Adds Strategic Investments and Over 100 New Locations;

Achieves Upper End of Earnings Guidance Range

PR Newswire

AUSTIN, Texas, Jan. 22, 2013

AUSTIN, Texas, Jan. 22, 2013 /PRNewswire/ -- EZCORP, Inc. (NASDAQ: EZPW), a
leading provider of instant cash solutions for consumers, today announced
results for its first fiscal quarter ended December 31, 2012.

(Logo: http://photos.prnewswire.com/prnh/20090713/EZCORPLOGO)

For the quarter, total revenues were $277.1 million, a record for the Company.
Net income was $30.7 million, and earnings per share were $0.59, at the upper
end of the Company's previously announced guidance range of $0.55 to $0.60.

EZCORP significantly expanded its reach by opening 75 new locations, acquiring
a U.S. online lender, entering the lucrative Arizona pawn market by acquiring
12 stores, acquiring a controlling interest in a 20-store buy/sell chain in
Mexico, and increasing its strategic investments in Cash Converters
International and Cash Genie.

Consolidated Financial Highlights — First quarter of fiscal 2013 vs. prior
year quarter

  oTotal revenues were $277.1 million, up 11%, driven primarily by growth in
    the Latin America segment. This increase is partially attributable to
    mid-year fiscal 2012 acquisitions of controlling interests in Crediamigo
    and Cash Genie and the inclusion of 100% of their revenues in EZCORP's
    consolidated revenues. Excluding these acquisitions, total revenues
    increased 3.4%, driven by growth in merchandise sales, pawn service
    charges and consumer loan fees.
  oNet income was $30.7 million, down 22%. This expected decrease resulted
    from the following:

       oGold and jewelry environment — The Company estimates the change in
         gold metrics (price and volume) from the prior year quarter caused a
         deterioration of approximately $10 million in consolidated net
         revenues, attributable primarily to the U.S. pawn business. The
         Company has provided supplemental information regarding the impact of
         the gold environment in the Investor Relations section of its website
       oPlanned growth initiatives — The Company incurred $5 million in
         incremental expenses associated with its growth initiatives. These
         expenses include $4.1 million in drag associated with 111 de novo
         locations opened during the last nine months, including the 75 de
         novo locations added this quarter, as well as the costs associated
         with various business unit growth initiatives, which were recorded as
         operations expense. Excluding these incremental growth-related
         operations expenses, as well as the operations expense associated
         with other businesses added since the first quarter of last year,
         consolidated operations expense increased 9%.

         The Company also incurred $0.9 million in transaction and integration
         costs during the quarter in connection with acquisitions and
         investments, which were recorded as administrative expense.
       oContinued infrastructure development — During the quarter, the
         Company invested an additional $1 million in its infrastructure to
         support the efficient management of a larger, more complex global
         company. These costs, along with the acquisition-related
         administrative expenses noted above, account for 14% of the Company's
         consolidated administrative expense. Excluding these growth and
         investment-related costs, administrative expense as a percentage of
         revenues was essentially flat.

  oThe Company ended the quarter with $419 million in earning assets
    (consisting of pawn loans, consumer loans and inventory on the balance
    sheet, combined with CSO loans not on the balance sheet), an increase of
    41%, driven primarily by the acquisition of Crediamigo.
  oCash and cash equivalents at quarter-end were $46.7 million, with debt of
    $235.5 million, including $92.9 million Crediamigo third party debt, which
    is non-recourse to EZCORP.

U.S. & Canada — Market Leading Storefront Growth

  oDe Novo Growth — During the quarter, the Company added 63 new locations in
    the U.S. & Canada segment (51 de novo and 12 acquired).

       oThe 51 de novo stores include 44 new financial service centers,
         primarily located outside of Texas, utilizing the Company's proven
         "store within a store" concept. The other seven locations are new
         pawn stores in key markets where the Company is already a leading
         provider. Capital expenditures associated with these new locations
         totaled $3.8 million, and the Company expects these stores to be
         profitable within six to eight months of opening.
       oThe 12 acquired stores are located in Arizona. This represents the
         Company's initial entry into a state that offers very attractive
         customer demographics and financial metrics. While this acquisition
         alone makes EZCORP the third largest provider in the state, the
         Company expects to take a market leading position over the next few
         years. The acquired stores should be immediately accretive to

  oPawn — The Company's U.S. Pawn & Retail business, consisting of 496 stores
    in 20 states, posted solid gains in a gold and jewelry environment that
    continues to be challenging.

