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EZCORP Income Increases 41% in March Quarter

Apr 23, 2009

EZCORP, Inc. (NASDAQ: EZPW) announced today results for its fiscal second quarter and six-month period ended March 31, 2009.

EZCORP's net income for the quarter ended March 31, 2009 increased 41% to $18,320,000 ($0.37 per share) compared to $13,016,000 ($0.30 per share) for the quarter ended March 31, 2008. Total revenues for the quarter increased 38% over the prior year period to $156,266,000 with pawn service charges up 54%, total sales (merchandise and jewelry scrapping) up 45%, and signature loan revenues (payday loan and credit service fees) up 5%.

Consolidated operating income improved 40% to $27,690,000 (29% of net revenues) from $19,712,000 (28% of net revenues) in the prior year quarter. The Company's U.S. pawn operations contributed $6,574,000 of the improvement and EZMONEY operations contributed $2,157,000, partially offset by an increase in administrative costs. Operating income from the 45-store Empeno Facil pawn segment increased 34% in Mexican pesos, but was relatively flat after translation to a stronger U.S. dollar.

The 78 pawn stores acquired in the December quarter contributed total revenues of $36,725,000, operating income of $4,881,000, and net income of $2,896,000. The acquired stores contributed approximately $0.02 earnings per share after the effect of shares issued in the acquisitions.

EZCORP's net income for the six-month period ended March 31, 2009 increased 30% to $33,148,000 ($0.71 per share) compared to $25,571,000 ($0.59 per share) for the prior year six-month period. Operating income for the six months improved 28% to $49,702,000 (29% of net revenues) compared to $38,842,000 (28% 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, with the 23% increase in earnings per share exceeding our guidance. This is our 27th consecutive quarter of year over year earnings growth. We ended the quarter with a strong balance sheet reflecting cash in excess of outstanding debt, and an additional $80 million available on our revolving line of credit."

Rotunda continued, "We are pleased with the contribution from the 78 stores we acquired in November and December. We migrated all acquired stores to our point-of-sale system by March 31 and all administrative functions will be fully integrated by April 30, leading to additional efficiencies and earnings accretion."

Rotunda concluded, "We expect full-year earnings per share of $1.50 to $1.52 compared to last year's $1.21, representing an increase of 24% to 26%. We expect our June quarter to be approximately $0.34 for a 36% increase, and the September quarter to be $0.46 to $0.48, or an increase of 24% to 30% over the prior year quarter. We remain on track to open 30 to 35 Mexico pawn locations by fiscal year-end, including the six opened and one acquired year-to-date. We opened fourteen EZMONEY stores year-to-date and closed nine as part of the ongoing analysis of store performance. We expect to open two more EZMONEY stores in the remainder of the fiscal year."

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 its pawnshops, 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 its signature loan stores and some pawnshops, the Company offers short-term non-collateralized loans, often referred to as payday loans, or fee based credit services to customers seeking loans.

As of March 31, 2009, EZCORP operated a total of 898 locations in the U.S. and Mexico consisting of 371 U.S. pawnshops, 45 pawnshops in Mexico and 482 U.S. signature loan stores.

This announcement contains certain forward-looking statements regarding the Company's expected operating and financial performance for future periods, including new store expansion, anticipated benefits of acquisitions and expected future earnings. These statements are based on the Company's current expectations. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of uncertainties and other factors, including changing market conditions in the overall economy and the industry, consumer demand for the Company's services and merchandise, actions of third parties who offer services and products in the Company's locations and changes in the regulatory environment. For a discussion of these and other factors affecting the Company's business and prospects, see 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 23, 2009 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=57864

  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,
                                                       ----------------
                                                         2009     2008
                                                         ----     ----
   1 Revenues:
   2   Merchandise sales                              $61,056  $44,675
   3   Jewelry scrapping sales                         27,957   16,655
   4   Pawn service charges                            33,516   21,785
   5   Signature loan fees                             31,594   30,166
   6   Auto title loan fees                               415        -
   7   Other                                            1,728      344
                                                        -----      ---
   8     Total revenues                               156,266  113,625
   9 Cost of goods sold:
  10   Cost of merchandise sales                       38,125   27,165
  11   Cost of jewelry scrapping sales                 18,301    9,566
                                                       ------    -----
  12     Total cost of goods sold                      56,426   36,731
  13 Bad debt:
  14   Signature loan bad debt                          5,072    6,632
  15   Auto title loan bad debt                            42        -
                                                           --      ---
  16     Total bad debt                                 5,114    6,632
                                                        -----    -----
  17 Net revenue                                       94,726   70,262
  18
  19 Operations expense                                54,628   38,899
  20 Administrative expense                             9,794    8,451
  21 Depreciation and amortization                      3,151    3,119
  22 (Gain) / Loss on sale/disposal of assets            (537)      81
                                                         ----       --
  23   Operating income                                27,690   19,712
  24
  25 Interest income                                      (72)    (137)
  26 Interest expense                                     471       75
  27 Equity in net income of unconsolidated affiliate  (1,371)  (1,118)
  28 Other                                                  2        -
                                                          ---      ---
  29 Income before income taxes                        28,660   20,892
  30 Income tax expense                                10,340    7,876
                                                       ------    -----
  31 Net income                                       $18,320  $13,016
                                                      =======  =======
  32
                                                        -----    -----
  33 Net income per share, diluted                      $0.37    $0.30
                                                        =====    =====
  34
  35 Weighted average shares, diluted                  49,272   43,228



