Mark Trinske – VP, IR and Communications Mark Kuchenrither – President and CEO.

William Armstrong – C.L. King & Associates John Rowan – Sidoti & Company Robert Ramsey – FBR Capital Markets.

Good afternoon, ladies and gentlemen, and thank you for standing by. And welcome to the EZCORP Fourth Quarter Fiscal Year 2014 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time.

(Operator Instructions) As a reminder, this conference call is being recorded. I would now like to turn the conference over to Mr. Mark Trinske, EZCORP’s Vice President of Investor Relations and Communications. Sir, the floor is yours..

Thank you, operator, and I’d like to welcome everyone today to EZCORP’s fourth quarter and fiscal year end September 2014 financial results conference call. On the call with me today is Mark Kuchenrither, our President and Chief Executive Officer.

Stuart Grimshaw, our Executive Chairman of the Board had planned to be on the call today but he had an unscheduled minor medical procedure today and has not able to be with us. He sends his regrets and said that he is looking forward to meeting many of you over the next month, and at our Institutional Investor Day on December 11.

Today’s conference call contains certain forward-looking statements regarding the company’s expected operating and financial performance for future periods. These statements are based on the company’s current expectations.

Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of risks including uncertainties and other factors that are discussed in our annual quarterly, and other reports filed with the Securities Exchange Commission, and in the cautionary note contained in our earnings press release.

Before turning the call over to Mark, I’d like to announce that we are hosting an Institutional Investor Day in Austin, Texas, on December 11. The meeting will be broadcast online and the webcast will be open to everyone.

Details on how to access the webcast will soon be on our website at ezcorp.com or you can contact our Investor Relations department for more information. On today’s call, Mr. Kuchenrither will present his opening comments and discuss our business strategy, and following his comments we will open the call to your questions.

Now, I would like to turn the call over to Mark Kuchenrither.

Mark?.

Thank you, Mark, and good afternoon everyone. Before I start my prepared remarks, I want to wish Stuart Grimshaw a speedy recovery. I planned to introduce Stuart on the call today, and although Stuart is not here I think it’s important to share a bit about his background and his established track record.

We are fortunate to have someone of Stuart’s caliber joined the EZCORP team. He brings the tremendous depth of experience in international banking and consumer financial services.

He is an exceptional strategic thinker and has a proven track record in driving operational excellence across large complex international corporate and consumer finance organizations. Most recently, as the CEO of Bank of Queensland, he led the banks turnaround beginning in 2011.

The bank has traded on the Australian Stock Exchange, and is a consumer banking and financial services institution with branches in every Australian state and territory. During Stuart’s tenure, he initiated fundamental changes to the bank’s culture, operating model and strategic direction, and established a strong track record by execution.

Under his leadership, the banks market capitalization more than doubled and after-tax profit grew from $28 million in 2012 to $301 million in 2014. As a result of a strong capital and provisioning strategy, the bank’s credit rating was upgraded twice to A minus.

The bank also successfully raised close to $800 million through two global equity offerings. Throughout Stuart’s 30-year career in financial services, he has held a number of executive positions across a wide variety of banking and financing functions. Stuart is a proven leader who generates results and we’re proud to have him join our team.

Now I’ll start my presentation with comments about our fourth quarter and significant actions that we have taken. Then I’ll discuss our 2015 strategic plan, and finally, I’ll open the call to you for your questions.

During the quarter, as part of our review process, we identified areas for improvement and have taken initial steps to address our organizational design to support our strategic plan for growth. As a result we discontinued certain businesses and reduced our overhead expenses.

These actions have positioned us for sustainable growth with the more efficient cost structure. Today our company is better aligned to provide cash solutions to our customers with an improved operational strategy in our pawn and financial services businesses.

We are committed to satisfy customer’s needs, and enhancing shareholder value through our sustainable growth model. By discontinuing our online lending businesses in the U.S. and the U.K.

we have streamlined our business into a more fully integrated financial service model while our customers will benefit from easy access to cash from our various channels of store fronts. We have completed our 90-day review of our businesses and we have implemented measures to line the skills of our team with the needs of customers.

We have reduced the non-customer facing overhead structure in all of our businesses to streamline operations and create synergies and efficiencies. The actions we took in the fourth quarter would generate sustainable savings resulting in an improvement to net income of approximately $9 million annual.

