##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2010
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from ___________ to ___________
 Commission File No. 0-19424
 EZCORP, INC.
  Delaware
    
    74-2540145(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 1901 Capital ParkwayAustin, Texas
    
    78746(Address of principal executive offices)
    
    (Zip Code)
 (512) 314-3400
 þ o
 o o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o(Do not check if a smaller reporting
company)
    
    Smaller reporting company o
 o þ




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##### 



EZCORP, INC.
INDEX TO FORM 10-Q
 PagePART I. FINANCIAL INFORMATIONItem 1. Financial Statements (Unaudited)Condensed Consolidated Balance Sheets as of March 31, 2010, March 31,
2009 and September 30, 2009 (audited)
    
    
    1Condensed Consolidated Statements of Operations for the Three Months
and Six Months Ended March 31, 2010 and 2009
    
    
    2Condensed Consolidated Statements of Cash Flows for the Six Months
Ended March 31, 2010 and 2009
    
    
    3Notes to Interim Condensed Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    18Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    38Item 4. Controls and Procedures
    
    
    40PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    41Item 1A. Risk Factors
    
    
    41Item 6. Exhibits
    
    
    41SIGNATURE
    
    
    42EXHIBIT INDEX
    
    
    43Exhibit 31.1Exhibit 31.2Exhibit 32.1




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PART I
 
 Item 1. Financial Statements
 
  March 31,
    
    
    March 31,
    
    
    September 30,2010
    
    
    2009
    
    
    2009(Unaudited)
    
    
    (Unaudited)(In thousands)Assets:Current assets:Cash and cash equivalents
    
    $
    51,192
    
    
    $
    55,244
    
    
    $
    44,764Pawn loans
    
    
    89,040
    
    
    
    79,359
    
    
    
    101,684Signature loans, net
    
    
    7,287
    
    
    
    6,420
    
    
    
    8,357Auto title loans, net
    
    
    1,939
    
    
    
    874
    
    
    
    1,663Pawn service charges receivable, net
    
    
    16,353
    
    
    
    14,551
    
    
    
    18,187Signature loan fees receivable, net
    
    
    4,607
    
    
    
    4,417
    
    
    
    5,599Auto title loan fees receivable, net
    
    
    850
    
    
    
    72
    
    
    
    529Inventory, net
    
    
    56,403
    
    
    
    56,025
    
    
    
    64,001Deferred tax asset
    
    
    15,673
    
    
    
    15,826
    
    
    
    15,670Federal income tax receivable
    
    
    13,414
    
    
    
    495
    
    
    
    Prepaid expenses and other assets
    
    
    15,625
    
    
    
    13,574
    
    
    
    16,927Total current assets 272,383
    
    
    246,857
    
    
    
    277,381Investments in unconsolidated affiliates
    
    
    90,854
    
    
    
    34,725
    
    
    
    38,851Property and equipment, net
    
    
    54,044
    
    
    
    48,206
    
    
    
    51,154Deferred tax asset, non-current
    
    
    5,318
    
    
    
    8,452
    
    
    
    6,311Goodwill
    
    
    101,456
    
    
    
    99,008
    
    
    
    100,719Other assets, net
    
    
    22,223
    
    
    
    17,533
    
    
    
    18,101Total assets
    
    $
    546,278
    
    
    $
    454,781
    
    
    $
    492,517Liabilities and stockholders equity:Current liabilities:Current maturities of long-term debt
    
    $
    10,000
    
    
    $
    10,000
    
    
    $
    10,000Accounts payable and other accrued expenses
    
    
    38,592
    
    
    
    30,457
    
    
    
    33,838Customer layaway deposits
    
    
    4,487
    
    
    
    4,345
    
    
    
    4,175Federal income taxes payable
    
    
    
    
    
    
    
    
    
    
    572Total current liabilities 53,079
    
    
    44,802
    
    
    
    48,585Long-term debt, less current maturities
    
    
    20,000
    
    
    
    30,000
    
    
    
    25,000Deferred gains and other long-term liabilities
    
    
    2,735
    
    
    
    3,462
    
    
    
    3,247Total liabilities
    
    
    75,814
    
    
    
    78,264
    
    
    
    76,832Commitments and contingenciesStockholders equity:Class A Non-voting Common Stock, par value $.01 per share;
Authorized 54 million shares; 46,192,698 issued and
outstanding at March 31, 2010; 45,636,645 issued and
45,626,645 outstanding at March 31, 2009; 45,732,998 issued
and outstanding at September 30, 2009
    
    
    462
    
    
    
    456
    
    
    
    457Class B Voting Common Stock, convertible, par value $.01 per
share; 3 million shares authorized; 2,970,171 issued and
outstanding
    
    
    30
    
    
    
    30
    
    
    
    30Additional paid-in capital
    
    
    222,423
    
    
    
    216,404
    
    
    
    217,176Retained earnings
    
    
    252,122
    
    
    
    167,318
    
    
    
    202,642Treasury stock, at cost; 10,000 shares at March 31, 2009
    
    
    
    
    
    
    (12
    )
    
    
    Accumulated other comprehensive loss
    
    
    (4,573
    )
    
    
    (7,679
    )
    
    
    (4,620
    )Total stockholders equity 470,464
    
    
    376,517
    
    
    
    415,685Total liabilities and stockholders equity
    
    $
    546,278
    
    
    $
    454,781
    
    
    $
    492,517
   1




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Three Months Ended
    
    
    Six Months EndedMarch 31,
    
    
    March 31,2010
    
    
    2009
    
    
    2010
    
    
    2009(In thousands, except per share amounts)Revenues:Sales
    
    $
    99,311
    
    
    $
    89,013
    
    
    $
    199,229
    
    
    $
    153,593Pawn service charges
    
    
    38,306
    
    
    
    33,516
    
    
    
    79,103
    
    
    
    59,897Signature loan fees
    
    
    31,642
    
    
    
    31,594
    
    
    
    70,320
    
    
    
    67,594Auto title loan fees
    
    
    3,956
    
    
    
    415
    
    
    
    7,058
    
    
    
    636Other
    
    
    3,369
    
    
    
    1,728
    
    
    
    5,625
    
    
    
    3,161Total revenues
    
    
    176,584
    
    
    
    156,266
    
    
    
    361,335
    
    
    
    284,881Cost of goods sold
    
    
    62,162
    
    
    
    56,426
    
    
    
    124,732
    
    
    
    96,851Signature loan bad debt
    
    
    4,397
    
    
    
    5,072
    
    
    
    13,187
    
    
    
    14,556Auto title loan bad debt
    
    
    320
    
    
    
    42
    
    
    
    780
    
    
    
    49Net revenues
    
    
    109,705
    
    
    
    94,726
    
    
    
    222,636
    
    
    
    173,425Operating expenses:Operations
    
    
    58,205
    
    
    
    54,628
    
    
    
    116,386
    
    
    
    98,122Administrative
    
    
    13,483
    
    
    
    9,794
    
    
    
    25,780
    
    
    
    20,205Depreciation and amortization
    
    
    3,573
    
    
    
    3,151
    
    
    
    6,929
    
    
    
    6,217(Gain) loss on sale / disposal of assets
    
    
    356
    
    
    
    (537
    )
    
    
    567
    
    
    
    (821
    )Total operating expenses
    
    
    75,617
    
    
    
    67,036
    
    
    
    149,662
    
    
    
    123,723Operating income
    
    
    34,088
    
    
    
    27,690
    
    
    
    72,974
    
    
    
    49,702Interest income
    
    
    (8
    )
    
    
    (72
    )
    
    
    (16
    )
    
    
    (198
    )Interest expense
    
    
    395
    
    
    
    471
    
    
    
    760
    
    
    
    636Equity in net income of unconsolidated affiliates
    
    
    (3,306
    )
    
    
    (1,371
    )
    
    
    (4,589
    )
    
    
    (2,312
    )Other
    
    
    12
    
    
    
    2
    
    
    
    (3
    )
    
    
    27Income before income taxes
    
    
    36,995
    
    
    
    28,660
    
    
    
    76,822
    
    
    
    51,549Income tax expense
    
    
    13,222
    
    
    
    10,340
    
    
    
    27,342
    
    
    
    18,401Net income
    
    $
    23,773
    
    
    $
    18,320
    
    
    $
    49,480
    
    
    $
    33,148Net income per common share:Basic
    
    $
    0.49
    
    
    $
    0.38
    
    
    $
    1.01
    
    
    $
    0.72Diluted
    
    $
    0.48
    
    
    $
    0.37
    
    
    $
    1.00
    
    
    $
    0.71Weighted average shares outstanding:Basic
    
    
    48,987
    
    
    
