Good afternoon, ladies and gentlemen, and welcome to the EZCORP second quarter, 2008 earnings call. (Operator Instructions). I will now turn the call over to Mr. Joe Rotunda. Mr. Rotunda, you may begin.

Thank you, Rose. Good afternoon, everyone. With me is Dan Tonissen, our Chief Financial Officer. Thank you all for joining us today. I'm going to provide an overview of the quarter. Dan will follow with more detail on the financial statements. At the end of the call, we'll insure that we have the opportunity for questions. Last quarter, we thought we did such a superb job of discussing the business that there wasn't one question, not one comment. However, we learned afterwards that no one was able to access the question mode on their phone. This quarter, we believe it's going to be able to work and function properly. Quarter two, fiscal year 2008, represents our 23rd consecutive quarter of year-on-year earnings improvement. Net income for the period is $13 million, an increase of 28% over last year. Diluted earnings per share were $0.30, a $0.01 better than our public guidance. It represents a 30% increase over the $0.23 we reported a year ago. The macro-economic environments had more of a profound influence on our US operations in this quarter than any other time in the past seven years. Everyone is feeling the economic stress for their disposable cash when they visit the grocery store or the gas station. And I believe, it is more pronounced with the cash and credit constrained consumer. Coupling this with higher unemployment and a lack of job growth has amplified the demand for short-term cash from both unemployed and underemployed consumers. There is an additional economic factor that impacts specifically our pawn business. Gold prices have continued to climb. In our US EZPAWN segment, we've responded by increasing our loan values on the gold products that are pawned in our shops. With over half of our pawn portfolio in jewelry, this has driven up…

Thanks, Joe. Joe gave you an overview of some of the numbers, and I'll give you a little more detail, starting with the consolidated statement of operations for the quarter, which you'll find on page three of our earnings announcement. For the quarter, our pawn net revenues comprised of sales gross profit, lines two and three less line eleven, pawn service charges, line four, and other revenues, line six, increased $10.2 million or 28% to $46.7 million. Merchandise sales, line two, increased $5.2 million or 13% to $44.7 million. Same-store sales for the quarter increased 4%. After a one percentage point margin decrease, merchandise gross profit, line two minus line nine, increased $1.6 million or 10% to $17.5 million. Scrap gross profit, line three less line 10, increased $3.4 million to $7.1 million. Higher gold values net of higher cost and higher volumes produced the increase in scrap gross profit. During the quarter, we scrapped approximately 1.3 million grams of gold jewelry, an increase of roughly 19% from the prior year quarter. Proceeds per gram increased 33% to $12.99. Our cost per gram increased 19% to $7.32 due to increases in gold loan values and what we paid to purchase gold. During the quarter and the prior year quarter, we did not sell any loose diamonds. We continue to forward contract our gold scraping 30 to 60 days out. And currently we have our April quantities locked at $944.00 per ounce. Hopefully, the margin will move up a bit and we can do as well covering our May and June quantities. For the quarter, we turned our inventory 3.8 times, the same as the prior year quarter. Inventory levels for ending store increased to $112,000 versus $102,000 a year ago. On service charge revenues, line four, increased approximately $5.2 million…

Thanks, Dan. In summary, it was a very strong quarter for us exceeding our public guidance and growing our earnings per share by 30% over last year. As a business, we're becoming more diverse with our segments, segments that have the capacity to compliment one another through both good and bad times. Each segment is also a growth vehicle unto itself. We've demonstrated strong organic growth in EZPAWN for the past five plus years. Additionally, acquisition opportunities still exist in the pawn industry. The Colorado acquisition is a good example of the benefit. During this quarter, we enjoyed the incremental operating contribution from Jumping Jack Cash. And there was an additional benefit. The $1.1 million from those stores reflected more than a 25% improvement on the base operating income that was generated in the same period a year ago before we did the acquisition. Our EZMONEY segment continues as a growth vehicle, both organically and via de novo growth domestically, with potential for entry into Canada. Empenos Facil also offers substantial growth opportunities, organically and through storefront expansion throughout Mexico. And Albemarle & Bond have the benefit of the integration and enhancement of the Herbert Brown acquisition. Now, to wrap up the call, here is our revised forecast for the year. We're raising our guidance for the fiscal year to $1.14. That's approximately a 30% increase over last year. Our guidance for quarter three is $0.21 in earnings per share and quarter four, $0.34. That concludes our prepared remarks. I'd like to pause now for Dan to cover the Safe Harbor, and then we'll open it up for questions.