We are in the very early stages of fundamental changes in operations, and while the implementation of initiatives will take time, we’re confident that we have the right strategy in place to drive the company forward.

We are now managing EZCORP based on a focused strategy with four clear pillars; number one, build a high performance organization; number two, deliver a superior customer value proposition; number three, drive operational excellence; and number four, maintain disciplined growth.

Much of what we have accomplished over the past 90 days has been focused on building a high performance culture within our organization. Through defining key operating principals, the restructuring of certain roles and responsibilities changes in key management positions and it continued strengthening of our Board.

We have taken important steps towards building this foundation. We have introduced a measurement and management structure with quarterly reviews in key performance metrics, we’re reviewing compensation plan in allowing pay for performance goals.

We are overall in our hiring and training processes and we are committed to hiring talented people and providing key members the support, training, and resources they need to best serve the customers. Across our businesses, we are emphasizing a customer centric approach.

We want to make sure that every customers contact with an EZCORP team member is always a great experience. The business will be focused on how efficiently and effectively we serve the customer and support the field operations.

We’re instituting customer surveys in order to benchmark the net promoter sector of each of our business units and we’ll conduct regular focus groups and enhance our feedback channels from our customers.

We’re making the necessary changes required on a standard customer needs in order to enhance the customer experience, and provide the financial options they prefer.

To drive operational excellence we’re implementing a balanced scorecard approach to measurement and management with key performance indicators clearly stated so that each team member understands the metrics that drives our asses and what’s expected from them.

For our pawn business units, we consider the critical sales factors to be developing quality loan portfolio growth, and increasing inventory turnover while managing margins. Our financial service businesses, the critical success factors are growing a quality loan portfolio through effectively underwriting and collections.

We’re actively shifting the corporate focus back to the field and towards supporting our stores. Key actions we will be taking in 2015 will include reinvesting in store labor, and the stores sales, as well as reviewing the field management structures to ensure we have the right organization to maximize our success.

We will grow in a disciplined manner consistent with our customer centric strategy. We are firmly committed to a focused and disciplined approach to growth in areas where we have had great success in the past, our pawn and financial service businesses.

Overtime we will look to expand our pawn and financial services footprint through a combination of carefully selected and accretive pawn acquisitions which meet our return on invested capital objectives, and through De Novo store growth in attractive markets where in the early stages of fundamental changes in operations and implementation of key initiatives or our strategy is in place and we are confident that through focused execution we will create a great experience for us customers and superior returns for our shareholders.

Operator, we are now ready for questions..

Thank you, Sir. (Operator Instructions) And it looks like our first question in queue will come from the line of Bill Armstrong with C.L. King & Associates. Please go ahead, your line is open..

Good afternoon, Mark. On the pawn side, I know in recently short run you’re looking, you’re willing to sacrifice some margin in order to increase inventory turns, although margins did decrease by a very significant amount.

Should we expect gross margins in that high 20s range going forward or was there like just a lot of inventory clearing during the quarter and we may settle into something little bit higher, just trying to figure that out for modelling purposes..

Hi, Bill, thank you for the question. First, let me talk about the go-forward strategy when I talk about fourth quarter. We are focused on improving our velocity of our inventory turns but we are confident we can do that without sacrificing margin.

There is – and we’re taking the necessary steps to ensure that, that happens and we’re very focused on protecting the margin while improving the turns. In the fourth quarter our margins were reduced because we took the appropriate inventory valuation reserve adjustments in the U.S.

because of the dropping gold values, and now primarily the adjustment we made in the U.S., and then in Mexico when we worked out our inventory values in fourth quarter there were small electronics that when we did the analysis we had to make appropriate adjustments as well.

So those adjustments were made in the fourth quarter, they pulled down the margins that we experienced in the fourth quarter but the go-forward gross margins we expect to be in the mid-30s and with every effort to improve upon those margins..

Okay, thanks, that’s helpful. And as a follow-up, actually a second question, for a while you guys have kind of struggled with – this is a bit more restricted regulations that a number of the large Texas cities have put in place, particularly on secured lending or at least non-pawn lending anyway.

I was wondering what you’re game plan is for operations in those Texas markets?.

Well certainly the regulation has impacted us in our Texas markets.

Most recently the Houston regulatory changes have impacted me of our store operations but we actually believe that through focused operational execution we can improve upon our loan portfolio growth and with improvements in our underwriting and collection activities we think we can manage our bad debt expenses better.