       oPawn loan balances were $147.1 million at quarter end, up 5% in total
         and down 1% on a same store basis. The overall pawn loan portfolio
         continues to reflect the ongoing shift to general merchandise
         collateral, with general merchandise loan balances up 13% in total
         and 6% on a same store basis, while jewelry loan balances were up 1%
         in total and down 3% on a same store basis.
       oPawn service charges increased 7% in total and 4% on a same store
         basis, reflecting a 500 basis point increase in yield, driven
         primarily by rate increases in Nevada and operational improvements in
       oRedemption rates were 82%, up from 81% a year ago, with a jewelry
         redemption rate of 85% and a general merchandise redemption rate of
         76%, both reflecting a slight increase over the same quarter last
         year. These increases were driven by improvements in customer
       oMerchandise sales increased 4% in total and down 1% on a same store
         basis. These increases were driven by general merchandise sales,
         which were up 15% in total and 6% on a same store basis. Jewelry
         sales were down 5% in total and 10% on a same store basis, also
         reflecting the ongoing shift in the business from jewelry to general
       oGross margin on merchandise sales was 42% (down 140 basis points)
         because of a one-time inventory reserve adjustment in last year's
         quarter. Excluding the effect of that adjustment, the margin rate was
         up 130 basis points.

  oFinancial Services — The U.S. Financial Services business, consisting of
    486 locations in 16 states, experienced significant growth in multiple
    payment and collateralized loan products.

       oTotal loan balances were $47 million, up 8% from the prior year
         quarter. Customers continued to shift from first generation single
         payment loan products (traditional payday loans) to lower-yielding
         second generation multiple payment products (installment loans) and
         collateralized products (auto title loans). Balances related to
         installment loans and other multiple payment products increased 20%,
         while auto title loan balances were up 42%. Balances outside of Texas
         grew 54%, driven by new locations and new products.
       oLoan fees were $43 million, up 1% from the prior year quarter,
         reflecting the shift in mix referred to above.
       oBad debt as a percentage of fees increased by 70 basis points to
         24.7%, driven by the growth in new stores and new products outside
       oThe profitability of the financial services business was negatively
         impacted by over $1 million during the quarter as a result of
         ordinances enacted in Dallas and Austin. Other Texas cities have
         adopted or are considering lending ordinances. The Company is
         actively supporting the enactment of consistent statewide regulation
         and expects the Texas Legislature to consider such a measure in the
         next few months.

  oOnline Lending — During the quarter, the Company completed the acquisition
    of Go Cash, a U.S. based online lender. This acquisition brings the
    Company an experienced management team and industry leading underwriting
    models and systems. The Company plans to quickly build a significant
    online presence under the name "ezMoney.com" using the state-by-state
    model. The Company's initial efforts will be directed primarily at states
    where it already has a significant storefront presence. The Company plans
    to deliver, over time, a seamless, superior customer experience through
    online and mobile platforms that are integrated with its other products
    and channels.

    The Company expects the U.S. online lending business to reach
    profitability during the fourth quarter of this fiscal year, and to meet
    the Company's rigorous ROIC standards (20% ROIC unlevered within three
    years). However, this business is expected to negatively impact earnings
    per share by $0.03 during the second quarter.

Latin America — 110% Increase in Segment Contribution

  oPawn — Empeno Facil, the Company's Mexico pawn operation, continued its
    strong performance. At the end of the quarter, the Company operated 254
    pawn stores in Mexico, 62 of which have been open less than 12 months.
    Full-line format locations (which make up 80% of all Empeno Facil
    locations), regardless of age, are running well ahead of the Company's
    investment model.

