Fiscal Year 2009 Financial Highlights

Total consolidated revenue for the fiscal year, which was impacted by the global recession and 114 U.S. financial services store closures during fiscal 2009, was $527.9 million, which on a constant currency basis equates to a record $595.1 million, representing a year-over-year increase of $22.9 million or 4.0%.

On a constant currency basis, total consumer lending revenue increased by $18.0 million or 6.2%, while check cashing revenue, driven by decreased check volumes and a lower average face amount of checks cashed as a result of the global recession, as well as the Company's conservative approach to cashing riskier checks amid the weakened economy, decreased by $12.9 million or 6.6%.

Money transfer fees increased by $3.0 million or 10.8% for the fiscal year on a constant currency basis, as a result of increased transaction volumes across all of the Company's geographic markets.

Other revenue was $70.4 million on a constant currency basis, representing a $14.8 million or 26.7% increase over the prior fiscal year, due principally to additional pawn gold scrap and retail sales in the U.K., increased debit card revenue in Canada, and growth in the foreign exchange product in the U.K.

In the midst of the economic downturn, the Company has taken a cautionary approach to credit decisioning by reducing the amount it is willing to loan certain customers. As a result, the consolidated loan loss provision, expressed as a percentage of gross consumer lending revenue, improved to 18.9% for fiscal 2009 compared to 20.0% for the prior fiscal year.

As a result of cost reduction initiatives across all of the Company's geographic markets, store and regional margin, on a constant currency basis, improved to 35.3% of total revenue for fiscal 2009 from 34.8% for the previous fiscal year.

Consolidated adjusted EBITDA was a record $158.6 million in fiscal 2009 on a constant currency basis, compared to $146.2 million for the prior fiscal year, representing a year-over-year increase of 8.5%.

Income before income taxes, on a GAAP basis including $63.5 million of non-recurring charges primarily related to the Company's Canadian class action litigation and the closure of 114 U.S. financial services stores in fiscal 2009, was $16.8 million for the fiscal year compared to $87.2 million for fiscal 2008, while net income for fiscal 2009 was $1.8 million compared to $51.2 million for the prior fiscal year.

On a constant currency basis and excluding the non-recurring charges, pro forma income before income taxes was a record $93.5 million for the fiscal year compared to $90.5 million for fiscal 2008. Likewise, pro forma net income, considering a pro forma effective income tax rate of 43.0%, was $53.3 million compared to $51.6 million for fiscal 2008.

Fully-diluted earnings per share, on an actual reported basis, was $0.07 for fiscal 2009 compared to $2.08 for the previous fiscal year.

Pro forma fully-diluted earnings per share was a record $2.21 for fiscal 2009 compared to $2.10 for fiscal 2008 on a constant currency basis and excluding non-recurring charges, representing a year-over-year increase of 5.2%.

Currency Overview

The U.S. Dollar strengthened significantly during fiscal 2009 with the relative value of the Canadian Dollar down nearly 15% to the U.S. Dollar, while the British Pound Sterling has been devalued by approximately 20% to the U.S. currency over the same time frame. As a majority of the Company's consolidated revenue is generated outside the United States in Canada and the U.K., the reported results for the Company's foreign subsidiaries were negatively impacted on a non-cash basis when translated into U.S. Dollars, as required by U.S. generally accepted accounting principles. More importantly, as the Company continues to reinvest the cash generated by its Canadian and U.K. business units back into those businesses, fluctuations in currency exchange rates presently have no near term cash flow impact on the Company's operations. Therefore, we also provide metrics on our financial results for the quarter and fiscal year on a constant currency basis, in order to better explain and compare the true operating performance of our business units.

Business Overview

Reflecting on the recent fiscal year, Jeff Weiss, the Company's Chairman and Chief Executive Officer, stated, "Despite having to navigate through the worst recession we may ever have to face, our business continued to perform very well in fiscal 2009 generating record revenue and profits on an operational basis. This strong performance is a testament to the strength and resiliency of our diversified business model, and the dedication and tireless work ethic of our more than 4,500 employees now spanning five countries and two continents.

