EZCORP INC - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K

(MARK ONE)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ______________ TO _____________

COMMISSION FILE NUMBER 000-19424
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EZCORP, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 74-2540145
(State or other jurisdiction of (IRS Employer Identification No.)
Incorporation or organization)

1901 CAPITAL PARKWAY
AUSTIN, TEXAS 78746
(Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code: (512) 314-3400

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Securities Registered Pursuant to Section 12(b) of the Act:
None
Securities Registered Pursuant to Section 12(g) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosures of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The only class of voting securities of the registrant issued and outstanding is
the Class B Voting Common Stock, par value $.01 per share, 100% of which is
owned by one record holder who is an affiliate of the registrant. There is no
trading market for the Class B Voting Common Stock. The aggregate market value
of the Class A Non-voting Common Stock held by non-affiliates of the registrant
as of November 30, 2001, based on the closing price on The Nasdaq Stock Market
on such date, was $15.4 million.

As of November 30, 2001, 10,937,841 shares of the registrant's Class A
Non-Voting Common Stock, par value $.01 per share and 1,190,057 shares of the
registrant's Class B Voting Common Stock, par value $.01 per share were
outstanding.

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EZCORP, INC.
YEAR ENDED SEPTEMBER 30, 2001
INDEX TO FORM 10-K

PART I

ITEM 1. BUSINESS

EZCORP, Inc. (the "Company") is a Delaware corporation with its principal
executive offices located at 1901 Capital Parkway, Austin, Texas 78746. Its
telephone number is (512) 314-3400. References to the Company include the
subsidiaries listed in Exhibit 22.1.

The discussion in this section of this report contains forward-looking
statements that involve risks and uncertainties. The Company's actual results
could differ materially from those discussed herein. Factors that could cause or
contribute to such differences include, but are not limited to, those discussed
in this section and those discussed elsewhere in this report.

GENERAL

The Company is primarily engaged in operating pawnshops which function as
convenient sources of consumer credit and as value-oriented specialty retailers
of primarily previously owned merchandise. Through its lending function, the
Company makes relatively small, non-recourse loans secured by pledges of
tangible personal property. The Company contracts for a pawn service charge to
compensate it for each pawn loan. Pawn service charges, which generally range
from 12% to 300% per annum, are calculated based on the dollar amount and
duration of the loan and accounted for approximately 29% of the Company's
revenues for the year ended September 30, 2001 ("Fiscal 2001"). In Fiscal 2001,
approximately 76% of the pawn loans made by the Company were redeemed in full or
were renewed or extended through the payment of the pawn service charges. In
most states in which the Company operates, collateral is held one month with a
60-day extension period after which such collateral is forfeited for resale.

The Company also offers non-collateralized short-term loans, commonly referred
to as "payday loans" in most of its pawnshops. These short-term loans are made
based on a customer's credit history and are for periods ranging from one to 31
days, averaging about 15 days, for a fee of $15 to $20 per $100 loaned.

As of December 1, 2001, the Company operated 283 locations: 182 in Texas, 24 in
Colorado, 20 in Oklahoma, 18 in Florida, 15 in Indiana, 8 in Alabama, 4 in
Nevada, 3 in Tennessee, 3 in Louisiana, 3 in Mississippi, 2 in California, and 1
in Arkansas.

The pawnshop industry in the United States is large and highly fragmented. The
industry consists of over 10,000 pawnshops owned primarily by independent
operators who typically own one to three locations.

LENDING ACTIVITIES

The Company is primarily engaged in the business of making pawn loans, which
typically are relatively small, non-recourse loans secured by pledges of
tangible personal property. As of September 30, 2001, the Company had
approximately 646,000 loans outstanding, representing an aggregate principal
balance of $47.1 million. The Company contracts for a pawn service charge to
compensate it for a pawn loan. A majority of the Company's pawn loans are in
amounts that permit pawn service charges of 20% per month or 240% per annum. For
Fiscal 2001, pawn service charges accounted for approximately 29% of the
Company's total revenues.

Collateral for the Company's pawn loans consists of tangible personal property,
generally jewelry, consumer electronics, tools, sporting goods, and musical
instruments. The Company does not investigate the creditworthiness of a pawn
customer, but relies on the estimated resale value of the pledged property, the
perceived probability of its redemption, and the estimated time required to sell
the item as a basis for its lending decision. The amount that the Company is
willing to lend generally ranges from 20% to 65% of the pledged property's
estimated resale value depending on an evaluation of these factors. The sources
for the Company's determination of the resale value of collateral include the
Company's computerized valuation software, catalogues, newspaper advertisements,
and previous sales of similar merchandise.

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The pledged property is held through the term of the loan, which in Texas is one
month with an automatic 60-day grace period, unless repaid or renewed earlier.
The Company seeks to maintain a redemption rate (the percent of loans made that
are redeemed, renewed, or extended) between 70% and 80%, and in each of the
Company's last three fiscal periods, it achieved this targeted redemption rate.
The redemption rate is maintained through loan policy and proper implementation
of such policy at the store level. If a borrower does not repay, extend, or
renew a loan, the collateral is forfeited to the Company and then becomes
inventory available for sale in the Company's pawnshops. The Company does not
record loan losses or charge-offs of pawn loans because the principal amount of
an unpaid loan becomes the inventory carrying cost of the forfeited collateral.
The Company evaluates the salability of inventory and provides an allowance for
valuation of inventory, based on the type of merchandise, recent sales trends
and margins, and the age of merchandise.

The table below shows the dollar amount of loan activity by the Company for the
fiscal years ended September 30, 1999, 2000 and 2001:

The realization of gross profit on sales of inventory primarily depends on the
Company's initial assessment of the property's resale value. Improper assessment
of the resale value of the collateral in the lending function can result in
reduced marketability of the property and the realization of a lower margin.
Jewelry, which constitutes approximately 60% of the principal amount of items
pledged, can be evaluated primarily based on weight, carat content, and value of
gemstones, if any. The other items pawned typically consist of consumer
electronics, tools, and musical instruments. These can be evaluated based on
recent sales experience and the selling price of similar new merchandise,
adjusted for age, wear, and obsolescence.

At the time a pawn transaction is made, a pawn loan agreement, commonly referred
to as a pawn ticket, is delivered to the borrower. It sets forth, among other
things, the name and address of the pawnshop and the borrower, the borrower's
identification number from his driver's license, military identification or
other official number, the date of the loan, an identification and description
of the pledged goods (including applicable serial numbers), the amount financed,
the pawn service charge, the maturity date of the loan, the total amount that
must be paid to redeem the pledged goods, and the annual percentage rate.

Of the Company's 283 operating locations as of December 1, 2001, 182 were stores
located in Texas. Accordingly, Texas pawnshop laws and regulations govern most
of the Company's operations. In Texas, pawnshop operations are regulated by the
Office of Consumer Credit Commissioner in accordance with Chapter 371 of the
Texas Finance Code, commonly known as the Texas Pawnshop Act (the "Pawnshop
Act") and Rules of Operation for Pawnshops (the "Rules"). See "Regulation".

The maximum allowable pawn service charges for stratified loan amounts made in
the State of Texas are set in accordance with Texas law under the Pawnshop Act.
Historically, the maximum allowable pawn service charges under Texas law have
not changed; however, the stratified loan amounts have been adjusted upward each
year. The maximum allowable pawn service charges under the Pawnshop Act for the
various stratified loan amounts for the periods indicated below are as follows:

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SCHEDULE OF APPLICABLE LOAN SERVICE CHARGES FOR TEXAS

Under Texas law, there is a ceiling on the maximum allowable pawn loan. For year
ended June 30, 2001, the loan ceiling was $12,000. For the year ending June 30,
2002, the loan ceiling is $12,500. The Company's average loan amount at the end
of Fiscal 2001 was approximately $73.

In addition to pawn loans, the Company offers unsecured short-term loans,
commonly referred to as "payday loans" in most of its pawnshops. In a limited
number of locations, the Company originates short-term loans. In most locations,
the Company markets, services, processes, and collects short-term loans
originated by County Bank, a federally insured Delaware banking corporation.
After origination of the short-term loans, the Company is entitled to purchase
an 85% participation in the loans made by County Bank and marketed by the
Company. Short-term loan terms range from one to 31 days, averaging about 15
days. The fee per $100 loaned is typically $18 per 14-day period, but varies in
certain locations. The loans and related fees reported in the Company's
consolidated financial statements reflect only the Company's participation
interest in such loans.

Unlike pawn loans, short-term loans are unsecured, and the Company provides for
a valuation allowance on both the principal and fees receivable based on recent
default and collection experience. At September 30, 2001, the valuation
allowance was 9.5% of the short-term loan principal and fees receivable. The
Company considers a loan defaulted if the loan has not been repaid or refinanced
by the maturity date. Although defaulted loans may be collected through
subsequent collection efforts, the Company charges defaulted loans to bad debt
when they default. When defaulted loans are collected, the amount collected is
recorded as a reduction of bad debt at the time of collection.

RETAIL ACTIVITIES

Jewelry sales represent approximately 40% of the Company's merchandise sales
with the remaining sales consisting primarily of consumer electronics, tools,
sporting goods, and musical instruments. The Company believes its ability to
offer quality used merchandise at prices significantly lower than original
retail prices attracts value-conscious customers. The Company obtains its
inventory primarily from unredeemed collateral, and to a lesser extent, from
purchases from the general public and from wholesale sources. For Fiscal 2001,
purchases from the general public and from wholesale sources constituted
approximately 9% of the dollar value of inflows to inventory. During Fiscal
2001, $70.9 million of merchandise was added to inventory through forfeited
collateral. For Fiscal 2001, retail activities accounted for approximately 69%
of the Company's total revenues, but only 46% of the Company's net revenue,
after deducting cost of goods sold on merchandise sales.

Analysis of the sales and inventory data provided by the Company's management
information systems facilitates the design and development of promotional and
merchandising programs and merchandise pricing decisions. Regional and area
managers implement these promotional and merchandising programs, review
merchandise pricing decisions, and balance inventory levels within markets.

The Company does not give prospective buyers any warranties on most merchandise
sold through its retail operations, except for certain purchases of new,
wholesale-purchased merchandise, which may

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have a limited manufacturer's warranty. Prospective buyers may purchase an item
on layaway, whereby a prospective purchaser will typically put down a minimum of
20% of an item's purchase price as a customer layaway deposit. The Company will
hold the item for a 90-day period during which the customer is required to pay
for the item in full. As of September 30, 2001, the Company had $2.1 million in
customer layaway deposits and payments.

The Company's overall inventory is stated at the lower of cost or market. The
Company provides inventory reserves for shrinkage and cost in excess of market
value. The Company estimates these reserves through study and analysis of sales
trends, inventory turnover, inventory aging, margins achieved on recent sales,
and shrinkage. Valuation allowances, including shrinkage reserves, amounted to
$1.1 million as of September 30, 2001. At September 30, 2001, total inventory on
hand was $34.2 million, after deducting such allowance for shrinkage and
valuation of inventory.

SEASONALITY

Historically, pawn service charge revenues are highest in the Company's fiscal
fourth quarter (July, August, and September) due to higher loan demand during
the summer months. Merchandise sales are highest in the Company's first and
second fiscal quarters (October through March) due to the holiday season and tax
refunds.

OPERATIONS

GENERAL

The typical Company location is a freestanding building or part of a retail
strip center. Nearly all of the Company's pawnshop locations have contiguous
parking available. Store interiors are designed to resemble small discount
operations and attractively display merchandise by category. Distinctive
exterior design and attractive in-store signage provide an appealing atmosphere
to customers. The typical store has approximately 1,800 square feet of retail
space and approximately 3,200 square feet dedicated to lending activities
(principally collateral storage). The Company maintains property and general
liability insurance for each of its pawnshops. The Company's stores are open six
or seven days a week, depending on location.

STORE MANAGEMENT

A typical Company store employs five to six people consisting of a manager, an
assistant manager, and three to four sales and lending representatives. Store
managers are specifically responsible for ensuring that their store is run in
accordance with the Company's established policies and procedures, and for
operating their store according to performance parameters consistent with the
Company's store operating guidelines. Each store manager reports to one of
approximately 33 area managers who are responsible for the stores within a
specific operating region. Area managers are responsible for the performance of
all stores within their area and report to one of four regional directors.
Regional directors, area managers, store managers, and assistant managers
receive incentive compensation based on their region, area, or store performance
to an operating budget. This incentive compensation typically ranges between 10%
and 25% of their total compensation, plus a gain-sharing component for store and
area managers whose stores exceed planned levels of earnings.

MANAGEMENT INFORMATION SYSTEMS AND CONTROLS

The Company has a store level point of sale (POS) system that automates the
recording of all store-level transactions. Financial summary data from all
stores is retrieved and processed at the corporate office each day and is
available for management review by early morning for the preceding day's
transactions. This information is available to field management via the
Company's internal network. The Company's communications network provides access
to each store from the corporate offices. During Fiscal 2000, the Company
completed the development of a new, three-tier architecture, store-level system.
This new system will provide additional store level functionality, increase
service offerings, enhance reporting and controls, and provide software and
hardware scalability. The company tested this new system in 51 of its 283 stores
in Fiscal 2001. The Company plans to install this new system in all its
locations by the end of Fiscal 2002.

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The Company has an internal audit staff of approximately 20 employees to help
ensure that the Company's policies and procedures are consistently followed. In
addition, the audit department monitors, among other matters, the Company's
perpetual inventory system, lending practices, and regulatory compliance.

HUMAN RESOURCES

As of September 30, 2001, the Company employed approximately 1,900 people. The
Company believes that its success is dependent upon its employees' ability to
make loans that achieve optimum redemption rates, to sell retail merchandise
effectively, and to provide prompt and courteous customer service. The Company
seeks to hire people who will become long-term, career employees. To achieve the
Company's long-range personnel goals, the Company strives to develop its
employees through a combination of learner-controlled instruction, classroom
training, and supervised on-the-job loan and sales training for new employees.
All employees go through periodic competency checks and all new employees go
through a learner-controlled instruction program. Managers attend on-going
management skills and operations performance training. Regional directors and
area managers receive training on how to effectively motivate employees and how
to increase each store's profitability. The Company's management believes that
its managers, at all levels, are the principal trainers in the organization.

The Company anticipates that store manager candidates will be promoted primarily
from the ranks of existing store employees and has created a process for
forecasting future needs and identifying potential internal candidates for
position openings. The Company's career development plan develops and advances
employees within the Company, and provides training for the efficient
integration of experienced retail managers and pawnbrokers from outside the
Company.

In Texas, each pawnshop employee must be licensed in order to make loans.
Employee pawnshop licenses are renewed annually. The licensing process and
renewals both include a review of each individual's background.

TRADE NAME

At December 1, 2001, the Company operated 281 of its pawnshops under the name
"EZ Pawn" and two locations under the name "EZMONEY." Both names are registered
with the United States Patent and Trademark Office.

GROWTH AND EXPANSION

In Fiscal 1998, the Company began expanding rapidly. In Fiscal 1998 and Fiscal
1999, the Company added a net 37 and 45 stores. Typically new stores turn
profitable during their second full year of operation as they build their loan
and sales customer base. During Fiscal 2000, the Company decided to slow its new
store expansion. As a result, the Company opened only five newly established
stores in Fiscal 2000 and none in Fiscal 2001. During the Fiscal 2000 fourth
quarter, the Company made the decision to close fifty-four under-performing
stores, 10 of which had been open less than two years. As of September 30, 2001,
forty-seven of the fifty-four stores had been closed. In the third quarter of
Fiscal 2001, the Company decided not to close the remaining seven of the stores
targeted for closure due to their improved operating performance.

The five most recently established stores with 12 full months of operating data,
opened by the Company in its fiscal year ended September 30, 2000, required an
average gross investment (including inventory, pawn loans, property, plant, and
equipment) of approximately $500,000 per pawnshop during the first 12 months of
operation.

The Company's ability to add new stores is dependent on several variables, such
as the availability of acceptable sites or acquisition candidates, the
regulatory environment, and the availability of qualified personnel. The
Company's ability to add newly established stores in Texas counties having a
population of 250,000 or more has been adversely affected by Texas law which
provides that, in counties with 250,000 or more residents, applications for new
licenses will be approved only at proposed locations which are not less than two
miles from another licensed pawnshop and applications to relocate a licensed

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pawnshop will be approved only for proposed locations which are not less than
one mile from another licensed pawnshop. Any existing store may relocate to
within one mile of its present location, regardless of the existence of other
pawnshops. The Company's ability to add newly established stores in such
counties may be adversely affected by such regulation. See "Regulation".