       oDuring the quarter, Empeno Facil added 24 new de novo locations,
         compared to 14 new locations added during the first quarter of last
         year. This accelerated de novo growth, in addition to a relatively
         large number of immature stores, created drag that led operating unit
         contribution to decrease year-over-year. The Company remains
         confident in its store operating model in Mexico and believes that
         the new stores will be profitable within six months of store opening.
       oPawn loan balances grew to $15 million, up 55% in total and 28% on a
         same store basis. General merchandise loan balances grew 60% in total
         and 37% on a same store basis, while jewelry loan balances increased
         10% in total and decreased 5% on a same store basis. These balances
         reflect the same shift from jewelry to general merchandise that is
         seen in the Company's U.S pawn business.
       oPawn service charges increased 44% in total and 25% on a same store
       oRedemption rates were 76%, down from 77% a year ago, with a jewelry
         redemption rate of 72% and a general merchandise redemption rate of
       oMerchandise sales were up 46% in total and 20% on a same store basis.
         General merchandise sales (which make up over 99% of all merchandise
         sales) increased 44% in total and 18% on a same store basis. Scrap
         sales increased 7%.
       oGross margin on merchandise sales was 43%, down 960 basis points
         because of a one-time inventory reserve adjustment in last year's
         quarter. Excluding the effect of that adjustment, the margin rate was
         down 100 basis points, driven by more aggressive pricing during the
         holiday season.

  oPayroll Lending — Crediamigo, the Company's Mexico payroll withholding
    lending business, gained market share through rapid growth and contributed
    nearly two-thirds of Latin America's segment contribution during the

       oTotal loans outstanding at the end of the quarter were $81 million,
         up 24% since acquisition in January 2012, and well ahead of the
         Company's investment pro-forma.
       oNet revenues were $13.8 million in the quarter, with bad debt as a
         percentage of fees less than 1%.
       oCrediamigo added 8 new employer contracts (a 12% increase) during the
         quarter, gaining access to over 175,000 potential new customers.
       oThese and other operational metrics for the business were at or
         better than the Company's original investment expectations.

  oBuy/Sell — During the quarter, the Company also completed the acquisition
    of a controlling interest in a chain of 20 buy/sell stores doing business
    under the name "TUYO." This acquisition extends the Company's buy/sell
    store channel into Mexico, further diversifying its service delivery
    formats. This is essentially a start-up business, and is expected to have
    no material impact on the Company's earnings for the remainder of this
    fiscal year. The Company expects this business to become profitable in the
    last half of fiscal 2014.

Other International — Highlighted by Cash Converters Strong Performance

  oIn November, Cash Converters International Limited, the Company's
    strategic affiliate in Australia, announced that it had achieved a 43%
    increase in EBIT during its first quarter (ended September 30, 2012),
    which, due to the three-month lag in reporting, positively impacted EZCORP
    results in its first fiscal quarter. The Company's equity investment in
    Cash Converters International, combined with its equity investment in
    Albemarle & Bond Holdings PLC in the U.K., generated a 21% increase in
    earnings attributable to EZCORP for the quarter, as compared to the same
    period last year.
  oThe Company made an additional investment in Cash Converters International
    in December as a part of a share placement, maintaining its 33% ownership
    percentage. EZCORP expects the new funds to be used to finance expansion
    and drive future earnings growth. During the quarter, the Company also
    increased its investment in Cash Genie, its U.K. online lending business,
    moving its ownership from 72% to 95%, with the remaining 5% held by local

CEO Commentary

Paul Rothamel, EZCORP's President and Chief Executive Officer, stated: "During
the first quarter, we furthered our previously announced strategic
initiatives, accelerating our de novo storefront growth and diversifying our
revenue and profit streams by adding new channels, new geographies and new
products. And excluding the impact of the challenging gold environment in pawn
and the regulatory environment in financial services, our core businesses
continued to perform well.

"Our vision is to be the global leader in providing customers with instant
cash solutions where they want, when they want and how they want, and we are
making the investments in both storefronts and technology platforms to achieve
that vision. The first quarter results reflect significant progress, and we
will continue to diligently pursue our goals. We believe our initiatives will
yield superior shareholder value over the long-term.

Company Outlook

The Company affirms its fiscal 2013 earnings per share guidance of $2.55 to
$2.80, and expects earnings per share for the second quarter of fiscal 2013 to
be between $0.60 and $0.65. The Company expects its performance, in
year-over-year comparison terms, to improve each quarter for the rest of
fiscal 2013, and expects to return to year-over-year earnings growth in the
latter half of the year.