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

                                                        Six Months Ended
                                                            March 31,
                                                        ----------------
                                                         2009     2008
                                                         ----     ----
   1 Revenues:
   2   Merchandise sales                              $105,851  $85,174
   3   Jewelry scrapping sales                          47,742   31,663
   4   Pawn service charges                             59,897   44,693
   5   Signature loan fees                              67,594   63,694
   6   Auto title loan fees                                636        -
   7   Other                                             3,161      707
                                                         -----      ---
   8     Total revenues                                284,881  225,931
   9 Cost of goods sold:
  10   Cost of merchandise sales                        65,291   51,416
  11   Cost of jewelry scrapping sales                  31,560   18,856
                                                        ------   ------
  12       Total cost of goods sold                     96,851   70,272
  13 Bad debt:
  14   Signature loan bad debt                          14,556   16,302
  15   Auto title loan bad debt                             49        -
                                                            --      ---
  16     Total bad debt                                 14,605   16,302
                                                        ------   ------
  17 Net revenue                                       173,425  139,357
  18
  19 Operations expense                                 98,122   77,435
  20 Administrative expense                             20,205   16,891
  21 Depreciation and amortization                       6,217    5,946
  22 (Gain) / Loss on sale/disposal of assets             (821)     243
                                                          ----      ---
  23   Operating income                                 49,702   38,842
  24
  25 Interest income                                      (198)    (194)
  26 Interest expense                                      636      156
  27 Equity in net income of unconsolidated affiliate   (2,312)  (2,165)
  28 Other                                                  27        -
                                                            --      ---
  29 Income before income taxes                         51,549   41,045
  30 Income tax expense                                 18,401   15,474
                                                        ------   ------
  31 Net income                                        $33,148  $25,571
                                                       =======  =======
  32
                                                         -----    -----
  33 Net income per share, diluted                       $0.71    $0.59
                                                         =====    =====
  34
  35 Weighted average shares, diluted                   46,939   43,241



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

                                                            As of March 31,
                                                            2009     2008
                                                            ----     ----
   1 Assets:
   2   Current assets:
   3     Cash and cash equivalents                        $55,244  $35,551
   4     Pawn loans                                        79,359   56,701
   5     Payday loans, net                                  6,420    5,290
   6     Pawn service charges receivable, net              14,551    8,983
   7     Auto title loans, net                                874        -
   8     Auto title loan finance charges receivable, net       72        -
   9     Signature loan fees receivable, net                4,417    4,781
  10     Inventory, net                                    56,025   35,999
  11     Deferred tax asset                                15,826    9,006
  12     Federal income taxes receivable                      495        -
  13     Prepaid expenses and other assets                 13,574    7,281
                                                           ------    -----
  14       Total current assets                           246,857  163,592
  15
  16   Investment in unconsolidated affiliate              34,725   36,904
  17   Property and equipment, net                         48,206   38,413
  18   Deferred tax asset, non-current                      8,452    5,346
  19   Goodwill                                            99,008   24,422
  20   Other assets, net                                   17,533    5,350
                                                           ------    -----
  21     Total assets                                    $454,781 $274,027
                                                         ======== ========
  22 Liabilities and stockholders' equity:
  23   Current liabilities:
  24     Current maturities of long-term debt             $10,000       $-
  25     Accounts payable and other accrued expenses       30,457   22,202
  26     Customer layaway deposits                          4,345    2,456
  27     Federal income taxes payable                           -    2,363
                                                              ---    -----
  28       Total current liabilities                       44,802   27,021
  29
  30   Long-term debt, less current maturities             30,000        -
  31   Deferred gains and other long-term liabilities       3,462    3,003
  32   Total stockholders' equity                         376,517  244,003
                                                          -------  -------
  33     Total liabilities and stockholders' equity      $454,781 $274,027
                                                         ======== ========
  34
  35 Pawn loan balance per ending pawn store                 $191     $177
  36 Inventory per ending pawn store                         $135     $112
  37 Book value per share                                   $7.75    $5.89
  38 Tangible book value per share                          $5.38    $5.20
  39 Pawn store count - end of period                         416      320
  40 Signature loan store count - end of period               482      462
  41 Shares outstanding - end of period                    48,597   41,398