COMPETITION

The Company encounters significant competition in connection with the operation
of its business. These competitive conditions may adversely affect the Company's
revenues, profitability, and its ability to expand. In connection with the
lending of money, the Company competes primarily with other pawnshops. While
there are four pawnshop chains with more than fifty locations, the majority of
the Company's competitors are independently owned pawnshops. The Company is the
second largest pawnshop chain in the United States. The Company believes that
the primary elements of competition in the pawnshop business are store location
and design, the ability to loan competitive amounts on items pawned, management
of store-level employees, and the quality of customer service. In addition, as
the pawnshop industry consolidates, the Company believes that the ability to
compete effectively will be based increasingly on strong general management,
regional market focus, automated management information systems, and access to
capital. Some of the Company's competitors may have greater financial resources
than the Company.

To a certain extent, the Company also competes with other types of financial
institutions such as consumer finance companies and companies making payday
loans. Other lenders may and do lend money on an unsecured basis, at interest
rates which are lower than the service charges of the Company, and on other
terms more favorable than those offered by the Company.

The Company's competitors, in connection with the sale of merchandise, include
numerous retail and wholesale stores, including jewelry stores, discount retail
stores, consumer electronics stores, other pawnshops, other retailers of
previously owned merchandise, electronic commerce retailers, and auction sites.
Competitive factors in the Company's retail operations include the ability to
provide the customer with a variety of merchandise at an exceptional value. On a
retail level, the Company competes with numerous other retailers who have
significantly greater financial resources than the Company.

STRATEGIC INVESTMENT

In 1998, the Company acquired 29.47% of the outstanding shares of Albemarle &
Bond Holdings plc ("A&B"). As its largest shareholder, the Company holds two of
A&B's seven board of directors positions. A&B is a publicly traded company based
in Bristol, England and trades on the Alternative Investment Market of the
London Stock Exchange. At June 30, 2001, A&B operated 50 locations in the United
Kingdom that offer pawn loans, payday loans, check cashing, and retail jewelry.
For A&B's 2001 fiscal year, which ended June 30, 2001, A&B's operating profit
increased 26% over the prior year twelve-month period to approximately
(pound)2.8 million.

The Company accounts for its investment in A&B under the equity method. In
Fiscal 2001, the Company's equity interest in A&B's income was $267,000, after
$453,000 of goodwill amortization. At November 30, 2001, the market value of the
Company's investment was $11.9 million, based on the closing price and exchange
rates on that date.

REGULATION

PAWNSHOP OPERATIONS

The Company's pawnshop operations are subject to extensive regulation,
supervision, and licensing under various federal, state, and local statutes,
ordinances, and regulations. Of the Company's 283 locations as of December 1,
2001, 182 were in Texas. Accordingly, Texas pawnshop laws govern most of the
Company's operations. The laws of Colorado, Oklahoma, Indiana, Florida, Alabama,
California, Tennessee, Nevada, Louisiana, Mississippi, and Arkansas apply to the
Company's pawnshop operations in those states. At December 1, 2001, the Company
operated 283 locations: 182 in Texas, 24 in Colorado, 20 in Oklahoma, 18 in
Florida, 15 in Indiana, 8 in Alabama, 4 in Nevada, 3 in Tennessee, 3 in
Louisiana, 3 in Mississippi, 2 in California, and 1 in Arkansas. In many states
in which the Company

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operates, pawnshops are subject to local regulation at the municipal and county
level, which regulation may affect the ability of the Company to expand its
operations in those states.

In addition, the Company's short-term loan operations are subject to various
state and federal statutes and regulations including, but not limited to the
federal Equal Credit Opportunity Act, Fair Credit Reporting Act, the Truth in
Lending Act, the Gramm-Leach-Bliley Act, and the Fair Debt Collection Practices
Act. The Company complies with the requirements of these federal statutes and
their regulations with respect to its short-term loan business, and state
statutes and regulations, where applicable.

TEXAS REGULATIONS

In Texas, pawnshops are governed by the Texas Pawnshop Act and the related Rules
of Operation for Pawnshops, and are subject to licensing by and supervision of
the Office of Consumer Credit Commissioner ("OCCC"). In addition, pawnshops and
pawnshop employees in Texas must be licensed by the Texas Consumer Credit
Commissioner. Furthermore, the Company is required to supply the Office of
Consumer Credit Commissioner with copies of information filed with the
Securities and Exchange Commission.

The maximum allowable pawn service charges for stratified loan amounts made in
the State of Texas are set in accordance with the Texas Pawnshop Act.
Historically, the maximum allowable pawn service charges under Texas law have
not changed; however, the stratified loan amounts have been adjusted upward each
year. Under Texas law, there is a ceiling on the maximum allowable pawn loan.
For the period July 1, 2000 to June 30, 2001, the loan ceiling was $12,000. For
the period July 1, 2001 through June 30, 2002, the loan ceiling is $12,500. A
table of the maximum allowable pawn service charges under the Texas Pawnshop Act
for the various stratified loan amounts for July 1, 2001 to June 30, 2002 is
presented in "Lending Activities".

To be eligible for a license to operate a pawnshop in Texas, an applicant must:
(i) be of good moral character, which in the case of a business entity applies
to each officer, director, and holder of five percent or more of the entity's
outstanding shares; (ii) have net unencumbered assets (as defined in the Texas
Pawnshop Act) of at least $150,000 readily available for use in conducting the
business of each licensed pawnshop; (iii) demonstrate that the applicant has the
financial responsibility, experience, character, and general fitness to command
the confidence of the public in its operation; and (iv) demonstrate that the
pawnshop will be operated lawfully and fairly in accordance with the Texas
Pawnshop Act and Rules. Current applications to the Office of Consumer Credit
Commissioner inquire, among other matters, into the applicant's credit history
and criminal record.

In addition, for new pawnshop applications filed after September 1, 1999 to be
operated in counties with 250,000 or more people, applications for new licenses
will be approved only at proposed locations which are not less than two miles
from another licensed pawnshop, and applications to relocate a license will be
approved only for proposed locations which are not less than one mile from
another licensed pawnshop. Any existing store may relocate to within one mile of
its present location, regardless of the existence of other pawnshops. The
Company's ability to add newly established stores in such counties may be
adversely affected by such regulation.

For a new license application in any Texas county, the Commissioner provides
notice of the application, and the opportunity for a public hearing, to the
other licensed pawnshops in the county in which the applicant proposes to
operate. The timeframe for the license application approval process generally
requires the Commissioner's office to process an application within 60 days of
its receipt of a complete application file. When a public hearing is requested,
however, the public hearing process can increase the timeframe substantially or
result in no application approval at all. The Company's ability to add newly
established stores may be adversely affected by the referenced provisions of the
Texas Pawnshop Act. The Texas Consumer Credit Commission may, after notice and
hearing, suspend or revoke any license for a Texas pawnshop upon finding, among
other matters, that: (i) any fees or charges have not been paid; (ii) the
licensee has violated (whether knowingly or unknowingly without due care) any
provisions of the Texas Pawnshop Act or any regulation or order thereunder; or
(iii) any fact or condition exists which, if

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it had existed at the time the original application was filed for a license,
would have justified the Commissioner in refusing such license.

The Texas Pawnshop Act also contains provisions related to the operation of
pawnshops and authorizes the promulgation of administrative rules called the
Rules of Operation of Pawnshops (the "Rules") which regulate the day-to-day
management of the Company's pawnshops. Under the Pawnshop Act and the Rules, a
pawnbroker may not do any of the following: accept a pledge from a person under
the age of 18 years; make any agreement requiring the personal liability of the
borrower; accept any waiver of any right or protection accorded to a pledgor
under the Texas Pawnshop Act; fail to exercise reasonable care to protect
pledged goods from loss or damage; fail to return pledged goods to a pledgor
upon payment of the full amount due; make any charge for insurance in connection
with a pawn transaction; enter into any pawn transaction that has a maturity
date of more than one month; display for sale in storefront windows or sidewalk
display cases, pistols, swords, canes, blackjacks or similar weapons; purchase
used or second hand personal property unless a record is established containing
the name, address, and identification of the seller, a complete description of
the property, including serial number and a signed statement that the seller has
the right to sell the property; or accept into pawn or purchase stolen goods.

In order to market and service short-term loans in Texas, the Company's 184
pawnshops and collection center are required to be licensed as a regulated
lender by the OCCC. The Company's ability to market and service short-term loans
in Texas at current fee levels is dependent upon its continued relationship with
County Bank or another similarly situated financial institution. Without such a
relationship with a federally insured bank domiciled in a state that permits
these rates, such as County Bank, the Company could offer short-term loans at a
lower fee level, not in excess of the Texas usury ceiling. While Delaware law
governs the short-term loans made by County Bank, the Company's short-term loan
activities in Texas are subject to review and regulation by the OCCC.

COLORADO REGULATIONS

Colorado law provides for the licensing and bonding of pawnbrokers in that
state. It also requires that pawn transactions be reported to local authorities
and that certain bookkeeping records be maintained. Under Colorado law, the
maximum allowable pawn service charge is 240% annually for pawn loans up to $50,
and 120% annually for pawn loans in excess of $50.

In Colorado, the Company makes short-term loans to customers pursuant to its own
underwriting guidelines. Short-term loans originated by the Company in Colorado
are regulated by the Department of Law, Office of the Attorney General, Uniform
Consumer Credit Code Division (the "UCCC Division"). The Company's 24 pawnshops
in Colorado have and are required to maintain a supervised lender's license
issued by the UCCC Division. The UCCC Division maintains regulatory and
supervisory authority over the stores. Under Colorado law, the Company is
required to maintain certain records related to its short-term loans and include
specific information and disclosures in the loan agreement.

The maximum loan amount is $500, exclusive of the service fee. Colorado law
provides for a graduated service fee: twenty percent (20%) of the first $300 and
7.5% of the amount over $300. The loan term may not exceed 31 days. Customers
have the right to rescind the loan within one business day after the date of
loan origination. The loan cannot be renewed more than once and if it is renewed
prior to the maturity date, the Company must refund a prorated portion of the
service fee.

OKLAHOMA REGULATIONS

The Company's Oklahoma operations are subject to the Oklahoma Pawnshop Act.
Following a statutory scheme similar to the Texas Pawnshop Act, the Oklahoma
Pawnshop Act provides for, among other matters, the licensing and bonding of
pawnbrokers in Oklahoma and provides for the Oklahoma Administrator of Consumer
Credit to investigate the general fitness of the applicant and generally
regulate pawnshops in that state. The Administrator has broad rule-making
authority with respect to Oklahoma pawnshops.

10

In general, the Oklahoma Pawnshop Act prescribes stratified loan amounts and
maximum rates of service charges which pawnbrokers in Oklahoma may charge for
lending money in Oklahoma within each stratified range of loan amounts. The
regulations provide for a graduated rate structure, similar to the graduated
rate structure utilized in federal income tax computations. Under this method of
calculation, a $500 loan, for example, earns interest as follows: (1) first $150
at 240% annually, (2) next $100 at 180% annually, and (3) the remaining $250 at
120% annually. The maximum allowable pawn service charges for the various
stratified loan amounts under the Oklahoma statute are as follows:

The amount financed in Oklahoma may not exceed $25,000 per pawn transaction. In
addition, the Oklahoma Pawnshop Act requires each applicant to (1) be of good
moral character; (2) have net assets of at least $25,000; (3) show that the
pawnshop will be operated lawfully and fairly within the purpose of the Oklahoma
Pawnshop Act; and (4) not have been convicted of any felony which directly
relates to the duties and responsibilities of the occupation of pawnbroker.

Oklahoma does not currently regulate or require a license for the Company's
short-term loan activities. In the future, if the Company alters its current
short-term loan business model in the state of Oklahoma or if Oklahoma changes
its laws regarding short-term loans, such an alteration or change could have a
material effect on the Company's short-term loan program in Oklahoma.

FLORIDA REGULATIONS

Pawnshop transactions in Florida are subject to Florida regulations codified in
Chapter 539 of the Florida Statutes. Under such regulations, licensing of
pawnshops and regulatory enforcement of such shops is performed by the Division
of Consumer Services of the Department of Agriculture and Consumer Services.
Such regulations require, among other things, that the pawnshop fill out a
Pawnbroker Transaction Form showing the customer name, type of item pawned, and
disclosing the amount of the pawn loan and the applicable finance charges. A
copy of each form must be delivered to local law enforcement officials at the
end of each business day.

Pawn loans in Florida typically have a 30-day maturity date. If the customer
does not redeem the loan within 30 days following the maturity date (or the next
business day, whichever is later), all right, title, and interest to the
property vests in the pawnbroker. The pawnbroker is entitled to charge two
percent of the amount financed for each 30 days as interest, and an additional
amount as pawn service charges, provided the total amount of such charge,
inclusive of interest, does not exceed 25% of the amount financed for each 30
day period in a pawn transaction. The pawnbroker may charge a minimum pawn
service charge of $5.00 for each 30-day period. Pawns may be extended by
agreement, with the charge applicable being one-thirtieth of the original total
pawn service charge for each day by which the loan is extended. For loans
redeemed greater than 60 days after the date made, pawn service charges continue
to accrue at the daily rate of one-thirtieth of the original total pawn service
charge.

INDIANA REGULATIONS

The Company's Indiana operations are regulated by the Department of Financial
Institutions. The Department requires all persons or entities to obtain a
license to act as a pawnbroker. The Indiana Pawnbroker's Act provides for the
Department of Financial Institutions to investigate the general fitness of the
applicant, to determine whether the convenience and needs of the public will be
served by granting an applicant a license, and generally to regulate pawnshops
in the state.

11

The Department of Financial Institutions has broad investigatory and enforcement
authority under the statute. The Department may grant, revoke, and suspend
licenses. For compliance purposes, pawnshops are required to keep such books,
accounts, and records as will enable the Department to determine if the pawnshop
is complying with the statute. Each pawnshop is required to give authorized
agents of the Department of Financial Institutions free access to its books and
accounts for these purposes. The Indiana statute allows the following annual
rates of interest plus pawn service charges: 276% annually on transactions of
$300 or less; 261% annually on transactions greater than $300 but not exceeding
$1,000, and 255% annually on transactions greater than $1,000. Furthermore, the
Indiana Pawnbroker Act provided for a grace period of 90 days after the initial
30-day term of the loan, subject to notice. During the grace period, interest
and service fees continue to accrue, subject to daily proration depending on the
date of loan redemption. As of July 1, 2001, the grace period was reduced to 60
days, and notice is no longer required.

ALABAMA REGULATIONS

The Alabama Pawnshop Act regulates the licensing and operation of pawnshops in
that state. The general fitness of pawnshop applicants is investigated by the
Supervisor of the Bureau of Loans of the State Department of Banking. The
Supervisor also issues pawnshop licenses. The Alabama Pawnshop Act requires that
certain bookkeeping records be maintained and made available to the Supervisor
and to local law enforcement authorities. The Alabama Pawnshop Act establishes a
maximum allowable pawn service charge of 300% annually.

NEVADA REGULATIONS

In Nevada, all pawn loans must be held for redemption for at least 120 days
after the date the loan is made. A pawnbroker may charge interest at the rate of
10% per month for money loaned on the security of personal property actually
received. In addition, the pawnbroker may collect an initial set up fee of $5.
Property received in pledge may not be removed from the pawnshop, except when
redeemed by the owner, after a report of the receipt of such property is
reported to the sheriff or chief of police.

Nevada does not regulate short-term loans. The Company originates short-term
loans in Nevada and charges a service fee of $20 per $100 loaned on a 14-day
term.

TENNESSEE REGULATIONS

Tennessee law provides for the licensing of pawnbrokers in that state. It
further requires (1) that pawn transactions be reported to local law enforcement
agencies, (2) requires pawnbrokers to maintain insurance coverage on the
property held in pledge for the benefit of the pledgor, (3) establishes certain
hours during which pawnshops may be opened for business, and (4) requires
certain bookkeeping records be maintained. Tennessee law prohibits pawnbrokers
from selling, redeeming, or disposing of any goods pledged or pawned to or with
them within 48 hours after making their report to local law enforcement
agencies.

Applicable Tennessee law provides that pawnbrokers may charge interest of 2% per
month, plus service charges of 20% for investigating the title, storing, and
insuring the pledged goods, closing the loan, and for other expenses and losses
associated with the loan.

LOUISIANA REGULATIONS

The Company's Louisiana operations are governed by the Louisiana Pawnshop Act.
The statute gives regulatory and enforcement powers to the Commissioner of the
Office of Financial Institutions within the Department of Economic Development.
This statute provides for, among other things, the licensing and bonding of all
pawnbrokers in Louisiana.

Under Louisiana law, the maximum allowable interest charge is 120% annually. In
addition, pawnshops may collect a 10% service charge for the first month of a
pawn transaction. Louisiana law requires that a pawnbroker hold jewelry that is
pledged as collateral until the lapse of six months prior to resale from the
time the loan was entered or extended. Louisiana law requires a three-month
lapse on other items.

12

MISSISSIPPI REGULATIONS

The Company's Mississippi operations are subject to the Mississippi Pawnshop
Act. The Commissioner of Banking administers the Mississippi Pawnshop Act.
Municipalities in the state may enact ordinances which are in compliance with,
but not more restrictive than those in the Mississippi Pawnshop Act.

