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•	Pawn service charges were $57 million, up 1% on a same-store basis, despite strengthening economic conditions and lower gasoline prices. Pawn loan balances averaged $140.2 million during the quarter, flat in total year-over-year and up 1% on a same-store basis. General merchandise accounted for 40% of the product mix while jewelry was 60%, consistent with the prior year quarter.

•	Merchandise sales unit volume increased 7% year-over-year to 1.5 million units, while revenue from merchandise sales increased 1% both in total and on a same-store basis.

•	Redemption rates remained flat at 83%, with the general merchandise redemption rate at 76% versus 75% a year earlier, and the jewelry redemption rate unchanged at 87%.

•	During the quarter we focused on growing a quality loan book and increasing the velocity of inventory disposition. We made significant strides in selling down aged inventory, as evidenced by an improvement in inventory turns.

*	General merchandise inventory turns for items aged 361+ days was 3.2 times compared to 2.3 times for the same period in the prior year. On a quarter-over-quarter basis, general merchandise inventory aged 361+ days declined 10%.

*	Jewelry inventory turns for items aged 361+ days were 1.8 times compared to 0.8 times in the same period a year earlier. On a quarter over quarter basis, jewelry inventory aged 361+ days was down 17%.

*	As a result of our efforts to reshape the inventory profile and increase the velocity of inventory, gross margin on merchandise sales was 34% as compared to 40% in the prior year. We expect to reduce aged inventory through the remainder of the fiscal year, which will pressure gross margins until we complete this effort.

•	In the quarter, we opened 5 pawn stores in the U.S., and have recently signed a definitive agreement to acquire 12 more pawn stores in the United States.

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Total loan balances including CSO loans, net of reserves, were $47.1 million at quarter-end, a 14% decrease over the same period last year. Non-Texas balances were $22.8 million, a 4% decrease, while Texas loan balances were $24.3 million, down 22%. The Texas balances are largely affected by a 41% decrease in balances in ordinance markets. Houston and El Paso ordinances have been in effect for two quarters, and we expect year-over-year loan comparables

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•	Non-Texas installment loan balances were up 7% over the same period last year, demonstrating a mix shift toward installment products. Likewise, installment loan balances in total, excluding ordinance markets, were up 2% as compared to the same quarter last year.

•	Non-Texas consumer loan fees were $18.0 million, a 3% increase over the same period last year. Total consumer loan fees were $42.2 million, down 8% over the prior year, highlighting the negative impact on the results of new ordinances in Texas. Fees in ordinance cities declined 29% to $4.6 million, with most of the impact experienced in Houston and El Paso.

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Bad debt expense as a percentage of fees was 34%, up 300 basis points over the prior year. Bad debt in auto title loans was 25%, down 200 basis points over the prior year as a result of adjusting our underwriting policies and procedures on auto title loans. Bad debt in installment products was 40%, up 700 basis points over the prior year quarter, and cash advance loan bad debt was 34%, an increase of 300 basis points over the prior year quarter. Both increases were predominantly in ordinance markets.

•	During the quarter, we opened 5 de novo financial services stores in the U.S., including one in Texas and four in Tennessee. We remain committed to investing in disciplined growth of the Financial Services business.

•	New loan originations at Grupo Finmart were $21.9 million, a year-over-year increase of 28% in total and 37% on a constant currency basis. Strength in new loan originations can be seen in both the growth in number of contracts and steady penetration rates at existing contracts.

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Structured asset sales resulted in approximately $6.6 million of gains (reported in “Consumer loan sales and other revenues”), up 43% as compared to the prior year and up 61% year-over-year on a constant currency basis. Consumer loan and interest fees on the remaining loan portfolio were $10.1 million, a year-over-year decrease of 30% (25% on a constant currency basis), primarily the result of structured asset sales over the last year.

•	Reflecting the improvement of the quality of the loan portfolio, bad debt expense as a percentage of fees declined to 9%, down 100 basis points over the prior year.

•	We continue to manage the growth and cost of capital at Grupo Finmart and have reduced the overall cost of debt to 9%, down from 11% in the same quarter last year. Total interest expense was up $1.9 million, up 57% year-over-year and 69% year-over-year on a constant currency basis, on a higher debt base.

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▪	Performance at Empeño Fácil was strong, as we continued our focus on operational execution. Pawn service charges were $7.9 million, a year-over-year increase of 12%, and 19% on a constant currency basis. Average pawn loan balances of $15.7 million were up 15% year-over-year and 22% year-over-year on a constant currency basis.

•	Total merchandise sales were $19.6 million, a year-over-year increase of 17% and 25% on a constant currency basis. Gross margin was 32%, as compared to 37% in the prior year which reflects our efforts to increase the velocity of inventory disposition consistent with our U.S. pawn operations.

•	Despite lower redemption rates (76%, down 300 basis points year-over-year) and higher inventory levels, inventory turns held steady at 2.6 times. Inventory turns for general merchandise held for one year or more were 3.2 times versus 1.5 times in the same period a year earlier. General merchandise items held for 361+ days were reduced by 43% quarter-over-quarter.

•	Income from the Other International segment was $2.2 million, up $0.9 million from a year earlier; the prior year incorporated a $1.2 million loss related to our Albemarle & Bond investment.

•	The first quarter includes $1.0 million in income from discontinued operations of our stand-alone online lending businesses in the U.S. and the U.K. as the wind-down collection experience was better than previously assumed.

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In addition to the financial information prepared in conformity with generally accepted accounting principles in the United States of America ("GAAP"), we provide certain other non-GAAP financial information such as constant currency results ("constant currency"). Management believes that presentation of non-GAAP financial information is meaningful and useful in understanding the activities and business metrics of our Latin America operations, which are denominated in Mexican pesos. Management believes that these non-GAAP financial measures reflect an additional way of viewing aspects of our business that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting our business. Management provides non-GAAP financial information for informational purposes and to enhance understanding of our GAAP consolidated financial statements. Readers should consider the information in addition to, but not instead of or superior to, its financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.

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Constant currency results reported herein are calculated by translating balance sheet and income statement items denominated in Mexican pesos using the exchange rate from the prior-year comparable period, as opposed to the current comparable period, in order to exclude the effects of foreign currency rate fluctuations.  For balance sheet items, the end of the period rate at the end of the applicable prior-year period (December 31, 2013) of 13.1 to 1 was used, compared

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