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EZCORP's Earnings Per Share Improve 16% in June Quarter

Jul 23, 2009

EZCORP, Inc. (NASDAQ: EZPW) announced today results for its fiscal third quarter and nine-month period ended June 30, 2009.

(Logo: http://www.newscom.com/cgi-bin/prnh/20090713/EZCORPLOGO)

EZCORP's net income for the quarter ended June 30, 2009 increased 33% to $14.4 million ($0.29 per share) compared to $10.8 million ($0.25 per share) for the quarter ended June 30, 2008. Total revenues for the quarter increased 37% over the prior year period to $147.8 million with pawn service charges up 45% and total sales (merchandise and jewelry scrapping) up 52%. Signature loan revenues (payday loan and credit service fees) decreased $0.4 million, or 1%. Auto title loans, a new and developing product, contributed $1.0 million of revenues.

Consolidated operating income improved 32% to $21.5 million (24% of net revenues) from $16.3 million (24% of net revenues) in the prior year quarter. The Company's U.S. pawn operations contributed $6.4 million of improvement, partially offset by a $0.5 million lower contribution from the EZMONEY operations and an increase in administrative costs. Operating income from the 47-store Empeno Facil pawn segment increased 46% in Mexican pesos, or 13% after translation to a stronger U.S. dollar.

The 78 pawn stores acquired in the December quarter contributed total revenues of $35.1 million, operating income of $5.3 million, and net income of $3.2 million. The acquired stores contributed approximately $0.04 earnings per share to the quarter after the effect of shares issued in the acquisitions.

EZCORP's net income for the nine-month period ended June 30, 2009 increased 31% to $47.5 million ($1.00 per share) compared to $36.4 million ($0.84 per share) for the prior year nine-month period. Operating income for the nine months improved 29% to $71.2 million (27% of net revenues) compared to $55.1 million (27% of net revenues) for the prior year nine-month period.

Commenting on these results, President and Chief Executive Officer, Joe Rotunda, stated, "Our third quarter earnings were in line with our revised guidance, and represent our 28th consecutive quarter of year over year earnings growth. Our results reflect the successful integration of the 78 pawn stores acquired in November and December, which collectively contributed $0.04 earnings per share. These acquisitions provided $0.02 earnings per share accretion in the March quarter, and have gained momentum as they have been assimilated into our business. These results clearly demonstrate the value of our strategy to build earning assets through quality acquisitions."

Rotunda continued, "In pawn, our same store loan yield remained strong across all categories, as did our general merchandise loan growth and sales. Jewelry loan growth and jewelry sales were not as strong as seasonally expected. We recently increased our gold lending guidelines to accelerate the loan growth, and anticipate a jewelry sales benefit from several promotions, beginning with our 'Christmas in July' layaway promotion. Our EZMONEY operations enjoyed a lift from new loan products, including auto title loans introduced this year and installment loans introduced last year. The benefit of these new products largely offset the lower contribution from payday loans. We expect an increased contribution from these new products as they mature and are introduced into more of our stores."

Rotunda concluded, "We continue to expect fourth quarter earnings per share of $0.41 to $0.43, representing an increase of 11% to 16% over the prior year quarter. We expect full-year earnings per share of $1.40 to $1.42 compared to last year's $1.21, or an increase of 16% to 17%. We remain on track to open approximately 30 Mexico pawn locations by fiscal year-end, including the nine added year-to-date. We anticipate opening our first Canadian EZMONEY stores prior to the holiday season."

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 June 30, 2009, EZCORP operated a total of 897 locations in the U.S. and Mexico consisting of 370 U.S. pawnshops, 47 pawnshops in Mexico and 480 U.S. signature loan stores. EZCORP, as a near-30% stockholder, is also actively involved in the management of Albemarle & Bond Holdings PLC, the U.K.'s largest pawnbroking business with 115 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 July 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=60390

  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 June 30,
                                                       ---------------
                                                        2009     2008
                                                        ----     ----
   1 Revenues:
   2     Merchandise sales                            $50,442  $35,728
   3     Jewelry scrapping sales                       30,867   17,907
   4     Pawn service charges                          32,880   22,691
   5     Signature loan fees                           30,815   31,223
   6     Auto title loan fees                           1,030      -
   7     Other                                          1,740      521
                                                      -------  -------
   8         Total revenues                           147,774  108,070
   9 Cost of goods sold:
  10     Cost of merchandise sales                     31,057   20,706
  11     Cost of jewelry scrapping sales               19,908   10,754
                                                       ------   ------
  12         Total cost of goods sold                  50,965   31,460
  13 Bad debt:
  14     Signature loan bad debt                        8,618    8,545
  15     Auto title loan bad debt                         104      -
                                                        -----    -----
  16         Total bad debt                             8,722    8,545
                                                       ------   ------
  17 Net revenue                                       88,087   68,065
  18
  19 Operations expense                                53,833   39,873
  20 Administrative expense                             9,687    8,527
  21 Depreciation and amortization                      3,254    3,081
  22 (Gain) / Loss on sale/disposal of assets            (146)     284
                                                       ------   ------
  23     Operating income                              21,459   16,300
  24
  25 Interest income                                      (59)    (165)
  26 Interest expense                                     428       72
  27 Equity in net income of unconsolidated affiliate    (851)    (997)
  28 Other                                                 11       11
                                                       ------   ------
  29 Income before income taxes                        21,930   17,379
  30 Income tax expense                                 7,545    6,552
                                                      -------  -------
  31 Net income                                       $14,385  $10,827
                                                      =======  =======
  32
                                                        -----    -----
  33 Net income per share, diluted                      $0.29    $0.25
                                                        =====    =====
  34
  35 Weighted average shares, diluted                  49,279   43,325