    48,560
    
    
    
    48,853
    
    
    
    46,084Diluted
    
    
    49,558
    
    
    
    49,272
    
    
    
    49,486
    
    
    
    46,939
   2




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Six Months EndedMarch 31,2010
    
    
    2009(In thousands)Operating Activities:Net income
    
    $
    49,480
    
    
    $
    33,148Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    6,929
    
    
    
    6,217Signature loan and auto title loan loss provisions
    
    
    4,530
    
    
    
    3,980Deferred taxes
    
    
    992
    
    
    
    946Net (gain) loss on sale or disposal of assets
    
    
    567
    
    
    
    (821
    )Share-based compensation
    
    
    2,344
    
    
    
    1,782Income from investments in unconsolidated affiliates
    
    
    (4,589
    )
    
    
    (2,312
    )Changes in operating assets and liabilities, net of business acquisitions:Service charges and fees receivable, net
    
    
    2,559
    
    
    
    3,851Inventory, net
    
    
    2,153
    
    
    
    733Prepaid expenses, other current assets, and other assets, net
    
    
    (4,264
    )
    
    
    (1,319
    )Accounts payable and accrued expenses
    
    
    4,469
    
    
    
    (6,319
    )Customer layaway deposits
    
    
    302
    
    
    
    1,035Deferred gains and other long-term liabilities
    
    
    (525
    )
    
    
    (131
    )Excess tax benefit from share-based compensation
    
    
    (1,645
    )
    
    
    (1,709
    )Federal income taxes
    
    
    (12,223
    )
    
    
    995Net cash provided by operating activities
    
    
    51,079
    
    
    
    40,076Investing Activities:Loans made
    
    
    (243,563
    )
    
    
    (194,458
    )Loans repaid
    
    
    169,503
    
    
    
    138,730Recovery of pawn loan principal through sale of forfeited collateral
    
    
    89,013
    
    
    
    76,316Additions to property and equipment
    
    
    (9,619
    )
    
    
    (9,226
    )Proceeds on disposal of assets
    
    
    1,347
    
    
    
    Acquisitions, net of cash acquired
    
    
    (31
    )
    
    
    (39,217
    )(Investments in)/dividends from unconsolidated affiliates
    
    
    (49,243
    )
    
    
    1,052Net cash used in investing activities
    
    
    (42,593
    )
    
    
    (26,803
    )Financing Activities:Proceeds from exercise of stock options and warrants
    
    
    1,294
    
    
    
    4,749Stock issuance costs related to acquisitions
    
    
    
    
    
    
    (443
    )Excess tax benefit from share-based compensation
    
    
    1,645
    
    
    
    1,709Debt issuance costs
    
    
    3
    
    
    
    (1,103
    )Proceeds from bank borrowings
    
    
    
    
    
    
    40,000Payments on bank borrowings
    
    
    (5,000
    )
    
    
    (30,385
    )Net cash provided by (used in) financing activities
    
    
    (2,058
    )
    
    
    14,527Change in cash and equivalents
    
    
    6,428
    
    
    
    27,800Cash and equivalents at beginning of period
    
    
    44,764
    
    
    
    27,444Cash and equivalents at end of period
    
    $
    51,192
    
    
    $
    55,244Non-cash Investing and Financing Activities:Pawn loans forfeited and transferred to inventory
    
    $
    83,339
    
    
    $
    71,484Foreign currency translation adjustment
    
    $
    (47
    )
    
    $
    10,260Acquisition-related stock issuance
    
    $
    (31
    )
    
    $
    72,783
   3




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EZCORP, Inc. and Subsidiaries
 
 Notes to Interim Condensed Consolidated Financial Statements (Unaudited)
March 31, 2010
 Note A: Basis of Presentation
   Note B: Significant Accounting Policies
       4




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5




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st
       6




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7




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Note C: Acquisitions
   Current assets:Pawn loans
    
    $
    5,442Payday loans
    
    
    55Auto title loans
    
    
    1,105Pawn service charges receivable
    
    
    1,231Signature loan fees receivable
    
    
    7Auto title loan fees receivable
    
    
    84Inventory
    
    
    2,860Deferred tax asset
    
    
    334Prepaid expenses and other assets
    
    
    79Total current assets
    
    
    11,197Property and equipment
    
    
    392Goodwill
    
    
    16,297Other assets
    
    
    6,711Total assets
    
    $
    34,597Liabilities:Accounts payable and other accrued expenses
    
    $
    (27
    )Customer layaway deposits
    
    
    (135
    )Total liabilities
    
    
    (162
    )Net assets acquired
    
    $
    34,435
       8




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Current assets:Pawn loans
    
    $
    17,886Pawn service charges receivable
    
    
    3,491Inventory
    
    
    16,265Deferred tax asset
    
    
    4,394Prepaid expenses and other assets
    
    
    1,438Total current assets
    
    
    43,474Property and equipment
    
    
    5,584Deferred tax asset, non-current
    
    
    690Goodwill
    
    
    61,877Other assets
    
    
    5,719Total assets
    
    $
    117,344Current Liabilities:Current maturities of long-term debt
    
    $
    (4,000
    )Accounts payable and other accrued expenses
    
    
    (8,404
    )Customer layaway deposits
    
    
    (872
    )Total Current liabilities
    
    
    (13,276
    )Long-term debt
    
    
    (26,385
    )Total liabilities
    
    
    (39,661
    )Net assets acquired
    
    $
    77,683
    9




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Three Months Ended
    
    
    Six Months EndedMarch 31,
    
    
    March 31,2010
    
    
    2009
    
    
    2010
    
    
    2009(Unaudited and Pro Forma)(In thousands, except per share amounts)Revenues:Sales
    
    $
    99,311
    
    
    $
    89,013
    
    
    $
    199,229
    
    
    $
    181,508Pawn service charges
    
    
    38,306
    
    
    
    33,516
    
    
    
    79,103
    
    
    
    68,747Signature loan fees
    
    
    31,642
    
    
    
    31,594
    
    
    
    70,320
    
    
    
    67,594Auto title loan fees
    
    
    3.956
    
    
    
    415
    
    
    
    7,058
    
    
    
    636Other
    
    
    3,369
    
    
    
    1,728
    
    
    
    5,625
    
    
    
    3,633Total revenues
    
    
    176,584
    
    
    
    156,266
    
    
    
    361,335
    
    
    
    322,118Cost of goods sold
    
    
    62,162
    
    
    
    56,426
    
    
    
    124,732
    
    
    
    114,002Signature loan bad debt
    
    
    4,397
    
    
    
    5,072
    
    
    
    13,187
    
    
    
    14,556Auto title loan bad debt
    
    
    320
    
    
    
    42
    
    
    
    780
    
    
    
    49Net revenues
    
    
    109,705
    
    
    
    94,726
    
    
    
    222,636
    
    
    
    193,511Operating expenses:Operations
    
    
    58,205
    
    
    
    54,628
    
    
    
    116,386
    
    
    
    108,991Administrative
    
    
    13,483
    
    
    
    9,794
    
    
    
    25,780
    
    
    
    25,562Depreciation and amortization
    
    
    3,573
    
    
    
    3,151
    
    
    
    6,929
    
    
    
    6,490(Gain) loss on sale/disposal of assets
    
    
    356
    
    
    
    (537
    )
    
    
    567
    
    
    
    (792
    )Total operating expenses
    
    
    75,617
    
    
    
    67,036
    
    
    
    149,662
    
    
    
    140,251Operating income
    
    
    34,088
    
    
    
    27,690
    
    
    
    72,974
    
    
    
    53,260Interest expense, net
    
    
    387
    
    
    
    399
    
    
    
    744
    
    
    
    927Equity in net income of unconsolidated affiliate
    
    
    (3,306
    )
    
    
    (1,371
    )
    
    
    (4,589
    )
    
    
    (2,312
    )Other
    
    
    12
    
    
    
    2
    
    
    
    (3
    )
    
    
    27Income before income taxes
    
    
    36,995
    
    
    
    28,660
    
    
    
    76,822
    
    
    
    54,618Income tax expense
    
    
    13,222
    
    
    
    10,340
    
    
    
    27,342
    
    
    