The Mississippi Pawnshop Act provides for, among other matters, the licensing of
pawnbrokers. The Act also provides for the Commissioner of Banking to
investigate the general fitness of the applicant and generally to regulate
pawnshops in the state. The Commissioner has broad rule-making authority with
respect to Mississippi pawnshops. The Mississippi Pawnshop Act establishes a
maximum allowable pawn service charge of 300% annually.

CALIFORNIA REGULATIONS

In California, both state and city or county licenses are required. Applicants
must pass a state and local background check, post a bond in the amount of
$20,000, and maintain net assets of at least $100,000 per location. Pawn loans
in California require a written contract, which must provide for a four-month
loan period. If the pledgor does not redeem the loan within such period, the
pawnbroker must, within 30 days thereafter, send a notification to the pledgor
giving him ten days from the date of the mailing to redeem the pawn. The
pawnbroker may charge up to $2 for this notice.

In California, a pawnbroker may charge an initial set up fee of $2 on a pawn
transaction. In addition, a pawnbroker may charge interest of 2.5% per month on
loans up to $225; 2.0% per month on the portion of any loan between $225.01 and
$900; 1.5% per month on the portion of any loan between $900.01 and $1,650; and
1.0% per month on the portion of any loan that is $1,650.01 and above.
Pawnbrokers may also charge storage fees of $3 for any article that cannot be
contained within one cubic foot, $9 for any article that cannot be contained
within three cubic feet, and $18 for any article that cannot be contained within
six cubic feet. Additionally, pawnbrokers may make service charges consistent
with the following schedule:

For loans not more than 30 days:

13

For loans not more than 90 days:

The Company originates short-term loans in California which are regulated under
California's check cashers statute as "deferred deposit" transactions. The
maximum loan amount may not exceed $300 for a term not to exceed 30 days. The
service fee is limited to 15% of the amount of the loan. Only one short-term
loan may be outstanding at a time.

ARKANSAS REGULATIONS

Arkansas law does not provide for the licensing of pawnbrokers or pawnshops in
that state. By statute, pawnbrokers must maintain certain records of each pawn
transaction and make those records available to local law enforcement agencies.
Arkansas law establishes a maximum allowable interest rate of 17% annually;
however, a pawnshop operator may charge reasonable fees for investigating title,
storage, and other services.

LOCAL REGULATIONS

At the local level, each pawnshop, voluntarily or pursuant to municipal
ordinance, provides copies of transactions involving pawn loans and
over-the-counter purchases to the local police department. These daily
transaction reports are designed to provide the local police with a detailed
description of the goods involved, including serial numbers, if any, and the
names and addresses of the owners obtained from valid identification cards.

A copy of each transaction ticket is provided to local law enforcement agencies
for processing by the National Crime Investigative Computer to determine
rightful ownership. Goods held to secure pawn loans or goods purchased which are
determined to belong to an owner other than the borrower or seller are subject
to recovery by the rightful owner. While a risk exists that pledged or purchased
merchandise may be subject to claims of rightful owners, historically, the
Company has experienced such claims with respect to less than 0.5% of pawn loans
made.

14

There can be no assurance that additional local, state, or federal legislation
will not be enacted or that existing laws and regulations will not be amended
which would materially, adversely impact the Company's operations and financial
condition.

FIREARMS REGULATIONS

With respect to firearm sales, each pawnshop must comply with the regulations
promulgated by the Bureau of Alcohol, Tobacco, and Firearms (the "ATF"). The ATF
regulations require each pawnshop dealing in firearms to maintain a permanent
written record of all transactions involving the receipt or disposition of guns.

The Brady Handgun Violence Prevention Act (the "Brady Act") and the ATF rules
promulgated under the Brady Act require all federal firearm licensees, in either
selling inventoried firearms or releasing pawned firearms, to have the customer
complete appropriate forms and pass a background check through the National
Instant Criminal Background Check System ("NICS") before the Company may
transfer a firearm to any customer.

The Company complies with the Brady Act and the regulations promulgated by the
ATF relating thereto. The Company does not believe that compliance with the
Brady Act and the ATF regulations materially affect the Company's operations.
There can be no assurance, however, that compliance with the Brady Act and the
ATF regulations, or any future changes or amendments thereto will not adversely
affect the Company's operations.

15

ITEM 2. PROPERTIES

As of December 1, 2001, the Company owned the real estate and buildings for 24
of its pawnshops and leased 259 of its operating pawnshop locations. The Company
generally leases facilities for a term of five to ten years with one or more
options to renew. The Company's existing leases expire on dates ranging between
January 1, 2002 and June 30, 2021. All leases provide for specified periodic
rental payments and such leases provide for market rental rates. Most leases
require the Company to maintain the property and pay the cost of insurance and
taxes. The Company believes that the termination of any one of its leases would
not have a material adverse effect on the Company's operations. The Company's
strategy is generally to lease, rather than acquire, space for its pawnshop
locations unless the Company finds what it believes is a superior location at an
attractive price. The Company completed sale-leasebacks on twenty of its owned
locations during Fiscal 2001 and plans to complete sale-leasebacks on other
owned properties in Fiscal 2002. The Company believes that the facilities owned
and leased by it as pawnshop locations are suitable for such purpose.

The following table presents the metropolitan areas or regions (as defined by
the Company) generally served by the Company and the number of pawnshop
locations serving each such market as of December 1, 2001:

In addition to its store locations, the Company leases its 27,400 square foot
corporate offices located in Austin, Texas and leases certain warehouse
facilities. The Company also leases approximately 8,100 square feet for its
Central Jewelry Processing Center.

17

ITEM 3. LEGAL PROCEEDINGS

From time to time, the Company is involved in litigation relating to claims
arising from its normal business operations. Currently, the Company is a
defendant in several lawsuits. Some of these lawsuits involve claims for
substantial amounts. While the ultimate outcome of these lawsuits cannot be
ascertained, after consultation with counsel, the Company believes the
resolution of these suits will not have a material adverse effect on the
Company's financial condition. There can be no assurance, however, that this
will be the case.

Pursuant to a settlement agreement dated February 4, 1998, the Company and its
founder and former President and Chief Executive Officer, Courtland L. Logue,
Jr., reached an out of court settlement in the lawsuit styled EZCORP, Inc. v.
Courtland L. Logue, Jr., in the 201st District Court of Travis County, Texas.
Under the terms of the settlement, which closed February 18, 1998, both the
Company and Mr. Logue released their claims against each other, including all
claims under Mr. Logue's employment agreement, and neither party admitted any
liability nor paid any cash consideration to the other.

The Company agreed to accelerate the release of contractual restrictions on the
transfer of Mr. Logue's 967,742 shares of common stock, which converted, as of
February 18, 1998, to publicly traded Class A Non-voting Common Stock. In
exchange, Mr. Logue agreed to assign 10,000 shares of his stock to the Company.

The settlement released 191,548 shares immediately from certain restrictions
against transfer, and a like amount was released as of October 29, 1998. An
additional 95,774 shares were released from restrictions on each of October 29,
1999 and October 29, 2000, with the remaining 40% of the shares released in July
2001. The Company and Mr. Logue also clarified the scope of Mr. Logue's
continuing non-competition agreement, agreed to a five-year limitation on Mr.
Logue's financial investments in competing pawnshop businesses and agreed to
renewal options with respect to certain existing real estate leases for store
locations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

18

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Since August 27, 1991, the Company's Class A Non-voting Common Stock ("Class A
Common Stock") has traded on The NASDAQ Stock Market under the symbol EZPW. As
of November 30, 2001, there were 176 stockholders of record of the Company's
Class A Common Stock. There is no trading market for the Company's Class B
Voting Common Stock ("Class B Common Stock"), and as of November 30, 2001, such
stock was held by one stockholder of record.

The high and low per share price for the Company's Class A Common Stock for the
past two fiscal years, as reported by The NASDAQ Stock Market, were as follows:

As of November 30, 2001, the Company's Class A Common Stock closed at $1.41 per
share.

The Company's restated certificate of incorporation provides that cash dividends
on common stock, when declared, must be declared and paid share and share alike
on the Class A Common Stock and the Class B Common Stock.

19

ITEM 6. SELECTED FINANCIAL DATA

The following selected financial information should be read in conjunction with,
and is qualified in its entirety by reference to the financial statements of the
Company and the notes thereto included elsewhere in this Form 10-K:

SELECTED FINANCIAL DATA

(a) Beginning in Fiscal 2000, the Company changed its method of
accounting for pawn service charge revenue and inventory, as described in
Management's Discussion and Analysis. Service charges and inventory before
Fiscal 2000 are stated on the historical accounting method, and are not directly
comparable to Fiscal 2000 and 2001 amounts.

20

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

This discussion and analysis compares the results of operations for the 12 month
periods ending September 30, 2001, 2000, and 1999 ("Fiscal 2001", "Fiscal 2000",
and "Fiscal 1999"). The discussion should be read in conjunction with, and is
qualified in its entirety by, the accompanying financial statements and related
notes. For purposes of management's discussion and analysis of results of
operations and financial condition, all comparisons reflect the pro forma
effects of applying the new accounting principle described below to the
consolidated financial statements as if the change had occurred on September 30,
1998.

SUMMARY FINANCIAL DATA

- ----------

(1) Average locations in operation during the period is calculated based on the
average of the stores operating at the beginning and end of each month during
such period.

21

RESULTS OF OPERATIONS

In Fiscal 2000, the Company adopted a restructuring plan, including the closure
of several under-performing stores. The restructuring plan and its effects are
described more fully below.

The Company's primary activity is the making of small, non-recourse loans
secured by tangible personal property. The income earned on this activity is
pawn service charge revenue. While the Company's average store count during
Fiscal 2001 was down 12.3% from Fiscal 2000 due to the restructuring, its pawn
service charge revenue decreased only 4.9%, or $2.8 million from Fiscal 2000 to
$54.7 million. This represents an increase in same store pawn service charge
revenue ($0.6 million) offset by the decrease in pawn service charge revenue
from the forty-seven closed stores ($3.4 million). At September 30, 2001, same
store pawn loan balances were 4% above September 30, 2000 and the annualized
yield on the average pawn loan balance decreased 5 percentage points to 120%.
Variations in the annualized loan yield, as we saw between these periods, are
due generally to changes in the level of loan forfeitures and a mix shift
between loans with different yields.

In Fiscal 2000, pawn service charge revenue decreased $1.2 million from Fiscal
1999 to $57.5 million as a result of a decrease in same store pawn service
charge revenue ($2.7 million), offset somewhat by pawn service charge revenue
from new stores not open the full 12 month period ($1.5 million). At September
30, 2000, same store pawn loan balances were 11.5% below September 30, 1999 and
the annualized yield on the average pawn loan balance increased by 5 percentage
points to 125%.

A secondary, but related, activity of the Company is the sale of merchandise,
primarily collateral forfeited from its pawn lending. For Fiscal 2001,
merchandise sales decreased approximately $10.4 million from Fiscal 2000 to
$129.4 million, primarily due to a reduction in sales from closed stores ($11.2
million). Also contributing to the change were increases in wholesale jewelry
sales ($4.6 million), offset by a decrease in same store merchandise sales ($3.6
million or 3%), and other revenues ($0.2 million).

For Fiscal 2000, merchandise sales increased approximately $9.7 million from
Fiscal 1999 to $139.8 million. Increases in wholesale jewelry sales ($5.7
million), new stores' merchandise sales ($4.4 million), and other revenues ($0.2
million) were offset by a decrease in same store merchandise sales ($0.6 million
or 0.5%).

Fiscal 2001 overall gross margins on sales improved 1.8 percentage points from
Fiscal 2000 to 38.9%. Margins on merchandise sales, excluding jewelry scrapping,
improved 3.1 percentage points, partially due to the absence of a restructuring
charge to cost of goods as was seen in Fiscal 2000 (1.4 percentage points). This
improvement in merchandise sales margins comprised 5.1 percentage points of the
improvement in overall gross margins. A 51% increase in jewelry scrapping
(jewelry is generally scrapped at a loss), reduced the overall gross margins
improvement by 3.3 percentage points. Inventory shrinkage was 1.4% of
merchandise sales in Fiscal 2001 compared to 1.1% in Fiscal 2000.

For Fiscal 2000, gross margins on merchandise sales decreased 4.1 percentage
points from Fiscal 1999 to 37.1%. This decrease was largely due to the impact of
increased jewelry scrapping activity (5.4 percentage points), and the charge to
cost of goods related to the fourth quarter restructuring discussed above (0.8
of a percentage point). Improved margins on merchandise sales (2.1 percentage
points) and lower levels of inventory shrinkage (1.1% in Fiscal 2000 v. 1.2% in
Fiscal 1999) partially offset the impact from jewelry scrapping and the
restructuring charge. During the Fiscal 2000 fourth quarter, the Company
identified and liquidated specific categories of jewelry that were overstocked.
This excess inventory had a cost basis of approximately $7.7 million and
generated cash proceeds of approximately $5.9 million.

At the end of Fiscal 2001, the Company also offered unsecured short-term loans,
commonly referred to as "payday loans" in 205 of its pawnshops. In five
locations, the Company originates short-term loans. In 200 locations, the
Company is the marketer, servicer, processor, and collector of short-term loans
originated by County Bank, a federally insured Delaware banking corporation.
After origination of the short-term loans, the Company is entitled to purchase
an 85% participation in the loans made by County Bank and marketed by the
Company. Short-term loan terms range from one to 31 days, averaging about 15
days. The fee per $100 loaned is

22

typically $18 per 14-day period, but varies in certain locations. The loans and
related fees reported in the Company's consolidated financial statements reflect
only the Company's participation interest in such loans. In Fiscal 2001,
short-term loan service charge revenue increased $2.0 million from Fiscal 2000
to $2.1 million as a result of offering the short-term loan product in 196
additional locations.

Unlike pawn loans, short-term loans are unsecured, and their profitability is
highly dependent upon the Company's ability to manage the default rate and
collect defaulted loans. The Company considers a loan defaulted if the loan has
not been repaid or refinanced by the maturity date. Although defaulted loans may
be collected through subsequent collection efforts, the Company charges
defaulted loans and related fees to bad debt expense when they default, leaving
only active loans in the reported balance. When defaulted loans are collected,
the amount collected is recorded as a reduction of bad debt expense at the time
of collection. During Fiscal 2001, the Company experienced a net default rate
(defaults net of collections measured as a percent of loans made) of 8.1%. The
Company provides for a valuation allowance on both the principal and fees
receivable, based on recent net default rates. Net defaults and changes in the
principal valuation allowance are charged to bad debt expense. In Fiscal 2001,
the Company's bad debt expense, included in store operating expense, was $1.2
million. Changes to the fee receivable valuation allowance are charged to
service charge revenue.

In Fiscal 2001, store operating expenses as a percent of total revenues
decreased 2.9 percentage points to 40.4%. Administrative expenses measured as a
percentage of total revenues decreased 2.3 percentage points from Fiscal 2000 to
7.5%. This expense level improvement is largely due to improved cost management
and the closure of 47 lower volume stores. On a per average store basis,
operating expenses in Fiscal 2001 were up slightly to $258,000 from $257,000 in
Fiscal 2000. Administrative expenses per average store decreased 17% during
Fiscal 2001 to $48,000, compared to $58,000 in Fiscal 2000.

In Fiscal 2000, store operating expenses as a percent of total revenues
decreased 0.1 of a percentage point from Fiscal 1999 to 43.3%. Exclusive of
stores opened in Fiscal 1999 and 2000, store operating expenses decreased from
39.9% in Fiscal 1999 to 38.1% of total revenues in Fiscal 2000. Newer stores
generally have a higher level of operating expense relative to revenues than do
mature stores. Administrative expenses measured as a percentage of total
revenues increased 2.0 percentage points from Fiscal 1999 to 9.8%, primarily due
to non-capitalizable software development costs (approximately $1.4 million),
higher labor related costs, and other inflationary cost increases.

Depreciation and amortization expense, when measured as a percent of total
revenue, increased 0.6 of a percentage point in Fiscal 2001 to 5.8%, primarily
due to additional software depreciation. Depreciation and amortization expense,
when measured as a percent of total revenue, increased 0.2 of a percentage point
in Fiscal 2000 to 5.2%. The increase was a net effect of greater revenues and an
increase in depreciation and amortization expense, primarily due to investments
made in new stores.

In Fiscal 2001, interest expense increased $2.0 million to $8.2 million. The
increase was primarily due to higher interest rates, offset somewhat by lower
average debt balances. At September 30, 2001, the Company's total long-term debt
was $60.2 million compared to $81.1 million at September 30, 2000. In Fiscal
2000, interest expense increased $2.5 million from $3.7 million in Fiscal 1999.
This increase was primarily due to higher interest rates coupled with increased
average debt balances needed to fund new store expansion and other capital
expenditures.