EZCORP is a leading provider of instant cash solutions for consumers,
employing approximately 7,200 teammates and operating over 1,350
Company-operated pawn, buy/sell and personal financial services locations in
the U.S., Mexico and Canada. We provide a variety of instant cash solutions,
including pawn loans, consumer loans and fee-based credit services to
customers seeking loans. At our pawn and buy/sell stores, we also sell
merchandise, primarily collateral forfeited from pawn lending operations and
used merchandise purchased from customers.

EZCORP owns controlling interests in Prestaciones Finmart, S.A.P.I. de C.V.,
SOFOM, E.N.R. (doing business under the name "Crediamigo"), a leading provider
of payroll deduction loans in Mexico; in Artiste Holding Limited (doing
business under the name "Cash Genie"), a leading provider of online loans in
the U.K.; and in Renueva Commercial, S.A.P.I. de C.V., an operator of buy/sell
stores in Mexico under the name "TUYO." The Company also has significant
investments in Albemarle & Bond Holdings PLC (ABM.L), one of the U.K.'s
largest pawnbroking businesses with over 180 full-line stores offering
pawnbroking, jewelry retailing, gold buying and financial services; and in
Cash Converters International Limited (CCV.ASX), which franchises and operates
a worldwide network of almost 700 stores that provide personal financial
services and sell pre-owned merchandise.

Special Note Regarding Forward-Looking Statements

This announcement contains certain forward-looking statements regarding the
Company's expected operating and financial performance for future periods,
including expected future earnings and growth rates. 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
changes in the regulatory environment, changing market conditions in the
overall economy and the industry, fluctuations in gold prices or the desire of
our customers to pawn or sell their gold items, and consumer demand for the
Company's services and merchandise. 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

EZCORP Investor Relations
(512) 314-2220

Highlights of Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
                                            Three Months Ended December 31,
                                            2012                   2011
Merchandise sales                           $    95,582        $   86,894
Jewelry scrapping sales                     45,925             56,403
Pawn service charges                        66,024             59,792
Consumer loan fees                          64,765             45,088
Other revenues                              4,830              696
Total revenues                              277,126            248,873
Merchandise cost of goods sold              55,501             48,396
Jewelry scrapping cost of goods sold        32,199             35,424
Consumer loan bad debt                      14,074             11,025
Net revenues                                175,352            154,028
Operations expense                          107,262            82,558
Administrative expense                      13,671             11,654
Depreciation and amortization               7,652              5,255
(Gain) / loss on sale or disposal of assets 29                 (201)
Operating income                            46,738             54,762
Interest income                             (178)              (39)
Interest expense                            3,815              590
Equity in net income of unconsolidated      (5,038)            (4,161)
Other income                                (501)              (1,119)
Income before income taxes                  48,640             59,491
Income tax expense                          16,485             20,139
Net income                                  32,155             39,352
Net income attributable to redeemable       1,438              —
noncontrolling interest
Net income attributable to EZCORP, Inc.     $    30,717        $   39,352
Net income per share, diluted               $    0.59          $   0.78
Weighted average shares, diluted            52,112             50,693

Highlights of Consolidated Balance Sheets (Unaudited)
(in thousands)
                                               December 31,
                                               2012           2011
Current assets:
Cash and cash equivalents                      $ 46,668     $ 22,988
Cash, restricted                               1,133        —
Pawn loans                                     162,095      150,060
Consumer loans, net                            40,599       16,188
Pawn service charges receivable, net           31,077       28,593
Consumer loan fees receivable, net             34,074       7,611
Inventory, net                                 120,326      100,385
Deferred tax asset                             15,716       18,169
Prepaid expenses and other assets              50,394       38,901
Total current assets                           502,082      382,895
Investments in unconsolidated affiliates       144,232      117,820
Property and equipment, net                    114,676      84,513
Goodwill                                       428,011      212,263
Intangible assets, net                         60,662       20,568
Non-current consumer loans, net                66,615       —
Restricted cash, non-current                   1,994        —
Other assets, net                              19,074       7,781
Total assets                                   $ 1,337,346  $ 825,840
Liabilities and stockholders' equity:
Current liabilities:
Current maturities of long-term debt           $ 27,562     $ —
Current capital lease obligations              533          —
Accounts payable and other accrued expenses    95,115       57,412
Customer layaway deposits                      6,254        6,152
Federal income taxes payable                   659          12,672
Total current liabilities                      130,123      76,236
Long-term debt, less current maturities        207,978      40,500
Long-term capital lease obligations            771          —
Deferred tax liability                         10,815       8,724
Deferred gains and other long-term liabilities 26,227       1,997
Total liabilities                              375,914      127,457
Temporary equity:
Redeemable noncontrolling interest             49,323       —
Stockholders' equity                           912,109      698,383
Total liabilities and stockholders' equity     $ 1,337,346  $ 825,840