    19,584Net income
    
    $
    23,773
    
    
    $
    18,320
    
    
    $
    49,480
    
    
    $
    35,034Net income per common share:Basic
    
    $
    0.49
    
    
    $
    0.38
    
    
    $
    1.01
    
    
    $
    0.73Diluted
    
    $
    0.48
    
    
    $
    0.37
    
    
    $
    1.00
    
    
    $
    0.72Weighted average shares outstanding:Basic
    
    
    48,987
    
    
    
    48,560
    
    
    
    48,853
    
    
    
    48,113Diluted
    
    
    49,558
    
    
    
    49,272
    
    
    
    49,486
    
    
    
    48,968
 Note D: Earnings per Share
    10




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Three Months Ended
    
    
    Six Months EndedMarch 31,
    
    
    March 31,2010
    
    
    2009
    
    
    2010
    
    
    2009Net income (A)
    
    $
    23,773
    
    
    $
    18,320
    
    
    $
    49,480
    
    
    $
    33,148Weighted average outstanding shares of common stock (B)
    
    
    48,987
    
    
    
    48,560
    
    
    
    48,853
    
    
    
    46,084Dilutive effect of stock options, warrants, and restricted stock
    
    
    571
    
    
    
    712
    
    
    
    633
    
    
    
    855Weighted average common stock and common stock equivalents (C)
    
    
    49,558
    
    
    
    49,272
    
    
    
    49,486
    
    
    
    46,939Basic earnings per share (A/B)
    
    $
    0.49
    
    
    $
    0.38
    
    
    $
    1.01
    
    
    $
    0.72Diluted earnings per share (A/C)
    
    $
    0.48
    
    
    $
    0.37
    
    
    $
    1.00
    
    
    $
    0.71Potential common shares excluded from the calculation of diluted earnings per share
    
    
    2
    
    
    
    145
    
    
    
    1
    
    
    
    145
 Note E: Strategic Investments
   As of December 31,2009
    
    
    2008(In thousands)Current assets
    
    $
    104,537
    
    
    $
    92,849Non-current assets
    
    
    53,128
    
    
    
    46,093Total assets
    
    $
    157,665
    
    
    $
    138,942Current liabilities
    
    $
    21,128
    
    
    $
    10,809Non-current liabilities
    
    
    48,025
    
    
    
    63,461Equity shareholders funds
    
    
    88,512
    
    
    
    64,672Total liabilities and equity shareholders funds
    
    $
    157,665
    
    
    $
    138,942
 Six Months Ended December 31,2009
    
    
    2008(in thousands)Turnover (gross revenues)
    
    $
    64,572
    
    
    $
    45,977Gross profit
    
    
    43,054
    
    
    
    34,859Profit after tax (net income)
    
    
    12,752
    
    
    
    7,718
  11




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As of December 31,2009
    
    
    2008(In thousands)Current assets
    
    $
    96,680
    
    
    $
    27,929Non-current assets
    
    
    64,212
    
    
    
    44,979Total assets
    
    $
    160,892
    
    
    $
    72,908Current liabilities
    
    $
    19,251
    
    
    $
    11,330Non-current liabilities
    
    
    11,010
    
    
    
    7,835Equity shareholders funds
    
    
    130,631
    
    
    
    53,743Total liabilities and equity shareholders funds
    
    $
    160,892
    
    
    $
    72,908
 Six Months Ended December 31,2009
    
    
    2008(in thousands)Gross revenues
    
    $
    51,609
    
    
    $
    34,816Gross profit
    
    
    38,315
    
    
    
    25,895Profit for the year (net income)
    
    
    8,759
    
    
    
    6,209
  March 31, 2010
    
    
    March 31, 2009
    
    
    September 30, 2009(In thousands of U.S. dollars)Albemarle & Bond:Recorded value
    
    $
    41,606
    
    
    $
    34,725
    
    
    $
    38,851Fair value
    
    
    61,235
    
    
    
    46,100
    
    
    
    61,504Cash Converters:Recorded value
    
    
    49,248
    
    
    
    
    
    
    
    Fair value
    
    
    57,714
    
    
    
    
    
    
    
    
  12




---



##### Table of Contents



Note F: Contingencies
  Note G: Comprehensive Income
  Note H: Long-term Debt
   Note I: Goodwill and Other Intangible Assets
  March 31, 2010
    
    
    March 31, 2009
    
    
    September 30, 2009(In thousands)Pawn licenses
    
    $
    8,229
    
    
    $
    7,749
    
    
    $
    8,229Trade Name
    
    
    4,870
    
    
    
    4,870
    
    
    
    4,870Goodwill
    
    
    101,456
    
    
    
    99,008
    
    
    
    100,719Total
    
    $
    114,555
    
    
    $
    111,627
    
    
    $
    113,818
  13




---



##### Table of Contents



U.S. Pawn
    
    
    
    
    
    
    EZMONEYOperations
    
    
    Empeño Fácil
    
    
    Operations
    
    
    Consolidated(in thousands)Balance at September 30, 2009
    
    $
    94,192
    
    
    $
    6,527
    
    
    $
    
    
    
    
    100,719Acquisitions  adjustments to initial estimate
    
    
    193
    
    
    
    
    
    
    
    
    
    
    
    193Effect of foreign currency translation changes
    
    
    
    
    
    
    544
    
    
    
    
    
    
    
    544Balance at March 31, 2010
    
    $
    94,385
    
    
    $
    7,071
    
    
    $
    
    
    
    $
    101,456
 U.S. Pawn
    
    
    
    
    
    
    EZMONEYOperations
    
    
    Empeño Fácil
    
    
    Operations
    
    
    Consolidated(in thousands)Balance at September 30, 2008
    
    $
    16,211
    
    
    $
    8,165
    
    
    $
    
    
    
    $
    24,376Acquisitions
    
    
    76,649
    
    
    
    
    
    
    
    
    
    
    
    76,649Effect of foreign currency translation changes
    
    
    
    
    
    
    (2,017
    )
    
    
    
    
    
    
    (2,017
    )Balance at March 31, 2009
    
    $
    92,860
    
    
    $
    6,148
    
    
    $
    
    
    
    $
    99,008
  March 31, 2010
    
    
    March 31, 2009
    
    
    September 30, 2009Carrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    Amortization(In thousands)License application fees
    
    $
    345
    
    
    $
    (344
    )
    
    $
    345
    
    
    $
    (329
    )
    
    $
    345
    
    
    $
    (339
    )Real estate finders fees
    
    
    699
    
    
    
    (382
    )
    
    
    556
    
    
    
    (353
    )
    
    
    609
    
    
    
    (367
    )Non-compete agreements
    
    
    2,666
    
    
    
    (1,514
    )
    
    
    2,405
    
    
    
    (945
    )
    
    
    2,497
    
    
    
    (1,192
    )Favorable lease
    
    
    644
    
    
    
    (158
    )
    
    
    644
    
    
    
    (23
    )
    
    
    644
    
    
    
    (95
    )Other
    
    
    39
    
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    Total
    
    $
    4,393
    
    
    $
    (2,401
    )
    
    $
    3,950
    
    
    $
    (1,650
    )
    
    $
    4,106
    
    
    $
    (1,993
    )
  Fiscal Year
    
    Amortization Expense2010
    
    $
    5412011
    
    $
    5052012
    
    $
    4702013
    
    $
    472014
    
    $
    31
  Note J: Share-based Compensation
  Three Months Ended March 31,
    
    
    Six Months Ended March 31,2010
    
    
    2009
    
    
    2010
    
    
    2009(in thousands)Gross compensation cost
    
    $
    1,288
    
    
    $
    723
    
    
    $
    2,344
    
    
    $
    1,782Income tax benefits
    
    
    (473
    )
    
    
    (306
    )
    
    
    (831
    )
    
    
    (625
    )Share-based compensation cost, net of tax benefit
    
    $
    815
    
    
    $
    417
    
    
    $
    1,513
    
    
    $
    1,157
  14




---



##### Table of Contents



Note K: Income Taxes
  Note L: Operating Segment Information
  
    
    The U.S. Pawn Operations segment offers pawn related activities in our 371 U.S. pawn
stores, offers signature loans in 54 pawn stores and six EZMONEY stores and offers auto
title loans in 54 pawn stores.
 
    
    The Empeño Fácil segment offers pawn related activities in 79 Mexico pawn stores.
 