This conference call and earnings announcement contains certain forward-looking statements regarding EZCORP's expected performance for future periods including, but not limited to, new store expansion, anticipated benefits of acquisitions and investments, and expected future earnings. Actual results for these periods may materially differ from these statements. Such forward-looking statements involve risks and uncertainties, such as changing market conditions in the overall economy and the industry, consumer demand for the company's products and services, actions of third parties who offer services and products in the company's locations, changes in the regulatory environment, and other factors periodically discussed in the company's annual, quarterly, and other reports filed with the Securities & Exchange Commission. Rose, we'll now open up the call to questions.

(Operator Instructions). We have our first question from Dennis Telzrow from Stephens, Incorporated. Please go ahead.

Good afternoon, Joe and Dan. Great quarter.

Thank you, Dennis.

You didn't mention or update us on the progress of the proposed acquisition of Value Financial Services. Any comment there?

Well, we're still in the due diligence stage. And we're moving through all of that detail. And at this point, we're maintaining our May ending target for closing.

And at that time, you might have some comment on the total potential and then outlook as how it would possible impact next fiscal year?

We certainly would once we get through all the due diligence.

Okay. And the stores you're opening in Mexico, I assume most of those are down in the same territory in which Mister Money had operated. And I guess a second part to that, have you put in your point of sales in those stores down there?

Your second question first. We do have our store operating system, our EZSYSTEM pawn operating system in place. All of the stores have been converted. And we've completed all that in the December, January time frame. As to our expansion in Mexico, if you think of the uppermost, Northwest area that we're in is the Biajo area, and take the route from there down through Mexico City into Veracruz, that's where our primary development is this year, along with a couple stores along the boarder where we're filling in there to build a full area for the multi-unit manager that we have there. That will take us through the end of this year. We'll still have considerable fill in opportunity in 2009. And we'll use that corridor as a hub and then grow out from there.

And I don't know if you have the ability to measure it, but some people and some of the other companies in business have commented that they felt that their collections were negatively impacted by, I guess you could call it, the decline in the customer's use of his tax refund to pay off previously delinquent loans. Is there any way or do you have any thoughts on that?

It'd certainly be very subjective. My gut would tell me that the customer's available cash is more stressed now than it has ever been and that income tax refund that may have gone towards a debt that they had in the past, whether it be pawn portfolio loans or signature payday loans, probably had other demand on it for maybe something more pressing.

Last question, I think you mentioned you raised your loan to value jewelry. Was that just March quarter you did that?

We did. It was towards the end of the quarter. In fact, since in the last year, the last four quarters, we raised the loan to values now three times, most recently in the March ending quarter, more towards the end of the quarter.

Okay. Thank you.

You're welcome.

We have our next question from John Rowan from Sidoti & Company. Please go ahead. John Rowan, Sidoti & Co.: Good afternoon. Just so I'm clear, the guidance doesn't include potential accretion from the value acquisition.

It does not, John. John Rowan, Sidoti & Co.: Okay. And just to go back to credit, I don't know if there is any way to quantify it, but are you seeing any more or less stress from your new stores? Can you just kind of break it out versus your more mature stores versus your new stores? John Rowan, Sidoti & Co.: We haven't segmented it by operations. Typically early on, very early in the opening of a new store, you're growing your portfolio, bad debt isn't a significant problem for the first couple months. And then, it becomes more pronounced. But over the first six or 12 months of a new store, I don't think the bad debt is significantly higher than as it works into its second year. That's what we've seen as we've looked at it. John Rowan, Sidoti & Co.: Okay. And can you just give me the CapEx numbers again?

I'm sorry, John. John Rowan, Sidoti & Co.: Dan, you gave out the CapEx numbers. Correct? Can you just repeat those for me?