The income tax benefit for Fiscal 2001 was $0.1 million (20% of pretax loss)
compared to an income tax benefit of $3.8 million (17% of pretax loss) for
Fiscal 2000 and an income tax expense of $3.2 million (37% of pretax income) for
Fiscal 1999. Exclusive of the deferred tax asset valuation allowance, the Fiscal
2000 income tax benefit was $7.5 million (34% of pretax loss). The decrease in
effective tax rate for Fiscal 2001 compared to the Fiscal 2000 benefit before
valuation allowance is due to non-tax deductible items having a greater
percentage effect on a smaller pre-tax loss.

A valuation allowance of $3.7 million was established during the year ended
September 30, 2000, to offset certain deferred tax assets due to uncertainties
regarding the realization of the deferred tax assets.

23

No additional valuation allowance was recorded for the year ended September 30,
2001, because management believes that it is more likely than not that certain
of the Company's deferred tax assets will be realized as a result of expected
future taxable income from continuing operations. Uncertainties that might
impact the realization of the deferred tax assets include possible declines in
sales, margins and revenues.

The amount of expected future taxable income that would have to be generated to
realize the deferred tax asset is approximately $18 million. Projected levels of
pre-tax earnings for financial reporting purposes over the next three years,
primarily attributable to ordinary and recurring operating results, are
sufficient to generate the required amount of taxable income noted above. The
Company intends to evaluate the realizability of the deferred tax assets
quarterly by assessing the need for additional valuation allowance, if any.

Operating income before depreciation, amortization, and restructuring for Fiscal
2001 increased $13.3 million over Fiscal 2000 to $17.8 million. Same store net
revenue growth ($6.1 million), expense management ($5.0 million) and the closure
of under-performing stores ($2.2 million) account for the earnings improvement.
After depreciation, amortization, interest expense, the Fiscal 2000
restructuring charge, and other non-operating items, the Fiscal 2001 net loss
improved to $0.6 million from Fiscal 2000's $18.2 million net loss before the
$14.3 million cumulative effect of the accounting change adopted in Fiscal 2000.
Net loss for Fiscal 2000 was $32.6 million compared to net income of $1.7
million for Fiscal 1999, assuming the effect of the cumulative change in
accounting principle is applied retroactively. The increase in net loss resulted
from several factors, including the cumulative effect of changing to a
preferable revenue recognition method ($14.3 million), recognition of a
restructuring charge ($11.8 million), lower gross margins on merchandise sales
($4.5 million), the establishment of a valuation reserve on the Company's
deferred tax asset ($3.7 million), and higher operating, administrative, and
interest expenses.

ACCOUNTING CHANGE

During the second quarter of Fiscal 2000, the Company changed its method of
revenue recognition on pawn loans by reducing the accrual of pawn service charge
revenues to the estimated amount that will be realized through loan collection,
and recording forfeited collateral at the lower of the principal balance of the
loan or estimated market value. Previously, pawn service charges were accrued on
all loans, and the carrying value of the forfeited collateral was the lower of
cost (principal amount of loan plus accrued pawn service charges) or market.

The Company believes the new method of revenue recognition is preferable in that
it better aligns reported net revenues and earnings with current economic trends
in its business and the management of the Company. In addition, the Company
believes the new method improves comparability of its operating results and
financial position with similar companies. This change was made effective
October 1, 1999, the first day of the Company's fiscal year.

The $14.3 million cumulative effect of this accounting change on prior years
(net of a tax benefit of $7.4 million) increased net loss for the year ended
September 30, 2000. Of the $2.71 net loss per share for the year ended September
30, 2000, $1.19 per share is attributable to the cumulative effect of the
accounting change.

RESTRUCTURING

Pursuant to a restructuring plan, the Company decided to close 54 stores and
recorded a pretax charge of $11.8 million ($7.8 million net of tax) during the
fourth quarter of Fiscal 2000.

The total pretax charge included $9.6 million (included in Restructuring expense
on the Consolidated Statement of Operations) for the write-down to realizable
value the closed stores' property, equipment, pawn loans outstanding, intangible
assets, and the estimated costs for the settlement of lease obligations,
administrative costs, severance costs, and other exit costs. Also included in
the total charge is approximately $1.0 million (included in Restructuring
expense on the Consolidated Statement of Operations) related to other
restructuring charges, primarily severance for administrative staff reductions.

24

All charges for severance included in the restructuring related to employees
notified of their position elimination prior to September 30, 2000. The $11.8
million pretax charge included a $1.2 million write down of inventory (included
in Cost of goods sold on the Consolidated Statement of Operations) for discounts
expected in liquidating these stores' remaining inventory. Of the 54 stores, 47
were closed as of June 30, 2001, resulting in 148 employee terminations.

In June 2001, the Company re-evaluated the seven remaining stores and decided to
continue their operation, based on their improved operating performance and
future outlook. Accordingly, the Company reversed the $1.3 million restructure
accrual related to these seven stores. The Company recorded an additional $0.3
million restructure expense for the 47 store previously closed, primarily to
account for lease obligations costing more than originally estimated, resulting
in a net credit to restructuring expense of $1.0 million in Fiscal 2001.

Of the $1.0 million net credit, $0.7 million is for the anticipated
administrative costs and loss from disposing of fixed and intangible assets and
is recorded as a credit to the restructuring expense, where the charge was
recorded in September 2000. The remaining $0.3 million was originally charged to
cost of goods sold to write these stores' inventory down to liquidation value,
and was credited to cost of goods sold in Fiscal 2001, as the Company no longer
expects to sell this inventory at liquidation prices.

The results of operations from the 47 closed stores were as follows (in
thousands):

At September 30, 2001, the Company had a remaining restructuring reserve of $0.2
million. It is anticipated that all remaining material cash outlays required for
these store closings and related restructuring costs will be made during Fiscal
2002.

LIQUIDITY AND CAPITAL RESOURCES

The Company's $11.7 million Fiscal 2001 cash flow from operations consisted of
$10.2 million of earnings before non-cash depreciation and amortization, a $5.0
million income tax refund, and the collection of a $1.5 million note receivable,
reduced by $1.9 million restructuring expenditures and other changes in
operating assets and liabilities. In Fiscal 2000, net cash provided by operating
activities increased to $10.9 million from $0.6 million in Fiscal 1999.
Excluding restructuring expenses of $10.6 million and the $14.3 million
cumulative effect of a change in accounting principle, the Company's most
significant item in reconciling net loss to cash flow from operations was a $7.5
million decrease in inventory, compared to a $14.1 million increase in inventory
in the year earlier period.

In Fiscal 2001, the Company invested $4.5 million in property and equipment and
$1.2 million in funding the net increase in short-term loans. These investments
and a $20.9 million reduction in debt were funded by cash flow from operating
activities of $11.7 million, $14.0 million in proceeds from the sale of assets,
primarily the sale-leaseback of owned properties, and $0.9 million of cash on
hand.

During Fiscal 2001, the Company completed sales and sale-leasebacks of certain
non-core assets and twenty owned properties in accordance with its restructuring
plan. During Fiscal 2002, the Company plans to complete sale-leasebacks of other
owned properties. The Company anticipates that cash flow from operations and
proceeds from sale-leasebacks will be adequate to fund planned capital
expenditures, working capital requirements, and required debt payments during
the coming year. However, there can be no assurance that the sale of these
assets will be completed or that cash flow from operating activities will be
adequate for these expenditures.

Effective December 3, 2001, the Company amended and restated its credit
agreement. Among other things, the amendment extends the maturity date to
October 1, 2002. The amended credit agreement provides for a $45 million
revolving credit facility and a term loan of approximately $15 million, which
are

25

secured by substantially all of the Company's assets. Availability under the
revolving credit facility continues to be tied to loan and inventory balances.
The term facility must be paid in full by July 1, 2002. These term facility
payments will be made from operating cash flow and the sale of assets, primarily
sale-leaseback transactions of owned properties. Interest on the revolving
credit facility will accrue at the agent bank's prime rate ("Prime") plus 300
basis points, but will be payable monthly at Prime plus 100 basis points. The
accrued but unpaid interest will be payable upon the earlier of the refinancing
or maturity of the revolving credit facility. Interest on the term loan will
accrue and be paid monthly at Prime plus 350 basis points. The Company pays a
commitment fee of 25 basis points on the unused amount of the revolving
facility.

The Company believes that the financial covenants established in the amended
credit facility will be achieved based upon the Company's current and
anticipated performance. Based upon management's expected performance for Fiscal
2002, including the sale-leaseback of certain assets and the availability under
the revolving credit facility, the Company believes that there is adequate
liquidity to fund the Company's operations and to make the required principal
payments under the term loan during Fiscal 2002. However, material shortfalls or
variances from anticipated performance or the delay in the sale of certain of
its assets could require the Company to seek a further amendment to the amended
credit facility or alternate sources of financing, or to limit capital
expenditures to an amount less than that currently anticipated or permitted
under the amended and restated credit facility.

SEASONALITY

Historically, pawn service charge revenues are highest in the fourth fiscal
quarter (July, August and September) due to higher loan demand during the summer
months and merchandise sales are highest in the first and second fiscal quarters
(October through March) due to the holiday season and tax refunds.

FORWARD-LOOKING INFORMATION

This Annual Report on Form 10-K includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All statements other
than statements of historical information provided herein are forward-looking
and may contain information about financial results, economic conditions,
trends, and known uncertainties. The Company cautions the reader that actual
results could differ materially from those expected by the Company depending on
the outcome of certain factors, including without limitation (i) fluctuations in
the Company's inventory and loan balances, inventory turnover, average yields on
loan portfolios, redemption rates, labor and employment matters, competition,
operating risk, acquisition, and expansion risk, liquidity, and capital
requirements and the effect of government and environmental regulations, and
(ii) adverse changes in the market for the Company's services. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. The Company undertakes no obligations to
release publicly the results of any revisions to these forward-looking
statements which may be made to reflect events or circumstances after the date
hereon, including without limitation, changes in the Company's business strategy
or planned capital expenditures, or to reflect the occurrence of unanticipated
events.

ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

MARKET RISK DISCLOSURES

The following discussion about the Company's market risk disclosures involves
forward-looking statements. Actual results could differ materially from those
projected in the forward-looking statements. The Company is exposed to market
risk related to changes in interest rates and foreign currency exchange rates.
The Company does not use derivative financial instruments.

The Company's earnings are affected by changes in interest rates due to the
impact those changes have on its debt, all of which is variable-rate debt at
September 30, 2001. If interest rates average 25 basis points more in 2002 than
they did in 2001, the Company's annual interest expense would be increased by
approximately $150,000. This amount is determined by considering the impact of
the hypothetical interest rates on the Company's variable-rate debt at September
30, 2001.

26

The Company's earnings and financial position are affected by foreign exchange
rate fluctuations related to the equity investment in Albemarle & Bond Holdings,
plc ("A&B"). A&B's functional currency is the U.K. pound. The U.K. pound
exchange rate can directly and indirectly impact the Company's results of
operations and financial position in several ways, including potential economic
recession in the U.K. resulting from a devalued pound. The impact on the
Company's financial position and results of operations of a hypothetical change
in the exchange rate between the U.S. dollar and the U.K. pound cannot be
reasonably estimated. The translation adjustment representing the weakening in
the U.K. pound during Fiscal 2001 was approximately $241,000. On November 30,
2001, the U.K. pound closed at 0.7007 to 1.00 U.S. dollar, an increase from
0.6782 at September 30, 2001. No assurance can be given as to the future
valuation of the U.K. pound and how further movements in the pound could effect
future earnings or the financial position of the Company.

27

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS

28

REPORT OF INDEPENDENT AUDITORS

Board of Directors
EZCORP, Inc.

We have audited the accompanying consolidated balance sheets of EZCORP, Inc. and
its subsidiaries as of September 30, 2000 and 2001, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
three years in the period ended September 30, 2001. Our audits also included the
financial statement schedule listed in the Index at Item 14(a)(2). These
financial statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of EZCORP,
Inc. and its subsidiaries at September 30, 2000 and 2001, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended September 30, 2001, in conformity with accounting principles
generally accepted in the United States. Also in our opinion, the related
financial statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.

As discussed in Note B to the financial statements, in the year ended September
30, 2000 the Company changed its method of accounting for revenue recognition on
pawn loans.

ERNST & YOUNG LLP

Austin, Texas

November 13, 2001 except for Note H,
as to which the date is December 20, 2001.

29

CONSOLIDATED BALANCE SHEETS

See notes to consolidated financial statements.

30

CONSOLIDATED STATEMENTS OF OPERATIONS

See notes to consolidated financial statements.

31

CONSOLIDATED STATEMENTS OF CASH FLOWS

See notes to consolidated financial statements.

32

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

See notes to consolidated financial statements.

33

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION: EZ Corp., Inc. (the "Company") is primarily engaged in
establishing, acquiring, and operating pawnshops. As of September 30, 2001 and
December 1, 2001, the Company operated 283 locations in 12 states. The pawnshops
function as sources of customer credit and as specialty retailers primarily of
previously owned merchandise.

CONSOLIDATION: The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. All significant inter-company
accounts and transactions have been eliminated in consolidation. The Company
accounts for its 29.47% interest in Albemarle & Bond Holdings, plc ("A&B") using
the equity method.

REVENUE RECOGNITION: Pawn loans are made on the pledge of tangible personal
property. Pawn service charges on pawn loans are recorded using the interest
method for all pawn loans the Company deems to be collectible based on
historical redemption rates (see Note B). If the pawn loan is not repaid, the
forfeited collateral (inventory) is valued at the lower of cost (pawn loan
principal) or market (net realizable value) of the property. When this inventory
is sold, sales revenue and the related cost are recorded at the time of sale.

SHORT-TERM LOANS: Short-term loans, commonly known as "payday loans," generally
are made for periods of less than 30 days. Based on historical collection rates,
the Company accrues short-term loan service charges on the loans the Company
deems to be collectible.

The Company charges defaulted short-term loans and related fees to bad debt
expense when they default, leaving only active loans in the reported balance.
The amount collected from defaulted loans is recorded as a reduction of bad debt
expense at the time of collection. The Company provides for a valuation
allowance on both the principal and fees receivable, based on recent net default
rates. Net defaults and changes in the principal valuation allowance are charged
to bad debt expense. Changes to the fee receivable valuation allowance are
charged to service charge revenue. In Fiscal 2001, the Company's bad debt
expense, included in store operating expense, was $1.2 million.

INVENTORY: Inventory is stated at the lower of cost (specific identification) or
market (net realizable value). Inventory consists of merchandise acquired from
forfeited pawn loans, merchandise purchased from customers, merchandise acquired
from the acquisition of other pawnshops, and new merchandise purchased from
vendors. The Company provides an allowance for shrinkage and valuation based on
management's evaluation of the market value of the merchandise. At September 30,
2000 and 2001, the valuation allowance deducted from the carrying value of
inventory amounted to $2,238,000 and $1,059,000, respectively.

SOFTWARE DEVELOPMENT COSTS: The Company accounts for software development costs
in accordance with SOP 98-1, Accounting for the Costs of Computer Software
Developed for or Obtained for Internal Use, which requires the capitalization of
certain costs incurred in connection with developing or obtaining software for
internal use. During 1999, 2000, and 2001, approximately $5,393,000, $8,055,000
and $1,979,000 were capitalized in connection with the development of internal
software systems. Included in these amounts are $285,000, $942,000, and $278,000
of capitalized interest in 1999, 2000, and 2001. Capitalized costs are amortized
over the estimated useful lives of each system when complete and ready for its
intended use.

CUSTOMER LAYAWAY DEPOSITS: Customer layaway deposits are recorded as deferred
revenue until the entire related sales price has been collected and the related
merchandise has been delivered to the customer.

34

PROPERTY AND EQUIPMENT: Property and equipment are stated at cost. Provisions
for depreciation are computed on a straight line basis using estimated useful
lives of 30 years for buildings and 2 to 10 years for furniture, equipment,
leasehold improvements, and software development costs.

INTANGIBLE ASSETS: Intangible assets consist primarily of excess purchase price
over net assets acquired in acquisitions (or goodwill). Goodwill has been
amortized on a straight-line basis over 20 to 40 years (the expected period of
benefit). Accumulated amortization of goodwill was approximately $3,854,000 and
$4,362,000 at September 30, 2000 and 2001, respectively. Accumulated
amortization of all other intangible assets was approximately $1,232,000 and
$2,250,000 at September 30, 2000 and 2001, respectively.

LONG-LIVED ASSETS: Long-lived assets (i.e., property, equipment, and intangible
assets) are reviewed for impairment whenever events or changes in circumstances
indicate that the net book value of the asset may not be recoverable. An
impairment loss is recognized if the sum of the expected future cash flows
(undiscounted and before interest) from the use of the asset is less than the
net book value of the asset. The amount of the impairment loss, if any, is
measured as the difference between the net book value and the estimated fair
value of the related assets.