Throughout fiscal 2009, we continued to fine tune the fundamentals of our core business by reducing our cost structure and improving the operating efficiency of our global store base and field support network, implementing industry leading proprietary credit scoring models for our global loan products, and leveraging new technologies and expertise in our debt collection processes. In addition, our global business development team completed several key acquisitions including our recent entrance into the Polish market, while launching a number of new products and services through our store and internet sales platforms. Combined, I believe these efforts will significantly enhance the long-term growth outlook for our Company and further strengthen our position as the most diversified company in the industry with respect to geography, breadth of product offering, and distribution channels."

Jeff Weiss continued, "In the U.K., we continued to aggressively expand our store footprint through both de novo store development and acquisitions, while our leading market position and strong brand recognition continues to drive organic customer growth. In Canada, where our largest and most profitable business unit resides, I am pleased to report that provincial regulation is moving ahead as expected in a manner that should establish a viable payday loan industry with strong consumer protections for years to come. With regard to our U.S. business, during fiscal 2009 we closed a total of 114 U.S. financial services stores and significantly reduced our U.S. field management and store support infrastructure, as part of a plan to divest underperforming stores and focus our domestic multi-product store footprint in states with more favorable and stable regulatory environments. As a direct result of the store closures and operating efficiency improvements resulting from a more contiguous store footprint, the store margin for the U.S. financial services business unit increased by more than $600,000 for the quarter when compared to the prior year period.

In retrospect, fiscal 2009 has been a transformational year for our Company, positioning us for sustained profitable earnings growth and I believe fiscal 2010 will mark the beginning of the realization of this potential. Furthermore, our strong cash flow from operations and solid liquidity should continue to enable us to take advantage of additional global business development and expansion opportunities in existing and prospective new markets as we move through fiscal 2010 and beyond."

The Company recently announced its expansion into the Polish market through the acquisition of an established consumer lending business headquartered in Gdansk. The Company has spent considerable time researching the Polish market, which is at the forefront of economic development and growth in the region. Poland has a population of nearly 40 million people with a significant percentage of the population currently underserved by the traditional banking industry. This acquisition represents a planned first step into mainland Europe, and also provides a platform for further expansion throughout Poland and other Eastern European countries. The demographics of the neighboring Eastern European countries are similar to Poland, with the entire population of Eastern Europe nearing 200 million people across several countries, with a significant percentage of the population residing in urban-industrial areas.

In the U.K., in the fourth quarter, despite the longest recession since the post World War II era, the Company was able to grow its U.K. consumer lending business by 12.8% on a same store sales basis. Furthermore, in April the Company completed the acquisition of an established internet based consumer lending business in the United Kingdom. The Company is pleased to report that this acquisition has performed better than expected with a loan book at the end of July of £4.4 million compared to £2.5 million just a couple of months ago at the time of acquisition, while maintaining expected loan loss rates. In addition, the management team of the acquired business bolsters the Company's already significant international management team and capabilities, while providing seasoned business acumen and industry experience with respect to internet lending, which the Company plans to transfer and leverage to other countries.

In Canada, to date, the provinces of Ontario, Nova Scotia, British Colombia, and Alberta have all announced maximum lending rates above the Company's existing price structure, but generally below the pricing of many of Dollar Financial's competitors. As the largest multi-product provider in Canada, the Company is in the strong position of being able to operate profitably at prices below the competition, since all of its products and services contribute to the coverage of joint fixed store operating costs and the generation of profits and cash flow. Under provincial regulation, the Company believes it has an opportunity to further leverage its multi-product store platform and improve upon its approximate 30% share of the Canadian market by offering products and services at prices below many of the Company's competitors. Furthermore, a number of the less efficient mono-line operators will likely struggle under provincial regulation, which should present an opportunity for the Company to acquire their stores or customer accounts at attractive prices. Additionally, provincial regulation should serve to both educate and legitimize the product in the eyes of potential consumers who have never before taken advantage of a payday loan. The Company intends to pursue these potential new customers through renewed radio and television advertising campaigns, which are expected to be rolled out as the individual provinces finalize and implement their new lending rate structures.