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

                                                       Nine Months Ended
                                                            June 30,
                                                       -----------------
                                                          2009      2008
                                                          ----      ----
   1 Revenues:
   2     Merchandise sales                            $156,293  $120,902
   3     Jewelry scrapping sales                        78,609    49,570
   4     Pawn service charges                           92,777    67,384
   5     Signature loan fees                            98,409    94,917
   6     Auto title loan fees                            1,666       -
   7     Other                                           4,901     1,228
                                                       -------   -------
   8         Total revenues                            432,655   334,001
   9 Cost of goods sold:
  10     Cost of merchandise sales                      96,348    72,122
  11     Cost of jewelry scrapping sales                51,468    29,610
                                                       -------   -------
  12         Total cost of goods sold                  147,816   101,732
  13 Bad debt:
  14     Signature loan bad debt                        23,174    24,847
  15     Auto title loan bad debt                          153       -
                                                        ------    ------
  16         Total bad debt                             23,327    24,847
                                                       -------   -------
  17 Net revenue                                       261,512   207,422
  18
  19 Operations expense                                151,955   117,308
  20 Administrative expense                             29,892    25,418
  21 Depreciation and amortization                       9,471     9,027
  22 (Gain) / Loss on sale/disposal of assets             (967)      527
                                                        ------    ------
  23     Operating income                               71,161    55,142
  24
  25 Interest income                                      (257)     (359)
  26 Interest expense                                    1,064       228
  27 Equity in net income of unconsolidated affiliate   (3,163)   (3,162)
  28 Other                                                  38        11
                                                        ------    ------
  29 Income before income taxes                         73,479    58,424
  30 Income tax expense                                 25,946    22,026
                                                        ------    ------
  31 Net income                                       $ 47,533  $ 36,398
                                                       =======   =======
  32
                                                         -----     -----
  33 Net income per share, diluted                       $1.00     $0.84
                                                         =====     =====
  34
  35 Weighted average shares, diluted                   47,724    43,269



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

                                                             As of June 30,
                                                             2009     2008
                                                             ----     ----
   1 Assets:
   2   Current assets:
   3     Cash and cash equivalents                       $ 46,546 $ 29,812
   4     Pawn loans                                        94,648   68,022
   5     Payday loans, net                                  7,649    6,598
   6     Pawn service charges receivable, net              16,693   10,061
   7     Auto title loans, net                              1,126      -
   8     Auto title loan finance charges receivable, net      352      -
   9     Signature loan fees receivable, net                5,105    5,086
  10     Inventory, net                                    57,141   39,444
  11     Deferred tax asset                                15,809    9,007
  12     Federal income taxes receivable                      -        454
  13     Prepaid expenses and other assets                 14,866    5,622
                                                          -------  -------
  14         Total current assets                         259,935  174,106
  15
  16   Investment in unconsolidated affiliate              34,784   37,248
  17   Property and equipment, net                         49,752   38,661
  18   Deferred tax asset, non-current                      9,090    5,620
  19   Goodwill                                           100,742   24,779
  20   Other assets, net                                   17,892    5,585
                                                         -------- --------
  21         Total assets                                $472,195 $285,999
                                                         ======== ========
  22 Liabilities and stockholders' equity:
  23   Current liabilities:
  24     Current maturities of long-term debt            $ 10,000 $    -
  25     Accounts payable and other accrued expenses       33,958   24,120
  26     Customer layaway deposits                          3,603    2,254
  27     Federal income taxes payable                       1,988      -
                                                           ------   ------
  28         Total current liabilities                     49,549   26,374
  29
  30   Long-term debt, less current maturities             27,500      -
  31   Deferred gains and other long-term liabilities       3,352    2,909
  32   Total stockholders' equity                         391,794  256,716
                                                         -------- --------
  33         Total liabilities and stockholders' equity  $472,195 $285,999
                                                         ======== ========
  34
  35 Pawn loan balance per ending pawn store             $    227 $    210
  36 Inventory per ending pawn store                     $    137 $    122
  37 Book value per share                                $   8.05 $   6.19
  38 Tangible book value per share                       $   5.65 $   5.50
  39 Pawn store count - end of period                         417      324
  40 Signature loan store count - end of period               480      461
  41 Shares outstanding - end of period                    48,652   41,441