FAIR VALUE OF FINANCIAL INSTRUMENTS: The fair value of financial instruments is
determined by reference to various market data and other valuation techniques,
as appropriate. Unless otherwise disclosed, the fair values of financial
instruments approximate their recorded values, due primarily to their short-term
nature. The Company considers investments with maturities of 90 days or less
when purchased to be cash equivalents.

FOREIGN CURRENCY TRANSLATION: The Company's equity investment in A&B is
translated into U.S. dollars at the exchange rate as of A&B's balance sheet date
(June 30). The related interest in A&B's net income is translated at the average
exchange rate for each six-month period reported by A&B. Resulting translation
adjustments are reflected as a separate component of stockholders' equity.

ADVERTISING: Advertising costs are expensed as incurred. Advertising expense was
approximately $1,467,000, $1,442,000, and $1,146,000 for the fiscal years ended
September 30, 1999, 2000, and 2001.

INCOME TAXES: The Company files a consolidated return with its wholly owned
subsidiaries. Deferred taxes are recorded based on the liability method and
result primarily from differences in the timing of the recognition of certain
revenue and expense items for federal income tax purposes and financial
reporting purposes.

STOCK-BASED COMPENSATION: The Company accounts for its stock based compensation
plans in accordance with Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees" ("APB 25"). In October 1995, the Financial
Accounting Standards Board ("FASB") issued SFAS No. 123, "Accounting for Stock
Based Compensation." SFAS No. 123 encourages expensing the fair value of
employee stock options, but allows an entity to continue to account for stock
based compensation to employees under APB 25 with disclosures of the pro forma
effect on net income had the fair value accounting provisions of SFAS No. 123
been adopted. The Company has calculated the fair value of options granted in
these periods using the Black-Scholes option-pricing model and has determined
the pro forma impact on net income. See Note I, Common Stock, Warrants, and
Options.

SEGMENTS: The Company accounts for its operations in accordance with SFAS No.
131, "Disclosures about Segments of an Enterprise and Related Information." No
segment disclosures have been made as the Company considers its business
activities as a single segment.

USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates and such
difference may be material.

35

RECLASSIFICATIONS: Certain prior year financial statement balances have been
reclassified to conform to the current year presentation.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS: In June 2001, the FASB issued SFAS
No. 141, "Business Combinations" that the Company adopted July 2001. SFAS No.
141 superceded Accounting Principles Board Opinion No. 16, "Business
Combinations," and related literature, and requires that all business
combinations initiated after June 30, 2001 be accounted for under the purchase
method. Use of the pooling-of-interests method is prohibited. It also
establishes criteria for the separate recognition of intangible assets acquired
in a business combination. The adoption of SFAS No. 141 had no effect on the
Company's consolidated financial position or results of operations.

In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets," which the Company must adopt by its fiscal year beginning October 1,
2002, but early adoption is allowed. Upon adoption, goodwill and other
intangible assets having an indefinite useful life acquired in business
combinations are no longer subject to amortization. All goodwill and other
intangible assets having an indefinite useful life then become subject to
periodic testing for impairment and are no longer amortized. The useful lives of
other intangible assets must be reassessed and the remaining amortization
periods adjusted accordingly. The Company has not yet determined SFAS No. 142's
possible effect on the Company's consolidated financial position or results of
operations, or if it will early-adopt the statement.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." SFAS No. 144 supercedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of" and related literature and establishes a single accounting
model, based on the framework established in SFAS No. 121, for long-lived assets
impaired or to be disposed of. SFAS No. 144 is effective for the Company's
Fiscal 2003 year beginning October 1, 2002, and is not expected to have a
material effect on the Company's consolidated financial position or results of
operations.

NOTE B: CHANGE IN ACCOUNTING PRINCIPLE

Effective October 1, 1999, the Company changed its method of revenue recognition
on pawn loans by reducing the accrual of pawn service charge revenue to the
estimated amount which will be realized through loan collection and recording
forfeited collateral at the lower of cost (the principal amount of the loan) or
market. Previously, pawn service charges were accrued on all loans, and the
carrying value of the forfeited collateral was the lower of cost (principal
amount of loan plus accrued pawn service charges) or market.

The Company believes the new method of revenue recognition is preferable in that
it better aligns reported net revenues and earnings with current economic trends
in its business and the management of the Company. In addition, the Company
believes the new method improves comparability of its operating results and
financial position with similar companies.

The new method was applied as of October 1, 1999. The charge of $14.3 million
included in the accompanying statement of operations for the year ending
September 30, 2000 represents the cumulative effect of applying the new method
retroactively (net of an income tax benefit of $7.4 million). The pro forma
amounts shown on the statements of operations reflect the effect of retroactive
application on pawn service charge revenues and cost of goods sold had the new
method been in effect for all periods, and the related income taxes.

NOTE C: RESTRUCTURING CHARGE

In Fiscal 2000 the Company reviewed its store portfolio to determine whether
closing certain stores would improve the Company's profitability and to
determine whether certain stores were strategically viable. As a result of this
review and the continuing evaluation of such assets for impairment, the Company
decided to close 54 stores and recorded a pretax charge of $11.8 million ($7.8
million net of tax) during the fourth quarter of Fiscal 2000.

36

The total pretax charge included $9.6 million (included in Restructuring expense
on the Consolidated Statement of Operations) for the write-down to realizable
value the closed stores' property, equipment, pawn loans outstanding, intangible
assets, and the estimated costs for the settlement of lease obligations,
administrative costs, severance costs, and other exit costs. Also included in
the total charge is approximately $1.0 million (included in Restructuring
expense on the Consolidated Statement of Operations) related to other
restructuring charges, primarily severance for administrative staff reductions.
All charges for severance included in the restructuring related to employees
notified of their position elimination prior to September 30, 2000. The $11.8
million pretax charge includes a $1.2 million write down of inventory (included
in Cost of goods sold on the Consolidated Statement of Operations) for discounts
expected in liquidating these stores' remaining inventory.

In June 2001, the Company re-evaluated the seven remaining stores which had not
been closed and decided to continue their operation, based on improved
performance and future outlook for these stores. Accordingly, the Company
reversed the $1.3 million restructure accrual related to these seven stores. The
Company recorded an additional $0.3 million restructure expense for the 47
stores previously closed, primarily to account for lease obligations costing
more than originally estimated, resulting in a net credit to restructuring
expense of $1.0 million in the period ended June 30, 2001.

Of the $1.0 million net credit, $0.7 million is for the anticipated
administrative costs and loss from disposing of the stores' fixed and intangible
assets and is recorded as a credit to the restructuring expense, where the
charge was recorded in September 2000. The remaining $0.3 million was originally
charged to the cost of goods sold to write these stores' inventory down to
liquidation value, and was credited to cost of goods sold in June 2001, as the
Company no longer expects to sell this inventory at liquidation prices.

The results of operations from the 47 closed stores were as follows (in
thousands):

37

At September 30, 2001, the Company had a remaining restructuring reserve of
$217,000, primarily for remaining severance obligations and future rent on
closed stores, the leases of which will expire over the next three years. The
following is a summary of the types and amounts recognized as accrued expenses
together with cash payments made against such accruals and adjustments made in
the accruals (in thousands):

In conjunction with the restructuring in fiscal 2000, the Company recorded an
additional $1.2 million inventory reserve for anticipated losses on sales at
stores to be closed. This amount was charged to cost of goods sold in fiscal
2000 and is excluded from the table above. Of this inventory reserve, $0.1
million was utilized by September 30, 2000, $0.6 million was utilized in the
first quarter of fiscal 2001, $0.2 million was utilized in the second quarter of
fiscal 2001, and $0.3 million was reversed in the third quarter of fiscal 2001,
as described above, leaving no balance as of June 30, 2001.

38

NOTE D: EARNINGS PER SHARE

A reconciliation of the numerators and denominators of basic and diluted
earnings per share is shown in the table below:

Outstanding options to purchase shares of common stock were as follows:

These options were excluded from the computation of diluted earnings per share
in 1999 because the options' exercise prices were greater than the average
market price of common shares and, therefore, the effect would be anti-dilutive.
Options outstanding in 2000 and 2001 were excluded from the computation of loss
per share because the Company incurred a loss for those years.

NOTE E: ACQUISITION OF PAWN STORES AND PURCHASE OF PAWN RELATED ASSETS

During the fiscal year ended September 30, 1999, the Company paid approximately
$1.8 million for the acquisition of pawn stores and pawn related assets. The
purchase price of the acquisitions was funded primarily from an existing bank
line of credit. These acquisitions have been accounted for under the purchase
method of accounting. The operating results of the acquired locations have been
included in the Company's consolidated results of operations since their
purchase dates. Through September 30, 2001, the Company has amortized the
related goodwill of approximately $508,000 on a straight-line basis over periods
ranging from 20 to 40 years.

There were no acquisitions during the fiscal years ended September 30, 2000 and
2001.

Since none of these acquisitions are material to the results of operations or
financial position of the Company (individually or collectively) no pro forma
results have been presented.

39

On March 28, 1998, the Company acquired 29.99% of the common shares of Albemarle
& Bond Holdings, plc ("A&B") for approximately $10.8 million. On October 16,
1998, the Company acquired an additional 1,896,666 newly issued common shares of
A&B for approximately $2 million. Following this purchase the Company owns
13,276,666 common shares of A&B, or approximately 29.47% of the total
outstanding shares. A&B is primarily engaged in pawnbroking, retail jewelry
sales and check cashing in England and Wales. Through September 30, 2001, the
related goodwill of approximately $9.0 million was amortized over 20 years.
Summarized financial information for this equity investment is not presented
since the investment is not material in relation to the financial position or
results of operations of the Company. The acquisition is accounted for using the
equity method. Since A&B's fiscal year end is June 30, the income reported by
the Company for its investment in A&B is on a three-month lag. The income
reported for the Company's fiscal year end of September 30 represents its
percentage interest in the results of A&B's operations, reduced by the
amortization of goodwill, from July 1 to June 30. A&B's shares are listed on the
Alternative Investment Market of the London Stock Exchange and at November 30,
2001, the market value of this investment was approximately $11.9 million, based
on the closing market price and foreign currency exchange rate on that date.

NOTE F: PROPERTY AND EQUIPMENT

Major classifications of property and equipment were as follows:

NOTE G: ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following:

40

NOTE H: LONG-TERM DEBT

Long-term debt consisted of:

Effective December 3, 2001, the Company amended and restated its credit
agreement. Among other things, the amendment extends the maturity date to
October 1, 2002. The amended credit agreement provides for a $45 million
revolving credit facility and a term loan of approximately $15 million, which
are secured by substantially all of the Company's assets. Availability under the
revolving credit facility continues to be tied to loan and inventory balances.
The term facility must be paid in full by July 1, 2002. These term facility
payments will be made from operating cash flow and the sale of assets, primarily
sale-leaseback transactions of owned properties. Interest on the revolving
credit facility will accrue at the agent bank's prime rate ("Prime") plus 300
basis points, but will be payable monthly at Prime plus 100 basis points. The
accrued but unpaid interest will be payable upon the earlier of the refinancing
or maturity of the revolving credit facility. Interest on the term loan will
accrue and be paid monthly at Prime plus 350 basis points. The Company pays a
commitment fee of 25 basis points on the unused amount of the revolving
facility.

The Company believes that the financial covenants established in the amended
credit facility will be achieved based upon the Company's current and
anticipated performance. Based upon management's expected performance for Fiscal
2002, including the sale-leaseback of certain assets and the availability under
the revolving credit facility, the Company believes that there is adequate
liquidity to fund the Company's operations and to make the required principal
payments under the term loan during Fiscal 2002. However, material shortfalls or
variances from anticipated performance or the delay in the sale of certain of
its assets could require the Company to seek a further amendment to the amended
credit facility or alternate sources of financing, or to limit capital
expenditures to an amount less than that currently anticipated or permitted
under the amended and restated credit facility.

The Company currently has a $691,000 letter of credit with the bank group as
required by a legal agreement relating to certain insurance policies.

NOTE I: COMMON STOCK, WARRANTS, AND OPTIONS

The capital stock of the Company consists of two classes of common stock
designated as Class A Non-voting Common Stock ("Class A Common Stock") and Class
B Voting Common Stock ("Class B Common Stock"). The rights, preferences, and
privileges of the Class A and Class B Common Stock are similar except that each
share of Class B Common Stock has one vote and each share of Class A Common
Stock has no voting privileges. All Class A Non-voting Common Stock is publicly
held. Holders of Class B Common Stock may, individually or as a class, convert
some or all of their shares into Class A Common Stock. Class A Common Stock
becomes voting common stock upon the conversion of all Class B Common Stock to
Class A Common Stock. The Company is required to reserve such number of
authorized but

41

unissued shares of Class A Common Stock as would be issuable upon conversion of
all outstanding shares of Class B Common Stock.

At September 30, 2001, warrants to purchase 23,579 shares of Class A Common
Stock and 4,074 shares of Class B Common Stock at $6.17 per share were
outstanding. The warrants are exercisable through July 25, 2009.

The Company has an Incentive Stock Option Plan (the "1991 Plan") under which
options to purchase Class A Common Stock could be granted to employees until
adoption of the 1998 Plan discussed below. Options granted under the 1991 Plan
were granted at exercise prices equal to or greater than the fair market value
of the Class A Common Stock on the date of grant. Grants under the 1991 Plan
provide for accelerated vesting upon a change in control of the Company.

On November 5, 1998, the Compensation Committee of the Board of Directors
approved the adoption of the EZCORP, Inc. 1998 Incentive Plan (the "1998 Plan"),
which provides for stock option awards of up to 1,275,000 of the Company's Class
A Common Stock. In approving such plan, the Compensation Committee resolved that
no further options would be granted under any previous plans.

On November 5, 1998, the Compensation Committee of the Board of Directors
approved a grant of 1,023,000 options to named executives, exercisable at $10.00
per share, and, except as discussed below, vesting on October 6, 2008. As of
September 30, 2001, 450,000 of these options remained outstanding (options
granted less options canceled due to employee termination) and none had been
exercised. The terms of this grant provide for accelerated vesting upon
achievement of certain debt to equity ratios and levels of earnings per share,
ranging from $1.30 in Fiscal 2001 to $3.66 in Fiscal 2005.

In Fiscal 2000 and 2001, the Compensation Committee of the Board of Directors
approved additional grants of options under the 1998 Plan at exercise prices
ranging from $2.00 to $15.00. Under both the 1991 Plan and the 1998 Plan, the
options vest at 20% each year and are fully vested in five years. They have a
contractual life of ten years. No options have been exercised pursuant to either
Plan. Total options available for grant at September 30, 2001 under the 1998
Plan were 242,250. A summary of the option plan activity follows:

SUMMARY OF OPTION PLAN ACTIVITY

42

RANGE OF OPTIONS OUTSTANDING

In accordance with SFAS 123, the fair value of these options was estimated at
the date of grant using a Black-Scholes option pricing model with the following
weighted average assumptions for the years ended September 30, 2000 and 2001,
respectively:

During Fiscal 2000, options to purchase 50,000 shares were granted to an
employee below the market price on the date of grant. As a result, the Company
recorded deferred compensation of approximately $31,000, of which $4,000 and
$6,000 was amortized to non-cash compensation expense during Fiscal 2000 and
2001. The remaining unearned compensation will be recognized as non-cash
compensation expense over the remaining vesting period of approximately three
years.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable. In addition, this option valuation model requires the input of
highly subjective assumptions including the expected stock price volatility.
Because the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the Black-Scholes model does not necessarily provide a reliable single
measure of the fair value of its employee stock options. Additionally, because
the provisions of SFAS 123 are not effective for options granted prior to
October 1, 1996 and due to the nature and timing of option grants, the resulting
pro forma compensation costs may not be indicative of future compensation costs.
For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period. The Company's pro
forma net income is as follows:

43

Shares of reserved common stock at September 30, 2001, were as follows:

NOTE J: INCOME TAXES

As of September 30, 2001, the Company had federal net operating loss
carryforwards of $5,749,000 which will expire in 2020, if not utilized. The
Company has alternative minimum tax and foreign tax credit carryforwards of
$330,000 and $35,000 respectively. The alternative minimum tax credit
carryforwards do not expire. The foreign tax credit carryforwards begin to
expire in 2004, if not utilized.

Utilization of the net operating losses and credit carryforwards may be subject
to a substantial limitation due to the "change in ownership" provisions of the
Internal Revenue Code of 1986. If a change in ownership were to occur, the
annual limitation may result in the expiration of net operating losses before
utilization.

The income tax provision (benefit) attributable to continuing operations is as
follows:

Income tax expense (benefit) is included in the financial statements as follows:

44

A reconciliation of income taxes calculated at the statutory rate and the
provision (benefit) for income taxes attributable to continuing operations is as
follows:

Income before income taxes for continuing operations on the statements of
operations differs from taxable income due to the following, which are accounted
for differently for financial statement purposes than for federal income tax
purposes and result in deferred tax expense (benefit):

Significant components of the Company's deferred tax liabilities and assets as
of September 30 are as follows:

The Company has established a valuation allowance due to uncertainties regarding
the realization of certain deferred tax assets. The valuation allowance was not
increased during the year ended

45

September 30, 2001 because management believes that it is more likely than not
that the Company's net deferred tax asset will be realized as a result of
expected future taxable income from operations and certain tax planning
strategies.