Operating Segment Results (Unaudited)
(in thousands)
                 Three Months Ended December 31, 2012
                 U.S.&Canada                  International  Consolidated
Merchandise      $      80,465   $    15,117    $    —         $  95,582
Jewelry          42,142          3,783          —              45,925
scrapping sales
Pawn service     58,210          7,814          —              66,024
Consumer loan    45,959          11,877         6,929          64,765
Other revenues   2,794           1,654          382            4,830
Total revenues   229,570         40,245         7,311          277,126
Merchandise cost 46,732          8,769          —              55,501
of goods sold
scrapping cost   29,157          3,042          —              32,199
of goods sold
Consumer loan    11,481          (1,048)        3,641          14,074
bad debt
Net revenues     142,200         29,482         3,670          175,352
Operations       87,443          15,741         4,078          107,262
Depreciation and 4,102           1,675          76             5,853
Loss on sale or
disposal of      29              —              —              29
Interest, net    17              2,613          —              2,630
Equity in net
income of        —               —              (5,038)        (5,038)
Other (income)   (4)             20             (69)           (53)
Segment          $      50,613   $    9,433     $    4,623     $  64,669
Administrative                                                 13,671
Depreciation and                                               1,799
Interest, net                                                  1,007
Other income                                                   (448)
Income before                                                  48,640
Income tax                                                     16,485
Net income                                                     32,155
Net income attributable
to redeemable                                                  1,438
noncontrolling interest
Net income
attributable to                                                $  30,717

Operating Segment Results (Unaudited)
(in thousands)
                 Three Months Ended December 31, 2011
                 U.S.&Canada  LatinAmerica                 Consolidated
Merchandise      $     76,552   $    10,342    $    —         $   86,894
Jewelry          52,866         3,537          —              56,403
scrapping sales
Pawn service     54,370         5,422          —              59,792
Consumer loan    45,012         —              76             45,088
Other revenues   576            120            —              696
Total revenues   229,376        19,421         76             248,873
Merchandise cost 43,451         4,945          —              48,396
of goods sold
scrapping cost   33,150         2,274          —              35,424
of goods sold
Consumer loan    10,890         —              135            11,025
bad debt
Net revenues     141,885        12,202         (59)           154,028
Operations       74,994         6,966          598            82,558
Depreciation and 3,223          770            22             4,015
(Gain) on sale
or disposal of   (200)          (1)            —              (201)
Interest, net    4              (36)           —              (32)
Equity in net
income of        —              —              (4,161)        (4,161)
Other (income)   (1,060)        3              (64)           (1,121)
Segment          $     64,924   $    4,500     $    3,546     $   72,970
Administrative                                                11,654
Depreciation and                                              1,240
Interest, net                                                 583
Other expense                                                 2
Income before                                                 59,491
Income tax                                                    20,139
Net income                                                    39,352
Net income
attributable to
redeemable                                                    —
Net income
attributable to                                               $   39,352

Store Count Activity
          Three Months Ended December 31, 2012
                         Company-owned Stores
          U.S.&Canada  LatinAmerica                 Consolidated  Franchises
Beginning 987            275            —              1,262         10
of period
De novo   51             24             —              75            —
Acquired  12             20             —              32            —
combined  —              —              —              —             —
or closed
End of    1,050          319            —              1,369         10
          Three Months Ended December 31, 2011
                         Company-owned Stores
          U.S. & Canada  Latin America                 Consolidated  Franchises
Beginning 933            178            —              1,111         13
of period
De novo   —              14             —              14            —
Acquired  25             —              —              25            —
combined  (8)            —              —              (8)           (1)
or closed
End of    950            192            —              1,142         12


Website: http://www.ezcorp.com
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