We are – our plan going forward this year is conservative in those areas but it does reflect growth and we are confident that we have the strategies in place to ensure that, that happens..

Thank you, Mr. Armstrong. And it looks like our next phone question will come from the line of John Rowan with Sidoti & Company. Please go ahead, your line is open..

Good afternoon, Mark..

Hey, John..

So as far as I understand it, the last word that you guys had was there any discussion whatsoever it puzzles [ph] to reinstitute advisor agreement with Madison Park?.

We just had a Board of Director meeting on November 3, and there has been absolutely no discussion regarding the Madison Park contract renewal, whatsoever..

Okay, I have a few, so I’ll try and get back into queue after this but can you give us an idea what the earning assets were for the quarter? What if any growth there was in the year-over-year basis?.

Earnings assets for the quarter were including CSO which is off balance sheet or approximately $432 million. Now when you look at that on a consolidated basis, year-over-year you need to consider that the Grupo Finmart model has changed with the addition of the distribution model that they have implemented.

So Grupo Finmart has sold approximately $77 million worth of loan assets during the course of this year, and so to compare apples-to-apples you need to take that into consideration with last year..

Thank you, Mr. Rowan. (Operator Instructions) And it looks like our next phone question will come from the line of Robert Bob Ramsey with FBR. Please go ahead Sir, your line is now open..

Good afternoon, Mark.

I guess first I’m going to ask if you had any guidance or share, I think this is normally when you would give some sort of guidance for the next fiscal year, I didn’t see that in the release or if not at this point if there are plans to provide any guidance down the road?.

Hi Bob, how you’re doing..

Thank you..

I appreciate your joining and asking the question. Our strategy that we’ve laid out today on the call and that we’re implementing is not a short term strategy and a quarter-by-quarter strategy.

If we’re focused on a developing long term sustainable shareholder value, and at this time I think we’re still at early stages of implementing that strategy, and so we’re not in a position to provide guidance.

Now Stuart Grimshaw, our Chairman has just started a couple of days ago, and Stuart and I will – and the Board of Directors and our executive management team will constantly we reviewing where we’re at and what we’re doing. But at this time we decided to not to provide guidance..

Okay. Maybe you’re thinking about the operating expenses, given the efficiency steps you have taken this quarter, I mean is it fair to sort of saying next quarter we should see the stuff down by two in a quarter million, I think you said $9 million in annual cost savings, is that fair? And I guess similarly, I’m curious with the sort of unusual cost.

I know you said that there was other release as there is $3 million of non-ratable items, is that in the expense line somewhere or where is that adjustment?.

Bob, why don’t we turn to the income statement for – that was with the earnings release and I can give you a little bit of guidance, okay.

We look at the operations line, you will see that for the year we spent $420 million in operation expenses, and there is a variable component of that because those are operations that are tied to each of our businesses, that’s about 43% of revenues and we expect that, that will improve based on the actions that we’ve taken by 1% at this point, and we’re going to continue to look for ways to improve upon that.

And then our administrative line, you can see we spent $64 million for the year in administrative expenses, we need to normalize that because we’ve got the former Chairman’s retirement in that number and that’s about $8 million pre-tax.

And then there is about $4 million of compensation and other expenses that are no longer part of that number due to the restructuring efforts that we took. And so a normalized number for 2014 is about $52 million and with the – our plan to this point are to run about 12% better than that, and we’re still seeking for additional improvements..

When you say 12% better you mean as a percent of that $52 million, so we would take 12% off the $52 million and that’s sort of what you’re looking to shake out this year?.

Yes..

Okay..

We have to normalize it, the $52 million, and then it’s 12% below the $52 million..

Got it, okay. That is helpful. Another question and then I’ll hop back out. But to consider loan fees were definitely lighter than I expected this quarter, a lot lighter than I expected.

Just trying to get a sense of how much of that maybe assigned to whine down of the online businesses or taxes or if there is anything else unusual or at least on a go-forward basis, I mean is this sort of a good level to build from? And then I guess seasonally this next quarter should be stronger than the last..

I think there is a couple of components to what you’re saying. First, there was an impact with the whine down of the two online businesses. So those fees are no longer part of that line. We also have some operational opportunities for improvement in our U.S. business and we are – leadership in our teams are focused in those areas.