Substantially all of the Company's operating income was generated from domestic
operations during 2000 and 2001. At September 30, 2000 and 2001, the Company has
provided deferred income taxes on all undistributed earnings from its foreign
unconsolidated affiliate. Such earnings have been reinvested in foreign
operations except for dividends at September 30, 2000 and 2001 of approximately
$258,000 and $235,000, respectively. Furthermore, any taxes paid to foreign
governments on those earnings may be used in whole or in part as credits against
the U.S. tax on any dividends distributed from such earnings.

NOTE K: RELATED PARTY TRANSACTIONS

Pursuant to the terms of a financial advisory services agreement, Morgan Schiff,
an affiliate of the general partner of the majority stockholder, provides
management consulting and investment banking services to the Company for a
$33,333 monthly retainer. These services include ongoing consultation with
respect to offerings by the Company of its securities, including, but not
limited to, the form, timing, and structure of such offerings. In addition to
the retainer, the affiliate earns fees from the Company for other business and
financial consulting services. Morgan Schiff has waived these consulting fees
since July 2000. In Fiscal 2001, Morgan Schiff received expense reimbursements
of $426,000 from the Company. In Fiscal 2000, Morgan Schiff received $33,333 per
month from October to June for its services as a financial advisor and received
expense reimbursements of $574,000. In Fiscal 1999, Morgan Schiff received
$33,333 per month for its services as a financial advisor and received related
expense reimbursements of $412,000.

In 1994, the Company loaned the former President and Chief Executive Officer and
current director, Vincent Lambiase, $729,000 to purchase 50,000 shares of Class
A Common Stock. The loan is shown as a reduction of stockholders' equity in
these financial statements. The maturity date of the loan is the earlier of (a)
ten business days following the first day that the closing price for the
Company's stock is equal to or exceeds $10 per share, or (b) August 1, 2005.
Additionally, under the agreement, all accrued and unpaid interest due on the
loan is forgiven until the first day that the closing price for the Company's
stock is equal to or exceeds $6 per share. As of September 30, 2001, the amount
owed is approximately $729,000 plus accrued interest of approximately $54,500.
The Company records interest income on the loan. Any forgiveness of interest is
charged as compensation expense for Mr. Lambiase.

In October 1994, the Board of Directors approved agreements that provide
incentive compensation to the Chairman, Sterling Brinkley, and Mr. Lambiase,
based on growth in the share price of the Company's Class A Non-voting Common
Stock. Each executive was advanced $1.5 million evidenced by a recourse
promissory note, initially due in 2005 and bearing interest at the minimum rate
allowable for federal income tax purposes (5.8% for Fiscal 2001).

Mr. Lambiase repaid his $1.5 million loan August 14, 2001. As stipulated by a
loan amendment dated August 15, 2000, the company forgave the related accrued
interest on this date and reimbursed Mr. Lambiase for the income tax
consequences of the interest forgiven.

Under the terms of Mr. Brinkley's $1.5 million loan, as amended, the loan
principal will be forgiven if, prior to October 1, 2005, a stock price target of
$28.25 is attained. The loan provides that upon Mr. Brinkley's death or
disability or certain changes in control the then remaining principal and
interest will be forgiven. Accrued interest is forgiven based upon continued
employment and the Company is required to reimburse Mr. Brinkley for the income
tax consequences of forgiveness of any portion of the debt. Through September
30, 2001, the stock price target had not been attained.

Under both the $1.5 million loans to Mr. Lambiase and Mr. Brinkley, charges to
operations consist of interest forgiveness and related income tax costs and
totaled approximately $272,000, $306,000, and $288,000 for the years ended
September 30, 1999, 2000, and 2001, respectively. In Fiscal 2001, the

46

interest forgiveness and related income tax costs related to Mr. Lambiase's $1.5
million loan were $127,000 and were charged to the Company's restructuring
reserve.

In February 2000, the Company loaned Mr. Rotunda $200,000. The principal and
interest of the loan are subject to forgiveness in equal increments over a
three-year period conditioned upon Mr. Rotunda's continued employment with the
Company on February 24th of each year. The Company is required to reimburse Mr.
Rotunda for the income tax consequence of any portion of the interest forgiven.
The remaining balance of this loan was $133,333 at September 30, 2001.

NOTE L: LEASES

The Company leases various facilities and certain equipment under operating
leases. Future minimum rentals due under noncancelable leases including closed
stores are as follows for each of the years ending September 30:

The Company subleases some of the above facilities. Future minimum rentals
expected under these subleases amount to $173,000 in 2002 and $99,000 in 2003.

Rent expense for the years ending September 30, 1999, 2000, and 2001 was $13.0
million, $13.6 million, and $13.0 million, respectively.

During Fiscal 2001, the Company completed several sale-leaseback transactions of
some of its previously owned facilities. Losses on such sales were recognized
immediately, and gains on such sales were deferred and are being amortized as a
reduction of lease expense over the terms of the related leases. Future rentals
pursuant to these sale-leasebacks are included in the above schedule of future
minimum rentals. Terms of these leases are consistent with the terms on the
Company's other lease agreements.

NOTE M: EMPLOYMENT AGREEMENTS

Pursuant to a settlement agreement dated February 4, 1998, the Company and its
founder and former President and Chief Executive Officer, Courtland L. Logue,
Jr., reached an out of court settlement to the lawsuit styled EZCORP, Inc. v.
Courtland L. Logue, Jr., in the 201st District Court of Travis County, Texas.
Under the terms of the settlement, which closed February 18, 1998, both the
Company and Mr. Logue released their claims against each other, including all
claims under Mr. Logue's employment agreement, and neither party admitted any
liability nor paid any cash consideration to the other.

The Company agreed to accelerate the release of contractual restrictions on the
transfer of Mr. Logue's 967,742 shares of common stock. The settlement released
191,548 shares immediately, and a like amount was released on October 29, 1998.
An additional 95,774 shares were released from restrictions on each of October
29, 1999 and October 29, 2000, with the remaining 40% of the shares released in
July 2001. As a result of this settlement, on February 4, 1998, 285,417 shares
of Mr. Logue's Class B Voting Common Stock were converted to publicly traded
Class A Non-voting Common Stock. The majority holder of the Class B Voting
Common Stock had previously approved and implemented the conversion of Mr.
Logue's other 682,325 shares from Class B Common Stock to Class A Common Stock

47

during the fiscal years ended September 30, 1996 and 1997. Also as a part of
this settlement, Mr. Logue agreed to assign 10,000 shares of his stock to the
Company. The Company accounted for the receipt of these shares as a capital
transaction and has excluded the effect of this transfer from net income. The
Company and Mr. Logue also clarified the scope of Mr. Logue's continuing
non-competition agreement, negotiated a five year limitation on Mr. Logue's
financial investments in competing pawnshop businesses and negotiated renewal
options with respect to certain existing real estate leases for store locations.

As President and Chief Executive Officer, Joseph L. Rotunda's annual
compensation includes a base salary of $400,000 and an annual bonus ranging from
50% to 150% of his base salary dependent upon the attainment of Board approved
operating goals. In the event of a change of control, Mr. Rotunda is entitled to
receive a bonus payment equivalent to 200% of his annual compensation, as well
as the immediate vesting of all stock options. If Mr. Rotunda's employment is
terminated, other than for cause, he is entitled to receive a severance payment
equal to his annual compensation. As long as Mr. Rotunda's employment with the
Company continues, a $200,000 loan by the Company to Mr. Rotunda is subject to
forgiveness over a three-year period ending on February 24, 2003.

Vincent A. Lambiase was employed as the Company's President and Chief Executive
Officer pursuant to an employment which provided for an annual salary, a bonus,
and a $1,500,000 loan and a $729,000 loan from the Company, among other things.
As of August 15, 2000, the Company entered into an agreement with Mr. Lambiase
whereby the parties mutually agreed to terminate his employment with the
Company. According to the terms of this agreement, the Company paid Mr. Lambiase
a monthly salary of $37,500 through August 14, 2001. This agreement further
modified the terms and conditions of the $1.5 million and $729,000 loans. See
Note K.

NOTE N: 401(k) PLAN

The Company sponsors a 401(k) Plan under which eligible employees of the Company
may contribute a maximum of 15% of their compensation within allowable limits.
To be eligible, an employee must be at least 21 years old and have been employed
by the Company for at least six months. The Company will match 25% of each
employee's contribution, up to 6% of their compensation, in the form of the
Company's Class A Non-voting Common Stock. Contribution expense related to the
plan for 1999, 2000 and 2001 was approximately $72,000, $96,000 and $89,000,
respectively.

NOTE O: CONTINGENCIES

From time to time, the Company is involved in litigation relating to claims
arising from its normal business operations. Currently, the Company is a
defendant in several lawsuits. Some of these lawsuits involve claims for
substantial amounts. While the ultimate outcome of these lawsuits cannot be
ascertained, after consultation with counsel, the Company believes the
resolution of these suits will not have a material adverse effect on the
Company's financial condition or results of operations. However, there can be no
assurance as to the ultimate outcome of these matters.

NOTE P: STOCKHOLDERS' EQUITY

On July 27, 1998, the Board of Directors declared an annual $0.05 per share cash
dividend payable quarterly. The first quarterly dividend of $0.0125 per share
was paid on August 25, 1998 to stockholders of record on August 11, 1998. The
Company continued its quarterly payment of $0.0125 per share through the quarter
ended March 31, 2000.

48

NOTE Q: QUARTERLY INFORMATION (UNAUDITED)

(1) The numbers presented for the quarter ended December 31, 1999 have been
adjusted for the change in accounting principle as it was effective October 1,
1999.

Included in the fourth quarter of Fiscal 2000 is a restructuring charge of $11.8
million for store closings, associated closing costs, asset impairment and other
restructuring charges (see Note C). Included in the $11.8 million is the $10.6
million separately classified charge shown above and a $1.2 million write-down
of inventory that was charged to cost of goods sold.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

The Company had no disagreements on accounting or financial disclosure matters
with its independent certified public accountants to report under this Item 9.

49

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The executive officers and directors of the Company as of December 1, 2001 were
as follows:

(1) Member of Executive Committee

(2) Member of Incentive Compensation Committee

(3) Member of Section 401(k) Plan Committee

(4) Member of Audit Committee

Mr. Brinkley has served as either Chairman of the Board or Chairman of the
Executive Committee of the Board of Directors of the Company since 1989. He
served as a Managing Director of Morgan Schiff & Co., Inc., an affiliate of Mr.
Phillip Cohen, from 1986 to 1990. See "Security Ownership of Certain Beneficial
Owners and Management." Mr. Brinkley has also served as Chairman of the Board or
Chairman of the Executive Committee of Crescent Jewelers, Inc., a 150-store
jewelry chain since 1988. In addition, since 1990, he has served as Chairman of
the Board or Chairman of the Executive Committee of Friedman's, Inc., and
Pietrafesa Corp., an apparel manufacturing business. In addition, Mr. Brinkley
is President and Chairman of the Board of MS Pawn Corporation, the general
partner of MS Pawn Limited Partnership. Morgan Schiff & Co., Inc., Crescent
Jewelers, Inc., and Pietrafesa Corp. are affiliates of the Company.

Mr. Rotunda has served as director, President, and Chief Executive Officer of
the Company since August 2000 following his initial employment with EZCorp as
director, President, and Chief Operating Officer in February 2000. From 1998 to
2000, he was Chief Operating Officer of G&K Services, Inc, a $500 million
provider of uniform and textile products based in Minneapolis MN. From 1991 to
1998 he progressed through several officer positions to ultimately become
Executive Vice President and Chief Operating Officer of Thorn Americas, Inc.
(d.b.a. Rent-A-Center, Remco, and U-Can Rent) as the company grew from 700 to
1400 stores. Mr. Rotunda began his career with Montgomery Ward, from 1969
through 1991, and held numerous positions including Territory Vice President and
Vice President of Customer Service and New Stores. Mr. Rotunda also currently
serves as a Director of RTO Enterprises, Inc., Toronto, Canada.

Mr. Tonissen has served as a director, Senior Vice President, Chief Financial
Officer, and Assistant Secretary of the Company since August 1994. Prior to
1994, he held senior level financial positions with La Salsa Holding Company,
Valley Grain Products, Inc., and Denny's, Inc.

50

Mr. Pickup has served as director of the Company since 1993. He served as
President and Co-Chief Executive Officer of Crescent Jewelers, Inc. from 1993 to
1995 and Chief Financial Officer of Crescent Jewelers, Inc. from 1992 until
1995. Since 1993, Mr. Pickup has also served as a director of Friedman's, Inc.
(and MS Jewelers Corporation, its predecessor). Prior to 1992, Mr. Pickup was a
partner in the firm of Ernst & Young LLP.

Mr. Price has served as director of the Company since September 1998. He has
served as President and CEO of JAMS/Endispute, a mediation and arbitration firm,
since 1997. From 1994 to 1997, he served as President and CEO of Supercuts, a
hair styling and product salon. From 1988 to 1994, he was a senior vice
president of Citibank.

Mr. Sage has served as director of the Company since July 1995. He was a
co-founder of AmeriHealth, Inc., which owned and managed hospitals. He served as
Treasurer of AmeriHealth, Inc. from April 1983 to October 1995 and was a member
of the board of directors of AmeriHealth, Inc. from April 1983 to December 1994.
Mr. Sage served from 1988 to 1993 as a Regional Vice President of HHL Financial
Services Company, which specializes in the collection of health care accounts
receivable. He was a member of the Board of Directors of Champion Healthcare
Corporation from January 1995 to August 1996. Since June 1993, he has been
associated with Sage Law Offices in Miami, Florida.

Mr. Lambiase has served as a director of the Company since 1994. Mr. Lambiase
also served as Chief Executive Officer of the Company from 1994 to August 2000
and as President of the Company from 1994 to February 2000. From 1991 to 1994,
he was a Vice President for Blockbuster Entertainment, Inc. From 1986 to 1991,
he was an associate of E.S. Jacobs & Company, a venture capital firm. From 1978
to 1985, he was CEO of Winchell's Donut House.

Mr. Bloom has served as the Senior Vice President of Operations since June 2000.
From January 1999 to May 2000, he served as the Metromedia Restaurant Group
Regional Vice President of Franchise Operations for the Family Steakhouse
division. Prior to 1999, he served as the Divisional Vice President of the Rural
Division for Thorn Americas, Vice President and General Manager for Thorn
Leasing Concepts, and Vice President Operations Administration for Thorn
Americas, Inc.

Mr. Kissick has served as Vice President of Strategic Development since August
2001. From 1991 to 1998 he served as Vice President of Strategic Planning for
Thorn Americas, Inc. Prior to 1991, he held senior marketing positions at
Reynolds and Reynolds, Hobart Corporation, and Pizza Hut.

Mr. Campbell served as the Company's Vice President of Human Resources from May
2001 to August 2001. Since August 2001, Mr. Campbell has served as the Company's
Vice President of Administration. From 1998 to 2001, Mr. Campbell served as the
Chief Operating Officer of SpinCycle, Inc., where he also served as the Chief
Learning Officer from 1997 to 1998. From 1994 to 1997, Mr. Campbell was the
Senior Director of Training and Management Development for Thorn Americas, Inc.
From 1991 to 1994, he served as the Dean of Remco University for Remco America,
Inc. Mr. Campbell also served as a Professor of Political Science for Troy State
University from 1983 to 1991.

Ms. Kondik has served as General Counsel since June 2000 and as Secretary since
January 2001. From June 1995 to June 2000, Ms. Kondik served as Sr. Associate
General Counsel, Vice--President, and Assistant Secretary of Empire Funding
Corp. and TMI Financial, Inc., a national sub-prime mortgage lender and
servicer.

Mr. Chism has served as Controller and Assistant Secretary of the Company since
August 1999 and as Secretary from May 2000 to January 2001. From 1996 to 1999,
Mr. Chism served as Audit Manager for Ernst & Young LLP, where he also served as
an audit Senior and audit staff member from 1991 to 1995. From 1995 to 1996, Mr.
Chism served as a Director of Internal Audit and a departmental Controller for
VarTec Telecom, Inc. Mr. Chism is a Certified Public Accountant licensed by the
Texas State Board of Public Accountancy.

51

Mr. Young has served as the Chief Information Officer of the Company since May
2000. From 1995 to 1999 he served as the Director of Retail Systems for Cracker
Barrel Old Country Stores. Prior to 1995 he served as Director of Systems and
Director of Telecommunications for Service Merchandise.