Yes. Growth CapEx of $2.8 million and maintenance of $1.3 million. John Rowan, Sidoti & Co.: Thanks. I'll let someone else hop on.

We have our next question from Liz Pierce from Roth Capital Partners. Please go ahead.

Thanks and good afternoon. So, Joe, if I understand you correctly, you haven't changed your underwriting requirements or policies or strategies that this is just, you think, a function of the environment.

I think much of it is related to the environment and it requires us to act a little bit differently. We've made in the last three quarters some revisions and adjustments to our underwriting. In this time frame that we're in, in this past quarter, we didn't make any additional adjustments from that end outside of working more with the customer to get the customer in by their due date to make their payment or to payoff their loan in the EZMONEY segment. Our activities and effort is now shifting to more diligent efforts on working with the customer once they reach that due date and haven't come into the store. And we're adjusting and shifting. Probably the most pronounced shift is in the field organization where we're moving some of the time we spend on local store marketing to bring in new customers to using that effort, that labor, that attention and focus on working with the customer immediately after they default and attempt to get them to either satisfy the debt or work on a plan to satisfy the debt.

Okay. But in terms of if we look into the next couple of quarters, if it doesn't necessarily feel like anything is going to get better, do you think you might get a little bit stricter on the underwriting?

We will adjust our underwriting as we have to if we see a trend that is more negative going forward than we've seen thus far. It's been three quarters of consecutive increases in our bad debt rate as a percent of fees. And I hope to see a leveling off of that relative to prior year levels.

Do you think with the stimulus checks that are suppose to be in the mail or whatever in May that maybe some of this pressure that the consumer has felt goes away a bit? I mean do you think maybe they defaulted in thinking well I'll get another check and take care of it then?

I really wish I knew. We're not really sure how to factor that into our projections. I think the fact is the consumer will have more disposable cash as a result of this. The question is where they are going to spend it. In the hierarchy of needs or in the hierarchy of those that they want to respond to, where will we fall? And that's one of the reasons that we're focusing on working more with the customer to help them satisfy the debt that they've incurred with these loans.

But you're working with them, you said, on the field organization before they default like when they're getting ready for the loan to mature or, I just want to make sure I understand this.

We're doing it at both ends.

Okay.

We're calling every single customer two days or so before their loan is due. And what we're doing is a courtesy call. And it's just to see what time or when they intend to come into the store so we can have everything ready and help facilitate the transaction for them, so they're not delayed on generally a Friday when we have a lot of transactions. That in effect also reminds the consumer of the obligation that they have. So we do that on the front end. We ask them when they intend to come in so we can have everything ready for them. It's a courtesy call, and it acts as a reminder. And then if they're not in on their due date, we immediately begin contact activities in the field locations, not through our centralized collections. And in more of a relationship manner, attempt to work with the customer on coming in to take care of the obligation or working on some type of plan to repay it. We're just intensifying our efforts in those contacts with the customer, particularly on the weekend.

Alright. Thank you. That's helpful. Thanks. Good luck:

(Operator Instructions). We have our next question from Daniel O'Sullivan from Utendahl. Please go ahead.

Yes. Good afternoon. Joe, I didn't catch all your remarks on the bad debt sales. Did you guys sell accounts during the quarter?

We did have a sale during the quarter, considerably less than it's been in the past, particularly with proceeds. And my comment was that if you look at the last year or so, our debt buyers have reduced the rate three times over that period of time, the rate that they pay for bad debt. We are on a systematic sale of bad debt as soon as it reached 60 days of internal collection activity on our part. Now the rate is down substantially to the point that we're looking for other alternatives and ways to maximize the collection of that bad debt, some internally, some with direct sale to third party debt buyers, and looking at contingency sales as well.

Okay. But is the forward flow still in effect?

Not in a regimented manner as it was before.

Okay. So you're meaning it's more opportunistic. You don't have the forward flow as you just described it in place anymore.

We do have a modified forward flow in effect.

Okay. Real quick, is there any updates on the case in Florida?