We have – although title is one of the areas that I think we have real opportunity to improve our performance and we’re taking a closer look in those areas.

We also – as we’ve introduced the installment loan product in Texas as the regulatory environment has moved customers away from the payday loans, we got some areas of opportunity relative to the installment loan performances well.

And we continue to grow our balances outside the state of Texas and so I look to see – I look to use that number as the baseline but expect it to grow nicely over the course of the year..

Thank you Mr. Ramsey. And it looks like we do have a follow-up question from John Rowan with Sidoti & Company. Mr. Rowan your line is now open..

Hi, Mark. Just – I guess kind of going back to the sales from Grupo Finmart, how much were they for the quarter and now it was kind of non-revolving chunk of debt in your capital structure.

I mean are you relying on selling assets from Grupo Finmart in order to meet your liquidity needs?.

So the first question, I’ll answer – we had, let me find the amount. [Indiscernible] I apologize. So in the quarter we had – the perpetual sale was little over $14 million.

And for the year we’ve sold about $35 million and you will see that in the operational segment results under consumer loan sales and other, that number is primarily represents our structured asset sales, okay.

But then there is also – there is expenses below the line in operations that are accelerated also when we make those sales but that’s the sales result of the fees that are being accelerated based on the sale.

And our strategy at Grupo Finmart for this next year is to sell about 60% of new originations through the structured asset sales because we want to pay down our debt and work towards becoming more self-funded at Grupo Finmart..

So at Grupo Finmart you’re paying down the non-recourse chunk of debt?.

Yes..

Okay. And then just kind of – maybe just give us a clean tax rate going forward, obviously it’s been a very quarters since you’ve had a clean tax rate..

Right. So in 2014 our tax rate was – I think that came up around 29% for the year, and next year we’re planning our tax rate to be 33% and that’s primarily due to having a higher percentage of our net income being derived in the U.S. which is a higher tax jurisdiction..

Okay. Thank you very much..

Thank you, Sir. And we do have a follow-up question from Robert Ramsey with FBR. Sir, your line is now open, please proceed..

Thanks for taking the follow-up. I was curious with the inventory valuation adjustment that you all took. I can understand further in Mexico, but in the U.S.

with the gold piece of it, what is it that actually triggers taking the provision this quarter because gold obviously fluctuates every quarter and you haven’t taken provisions around gold in the past..

We do, we look at the inventory on a quarterly basis and we look at the lower cost from market on a quarterly basis and with the drop of the gold prices, remember our gold inventory – gold is turning away about onetime a year so there is a significant amount of time between the time we’ve created our cost basis and the time that we’re valuing it in many cases.

So that just gets down to math in what we expect that we can sell the item for, and/or disposition the item for, and we take that in consideration with our inventory terms and we have to make the appropriate adjustments..

Okay, fair enough. And then I guess moving on a different question.

As we think about the newer – I guess it’s like a couple of years ago now you added them, but the store within the stores that you all pushed out a couple of years ago, given that the consumer loan balances seem to be lower in the fees or lower at this point, how are you feeling about those newer locations.

Honestly, this came off the 90-day review so I’m sure since you didn’t mentioned that doing the end of that business you are committed to and think you can get to the 15% ROEs but just curious if have you any comments around those locations..

Great question Bob. First I would tell you that the U.S. financial services business saw a tremendous return on invested capital even with all the challenges that we’ve had. And our stores in the store model still continues to be our most profitable model.

It’s a tremendous model for us, we’re committed to that model, it’s upto us to adapt to the changing regulatory environment and still find ways to offer our customers the cash that they need. But when we share the rent and some of the fixed costs of store front between two different models, both businesses win.

And so wherever it makes sense, we’re going to be committed to that forth in the store concept..

Okay. Thank you, that’s all I have..

Thank you, Sir. (Operator Instructions) Presenters, at this time, I’m showing no further questions at this time. I’d like to turn the program back over to Mr. Kuchenrither for any closing remarks..

Well, we want to thank everybody that decided to join the call and listen. And I want to thank everybody that asked questions and participated. It’s our honor to be with you today, and it’s my honor to serve this company, and to serve our customers.

And we’ll be working hard over the next quarter to implement the strategies that I have outlined for you. And we look forward to talking to you in the near future. Take care..

Thank you, gentlemen. And ladies and gentlemen, this will conclude today’s conference. Thank you for your participation and have a wonderful day. You may now all disconnect..