    
    The EZMONEY Operations segment offers signature loans in 456 U.S. EZMONEY stores and 20
Canadian CASHMAX stores. The segment offers auto title loans in 391 of its U.S. EZMONEY
stores.
  U.S. Pawn
    
    
    Empeño
    
    
    EZMONEYOperations
    
    
    Fácil
    
    
    Operations
    
    
    Consolidated(in thousands)Three Months Ended March 31, 2010:Revenues:Sales
    
    $
    94,364
    
    
    $
    4,895
    
    
    $
    52
    
    
    $
    99,311Pawn service charges
    
    
    36,256
    
    
    
    2,050
    
    
    
    
    
    
    
    38,306Signature loan fees
    
    
    434
    
    
    
    
    
    
    
    31,208
    
    
    
    31,642Auto title loan fees
    
    
    427
    
    
    
    
    
    
    
    3,529
    
    
    
    3,956Other
    
    
    3,243
    
    
    
    126
    
    
    
    
    
    
    
    3,369Total revenues
    
    
    134,724
    
    
    
    7,071
    
    
    
    34,789
    
    
    
    176,584Cost of goods sold
    
    
    58,541
    
    
    
    3,597
    
    
    
    24
    
    
    
    62,162Signature loan bad debt
    
    
    101
    
    
    
    
    
    
    
    4,296
    
    
    
    4,397Auto title loan bad debt
    
    
    52
    
    
    
    
    
    
    
    268
    
    
    
    320Net revenues
    
    
    76,030
    
    
    
    3,474
    
    
    
    30,201
    
    
    
    109,705Operations expense
    
    
    39,912
    
    
    
    2,573
    
    
    
    15,720
    
    
    
    58,205Store operating income
    
    $
    36,118
    
    
    $
    901
    
    
    $
    14,481
    
    
    $
    51,500Three Months Ended March 31, 2009:Revenues:Sales
    
    $
    86,808
    
    
    $
    2,205
    
    
    $
    
    
    
    $
    89,013Pawn service charges
    
    
    32,265
    
    
    
    1,251
    
    
    
    
    
    
    
    33,516Signature loan fees
    
    
    557
    
    
    
    
    
    
    
    31,037
    
    
    
    31,594Auto title loan fees
    
    
    351
    
    
    
    
    
    
    
    64
    
    
    
    415Other
    
    
    1,727
    
    
    
    1
    
    
    
    
    
    
    
    1,728Total revenues
    
    
    121,708
    
    
    
    3,457
    
    
    
    31,101
    
    
    
    156,266Cost of goods sold
    
    
    55,072
    
    
    
    1,354
    
    
    
    
    
    
    
    56,426Signature loan bad debt
    
    
    108
    
    
    
    
    
    
    
    4,964
    
    
    
    5,072Auto title loan bad debt
    
    
    36
    
    
    
    
    
    
    
    6
    
    
    
    42Net revenues
    
    
    66,492
    
    
    
    2,103
    
    
    
    26,131
    
    
    
    94,726Operations expense
    
    
    38,367
    
    
    
    1,299
    
    
    
    14,962
    
    
    
    54,628Store operating income
    
    $
    28,125
    
    
    $
    804
    
    
    $
    11,169
    
    
    $
    40,098
  15




---



##### Table of Contents



U.S. Pawn
    
    
    Empeño
    
    
    EZMONEYOperations
    
    
    Fácil
    
    
    Operations
    
    
    Consolidated(in thousands)Six Months Ended March 31, 2010:Revenues:Sales
    
    $
    190,398
    
    
    $
    8,767
    
    
    $
    64
    
    
    $
    199,229Pawn service charges
    
    
    75,197
    
    
    
    3,906
    
    
    
    
    
    
    
    79,103Signature loan fees
    
    
    987
    
    
    
    
    
    
    
    69,333
    
    
    
    70,320Auto title loan fees
    
    
    902
    
    
    
    
    
    
    
    6,156
    
    
    
    7,058Other
    
    
    5,410
    
    
    
    215
    
    
    
    
    
    
    
    5,625Total revenues
    
    
    272,894
    
    
    
    12,888
    
    
    
    75,553
    
    
    
    361,335Cost of goods sold
    
    
    118,271
    
    
    
    6,430
    
    
    
    31
    
    
    
    124,732Signature loan bad debt
    
    
    287
    
    
    
    
    
    
    
    12,900
    
    
    
    13,187Auto title loan bad debt
    
    
    122
    
    
    
    
    
    
    
    658
    
    
    
    780Net revenues
    
    
    154,214
    
    
    
    6,458
    
    
    
    61,964
    
    
    
    222,636Operations expense
    
    
    80,111
    
    
    
    4,737
    
    
    
    31,538
    
    
    
    116,386Store operating income
    
    $
    74,103
    
    
    $
    1,721
    
    
    $
    30,426
    
    
    $
    106,250Six Months Ended March 31, 2009:Revenues:Sales
    
    $
    148,975
    
    
    $
    4,618
    
    
    $
    
    
    
    $
    153,593Pawn service charges
    
    
    57,149
    
    
    
    2,748
    
    
    
    
    
    
    
    59,897Signature loan fees
    
    
    1,243
    
    
    
    
    
    
    
    66,351
    
    
    
    67,594Auto title loan fees
    
    
    561
    
    
    
    
    
    
    
    75
    
    
    
    636Other
    
    
    3,160
    
    
    
    1
    
    
    
    
    
    
    
    3,161Total revenues
    
    
    211,088
    
    
    
    7,367
    
    
    
    66,426
    
    
    
    284,881Cost of goods sold
    
    
    94,010
    
    
    
    2,841
    
    
    
    
    
    
    
    96,851Signature loan bad debt
    
    
    344
    
    
    
    
    
    
    
    14,212
    
    
    
    14,556Auto title loan bad debt
    
    
    42
    
    
    
    
    
    
    
    7
    
    
    
    49Net revenues
    
    
    116,692
    
    
    
    4,526
    
    
    
    52,207
    
    
    
    173,425Operations expense
    
    
    65,045
    
    
    
    2,583
    
    
    
    30,494
    
    
    
    98,122Store operating income
    
    $
    51,647
    
    
    $
    1,943
    
    
    $
    21,713
    
    
    $
    75,303
  Three Months Ended
    
    
    Six Months EndedMarch 31,
    
    
    March 31,2010
    
    
    2009
    
    
    2010
    
    
    2009(in thousands)Consolidated store operating income
    
    $
    51,500
    
    
    $
    40,098
    
    
    $
    106,250
    
    
    $
    75,303Administrative expenses
    
    
    13,483
    
    
    
    9,794
    
    
    
    25,780
    
    
    
    20,205Depreciation and amortization
    
    
    3,573
    
    
    
    3,151
    
    
    
    6,929
    
    
    
    6,217(Gain) loss on sale / disposal of assets
    
    
    356
    
    
    
    (537
    )
    
    
    567
    
    
    
    (821
    )Interest income
    
    
    (8
    )
    
    
    (72
    )
    
    
    (16
    )
    
    
    (198
    )Interest expense
    
    
    395
    
    
    
    471
    
    
    
    760
    
    
    
    636Equity in net income of unconsolidated affiliate
    
    
    (3,306
    )
    
    
    (1,371
    )
    
    
    (4,589
    )
    
    
    (2,312
    )Other
    
    
    12
    
    
    
    2
    
    
    
    (3
    )
    
    
    27Consolidated income before income taxes
    
    $
    36,995
    
    
    $
    28,660
    
    
    $
    76,822
    
    
    $
    51,549
  16




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##### Table of Contents



U.S. Pawn
    
    
    Empeño
    
    
    EZMONEYOperations
    
    
    Fácil
    
    
    Operations
    
    
    Consolidated(in thousands)Assets at March 31, 2010:Pawn loans
    
    $
    84,116
    
    
    $
    4,924
    
    
    $
    
    
    
    $
    89,040Signature loans, net
    
    
    371
    
    
    
    
    
    
    
    6,916
    
    
    
    7,287Auto title loans, net
    
    
    577
    
    
    
    
    
    
    
    1,362
    
    
    
    1,939Inventory, net
    
    
    53,122
    
    
    
    3,262
    
    
    
    19
    
    
    
    56,403Total separately identified recorded segment assets
    
    $
    138,186
    
    
    $
    8,186
    
    
    $
    8,297
    
    
    $
    154,669Brokered signature loans outstanding from unaffiliated lenders
    
    $
    170
    
    
    $
    
    
    
    $
    17,571
    
    
    $
    17,741Brokered auto title loans outstanding from unaffiliated lenders
    
    $
    193
    
    
    $
    
    
    
    $
    3,719
    
    
    $
    3,912Assets at March 31, 2009:Pawn loans
    
    $
    76,092
    
    
    $
    3,267
    
    
    $
    
    
    