COMMITTEES OF THE BOARD

The Board of Directors held five meetings during the year ended September 30,
2001. The Board of Directors has appointed four committees: an Executive
Committee, an Audit Committee, a Compensation Committee, and a Section 401(k)
Plan Committee. The members of the Executive Committee for Fiscal 2001 were Mr.
Brinkley, Mr. Rotunda, and Mr. Tonissen. The Executive Committee held four
meetings, which all members attended. The members of the Audit Committee for
Fiscal 2001 were Mr. Pickup, Mr. Sage, and Mr. Price. The Audit Committee held
four meetings which all members attended. All audit committee members are
independent directors and are financially literate. As a former Partner of Ernst
& Young LLP, Mr. Pickup has significant accounting and financial expertise. The
Compensation Committee, comprised of Mr. Pickup and Mr. Price, held one meeting
during Fiscal 2001 of which all members attended. The committee that administers
the Section 401(k) Plan consists of Mr. Rotunda and Mr. Tonissen and held one
meeting during Fiscal 2001 of which all members attended. All directors attended
at least 75% of the total number of meetings of the Board and of the committees
on which they serve.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Based primarily on statements received from officers and directors and a review
of the relevant Forms 3, 4, and 5, all officers, directors, and beneficial
owners of more than ten percent of any class of equity securities were timely
throughout the fiscal year in filing all reports required by Section 16(a) of
the Exchange Act.

52

ITEM 11. EXECUTIVE COMPENSATION

CASH COMPENSATION

The following table sets forth compensation paid by the Company and its
subsidiaries for services during Fiscal 1999, Fiscal 2000 and Fiscal 2001 to the
Company's Chief Executive Officer, and to each of the Company's four most highly
compensated executive officers whose total annual compensation exceeded $100,000
(such persons collectively herein referred to as the "Named Executive
Officers").

(1) The Company's long-term compensation program for most senior officers does
not include long-term incentive payouts, SARs, or other forms of
compensation.

(2) This category includes the value of any insurance premiums paid on behalf
of the named executive.

(3) Mr. Brinkley's Other Annual Compensation includes $81,605 for payment of
taxes for Fiscal 2001.

(4) Mr. Rotunda's Other Annual Compensation includes $54,523 for payment of
taxes for Fiscal 2001.

(5) Mr. Lambiase's Other Annual Compensation includes $101,568 for payment of
taxes for Fiscal 2001. Mr. Lambiase's Fiscal 2001 salary was reported as
"Other" compensation in Fiscal 2000 due to its inclusion in a termination
agreement at that time.

(6) Mr. Tonissen's Other Annual Compensation includes $22,036 for auto
allowance.

(7) Mr. Bloom's Other Annual Compensation for Fiscal 2000 includes $30,048 for
relocation to Austin, Texas.

EMPLOYMENT AGREEMENTS

As President and Chief Executive Officer, Joseph L. Rotunda's annual
compensation includes a base salary of $400,000 and an annual bonus ranging from
50% to 150% of his base salary dependent upon

53

the attainment of Board approved operating goals. In the event of a change of
control, Mr. Rotunda is entitled to receive a bonus payment equivalent to 200%
of his annual compensation, as well as immediate vesting of all stock options.
If Mr. Rotunda's employment is terminated, other than for cause, he is entitled
to receive a severance payment equal to his annual compensation. As long as Mr.
Rotunda's employment with the Company continues, a $200,000 loan by the Company
to Mr. Rotunda is subject to forgiveness over a three-year period ending on
February 24, 2003.

Vincent A. Lambiase was employed as the Company's President and Chief Executive
Officer pursuant to an employment agreement which provided for an annual salary,
a bonus, and a $1.5 million loan and a $729,000 loan from the Company, among
other things. As of August 15, 2000, the Company entered into an agreement with
Mr. Lambiase whereby the parties mutually agreed to terminate his employment
with the Company. Pursuant to the terms of this agreement, the Company paid Mr.
Lambiase a monthly salary of $37,500 through August 14, 2001. This agreement
further modified the terms and conditions of the $1.5 million loan by extending
the term and forgiving interest. Mr. Lambiase repaid the $1.5 million loan in
accordance with its terms. As stipulated by the loan amendment dated August 15,
2000, the Company forgave the related accrued interest on this date and
reimbursed Mr. Lambiase for the income tax consequences of the interest
forgiven. The $729,000 loan was also modified to change the maturity date and
provisions related to forgiveness and repayment of interest.

INSIDER NOTES

In 1994, the Company loaned the former President and Chief Executive Officer and
current director, Vincent Lambiase, $729,000 to purchase 50,000 shares of Class
A Common Stock. The loan is shown as a reduction of stockholders' equity in
these financial statements. The maturity date of the loan is the earlier of (a)
ten business days following the first day that the closing price for the
Company's stock is equal to or exceeds $10 per share, or (b) August 1, 2005.
Additionally, under the agreement, all accrued and unpaid interest due on the
loan is forgiven until the first day that the closing price for the Company's
stock is equal to or exceeds $6 per share. As of September 30, 2001, the amount
owed is approximately $729,000 plus accrued interest of approximately $54,500.
The Company records interest income on the loan. Any forgiveness of interest is
charged as compensation expense for Mr. Lambiase.

In October 1994, the Board of Directors approved agreements that provide
incentive compensation to the Chairman, Sterling Brinkley, and Mr. Lambiase,
based on growth in the share price of the Company's Class A Non-voting Common
Stock. Each executive was advanced $1.5 million evidenced by a recourse
promissory note, initially due in 2005 and bearing interest at the minimum rate
allowable for federal income tax purposes (5.8% for Fiscal 2001).

Mr. Lambiase repaid his $1.5 million loan in accordance with its terms. As
stipulated by the loan amendment dated August 15, 2000, the company forgave the
related accrued interest on this date and reimbursed Mr. Lambiase for the income
tax consequences of the interest forgiven.

Under the terms of Mr. Brinkley's $1.5 million loan, as amended, the loan
principal will be forgiven if, prior to October 1, 2005, a stock price target of
$28.25 is attained. The loan provides that upon Mr. Brinkley's death or
disability or certain changes in control the then remaining principal and
interest will be forgiven. Accrued interest is forgiven based upon continued
employment and the Company is required to reimburse Mr. Brinkley for the income
tax consequences of forgiveness of any portion of the debt. Through September
30, 2001, the stock price target had not been attained.

In February 2000, the Company loaned Mr. Rotunda $200,000. The principal and
interest of the loan are subject to forgiveness in equal increments over a
three-year period ending February 24, 2003 conditioned upon Mr. Rotunda's
continued employment with the Company on February 24th of each year. The Company
is required to reimburse Mr. Rotunda for the income tax consequence of any
portion of the interest forgiven. The remaining balance of this loan was
$133,333 at September 30, 2001.

54

DIRECTOR COMPENSATION

Mr. Pickup receives $25,000 per annum as compensation for his service as a
director and Chairman of the Audit Committee. Mr. Price and Mr. Sage each
receive $12,000 per annum as compensation for their board service. No other
outside director receives compensation from the Company.

STOCK OPTIONS

On November 5, 1998, the Compensation Committee of the Board of Directors
approved the grant of 350,000 options to Sterling B. Brinkley and 100,000
options to Daniel N. Tonissen which remain outstanding. The options are
exercisable at $10 per share, vest on October 6, 2008, and have a contractual
life of ten years. The terms of this grant provide for accelerated vesting upon
achievement of certain debt to equity ratios and levels of earnings per share,
ranging from $1.30 in Fiscal 2001 to $3.66 in Fiscal 2005. If any of these
options fail to qualify as incentive options under the Internal Revenue Code,
the Company has agreed to pay a bonus to each Optionee at the time and in the
amount of any tax savings actually realized by the Company resulting therefrom.

55

OPTION/SAR GRANTS IN LAST FISCAL YEAR

INDIVIDUAL GRANTS

(1) Stock options become exercisable in five equal installments beginning one
year after the date of grant.

(2) As suggested by the Securities and Exchange Commission's rules on executive
compensation disclosure, the Company projected the potential realizable value of
each grant of options or freestanding SARs, assuming that the market price of
the underlying security appreciates in value from the date of grant to the end
of the option or SAR term at annualized rates of 5% and 10%.

56

AGGREGATE OPTIONS/SAR EXERCISES IN LAST
FISCAL YEAR AND FY-END OPTION/SAR VALUES

The following table sets forth certain information concerning the exercise of
stock options (or tandem SARs) and freestanding SARs in Fiscal 2001 and the
value of unexercised options and SARs held by each of the Named Executive
Officers at the end of the Company's last fiscal year.

(1) Values stated are based upon the closing price of $1.700 per share of the
Company's Class A Non-voting Common Stock on The NASDAQ Stock Market on
September 27, 2001, the last trading day of the fiscal year.

COMPENSATION PURSUANT TO PLANS

STOCK INCENTIVE PLAN

The Company's Board of Directors and stockholders adopted the EZCORP, Inc. 1991
Long-Term Incentive Plan on June 6, 1991 (the "1991 Plan"). The 1991 Plan
provides for (i) the granting of stock options qualified under the Internal
Revenue Code of 1986, as amended (the "Code") section 422 (so-called "incentive
stock options") to purchase Class A Common Stock, (ii) the granting of stock
options not

57

qualified under Code section 422 ("nonqualified stock options") to purchase
Class A Common Stock, (iii) the granting of stock appreciation rights ("SARs"),
which give the holder the right to receive cash or Class A Common Stock in an
amount equal to the difference between the fair market value of a share of Class
A Common Stock on the date of exercise and the date of grant, (iv) the granting
of limited stock appreciation rights ("LSARs"), which give the holder the right
under limited circumstances to receive cash in an amount equal to the difference
between (a) the per-share price paid in an applicable tender offer or exchange
offer for the Company or fair market value of the Class A Common Stock in the
event of specified "change of control" events and (b) the fair market value of
the Class A Common Stock on the date of grant. The 1991 Plan permits the
exercise price of the options to be paid either in cash, by withholding from the
shares to be delivered pursuant to the exercise of the option that number of
shares equal in value to the exercise price, or by the delivery of already-owned
Class A Common Stock.

There are 1,800,000 shares of Class A Common Stock (subject to certain
adjustments) reserved under the Plan for issuance upon the exercise of options
and the settlement of SARs and LSARs. Adoption of the 1998 Plan, described
below, precluded any further grants under the 1991 Plan.

In general, the Committee had the discretion to establish the terms, conditions,
and restrictions to which options, SARs, and LSARs are subject. The options,
SARs, and LSARs are not transferable except by will and by the laws of descent
and distribution, and under other limited circumstances. The 1991 Plan is
intended to be qualified under Rule 16b-3 promulgated by the Securities and
Exchange Commission, which Rule generally exempts certain option grants and
certain stock or cash awards from the provisions of Section 16(b) under the
Securities Exchange Act of 1934.

Options granted under the 1991 Plan were granted at exercise prices equal to or
above the fair market value on the date of the grant. In October 1994, the Board
of Directors amended the Plan to provide accelerated vesting upon a change in
control of the Company. As of September 30, 2000, the Company had 193,813 active
options outstanding to executives under the 1991 Plan at prices ranging from
$12.00 to $14.00. Of these options, 179,013 are vested and none has been
exercised.

On November 5, 1998, the Compensation Committee of the Board of Directors
approved the adoption of the EZCORP, Inc. 1998 Incentive Plan (the "1998 Plan").
The 1998 Plan permits grants of the same types of options, SARs and LSARs as the
1991 Plan and provides for stock option awards of up to 1,275,000 of the
Company's Class A Common Stock. In approving such plan, the Compensation
Committee resolved that no further options would be granted under any previous
plans.

These options vest at the end of 119 months, but are subject to early vesting
from November 5, 1999 to November 5, 2005 (10%, 10%, 15%, 15%, 20%, 20%, and
10%) if the Company meets certain earnings per share targets. See Notes to
Consolidated Financial Statements-Note H "Common Stock, Warrants and Options."

As of September 30, 2001, the Company had 947,000 active options outstanding to
executives (options granted less options canceled due to employee termination)
under the 1998 Plan at prices ranging from $2.00 to $15.00. Of these options,
127,467 are vested and none have been exercised.

401(k) PLAN

On June 6, 1991, the Company adopted the EZCORP, Inc. 401(k) Plan (the "401(k)
Plan"), a savings and profit sharing plan intended to qualify under Section
401(k) of the Code. Under the 401(k) Plan, employees of the Company and those
subsidiaries that adopt it may contribute up to 15% of their compensation (not
to exceed $10,500 in 2001) to the plan trust. The Company will match 25% of an
employee's contributions up to 6% of his compensation. Employer contributions
may be made in the form of or invested in Class A Common Stock. Contribution
expense related to the 401(k) Plan for 2001 was approximately $89,000. The
Company's contributions vest based on the employee's length of service with the
Company and its subsidiaries, with 20% of the total contributions vesting each
year once the employee has three years of service. On termination of employment,
an employee will receive all of his contributions and any vested portion of the
Company's contributions, as adjusted by any earnings and losses.

58

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Not applicable.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS

The Company is controlled, indirectly, by Phillip Ean Cohen, through his
ownership of all of the issued and outstanding stock of MS Pawn Corporation, the
sole general partner of MS Pawn Limited Partnership ("MS Pawn") which owns 100%
of the Class B Voting Common Stock of the Company.

The table below sets forth information regarding the beneficial ownership of the
Company's Common Stock as of November 30, 2001 for (i) each of the Company's
current directors, (ii) each of the named executive officers, (iii) beneficial
owners known to the registrant to own more than five percent of any class of the
Company's voting securities, and (iv) all current officers and directors as a
group.

59

Matthew Campbell(j) 0 0.00% -- -- --
1901 Capital Parkway
Austin, Texas 78746

Connie Kondik(n) 1,000 0.01% -- -- --
1901 Capital Parkway
Austin, Texas 78746

Daniel M. Chism(l) 5,000 0.05% -- -- --
1901 Capital Parkway
Austin, Texas 78746

Tom Young(m) 4,000 0.04% -- -- --
1901 Capital Parkway
Austin, Texas 78746

Mark C. Pickup 2,600 0.02% -- -- --
6734 Corte Segunda
Martinez, California 94553

Steve Price 0 0.00% -- -- --
7 Monterey Pine Drive
Newport Coast, California 92657

Richard D. Sage(o) 31 0.00% -- -- --
13636 Deering Bay Drive
Coral Gables, Florida 33158

All officers and directors as a 289,202 4.98% -- -- --
group (fifteen persons)(b)(f)

(a) Except as indicated in the footnotes to this table, the persons named in
the table have sole voting and investment power with respect to all shares
of Class B Common Stock shown as beneficially owned by them, subject to
community property laws where applicable.

(b) MS Pawn Corporation is the general partner of MS Pawn and has the sole
right to vote its shares of Class B Common Stock and to direct their
disposition. Mr. Cohen is the sole stockholder of MS Pawn Corporation. See
"Certain Relationships and Related Transactions." Mr. Cohen also owns
189,341 shares of Class A common stock directly.

(c) Includes options to acquire 125,000 shares of Class A Common Stock at
$14.00 per share and warrants to acquire 1,191 shares of Class A Common
Stock at $6.17 per share. Does not include options to acquire 350,000
shares of Class A Common Stock at $10.00 per share, none of which are
currently exercisable.

(d) Includes options to acquire 40,000 shares of Class A Common Stock at $4.00
per share and 66,667 shares of Class A Common Stock at $2.00. Does not
include options to acquire 50,000 shares of Class A Common Stock at $10.00,
50,000 shares of Class A Common Stock at $13.00 or 50,000 shares of Class A
Common Stock at $15.00, none of which are currently exercisable.

(e) Includes options to acquire 24,313 shares of Class A Common Stock at $12.75
per share and 18,000 shares of Class A Common Stock at $12.00 per share.
Does not include options to acquire 100,000 shares of Class A Common Stock
at $10.00 per share or 20,000 shares of Class A Common Stock at $2.00 per
share, none of which are currently exercisable.

(f) Includes options to acquire 287,980 shares of Class A Common Stock at
prices ranging from $2.00 to $14.00 per share and warrants to acquire 1,222
Class A Common Stock shares at $6.17 per share.

(g) Includes warrants for 4,093 shares of Class A Common Stock and 4,074 shares
of Class B Common Stock held by MS Pawn and warrants for 1,292 shares of
Class A Common Stock held by Mr. Cohen.

60

(h) The number of shares and percentage reflect Class A Common Stock, together
with Class B Common Stock which is convertible to Class A Common Stock.

(i) Includes options to acquire 2,000 shares of Class A Common Stock at $2.00
per share and 2,000 shares of Class A Common Stock at $4.00 per share. Does
not include options to acquire 20,000 shares of Class A Common Stock at
$2.00 per share, none of which are currently exercisable.

(j) Does not include options to acquire 10,000 shares of Class A Common Stock
at $2.41 per share nor 20,000 shares of Class A Common Stock at $2.00 per
share, none of which are currently exercisable.

(k) Does not include options to acquire 30,000 shares of Class A Common Stock
at $2.00 per share, none of which are currently exercisable.