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

                                U.S. Pawn  Empeno  EZMONEY
                                Operations  Facil Operations Consolidated
                                ----------  ----- ---------- ------------
     Three months ended
      March 31, 2009:
   1 Revenues:
   2   Sales                       $86,808 $2,205         $-      $89,013
   3   Pawn service charges         32,265  1,251          -       33,516
   4   Signature loan fees             557      -     31,037       31,594
   5   Auto title loan fees            351      -         64          415
   6   Other                         1,727      1          -        1,728
                                     -----    ---        ---        -----
   7     Total revenues            121,708  3,457     31,101      156,266
   8
   9 Cost of goods sold             55,072  1,354          -       56,426
  10 Signature loan bad debt           108      -      4,964        5,072
  11 Auto title loan bad debt           36      -          6           42
                                        --    ---        ---           --
  12     Net revenues               66,492  2,103     26,131       94,726
  13
  14 Operations expense             38,367  1,299     14,962       54,628
                                    ------  -----     ------       ------
  15    Store operating income     $28,125   $804    $11,169      $40,098
                                   =======   ====    =======      =======
  16
  17 Pawn store count -
      end of period                    371     45          -          416
  18 Signature loan store count
      - end of period                    6      -        476          482
  19
  20 Three months ended
      March 31, 2008:
  21 Revenues:
  22   Sales                       $59,747 $1,583         $-      $61,330
  23   Pawn service charges         20,720  1,065          -       21,785
  24   Signature loan fees             672      -     29,494       30,166
  25   Auto title loan fees              -      -          -            -
  26   Other                           341      3          -          344
                                       ---    ---        ---          ---
  27     Total revenues             81,480  2,651     29,494      113,625
  28
  29 Cost of goods sold             35,784    947          -       36,731
  30 Signature loan bad debt           167      -      6,465        6,632
  31 Auto title loan bad debt            -      -          -            -
                                       ---    ---        ---          ---
  32     Net revenues               45,529  1,704     23,029       70,262
  33
  34 Operations expense             23,978    904     14,017       38,899
                                    ------    ---     ------       ------
  35     Store operating income    $21,551   $800     $9,012      $31,363
                                   =======   ====     ======      =======
  36
  37 Pawn store count - end
      of period                        294     26          -          320
  38 Signature loan store count
      - end of period                    6      -        456          462



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

                                 U.S. Pawn  Empeno  EZMONEY
                                Operations  Facil Operations Consolidated
                                ----------  ----- ---------- ------------
     Six months ended
      March 31, 2009:
   1 Revenues:
   2   Sales                      $148,975 $4,618         $-     $153,593
   3   Pawn service charges         57,149  2,748          -       59,897
   4   Signature loan fees           1,243      -     66,351       67,594
   5   Auto title loan fees            561      -         75          636
   6   Other                         3,160      1          -        3,161
                                     -----    ---        ---        -----
   7     Total revenues            211,088  7,367     66,426      284,881
   8
   9 Cost of goods sold             94,010  2,841          -       96,851
  10 Signature loan bad debt           344      -     14,212       14,556
  11 Auto title loan bad debt           42      -          7           49
                                        --    ---        ---           --
  12     Net revenues              116,692  4,526     52,207      173,425
  13
  14 Operations expense             65,045  2,583     30,494       98,122
                                    ------  -----     ------       ------
  15     Store operating income    $51,647 $1,943    $21,713      $75,303
                                   ======= ======    =======      =======
  16
  17 Pawn store count - end
      of period                        371     45          -          416
  18 Signature loan store
      count - end of period              6      -        476          482
  19
  20 Six months ended
      March 31, 2008:
  21 Revenues:
  22   Sales                      $113,948 $2,889         $-     $116,837
  23   Pawn service charges         42,710  1,983          -       44,693
  24   Signature loan fees           1,481      -     62,213       63,694
  25   Auto title loan fees              -      -          -            -
  26   Other                           703      4          -          707
                                       ---    ---        ---          ---
  27     Total revenues            158,842  4,876     62,213      225,931
  28
  29 Cost of goods sold             68,552  1,720          -       70,272
  30 Signature loan bad debt           539      -     15,763       16,302
  31 Auto title loan bad debt            -      -          -            -
                                       ---    ---        ---          ---
  32     Net revenues               89,751  3,156     46,450      139,357
  33
  34 Operations expense             48,000  1,745     27,690       77,435
                                    ------  -----     ------       ------
  35     Store operating income    $41,751 $1,411    $18,760      $61,922
                                   ======= ======    =======      =======
  36
  37 Pawn store count - end
      of period                        294     26          -          320
  38 Signature loan store count
      - end of period                    6      -        456          462

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

Audio: http://www.videonewswire.com/event.asp?id=57864

SOURCE: EZCORP, Inc.

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

Web Site: http://www.ezcorp.com/

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