    $
    79,359Signature loans, net
    
    
    422
    
    
    
    
    
    
    
    5,998
    
    
    
    6,420Auto title loans, net
    
    
    759
    
    
    
    
    
    
    
    115
    
    
    
    874Inventory, net
    
    
    53,273
    
    
    
    2,752
    
    
    
    
    
    
    
    56,025Total separately identified recorded segment assets
    
    $
    130,546
    
    
    $
    6,019
    
    
    $
    6,113
    
    
    $
    142,678Brokered signature loans outstanding from unaffiliated lenders
    
    $
    233
    
    
    $
    
    
    
    $
    17,818
    
    
    $
    18,051Brokered auto title loans outstanding from unaffiliated lenders
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Assets at September 30, 2009:Pawn loans
    
    $
    98,099
    
    
    $
    3,585
    
    
    $
    
    
    
    $
    101,684Signature loans, net
    
    
    453
    
    
    
    
    
    
    
    7,904
    
    
    
    8,357Auto title loans, net
    
    
    685
    
    
    
    
    
    
    
    978
    
    
    
    1,663Inventory, net
    
    
    61,196
    
    
    
    2,804
    
    
    
    1
    
    
    
    64,001Total separately identified recorded segment assets
    
    $
    160,433
    
    
    $
    6,389
    
    
    $
    8,883
    
    
    $
    175,705Brokered signature loans outstanding from unaffiliated lenders
    
    $
    278
    
    
    $
    
    
    
    $
    22,706
    
    
    $
    22,984Brokered auto title loans outstanding from unaffiliated lenders
    
    $
    276
    
    
    $
    
    
    
    $
    1,910
    
    
    $
    2,186
  Note M: Subsequent Events
   17




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##### Table of Contents



Item 2.
    Managements Discussion and Analysis of Financial Condition and Results of Operations
  Three Months Ended March 31, 2010 vs. Three Months Ended March 31, 2009
  Three Months Ended March 31,
    
    
    Percentage2010
    
    
    2009
    
    
    Change(in thousands)Net revenues:Sales
    
    $
    99,311
    
    
    $
    89,013
    
    
    
    11.6
    %Pawn service charges
    
    
    38,306
    
    
    
    33,516
    
    
    
    14.3
    %Signature loan fees
    
    
    31,642
    
    
    
    31,594
    
    
    
    0.2
    %Auto title loan fees
    
    
    3,956
    
    
    
    415
    
    
    
    853.3
    %Other
    
    
    3,369
    
    
    
    1,728
    
    
    
    95.0
    %Total revenues
    
    
    176,584
    
    
    
    156,266
    
    
    
    13.0
    %Cost of goods sold
    
    
    62,162
    
    
    
    56,426
    
    
    
    10.2
    %Signature loan bad debt
    
    
    4,397
    
    
    
    5,072
    
    
    
    (13.3
    )%Auto title loan bad debt
    
    
    320
    
    
    
    42
    
    
    
    661.9
    %Net revenues
    
    $
    109,705
    
    
    $
    94,726
    
    
    
    15.8
    %Net income
    
    $
    23,773
    
    
    $
    18,320
    
    
    
    29.8
    %
 Six Months Ended March 31, 2010 vs. Six Months Ended March 31, 2009
  Six Months Ended March 31,
    
    
    Percentage2010
    
    
    2009
    
    
    Change(in thousands)Net revenues:Sales
    
    $
    199,229
    
    
    $
    153,593
    
    
    
    29.7
    %Pawn service charges
    
    
    79,103
    
    
    
    59,897
    
    
    
    32.1
    %Signature loan fees
    
    
    70,320
    
    
    
    67,594
    
    
    
    4.0
    %Auto title loan fees
    
    
    7,058
    
    
    
    636
    
    
    
    1009.7
    %Other
    
    
    5,625
    
    
    
    3,161
    
    
    
    78.0
    %Total revenues
    
    
    361,335
    
    
    
    284,881
    
    
    
    26.8
    %Cost of goods sold
    
    
    124,732
    
    
    
    96,851
    
    
    
    28.8
    %Signature loan bad debt
    
    
    13,187
    
    
    
    14,556
    
    
    
    (9.4
    )%Auto title loan bad debt
    
    
    780
    
    
    
    49
    
    
    
    1491.8
    %Net revenues
    
    $
    222,636
    
    
    $
    173,425
    
    
    
    28.4
    %Net income
    
    $
    49,480
    
    
    $
    33,148
    
    
    
    49.3
    %
  18




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##### Table of Contents



Three Months Ended
    
    
    Six Months EndedMarch 31,
    
    
    March 31,2010
    
    
    2009
    
    
    2010
    
    
    2009(Dollars in thousands)Fee revenue
    
    $
    31,642
    
    
    $
    31,594
    
    
    $
    70,320
    
    
    $
    67,594Bad debt:Net defaults, including interest on brokered loans
    
    
    5,181
    
    
    
    5,764
    
    
    
    13,560
    
    
    
    15,149Insufficient funds fees, net of collections
    
    
    186
    
    
    
    182
    
    
    
    405
    
    
    
    475Change in valuation allowance
    
    
    (1,046
    )
    
    
    (939
    )
    
    
    (926
    )
    
    
    (1,193
    )Other related costs
    
    
    76
    
    
    
    65
    
    
    
    148
    
    
    
    125Net bad debt
    
    
    4,397
    
    
    
    5,072
    
    
    
    13,187
    
    
    
    14,556Fee revenue less bad debt
    
    $
    27,245
    
    
    $
    26,522
    
    
    $
    57,133
    
    
    $
    53,038Average signature loan balance outstanding during period (a)
    
    $
    28,973
    
    
    $
    28,190
    
    
    $
    29,916
    
    
    $
    28,902Signature loan balance at end of period (a)
    
    $
    25,028
    
    
    $
    24,393
    
    
    $
    25,028
    
    
    $
    24,393Participating stores at end of period
    
    
    536
    
    
    
    559
    
    
    
    536
    
    
    
    559Signature loan bad debt, as a percent of fee revenue
    
    
    13.9
    %
    
    
    16.1
    %
    
    
    18.8
    %
    
    
    21.5
    %Net default rate (a) (b)
    
    
    3.6
    %
    
    
    3.8
    %
    
    
    4.1
    %
    
    
    4.6
    %
 (a)
    
    Signature loan balances include payday loans and installment loans (net of valuation
allowance) recorded on our balance sheets and the principal portion of similar active
brokered loans outstanding from unaffiliated lenders, the balance of which is not included
on our balance sheets.(b)
    
    Principal defaults net of collections, as a percentage of signature loans made and
renewed.  19




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Overview
    Three Months Ended March 31, 2010U.S. Pawn
    
    
    Empeño
    
    
    EZMONEYOperations
    
    
    Fácil
    
    
    Operations
    
    
    ConsolidatedStores in operation:Beginning of period
    
    
    376
    
    
    
    70
    
    
    
    474
    
    
    
    920New openings
    
    
    1
    
    
    
    9
    
    
    
    12
    
    
    
    22Acquired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sold, combined, or closed
    
    
    
    
    
    
    
    
    
    
    (10
    )
    
    
    (10
    )End of period
    
    
    377
    
    
    
    79
    
    
    
    476
    
    
    
    932Average number of stores during the period
    
    
    377
    
    
    
    74
    
    
    
    474
    
    
    
    925
 Six Months Ended March 31, 2010U.S. Pawn
    
    
    Empeño
    
    
    EZMONEYOperations
    
    
    Fácil
    
    
    Operations
    
    
    ConsolidatedStores in operation:Beginning of period
    
    
    375
    
    
    
    62
    
    
    
    473
    
    
    
    910New openings
    
    
    2
    
    
    
    17
    
    
    
    18
    
    
    
    37Acquired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sold, combined, or closed
    
    
    
    
    
    
    
    
    
    
    (15
    )
    
    
    (15
    )End of period
    
    
    377
    
    
    
    79
    
    
    
    476
    
    
    
    932Average number of stores during the period
    
    
    376
    
    
    
    70
    
    
    
    473
    
    
    
    919Composition of ending stores:Pawn
    
    
    371
    
    
    
    79
    
    
    
    
    
    
    
    450Short-term consumer loan stores
    
    
    6
    
    
    
    
    
    
    
    476
    
    
    
    482Total stores in operation
    
    
    377
    
    
    
    79
    
    
    
    476
    
    
    
    932Stores offering payday loans (a)
    
    
    60
    
    
    
    
    
    
    
    476
    
    
    