Fourth Quarter Financial Results

In the face of the current global recession, consolidated consumer lending revenue, on a constant currency basis was $74.9 million, reflecting a moderate decrease of $2.2 million or 2.8% in the fiscal fourth quarter when compared to the same quarter in the prior year. Consumer lending revenue in the U.K. increased by a healthy 34.3% or £3.3 million for the quarter, benefitting from growing consumer awareness of the Company's loan products in addition to strong growth in the pawn lending business. Total revenue generated by the pawn business in the U.K. was £2.1 million for the quarter, as compared to £1.8 million for the prior year's quarter, representing a year-over-year increase of 19.1%.

Consumer lending revenue in Canada declined by 9.0% or C$3.3 million compared to the previous year's quarter. The lower consumer lending revenue in Canada is primarily attributable to higher unemployment across all provinces, as well as the Company's decision to suspend its advertising campaigns until provincial regulation is established. The Company plans to renew its radio and television advertising campaigns in fiscal 2010 as the individual provinces finalize and implement their new rate structures.

In the U.S., as in Canada, increasing unemployment through all sectors of the economy negatively impacted consumer lending volumes, as lending revenue in the Company's domestic business decreased by $5.4 million or 24.6% for the quarter. The closure of 114 U.S. financial services stores during fiscal 2009 can be attributed to a substantial portion of the consumer lending revenue decline for the quarter.

As the current recession ensues, the potential for fraudulent checks being presented is higher than normal; therefore the Company continues to employ a more cautious approach to cashing checks which includes more of a focus on net margin as opposed to gross fees or revenue. On a constant currency basis, total check cashing revenue was $42.1 million for the quarter ended June 30, 2009, representing a year-over-year decrease of $8.5 million. Net write-offs of returned checks, as a percentage of check cashing revenue, decreased to 6.1% for the quarter compared to 9.5% for the prior fiscal year. Check cashing revenue in Canada decreased by C$2.0 million or 9.5% and by £1.6 million or 22.1% in the U.K. The diminution of the construction industry in the London area, principally due to the slowing housing market, and the return home of migratory construction laborers to Eastern Europe were significant drivers of the decline in check cashing revenue in the United Kingdom. Check cashing revenue in the U.S. decreased by 21.7% or $3.3 million, of which approximately $1.0 million of the decline was related to the store closures in fiscal 2009.

Total money transfer revenue, on a constant currency basis, was approximately flat to the prior year period. Other revenue, excluding the impact of changes in currency exchange rates, increased by 20.5% or $3.1 million, primarily as a result of additional pawn gold scrap and retail sales in the U.K., additional foreign exchange product revenue in the U.K., and growth in the debit card business in Canada.

On a constant currency basis, store and regional margin was $50.9 million for the quarter ended June 30, 2009, representing a slight decrease of $1.2 million from the prior year period. Due to the global recession, the Company instituted a number of cost reduction initiatives across all of the Company's markets. As a result, store and regional margin on a constant currency basis improved to 35.7%, as a percentage of total revenue, from 34.6% for the prior year's quarter. Although it is difficult to predict the continuing depth and duration of the current recession, the Company continues to regulate its labor and other variable store costs with fluctuations in customer transaction volume. Corporate costs also decreased on a constant currency basis to $17.0 million for the current quarter from $18.2 million for the prior year's quarter.

In the fourth quarter ended June 30, 2009, the Company recorded a charge of $57.5 million associated with its long-standing Canadian class action litigation. In addition, the Company recorded a one-time charge of $4.5 million in the quarter related to severance and other store closing expenses, including the closure of 60 under-performing financial services stores in the U.S. in the fourth quarter, along with associated reductions in field management and store support functions.