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


   Three months ended           U.S. Pawn    Empeno   EZMONEY
    June 30, 2009:              Operations   Facil  Operations  Consolidated
                                ----------   -----  ----------  ------------
   1 Revenues:
   2   Sales                      $78,519    $2,790     $  -        $81,309
   3   Pawn service charges        31,409     1,471        -         32,880
   4   Signature loan fees            523       -       30,292       30,815
   5   Auto title loan fees           430       -          600        1,030
   6   Other                        1,706        34        -          1,740
                                  -------     -----     ------      -------
   7     Total revenues           112,587     4,295     30,892      147,774
   8
   9 Cost of goods sold            49,157     1,808        -         50,965
  10 Signature loan bad debt          237       -        8,381        8,618
  11 Auto title loan bad debt          30       -           74          104
                                   ------     -----     ------       ------
  12     Net revenues              63,163     2,487     22,437       88,087
  13
  14 Operations expense            37,719     1,441     14,673       53,833
                                  -------    ------     ------      -------
  15     Store operating income   $25,444    $1,046     $7,764      $34,254
                                  =======    ======     ======      =======
  16
  17 Pawn store count
      - end of period                 370        47        -            417
  18 Signature loan store count
      - end of period                   6       -          474          480
  19
  20 Three months ended June 30, 2008:
  21 Revenues:
  22   Sales                      $51,799    $1,836     $  -        $53,635
  23   Pawn service charges        21,378     1,313        -         22,691
  24   Signature loan fees            650       -       30,573       31,223
  25   Auto title loan fees           -         -          -            -
  26   Other                          521       -          -            521
                                   ------     -----     ------      -------
  27     Total revenues            74,348     3,149     30,573      108,070
  28
  29 Cost of goods sold            30,301     1,159        -         31,460
  30 Signature loan bad debt          202       -        8,343        8,545
  31 Auto title loan bad debt         -         -          -            -
                                   ------     -----     ------       ------
  32     Net revenues              43,845     1,990     22,230       68,065
  33
  34 Operations expense            24,831     1,065     13,977       39,873
                                  -------     -----     ------      -------
  35     Store operating income   $19,014      $925     $8,253      $28,192
                                  =======      ====     ======      =======
  36
  37 Pawn store count
      - end of period                 294        30        -            324
  38 Signature loan store count
      - end of period                   6       -          455          461



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

   Nine months ended            U.S. Pawn    Empeno   EZMONEY
    June 30, 2009:              Operations   Facil  Operations  Consolidated
                                ----------   -----  ----------  ------------
   1 Revenues:
   2   Sales                     $227,494    $7,408    $   -       $234,902
   3   Pawn service charges        88,558     4,219        -         92,777
   4   Signature loan fees          1,766       -       96,643       98,409
   5   Auto title loan fees           991       -          675        1,666
   6   Other                        4,866        35        -          4,901
                                  -------    ------     ------      -------
   7     Total revenues           323,675    11,662     97,318      432,655
   8
   9 Cost of goods sold           143,167     4,649        -        147,816
  10 Signature loan bad debt          581       -       22,593       23,174
  11 Auto title loan bad debt          72       -           81          153
                                  -------     -----     ------      -------
  12     Net revenues             179,855     7,013     74,644      261,512
  13
  14 Operations expense           102,764     4,024     45,167      151,955
                                  -------    ------    -------     --------
  15   Store operating income     $77,091    $2,989    $29,477     $109,557
                                  =======    ======    =======     ========
  16
  17 Pawn store count
      - end of period                 370        47        -            417
  18 Signature loan store count
      - end of period                   6       -          474          480
  19
  20 Nine months ended June 30, 2008:
  21 Revenues:
  22   Sales                     $165,749    $4,723     $  -       $170,472
  23   Pawn service charges        64,089     3,295        -         67,384
  24   Signature loan fees          2,131       -       92,786       94,917
  25   Auto title loan fees           -         -          -            -
  26   Other                        1,224         4        -          1,228
                                  -------     -----     ------      -------
  27     Total revenues           233,193     8,022     92,786      334,001
  28
  29 Cost of goods sold            98,853     2,879        -        101,732
  30 Signature loan bad debt          741       -       24,106       24,847
  31 Auto title loan bad debt         -         -          -            -
                                  -------     -----     ------      -------
  32     Net revenues             133,599     5,143     68,680      207,422
  33
  34 Operations expense            72,831     2,810     41,667      117,308
                                  -------    ------    -------      -------
  35     Store operating income   $60,768    $2,333    $27,013      $90,114
                                  =======    ======    =======      =======
  36
  37 Pawn store count
      - end of period                 294        30        -            324
  38 Signature loan store count
      - end of period                   6       -          455          461

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

Photo: http://www.newscom.com/cgi-bin/prnh/20090713/EZCORPLOGO
http://photoarchive.ap.org/
photodesk@prnewswire.com

SOURCE: EZCORP, Inc.

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

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

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