    536Stores offering installment loans (a)
    
    
    
    
    
    
    
    
    
    
    197
    
    
    
    197Stores offering auto title loans (a)
    
    
    54
    
    
    
    
    
    
    
    391
    
    
    
    445
 Three Months Ended March 31, 2009U.S. Pawn
    
    
    Empeño
    
    
    EZMONEYOperations
    
    
    Fácil
    
    
    Operations
    
    
    ConsolidatedStores in operation:Beginning of period
    
    
    377
    
    
    
    41
    
    
    
    471
    
    
    
    889New openings
    
    
    
    
    
    
    4
    
    
    
    8
    
    
    
    12Acquired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sold, combined, or closed
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    (3
    )End of period
    
    
    377
    
    
    
    45
    
    
    
    476
    
    
    
    898Average number of stores during the period
    
    
    377
    
    
    
    42
    
    
    
    474
    
    
    
    893
  20




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##### Table of Contents



Six Months Ended March 31, 2009U.S. Pawn
    
    
    Empeño
    
    
    EZMONEYOperations
    
    
    Fácil
    
    
    Operations
    
    
    ConsolidatedStores in operation:Beginning of period
    
    
    300
    
    
    
    38
    
    
    
    471
    
    
    
    809New openings
    
    
    
    
    
    
    6
    
    
    
    14
    
    
    
    20Acquired
    
    
    77
    
    
    
    1
    
    
    
    
    
    
    
    78Sold, combined, or closed
    
    
    
    
    
    
    
    
    
    
    (9
    )
    
    
    (9
    )End of period
    
    
    377
    
    
    
    45
    
    
    
    476
    
    
    
    898Average number of stores during the period
    
    
    346
    
    
    
    40
    
    
    
    473
    
    
    
    859Composition of ending stores:Pawn
    
    
    371
    
    
    
    45
    
    
    
    
    
    
    
    416Short-term consumer loan stores
    
    
    6
    
    
    
    
    
    
    
    476
    
    
    
    482Total stores in operation
    
    
    377
    
    
    
    45
    
    
    
    476
    
    
    
    898Stores offering payday loans (a)
    
    
    83
    
    
    
    
    
    
    
    476
    
    
    
    559Stores offering installment loans (a)
    
    
    
    
    
    
    
    
    
    
    88
    
    
    
    88Stores offering auto title loans (a)
    
    
    32
    
    
    
    
    
    
    
    139
    
    
    
    171
 (a)
    
    Including credit services    March 31, 2010
    
    
    March 31, 2009
    
    
    September 30, 2009Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent(Dollars in thousands)Jewelry:Gross inventory held one year or less
    
    $
    29,750
    
    
    
    78.7
    %
    
    $
    28,690
    
    
    
    80.6
    %
    
    $
    28,338
    
    
    
    78.1
    %Gross inventory held more than one year
    
    
    8,029
    
    
    
    21.3
    %
    
    
    6,919
    
    
    
    19.4
    %
    
    
    7,953
    
    
    
    21.9
    %Total jewelry inventory, gross
    
    
    37,779
    
    
    
    100.0
    %
    
    
    35,609
    
    
    
    100.0
    %
    
    
    36,291
    
    
    
    100.0
    %General merchandise:Gross inventory held one year or less
    
    
    22,556
    
    
    
    93.7
    %
    
    
    24,317
    
    
    
    92.7
    %
    
    
    31,246
    
    
    
    93.5
    %Gross inventory held more than one year
    
    
    1,525
    
    
    
    6.3
    %
    
    
    1,904
    
    
    
    7.3
    %
    
    
    2,183
    
    
    
    6.5
    %Total general merchandise, gross
    
    
    24,081
    
    
    
    100.0
    %
    
    
    26,221
    
    
    
    100.0
    %
    
    
    33,429
    
    
    
    100.0
    %Total inventory:Gross inventory held one year or less
    
    
    52,306
    
    
    
    84.6
    %
    
    
    53,007
    
    
    
    85.7
    %
    
    
    59,584
    
    
    
    85.5
    %Gross inventory held more than one year
    
    
    9,554
    
    
    
    15.4
    %
    
    
    8,823
    
    
    
    14.3
    %
    
    
    10,136
    
    
    
    14.5
    %Total inventory, gross
    
    
    61,860
    
    
    
    100.0
    %
    
    
    61,830
    
    
    
    100.0
    %
    
    
    69,720
    
    
    
    100.0
    %Valuation allowance
    
    
    (5,457
    )
    
    
    (8.8
    %)
    
    
    (5,805
    )
    
    
    (9.4
    %)
    
    
    (5,719
    )
    
    
    (8.2
    %)Total inventory, net
    
    $
    56,403
    
    
    
    
    
    
    $
    56,025
    
    
    
    
    
    
    $
    64,001
  21




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Results of Operations
 Three Months Ended March 31, 2010 vs. Three Months Ended March 31, 2009
  U.S. Pawn Operations Segment
  Three Months Ended March 31,2010
    
    
    2009(Dollars in thousands)Sales
    
    $
    94,364
    
    
    $
    86,808Pawn service charges
    
    
    36,256
    
    
    
    32,265Signature loan fees
    
    
    434
    
    
    
    557Auto title loan fees
    
    
    427
    
    
    
    351Other
    
    
    3,243
    
    
    
    1,727Total revenues
    
    
    134,724
    
    
    
    121,708Cost of goods sold
    
    
    58,541
    
    
    
    55,072Signature loan bad debt
    
    
    101
    
    
    
    108Auto title loan bad debt
    
    
    52
    
    
    
    36Net revenues
    
    
    76,030
    
    
    
    66,492Operations expense
    
    
    39,912
    
    
    
    38,367Store operating income
    
    $
    36,118
    
    
    $
    28,125Other data:Gross margin on sales
    
    
    38
    %
    
    
    37
    %Annualized inventory turnover
    
    
    4.1
    x
    
    
    3.8
    xAverage pawn loan balance per pawn store at quarter end
    
    $
    227
    
    
    $
    205Average inventory per pawn store at quarter end
    
    $
    143
    
    
    $
    144Average yield on pawn loan portfolio (a)
    
    
    163
    %
    
    
    160
    %Pawn loan redemption rate
    
    
    83
    %
    
    
    81
    %Average signature loan balance per store offering signature loans at quarter end (b)
    
    $
    9
    
    
    $
    8Average auto title loan balance per store offering auto title loans at quarter end (c)
    
    $
    14
    
    
    $
    24
 (a)
    
    Average yield on pawn loan portfolio is calculated as annualized pawn service charge revenues for the period divided by the average pawn loan balance during the period.(b)
    
    Signature loan balances include payday loans (net of valuation allowance) recorded on our balance sheets and the principal portion of similar active brokered loans
outstanding from unaffiliated lenders, the balance of which is not included on our balance sheets.(c)
    
    Auto title loan balances include title loans (net of valuation allowance) recorded on our balance sheets and the principal portion of active brokered loans outstanding
from unaffiliated lenders, the balance of which is not included on our balance sheets.    24




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Three Months Ended March 31,2010
    
    
    2009(Dollars in millions)Merchandise sales
    
    $
    60.0
    
    
    $
    59.1Jewelry scrapping sales
    
    
    34.4
    
    
    
    27.7Total sales
    
    $
    94.4
    
    
    $
    86.8Gross profit on merchandise sales
    
    $
    22.9
    
    
    $
    22.2Gross profit on jewelry scrapping sales
    
    $
    12.9
    
    
    $
    9.5Gross margin on merchandise sales
    
    
    38.2
    %
    
    
    37.5
    %Gross margin on jewelry scrapping sales
    
    
    37.6
    %
    
    
    34.5
    %Overall gross margin
    
    
    38.0
    %
    
    
    36.6
    %
      25




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Empeño Fácil Segment
  Three months ended March 31,2010
    
    
    2009
    
    
    2010
    
    
    2009(Dollars in thousands)
    
    
    (Pesos in thousands)Sales
    
    $
    4,895
    
    
    $
    2,205
    
    
    $
    62,607
    
    
    $
    31,620Pawn service charges
    
    
    2,050
    
    
    
    1,251
    
    
    
    26,233
    
    
    
    17,968Other
    
    
    126
    
    
    
    1
    
    
    
    1,619
    
    
    
    6Total revenues
    
    
    7,071
    
    
    
    3,457
    
    
    
    90,459
    
    
    
    49,594Cost of goods sold
    
    
    3,597
    
    
    
    1,354
    
    
    