(l) Includes options to acquire 4,000 shares of Class A Common Stock at $10.00
per share and 1,000 shares of Class A Common Stock at $2.00 per share. Does
not include options to acquire 7,000 shares of Class A Common Stock at
$2.00 per share, none of which are currently exercisable.

(m) Includes options to acquire 2,000 shares of Class A Common Stock at $2.00
per share and 2,000 shares of Class A Common Stock at $4.00 per share. Does
not include options to acquire 20,000 shares of Class A Common Stock at
$2.00 per share, none of which are currently exercisable.

(n) Includes options to acquire 1,000 shares of Class A Common Stock at $2.00
per share. Does not include options to acquire 7,000 shares of Class A
Common Stock at $2.00 per share, none of which are currently exercisable.

(o) Includes warrants to acquire 31 shares of Class A Common Stock at $6.17 per
share.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

For information concerning the $729,000 loan from the Company to Mr. Lambiase,
the $1.5 million loans from the Company to each of Mr. Brinkley and Mr.
Lambiase, and the $200,000 loan from the Company to Mr. Rotunda, see "Executive
Compensation, Employment Agreements."

The Company and Morgan Schiff & Co., Inc. ("Morgan Schiff"), whose sole
stockholder is Mr. Cohen, are parties to a Financial Advisory Agreement renewed
January 1, 2000, pursuant to which Morgan Schiff receives certain fees for its
provision of financial advisory services to the Company. These services include,
among other matters, ongoing consultation with respect to the business and
financial strategies of the Company. In Fiscal 2000, from October to June,
Morgan Schiff received $33,333 per month for its services as a financial advisor
and received expense reimbursements of $574,000. Morgan Schiff waived the
monthly advisory fee from July 2000 through September 2001. In Fiscal 2001,
Morgan Schiff received expense reimbursements of $426,000.

61

PART IV

ITEM 14. FINANCIAL STATEMENT SCHEDULES, EXHIBITS, AND REPORTS ON FORM 8-K

(a)(1) The following consolidated financial statements of EZCORP, Inc. and
subsidiaries are included in Item 8:

CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Auditors

Consolidated Balance Sheets as of September 30, 2000 and 2001

Consolidated Statements of Operations for each of the three years in the period
ended September 30, 2001

Consolidated Statements of Cash Flows for each of the three years in the period
ended September 30, 2001

Consolidated Statements of Stockholders' Equity for each of the three years in
the period ended September 30, 2001

Notes to Consolidated Financial Statements.

(2) The following Financial Statement Schedule is included herein:

Schedule II-Allowance for Valuation of Inventory

All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable, and therefore, have been omitted.

(3) Listing of Exhibits (included herein)

(b) Through the fourth quarter ended September 30, 2001, the Company
has not filed any reports on Form 8-K.

62

EZCORP, INC. AND SUBSIDIARIES

SCHEDULE II-ALLOWANCE FOR VALUATION OF INVENTORY
(In millions)

The Company does not determine its inventory valuation allowance by specific
inventory items. During the year ended September 30, 2000, the $1.2 million
charged to other accounts was recorded as cost of goods sold as part of the
Company's restructuring.

63

LISTING OF EXHIBITS

See Exhibit Index immediately following signature page on page 65.

64

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

EZCORP, Inc.

December 21, 2001
By: /s/ Joseph L. Rotunda
----------------------
(Joseph L. Rotunda)
(President & Chief Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

65

EXHIBIT INDEX

10.3 $5 million Revolving Credit Note - Exhibit 10.3 to Registrant's Annual
Franklin Federal Bancorp. Report on Form 10-K for the year ended
September 30, 1992
(File No. 0-19424)

10.4 Omitted N/A

10.5 Security Agreement executed by Exhibit 10.5 to Registrant's Annual
EZPAWN Texas, Inc. (substantially the same Report on Form 10-K for the year ended
agreement also was executed by EZPAWN September 30, 1992
Oklahoma, Inc.; EZPAWN Mississippi, Inc.; (File No. 0-19424)
EZPAWN Arkansas, Inc.; EZPAWN Colorado,
Inc.; EZPAWN Alabama, Inc.; EZPAWN
Tennessee, Inc.; and Houston Financial
Corporation).

10.6 Guaranty Agreement executed by Exhibit 10.6 to Registrant's Annual
EZPAWN Texas, Inc. (substantially the same Report on Form 10-K for the year ended
agreement also was executed by EZPAWN September 30, 1992
Oklahoma, Inc.; EZPAWN Mississippi, Inc.; (File No. 0-19424)
EZPAWN Arkansas, Inc.; EZPAWN Colorado,
Inc.; EZPAWN Alabama, Inc.; EZPAWN
Tennessee, Inc.; and Houston Financial
Corporation).

10.7 Loan Agreement between the Company, as Exhibit 10.7 to Registrant's Annual
Borrower, and Franklin Federal Bancorp, Report on Form 10-K for the year ended
FSB, as lender, dated April 30, 1993. September 30, 1993
(File No. 0-19424)

10.8 Omitted N/A

10.9 Omitted N/A

10.10 Letter agreement executed December Exhibit 10.10 to the Registration
20, 1990 between Morgan Schiff & Co., Statement on Form S-1 effective
Inc. ("Morgan Schiff") and the August 23, 1991
Company. (File No. 33-41317)

10.11 Stock Purchase Agreement between Exhibit 10.11 to the Registration
the Company, Courtland L. Statement on Form S-1 effective
Logue, Jr., Courtland L. Logue, August 23, 1991
Sr., James D. McGee, M. Frances (File No. 33-41317)
Spears, Porter A. Stratton and
Steve A. Stratton dated as of May
18, 1989.

10.12 Capitalization and Subscription Exhibit 10.12 to the Registration
Agreement between MS Pawn Statement on Form S-1 effective
Limited Partnership ("MS Pawn") August 23, 1991
and the Company, dated as of July (File No. 33-41317)
25, 1989.

10.13 Omitted N/A

10.14 Consulting Agreement between Exhibit 10.14 to Registrant's Annual
the Company and Courtland L. Logue, Report on Form 10-K for the year
Sr., dated February 15, 1993 ended September 30, 1993
(File No. 0-19424)

10.15 Omitted N/A

10.16 Junior Subordinated Note due Exhibit 10.16 to Registration
1996 issued July 25, 1989 to Court- Statement on Form S-1 effective
land L. Logue, Sr. in the original August 23,1991
Principal amount of $238,319.95. (File No. 33-41317)

10.17 Omitted N/A

10.18 Warrant Certificate issued by the Exhibit 10.18 to the Registration
Company to MS Pawn on July 25, Statement on Form S-1 effective
1989. August 23, 1991
(File No. 33-41317)

10.19 Amendment to the Stock Purchase Exhibit 10.19 to the Registration
Agreement dated as of June 19, 1989 Statement on Form S-1 effective
Between the Company and the August 23, 1991
Stockholders of the Predecessor (File No. 33-41317)
Company.

10.20 Second Amendment to Stock Pur- Exhibit 10.20 to the Registration
chase Agreement dated as of April 20, Statement on Form S-1 effective
1990 between the Company and the August 23, 1991
Stockholders of the Predecessor (File No. 33-41317)
Company.

10.21 Omitted N/A

10.22 Omitted N/A

10.23 Omitted N/A

10.24 Omitted N/A

10.25 Omitted N/A

10.27 Omitted N/A

10.28 Omitted N/A

10.29 Omitted N/A

10.30 Omitted N/A

10.31 Omitted N/A

10.32 Omitted N/A

10.33 Omitted N/A

10.34 Omitted N/A

10.35 Stockholders' Agreement dated as Exhibit 10.35 to the Registration
of July 25, 1989 between the Com- Statement on Form S-1 effective
pany, MS Pawn and Courtland L. August 23, 1991
Logue, Jr. (File No. 33-41317)

10.36 Joinder Agreement to the Stock- Exhibit 10.36 to the Registration
Holders' Agreement dated as of Statement on Form S-1 effective
May 1, 1991 between the Company August 23, 1991
MS Pawn, Mr. Kofnovec, Mr. Gary, (File No. 33-41317)
Mr. Ross and Ms. Berger.

10.37 Incentive Stock Option Plan. Exhibit 10.37 to the Registration
Statement on Form S-1 effective
August 23, 1991
(File No. 33-41317)

10.38 401(k) Plan. Exhibit 10.38 to the Registration
Statement on Form S-1 effective
August 23, 1991
(File No. 33-41317)

10.39 Section 125 Cafeteria Plan. Exhibit 10.39 to the Registration
Statement on Form S-1 effective
August 23, 1991
(File No. 33-41317)

10.40 Lease of 1970 Cessna 210K Aircraft Exhibit 10.40 to the Registration
Between Courtland L. Logue, Jr. and Statement on Form S-1 effective
Transamerica Pawn Corporation, August 23, 1991
dated July 25, 1989. (File No. 33-41317)

10.41 Omitted N/A

10.42 Omitted N/A

10.43 Omitted N/A

10.44 Lease of Cessna P210 Aircraft Exhibit 10.44 to the Registration
Between Courtland L. Logue, Jr. Statement on Form S-1 effective
and Transamerica Pawn Corporation, August 23, 1991
dated December 29, 1989. (File No. 33-41317)

10.45 Lease between Logue, Inc. and E-Z Exhibit 10.45 to the Registration
Corporation for real estate located Statement on Form S-1 effective
at 1166 Airport Boulevard, Austin, August 23, 1991
Texas, dated July 25, 1989. (File No. 33-41317)

10.46 Lease between Logue, Inc. and E-Z Exhibit 10.46 to the Registration
Corporation for real estate located Statement on Form S-1 effective
at 5415 North Lamar Boulevard, August 23, 1991
Austin, Texas, dated July 25, 1989 (File No. 33-41317)

10.47 Agreement of Lease between LDL Exhibit 10.47 to the Registration
Partnership and Logue-Drouin Statement on Form S-1 effective
Industries, Inc. for real property August 23, 1991
at 8540 Broadway Blvd., Houston, (File No. 33-41317)
Texas, dated May 3, 1988 and related
Assignment of Lease.

10.48 Lease Agreement between C Minus Exhibit 10.48 to the Registration
Corporation and Logue-Drouin Statement on Form S-1 effective
Industries, Inc. DBA E-Z Pawn #5 August 23, 1991
for real property located at 5209 (File No. 33-41317)
Cameron Road, Austin, Texas,
dated December 28, 1987.

10.49 Lease Agreement between Logue, Exhibit 10.49 to the Registration
Inc. and E-Z Corporation for real Statement on Form S-1 effective
Property located at 901 E. 1st St., August 23, 1991
Austin, Texas, dated July 25, 1989. (File No. 33-41317)

10.50 Agreements between the Company Exhibit 10.50 to the Registration
and MS Pawn dated February 18, Statement on Form S-1 effective
1992 for the payment of $1.377 March 16, 1992
million of Series A Increasing Rate (File No. 33-45807)
Senior Subordinated Notes held by
MS Pawn.

10.51 Agreement Regarding Reservation Exhibit 10.51 to Registrant's
of Shares. Quarterly Report on Form 10-Q
for the quarter ended June 30, 1993
(File No. 0-19424)

10.52 Omitted N/A

10.53 Omitted N/A

10.54 Omitted N/A

10.55 Omitted N/A

10.56 Omitted N/A

10.57 Omitted N/A

10.58 Omitted N/A

10.59 Omitted N/A

10.60 Loan Agreement between Sterling B. Exhibit 10.60 to Registrant's Annual
Brinkley and the Company dated Report on Form 10-K for the year
October 7, 1994 (an identical ended September 30, 1995
document exists with respect to (File No. 0-19424)
Vincent A. Lambiase).

10.61 Promissory Note between Sterling Exhibit 10.61 to Registrant's Annual
B. Brinkley and the Company in the Report on Form 10-K for the year
original principal amount of ended September 30, 1995
$1,500,000 attached thereto (an (File No. 0-19424)
identical document exists with respect
to Vincent A. Lambiase).

10.62 July 1, 1994 Employment Agreement Exhibit 10.62 to Registrant's Annual
between the Company and Vincent Report on Form 10-K for the year
A. Lambiase and Promissory Note in ended September 30, 1995
the amount of $729,112.50 in (File No. 0-19424)
connection therewith.

10.63 EZCORP, Inc. Incentive Stock Option Exhibit 10.63 to Registrant's
Award Agreement, Employee Form Annual Report on Form 10-K
For the year ended September
30,1998 (File No.0-19424)

10.64 EZCORP, Inc. Incentive Stock Option Exhibit 10.64 to Registrant's
Award Agreement, Executive Form Annual Report on Form 10-K
for the year ended September
30, 1998 (File No. 0-19424)

10.71 Amended and restated Loan Agreement between Exhibit 10.71 to Registrant's
the Company, as Borrower, and Franklin Quarterly Report on Form 10-Q for
Federal Bancorp, FSB, as Lender, dated the quarter ended March 31, 1994
March 17, 1994. (File No. 0-19424)

10.72 First Amendment to Amended and Restated Form 10-Q for the quarter ended
Loan Agreement between the Company and December 31, 1994
First Interstate Bank of Texas, N.A. as (File No. 0-19424)

10.73 Second Amendment to Amended and Restated Form 10-Q for the quarter ended
Loan Agreement between the June 30, 1995
Company and First Interstate Bank of (File No. 0-19424)
Texas, N.A. as Agent, re: Revolving
Credit Loan.

10.74 Third Amendment to Amended and Restated Form 10-Q for the quarter ended
Loan Agreement between the Company and June 30, 1996
Wells Fargo Bank (Texas), N.A. as Agent, (File No. 0-19424)
re: Revolving Credit Loan.

10.75 Fourth Amendment to Amended and Restated Form 10-Q for the quarter ended
Loan Agreement between the Company and Wells March 31, 1998
Fargo Bank (Texas), N.A. as Agent, re: (File No. 0-19424)
Revolving Credit Loan.

10.76 Fifth Amendment to Amended and Restated Exhibit 10.76 to Registrant's Annual
Loan Agreement between the Company and Report on Form 10-K for the year ended
Wells Fargo Bank (Texas), N.A. as Agent, September 30, 1998
re: Revolving Credit Loan. (File No. 0-19424)

10.77 Credit Agreement between the Company and Exhibit 10.77 to Registrant's Annual
Wells Fargo Bank (Texas), N.A., as Agent Report on Form 10-K for the year ended
and Issuing Bank, re: $110 million September 30, 1998
Revolving Credit Loan (File No. 0-19424)

10.78 First Amendment to Credit Agreement Exhibit 10.78 to Registrant's Annual
Between the Company and Wells Fargo Bank Report on Form 10-K for the year
(Texas), N.A., as Agent and Issuing Bank, Ended September 30, 1999
re: $110 million Revolving Credit Loan. (File No. 0-19424)

10.79 Second Amendment to Credit Agreement and Exhibit 10.79 to Registrant's Quarterly
Waiver between the Company and Wells Fargo Report on Form 10-Q for the quarter
Bank (Texas), N.A., as Agent and Issuing ended March 31, 2000
Bank, re: $85 million Revolving Credit Loan. (File No. 0-19424)

10.80 Limited Waiver between the Company and Exhibit 10.80 to Registrant's Quarterly
Wells Fargo Bank Texas, N.A., as Agent and Report on Form 10-Q for the quarter
Issuing Bank, re: $85 million Revolving ended June 30, 2000
Credit Loan. (File No. 0-19424)

10.81 Amended and Restated Credit Agreement Exhibit 10.81 to Registrant's Annual
between the Company and Wells Fargo Bank Report on Form 10-K for the year ended
Texas, N.A., as Agent and Issuing Bank, re: September 30, 2000
$85 million Credit Facility. (File No. 0-19424)

10.82 Waivers of Selected Sections of Credit Exhibit 10.82 to Registrant's Quarterly
Agreement between the Company and Wells Report on Form 10-Q for the quarter
Fargo Bank, N.A., as Agent and Issuing ended June 30, 2001
Bank, re: $85 million Credit Facility. (File No. 0-19424)

10.83 First Amendment to Amended and Restated Exhibit 10.83 to Registrant's Quarterly
Credit Agreement between the Company and Report on Form 10-Q for the quarter
Wells Fargo Bank, N.A., as Agent and ended June 30, 2001
Issuing Bank, re: $85 million Credit (File No. 0-19424)
Facility.

10.84 Second Amendment to Amended and Restated N/A
Credit Agreement between the Company and
Wells Fargo Bank, N.A., as Agent and
Issuing Bank, re: $85 million Credit
Facility.*

10.85 Third Amendment to Amended and Restated N/A
Credit Agreement between the Company and
Wells Fargo Bank, N.A., as Agent and
Issuing Bank, re: $85 million Credit
Facility.*

22.1 Subsidiaries of Registrant.* N/A

23.1 Consent of Ernst & Young LLP.* N/A

- ----------

*Filed herewith.