 Net income                                 $25,571           $19,957
   27
   28 Net income per share, diluted                $0.59             $0.46
   29
   30 Weighted average shares, diluted            43,241            43,347



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


                                                     As of March 31,
                                                  2008              2007
   1  Assets:
   2    Current assets:
   3      Cash and cash equivalents              $35,551           $61,605
   4      Pawn loans                              56,701            43,109
   5      Payday loans, net                        5,290             3,314
   6      Pawn service charges receivable, net     8,983             6,986
   7      Signature loan fees receivable, net      4,781             4,334
   8      Inventory, net                          35,999            28,649
   9      Deferred tax asset                       9,006             7,150
   10     Prepaid expenses and other assets        7,281             5,373
   11       Total current assets                 163,592           160,520
   12
   13   Investment in unconsolidated affiliate    36,904            20,955
   14   Property and equipment, net               38,413            30,967
   15   Deferred tax asset, non-current            5,346             4,249
   16   Goodwill                                  24,422               768
   17   Other assets, net                          5,350             2,952
   18     Total assets                          $274,027          $220,411
   19 Liabilities and stockholders' equity:
   20   Current liabilities:
   21     Accounts payable and other accrued
           expenses                              $22,202           $18,594
   22     Customer layaway deposits                2,456             2,168
   23     Federal income taxes payable             2,363             1,104
   24       Total current liabilities             27,021            21,866
   25
   26   Deferred gains and other long-term
         liabilities                               3,003             3,067
   27   Total stockholders' equity               244,003           195,478
   28     Total liabilities and stockholders'
           equity                               $274,027          $220,411
   29
   30 Pawn loan balance per ending pawn store       $177              $153
   31 Inventory per ending pawn store               $112              $102
   32 Book value per share                         $5.89             $4.74
   33 Tangible book value per share                $5.20             $4.67
   34 EZPAWN store count - end of period             320               282
   35 EZMONEY signature loan store count -
       end of period                                 462               369
   36 Shares outstanding - end of period          41,398            41,248



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

                                         EZPAWN
                                         United  EZPAWN
                                         States  Mexico  EZMONEY
                                          Oper-   Oper-   Oper-  Consoli-
     Three months ended March 31, 2008:  ations  ations  ations   dated
   1   Revenues:
   2     Sales                          $59,747  $1,583    $-    $61,330
   3     Pawn service charges            20,720   1,065     -     21,785
   4     Signature loan fees                672     -    29,494   30,166
   5     Other                              341       3     -        344
   6         Total revenues              81,480   2,651  29,494  113,625
   7
   8   Cost of goods sold                35,784     947     -     36,731
   9         Net revenues                45,696   1,704  29,494   76,894
  10
  11   Operating expenses:
  12     Operations expense              23,521     889  13,111   37,521
  13     Signature loan bad debt            167     -     6,465    6,632
  14         Total direct expenses       23,688     889  19,576   44,153
  15         Store operating income     $22,008    $815  $9,918  $32,741
  16
  17   EZPAWN store count - end of
        period                              294      26     -        320
  18   EZMONEY signature loan store
        count - end of period                 6     -       456      462
  19
  20 Three months ended March 31, 2007:
  21   Revenues:
  22     Sales                          $50,019     $13    $-    $50,032
  23     Pawn service charges            16,548       8     -     16,556
  24     Signature loan fees                792     -    21,921   22,713
  25     Other                              342     -       -        342
  26         Total revenues              67,701      21  21,921   89,643
  27
  28   Cost of goods sold                30,367       7     -     30,374
  29         Net revenues                37,334      14  21,921   59,269
  30
  31   Operating expenses:
  32     Operations expense              21,501      58   9,545   31,104
  33     Signature loan bad debt            148     -     2,768    2,916
  34         Total direct expenses       21,649      58  12,313   34,020
  35         Store operating income     $15,685    $(44) $9,608  $25,249
  36
  37   EZPAWN store count - end of
        period                              280       2     -        282
  38   EZMONEY signature loan store
        count - end of period                 6     -       363      369



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

                                          EZPAWN
                                          United  EZPAWN
                                          States  Mexico   EZMONEY
                                           Oper-   Oper-    Oper-   Consoli-
     Six months ended March 31, 2008:     ations  ations   ations    dated
   1   Revenues:
   2     Sales                          $113,948  $2,889     $-    $116,837
   3     Pawn service charges             42,710   1,983      -      44,693
   4     Signature loan fees               1,481     -     62,213    63,694
   5     Other                               703       4      -         707
   6         Total revenues              158,842   4,876   62,213   225,931
   7
   8   Cost of goods sold                 68,552   1,720      -      70,272
   9         Net revenues                 90,290   3,156   62,213   155,659
  10
  11   Operating expenses:
  12     Operations expense               47,029   1,721   25,842    74,592
  13     Signature loan bad debt             539     -     15,763    16,302
  14         Total direct expenses        47,568   1,721   41,605    90,894
  15         Store operating income      $42,722  $1,435  $20,608   $64,765
  16
  17   EZPAWN store count - end of
        period                               294      26      -         320
  18   EZMONEY signature loan store
        count - end of period                  6     -        456       462
  19
  20 Six months ended March 31, 2007:
  21   Revenues:
  22     Sales                           $98,998     $14     $-     $99,012
  23     Pawn service charges             34,508      10      -      34,518
  24     Signature loan fees               1,704     -     45,404    47,108
  25     Other                               692     -        -         692
  26         Total revenues              135,902      24   45,404   181,330
  27
  28   Cost of goods sold                 60,188       9      -      60,197
  29         Net revenues                 75,714      15   45,404   121,133
  30
  31   Operating expenses:
  32     Operations expense               43,166     120   19,206    62,492
  33     Signature loan bad debt             484     -      8,460     8,944
  34         Total direct expenses        43,650     120   27,666    71,436
  35         Store operating income      $32,064   $(105) $17,738   $49,697
  36
  37   EZPAWN store count - end of
        period                               280       2      -         282
  38   EZMONEY signature loan store
        count - end of period                  6     -        363       369

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/

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