    45,988
    
    
    
    19,435Net revenues
    
    
    3,474
    
    
    
    2,103
    
    
    
    44,471
    
    
    
    30,159Operations expense
    
    
    2,573
    
    
    
    1,299
    
    
    
    32,894
    
    
    
    18,596Store operating income
    
    $
    901
    
    
    $
    804
    
    
    $
    11,577
    
    
    $
    11,563Other data:Gross margin on sales
    
    
    27
    %
    
    
    39
    %
    
    
    27
    %
    
    
    39
    %Annualized inventory turnover
    
    
    5.2
    x
    
    
    2.1
    x
    
    
    5.2
    x
    
    
    2.1
    xAverage pawn loan balance per pawn store at quarter end
    
    $
    62
    
    
    $
    73
    
    
    $
    777
    
    
    $
    1,041Average inventory per pawn store at quarter end
    
    $
    41
    
    
    $
    61
    
    
    $
    515
    
    
    $
    877Average yield on pawn loan portfolio (a)
    
    
    177
    %
    
    
    162
    %
    
    
    177
    %
    
    
    162
    %Pawn loan redemption rate
    
    
    74
    %
    
    
    84
    %
    
    
    74
    %
    
    
    84
    %
 (a)
    
    Average yield on pawn loan portfolio is calculated as annualized pawn service charge revenue for the period divided by the average pawn loan balance during the period.     26




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Three months ended March 31,2010
    
    
    2009
    
    
    2010
    
    
    2009(Dollars in millions)
    
    
    (Pesos in millions)Merchandise sales
    
    $
    3.1
    
    
    $
    1.9
    
    
    $
    40.1
    
    
    $
    27.5Jewelry scrapping sales
    
    
    1.8
    
    
    
    0.3
    
    
    
    22.5
    
    
    
    4.1Total sales
    
    
    4.9
    
    
    
    2.2
    
    
    
    62.6
    
    
    
    31.6Gross profit on merchandise sales
    
    $
    1.1
    
    
    $
    0.7
    
    
    $
    14.2
    
    
    $
    10.5Gross profit on jewelry scrapping sales
    
    
    0.2
    
    
    
    0.1
    
    
    
    2.4
    
    
    
    1.7Gross margin on merchandise sales
    
    
    35.4
    %
    
    
    38.3
    %
    
    
    35.4
    %
    
    
    38.3
    %Gross margin on jewelry scrapping sales
    
    
    10.7
    %
    
    
    40.7
    %
    
    
    10.7
    %
    
    
    40.7
    %Overall gross margin
    
    
    26.5
    %
    
    
    38.6
    %
    
    
    26.5
    %
    
    
    38.6
    %
      27




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##### Table of Contents



EZMONEY Operations Segment
  Three Months Ended March 31,2010
    
    
    2009(Dollars in thousands)Signature loan fees
    
    $
    31,208
    
    
    $
    31,037Auto title loan fees
    
    
    3,529
    
    
    
    64Jewelry scrapping sales
    
    
    52
    
    
    
    Total revenues
    
    
    34,789
    
    
    
    31,101Signature loan bad debt
    
    
    4,296
    
    
    
    4,964Auto title loan bad debt
    
    
    268
    
    
    
    6Jewelry scrapping cost of goods sold
    
    
    24
    
    
    
    Net revenues
    
    
    30,201
    
    
    
    26,131Operations expense
    
    
    15,720
    
    
    
    14,962Store operating income
    
    $
    14,481
    
    
    $
    11,169Other data:Signature loan bad debt as a percent of signature loan fees
    
    
    13.8
    %
    
    
    16.0
    %Auto title loan bad debt as a percent of auto title loan fees
    
    
    7.6
    %
    
    
    9.4
    %Average signature loan balance per store offering signature loans at quarter end (a)
    
    $
    51
    
    
    $
    50Average auto title loan balance per store offering title loans at quarter end (b)
    
    $
    13
    
    
    $
    1
 (a)
    
    Signature loan balances include payday and installment loans (net of valuation allowance) recorded on our balance sheets and the
principal portion of active signature loans outstanding from unaffiliated lenders, the balance of which is not included on our balance
sheets.(b)
    
    Auto title loan balances include title loans (net of valuation allowance) recorded on our balance sheets and the principal portion of
active brokered loans outstanding from unaffiliated lenders, the balance of which is not included on our balance sheets.      28




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Other Items
          29




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Six Months Ended March 31, 2010 vs. Six Months Ended March 31, 2009
  U.S. Pawn Operations Segment
  Six Months Ended March 31,2010
    
    
    2009(Dollars in thousands)Sales
    
    $
    190,398
    
    
    $
    148,975Pawn service charges
    
    
    75,197
    
    
    
    57,149Signature loan fees
    
    
    987
    
    
    
    1,243Auto title loan fees
    
    
    902
    
    
    
    561Other
    
    
    5,410
    
    
    
    3,160Total revenues
    
    
    272,894
    
    
    
    211,088Cost of goods sold
    
    
    118,271
    
    
    
    94,010Signature loan bad debt
    
    
    287
    
    
    
    344Auto title loan bad debt
    
    
    122
    
    
    
    42Net revenues
    
    
    154,214
    
    
    
    116,692Operations expense
    
    
    80,111
    
    
    
    65,045Store operating income
    
    $
    74,103
    
    
    $
    51,647Other data:Gross margin on sales
    
    
    38
    %
    
    
    37
    %Annualized inventory turnover
    
    
    3.9
    x
    
    
    3.7
    xAverage pawn loan balance per pawn store at quarter end
    
    $
    227
    
    
    $
    205Average inventory per pawn store at quarter end
    
    $
    143
    
    
    $
    144Average yield on pawn loan portfolio (a)
    
    
    162
    %
    
    
    154
    %Pawn loan redemption rate
    
    
    81
    %
    
    
    80
    %Average signature loan balance per store offering signature loans at quarter end (b)
    
    $
    9
    
    
    $
    8Average auto title loan balance per store offering auto title loans at quarter end (c)
    
    $
    14
    
    
    $
    24
 (a)
    
    Average yield on pawn loan portfolio is calculated as annualized pawn service charge revenues for the period divided by the average pawn loan balance during the period.(b)
    
    Signature loan balances include payday loans (net of valuation allowance) recorded on our balance sheets and the principal portion of similar active brokered loans outstanding from unaffiliated lenders,
the balance of which is not included on our balance sheets.(c)
    
    Auto title loan balances include title loans (net of valuation allowance) recorded on our balance sheets and the principal portion of active brokered loans outstanding from unaffiliated lenders, the
balance of which is not included on our balance sheets.    30




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Six Months Ended March 31,2010
    
    
    2009(Dollars in millions)Merchandise sales
    
    $
    119.2
    
    
    $
    102.0Jewelry scrapping sales
    
    
    71.2
    
    
    
    47.0Total sales
    
    $
    190.4
    
    
    $
    149.0Gross profit on merchandise sales
    
    $
    45.2
    
    
    $
    39.1Gross profit on jewelry scrapping sales
    
    $
    26.9
    
    
    $
    15.9Gross margin on merchandise sales
    
    
    37.9
    %
    
    
    38.3
    %Gross margin on jewelry scrapping sales
    
    
    37.8
    %
    
    
    33.8
    %Overall gross margin
    
    
    37.9
    %
    
    
    36.9
    %
        31




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Empeño Fácil Segment
  Six months ended March 31,2010
    
    
    2009
    
    
    2010
    
    
    2009(Dollars in thousands)
    
    
    (Pesos in thousands)Sales
    
    $
    8,767
    
    
    $
    4,618
    
    
    $
    113,049
    
    
    $
    63,082Pawn service charges
    
    
    3,906
    
    
    
    2,748
    
    
    
    50,512
    
    
    
    37,457Other
    
    
    215
    
    
    
    1
    
    
    
    2,778
    
    
    
    8Total revenues
    
    
    12,888
    
    
    
    7,367
    
    
    
    166,339
    
    
    
    100,547Cost of goods sold
    
    
    6,430
    
    
    
    2,841
    
    
    
    82,854
    
    
    
    38,773Net revenues
    
    
    6,458
    
    
    
    4,526
    
    
    
    83,485
    
    
    
    61,774Operations expense
    
    
    4,737
    
    
    
    2,583
    
    
    
    61,177
    
    
    