It went to an administrative law judge and there was a order that was adverse that was issued by the administrative law judge in late March. And the administrative law judge found, in effect, I'm not sure of the exact reasons, that the fee was to be included as part of the interest calculation. So as a result of that, we expect that we're going to have a cease and desist order relatively soon. We also have found what we believe and have been advised are strong grounds for an appeal. And when that occurs, we'll file for a stay and then we intend to, at this point, pursue an appeal.

Okay. What do you think the timing on all that is?

It's usually, once you get by the stay, it's a fairly long period of time for the appeal process, as we understand it in Florida.

Okay. That's helpful. And a couple quick ones on your cash advance business. Now that you don't have a ton or regulatory risks, I think the only state where there might be some things in place, Colorado. Can you give us an update on what's going on in Colorado right now?

Yes. There was a House Bill that was introduced by a freshman legislator in the House. And it was in effect a prohibition bill. It passed the House, went into the Senate. It never rose to Third Note in the Senate. There were some amendments that were proposed as it went through that process. It went to, I believe, the appropriations committee. And the bill just, may have been this week, early this week, was actually pulled by the sponsor.

And one last one, your CSO lenders, have you guys noticed any uneasiness on their part as far as what's going on in the economy? Do you think they might demand more or will how much your guarantying and your letters of credit will there be any more types of guaranties you'll have to give them given where we're seeing losses going right now?

Dan, no change all there at all with our two lenders.

Great. Nice quarter, guys. Thanks.

Thank you.

(Operator Instructions). We do have our next question from John Rowan from Sidoti & Company. Please go ahead. John Rowan - Sidoti & Co.: Hi, guys. Sorry. I have a follow-up question. Can you just comment on how the financing is shoring up for the value acquisition?

Yes, that's in process right now. We're putting together a syndicate that should be more than sufficient to meet that need. John Rowan - Sidoti & Co.: You don't have any projects to how much it is going to cost though. Well, I'm assuming it's going to be debt, so I'm just trying to figure out kind of what the rate is going to be that you're going to be paying on that.

Yes. I think the market right now and given the leverage ratio where we would be out of the gate, we're probably looking at the one and a half to two range over LIBOR. So what would that be? What's that about 5%? John Rowan - Sidoti & Co.: Around there. Okay. That's it. Thank you.

(Operator Instructions). We do have Daniel O'Sullivan from Utendahl. Please go ahead.

Yes, thank you. Quick follow up on your expansion this year for Payday. Which states, Joe, do you think you're going to be expanding into or where are the stores going to be you're going to be opening up this year?

Texas will have a considerable, and you're talking for the whole year or the balance of the year?

The balance of the year. In the next 12 months, I'm sorry. What's your outlook for the next 12 months? Where would you guys see opening up your stores.

Well, we only go through the month of September. And we have the greatest or the lion's share of them in the Texas market. You get beyond that, we did open a number of them in Missouri, which we just got into this year. We're getting enough presence there to have two areas. And finished out Kansas with about two areas. And we're planning a couple more up in the Midwest.

Okay. That's helpful. Thank you.

(Operator Instructions). We have our next question from Andrew Moore from B. Riley. Please go ahead.

Hey, gentlemen, nice quarter. Wonder if you could talk a little bit about pawn sales. It looks like your merchandise sales were up about 13% year on year, pretty strong growth, 4% comp on the quarter, so it looks like traffic has been pretty good. Could you kind of characterize what's going on there and what is driving that strength principally?

Primary strength in pawn sales have come in general merchandise throughout the quarter. Some of the pressure on gold pricing also affects the retail pricing of jewelry in the stores in our pawn shops. And we've had a slowdown in jewelry until really this last quarter. And it began about February and into March where we picked up on our jewelry sales. We ended our quarter with a fairly good inventory. Dan covered our turnover, 3.8 times for the quarter. We're ending the quarter with about 10% more inventory per store than we had a year ago. We believe we'll be able to maintain our turnover performance and we expect to realize, continual level of sales growth as we've had this last quarter relative to the prior year. Again, GM has been very strong component of that.

Very good. Thanks.

(Operator Instructions). At this time, we have no further questions.

Okay. Rose, thank you very much. And I'd like to thank everybody for your participation today and your continued interest in EZCORP. Thank you.

Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for participating. You may all disconnect.