    35,283Store operating income
    
    $
    1,721
    
    
    $
    1,943
    
    
    $
    22,308
    
    
    $
    26,491Other data:Gross margin on sales
    
    
    27
    %
    
    
    38
    %
    
    
    27
    %
    
    
    38
    %Annualized inventory turnover
    
    
    4.5
    x
    
    
    2.1
    x
    
    
    4.5
    x
    
    
    2.1
    xAverage pawn loan balance per pawn store at quarter end
    
    $
    62
    
    
    $
    73
    
    
    $
    777
    
    
    $
    1,041Average inventory per pawn store at quarter end
    
    $
    41
    
    
    $
    61
    
    
    $
    515
    
    
    $
    877Average yield on pawn loan portfolio (a)
    
    
    179
    %
    
    
    157
    %
    
    
    179
    %
    
    
    157
    %Pawn loan redemption rate
    
    
    77
    %
    
    
    83
    %
    
    
    77
    %
    
    
    83
    %
 (a)
    
    Average yield on pawn loan portfolio is calculated as annualized pawn service charge revenue for the period
divided by the average pawn loan balance during the period.     32




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Six months ended March 31,2010
    
    
    2009
    
    
    2010
    
    
    2009(Dollars in millions)
    
    
    (Pesos in millions)Merchandise sales
    
    $
    6.4
    
    
    $
    3.9
    
    
    $
    82.6
    
    
    $
    53.1Jewelry scrapping sales
    
    
    2.4
    
    
    
    0.7
    
    
    
    30.4
    
    
    
    10.0Total sales
    
    
    8.8
    
    
    
    4.6
    
    
    
    113.0
    
    
    
    63.1Gross profit on merchandise sales
    
    $
    2.0
    
    
    $
    1.5
    
    
    $
    26.1
    
    
    $
    20.5Gross profit on jewelry scrapping sales
    
    
    0.3
    
    
    
    0.3
    
    
    
    4.1
    
    
    
    3.8Gross margin on merchandise sales
    
    
    31.5
    %
    
    
    38.5
    %
    
    
    31.5
    %
    
    
    38.5
    %Gross margin on jewelry scrapping sales
    
    
    13.5
    %
    
    
    38.3
    %
    
    
    13.5
    %
    
    
    38.3
    %Overall gross margin
    
    
    26.7
    %
    
    
    38.5
    %
    
    
    26.7
    %
    
    
    38.5
    %
      33




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##### Table of Contents



EZMONEY Operations Segment
  Six Months Ended March 31,2010
    
    
    2009(Dollars in thousands)Signature loan fees
    
    $
    69,333
    
    
    $
    66,351Auto title loan fees
    
    
    6,156
    
    
    
    75Jewelry scrapping sales
    
    
    64
    
    
    
    Total revenues
    
    
    75,553
    
    
    
    66,426Signature loan bad debt
    
    
    12,900
    
    
    
    14,212Auto title loan bad debt
    
    
    658
    
    
    
    7Jewelry scrapping cost of goods sold
    
    
    31
    
    
    
    Net revenues
    
    
    61,964
    
    
    
    52,207Operations expense
    
    
    31,538
    
    
    
    30,494Store operating income
    
    $
    30,426
    
    
    $
    21,713Other data:Signature loan bad debt as a percent of signature loan fees
    
    
    18.6
    %
    
    
    21.4
    %Auto title loan bad debt as a percent of auto title loan fees
    
    
    10.7
    %
    
    
    9.3
    %Average signature loan balance per store offering signature loans at quarter end (a)
    
    $
    51
    
    
    $
    50Average auto title loan balance per store offering title loans at quarter end (b)
    
    $
    13
    
    
    $
    1
 (a)
    
    Signature loan balances include payday and installment loans (net of valuation allowance) recorded on our balance sheets and the
principal portion of active signature loans outstanding from unaffiliated lenders, the balance of which is not included on our
balance sheets.(b)
    
    Auto title loan balances include title loans (net of valuation allowance) recorded on our balance sheets and the principal portion of
active brokered loans outstanding from unaffiliated lenders, the balance of which is not included on our balance sheets.       34




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Other Items
          35




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##### Table of Contents



Liquidity and Capital Resources
     Payments due by PeriodLess than
    
    
    
    
    
    
    
    
    
    
    More thanContractual Obligations
    
    Total
    
    
    1 year
    
    
    1-3 years
    
    
    4-5 years
    
    
    5 yearsLong-term debt obligations
    
    $
    30.0
    
    
    $
    10.0
    
    
    $
    20.0
    
    
    $
    
    
    
    $
    Interest on long-term debt obligations
    
    
    1.5
    
    
    
    0.8
    
    
    
    0.7
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    134.8
    
    
    
    34.3
    
    
    
    54.7
    
    
    
    27.2
    
    
    
    18.6Total
    
    $
    166.3
    
    
    $
    45.1
    
    
    $
    75.4
    
    
    $
    27.2
    
    
    $
    18.6
      36




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##### Table of Contents



Off-Balance Sheet Arrangements
     37




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##### Table of Contents



Seasonality
    Use of Estimates and Assumptions
  
 Item 3.
    Quantitative and Qualitative Disclosures about Market Risk
      38




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##### Table of Contents



Forward-Looking Information
   39




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##### Table of Contents



Item 4.
    Controls and Procedures
  Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  Inherent Limitations on Internal Controls
  
    
    Judgments in decision-making can be faulty, and control and process breakdowns can occur
because of simple errors or mistakes.
 
    
    Controls can be circumvented by individuals, acting alone or in collusion with others, or
by management override.
 
    
    The design of any system of controls is based in part on certain assumptions about the
likelihood of future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions.
 
    
    Over time, controls may become inadequate because of changes in conditions or deterioration
in the degree of compliance with associated policies or procedures.
 
    
    The design of a control system must reflect the fact that resources are constrained, and
the benefits of controls must be considered relative to their costs.
   40




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##### Table of Contents



PART II
 
 Item 1.
    Legal Proceedings
  
 Item 1A.
    Risk Factors
  A number of recent and ongoing legislative efforts could have an adverse effect on certain of our
financial products, particularly payday loans 
  
 Item 6.
    Exhibits
 Exhibit No.
    
    Description of Exhibit10.1
    
    
    EZCORP, Inc. 2010 Long-Term Incentive Plan, effective March 1,
2010 (incorporated by reference to Exhibit 10.1 of the
Companys Current Report on Form 8-K dated February 10, 2010
and filed February 11, 2010, Commission File No. 0-19424)10.2
    
    
    Employment and Post-Employment Agreement, dated February 11,
2010, between EZCORP, Inc. and Robert A. Kasenter
(incorporated by reference to Exhibit 10.1 of the Companys
Current Report on Form 8-K dated February 11, 2010 and filed
February 16, 2010, Commission File No. 0-19424)31.1
    
    
    Certification of Joseph L. Rotunda, Chief Executive Officer,
pursuant to Rule 13a-14(a) under the Securities Exchange Act
of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 200231.2
    
    
    Certification of Brad Wolfe, Senior Vice President and Chief
Financial Officer, pursuant to Rule 13a-14(a) under the
Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    
    Certifications of Joseph L. Rotunda, Chief Executive Officer,
and Brad Wolfe, Senior Vice President and Chief Financial
Officer, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  41




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##### Table of Contents



SIGNATURE
  EZCORP, INC.Date:  May 7, 2010
    /s/ Daniel M. ChismDaniel M. ChismVice President and
Chief Accounting Officer
(on behalf of the registrant and as principal
accounting officer)  42




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##### Table of Contents



Exhibit No.
    
    Description of Exhibit10.1
    
    
    EZCORP, Inc. 2010 Long-Term Incentive Plan, effective March 1,
2010 (incorporated by reference to Exhibit 10.1 of the
Companys Current Report on Form 8-K dated February 10, 2010
and filed February 11, 2010, Commission File No. 0-19424)10.2
    
    
    Employment and Post-Employment Agreement, dated February 11,
2010, between EZCORP, Inc. and Robert A. Kasenter
(incorporated by reference to Exhibit 10.1 of the Companys
Current Report on Form 8-K dated February 11, 2010 and filed
February 16, 2010, Commission File No. 0-19424)31.1
    
    
    Certification of Joseph L. Rotunda, Chief Executive Officer,
pursuant to Rule 13a-14(a) under the Securities Exchange Act
of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 200231.2
    
    
    Certification of Brad Wolfe, Senior Vice President and Chief
Financial Officer, pursuant to Rule 13a-14(a) under the
Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    
    Certifications of Joseph L. Rotunda, Chief Executive Officer,
and Brad Wolfe, Senior Vice President and Chief Financial
Officer, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  43