UNITED STATES

FORM 10-K

OR

Commission File Number 0-20774

ACE CASH EXPRESS, INC.

(Registrant’s telephone number, including area code) (972) 550-5000

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $.01 par value

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.

Indicate by check mark if disclosure 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. [   ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

As of September 7, 2004, 13,401,089 shares of Common Stock were outstanding. As of such date the aggregate market value of voting stock (based upon the last reported sales price in The Nasdaq Stock Market) held by nonaffiliates of the registrant was approximately $316,046,208.

DOCUMENTS INCORPORATED BY REFERENCE

The information required by Part III is incorporated by reference from the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this report.

ACE CASH EXPRESS, INC.
FORM 10-K
For the Year Ended June 30, 2004

Table of Contents

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PART I

ITEM 1. BUSINESS

Overview

     We are a leading retailer of financial services, including check cashing, short-term consumer loans and bill payment services. As of June 30, 2004, we had a total network of 1,230 stores in 36 states and the District of Columbia, consisting of 1,026 company-owned stores and 204 franchised stores. This makes us the largest owner, operator and franchisor of check cashing stores in the United States and one of the largest providers of short-term consumer loans, also known as payday loans. We focus on serving unbanked and underbanked consumers, many of whom seek alternatives to traditional banking relationships in order to gain convenient and immediate access to check cashing services and short-term consumer loans. We seek to develop and maintain the largest network of stores in each of the markets where we operate. Our growth strategy is to open new stores, franchise stores in new and existing markets, opportunistically acquire stores, and introduce new services into our store network.

     Our stores offer check cashing, loans and other retail financial services at competitive rates in clean settings during hours convenient for our customers. Our stores are located in highly visible, accessible locations, usually in strip shopping centers, free-standing buildings and kiosks located inside retail stores.

Industry Overview

     Check Cashing. We operate primarily in the check cashing industry. We believe there are approximately 11,000 check cashing stores nationally, with five other check cashing companies operating or franchising over 100 stores and five companies operating or franchising between 50 and 100 locations.

     Check cashing companies focus on and offer services to a customer segment that banks generally do not service and operate at locations and during hours that are typically more convenient than those traditionally offered by banks. In addition, unlike many banks, check cashing stores are willing, for a fee, to assume the risk that checks they cash will “bounce.” For instance, some banks will refuse to cash a check for a person who does not maintain an account with the bank. For account holders, some banks will require an account holder to maintain sufficient funds to cover a check to be cashed or to wait several days for the check to clear. As a result, we believe check cashing stores provide an attractive alternative to customers with relatively small account balances or without bank accounts. Although these customers might save money by depositing their checks in a bank and waiting for them to clear, many prefer paying a fee to take advantage of the convenience and availability of immediate cash offered by check cashing stores.

     The fees charged for this service are intended to provide the check casher with a profit after covering operating expenses, including any interest expense incurred by the check casher on the funds advanced to customers, and for the risk assumed by the check cashing store. A check cashing store assumes the risk that the check will not be collected because of insufficient funds, stop payment orders or fraud. In order to minimize this risk and the losses associated with uncollected checks, many check cashing stores cash only payroll or government entitlement checks, or charge higher fees and have stricter approval procedures for cashing personal checks.

     Short-Term Consumer Loans. Short-term consumer loans provide a customer cash in exchange for the customer’s check or an authorization to debit the customer’s bank account, along with an agreement to defer the deposit of that check or initiation of that debit to the customer’s bank account, as the case may be, until the customer’s next payday, typically two to four weeks later. If the customer returns to the store and repays the loan within that time period, the check is returned to the customer.

     Short-term consumer loans provide a simple, quick and confidential way for consumers to meet short-term cash needs between paydays while avoiding the high cost of penalties associated with writing checks with insufficient funds and other penalties and fees associated with making a late payment. Until the development of the short-term consumer loan industry in the early 1990s, customers often resorted to writing bad checks as a short-term solution to meet immediate cash needs.

     We believe there are currently 22,000 short-term consumer loan stores operating in the United States. While the majority of these stores offer only the short-term consumer loan service, some of these stores also offer other services such as check cashing or pawn loans.

     Other financial services. In addition to check cashing and short-term consumer loan services, some stores offer customers a range of other services, including bill payments, money orders and money transfers. Some stores also offer public transportation passes, photocopying, fax transmission services and postage stamps.

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Competitive Strengths

     We offer a menu of retail financial services delivered through our growing network of 1,230 stores conveniently located in close proximity to where our customers live and work. We believe that our store employees provide a professional experience that our customers value, which allows us to better understand their present and future financial service needs. We intend to capitalize on the following competitive strengths in order to grow our company:

     Focus on Customer Service. Treating our customers with respect is an integral part of our organizational culture. Unlike many of our competitors, all of our stores display an easy-to-read menu of our services, with costs and fees clearly stated, in order to help our customers make an informed purchasing decision. Additionally, many of our stores located in markets with large Hispanic populations display our services in both English and Spanish. Our customers also receive a receipt with each transaction that details the fees paid. Our store employees are trained to greet customers as they enter the store, assist them in an efficient and helpful manner and thank them for their business. Many of our employees have long-standing relationships with customers who use our services multiple times a year. We believe that providing prompt, friendly and knowledgeable service helps us achieve higher levels of customer satisfaction and generate higher visit frequency. We measure and track our customer service quality at the store and employee levels through customer calls made to our toll-free service line and our annual customer service survey.

     Efficient Operating Model. We believe that our operating model and business practices position us to grow our revenues and increase profitability. In our fiscal year ended June 30, 2002, we introduced our Operational Goals program, a standardized set of best practices, to help ensure a clear and consistent benchmark would be used to evaluate the performance of our store employees. Our regional vice presidents, district managers and store employees continue to be focused on their achievement of these goals. We measure their performance on a daily, weekly, monthly and quarterly basis. Each year, we adjust our Operational Goals and our measurement targets to encourage continued improvement across our store base and maximize profitability.

     Our Operational Goals for fiscal 2005 are to:

•		provide quality customer service and take pride in our store appearance;
•		reduce cash shortages in our stores;
•		reduce forgeries;
•		increase our in-store loan payoffs;
•		reduce the number of times our stores open late or close early;
•		properly staff our stores for peak schedules;
•		increase the number of daily loan transactions
•		reduce overtime hours;
•		increase number of good checks cashed; and
•		provide more customers with the ACE Prepaid Mastercard®.

     Since implementing our Operational Goals, we have increased comparable store revenue and decreased store operating expenses, resulting in increased gross margin.

     Proprietary Information Systems. To better service our customers and manage our stores in the most profitable manner, we have developed proprietary information systems, including a point-of-sale system and a management information system, designed for the efficient delivery of our financial services with the proper balance of corporate management. Our in-house information systems team has built a reliable and scalable technology infrastructure that will allow us to grow our business without significant additional capital expenditures. Our investment in information systems has allowed us to improve functionality, including:

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moving customers in and out of the store more quickly due to faster connectivity to our centralized risk management system;

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•		evaluating customer transaction patterns to improve our check cashing approval process;
•		utilizing automated decision-making technology to reduce check cashing risk;
•		monitoring daily revenue by service on a regional, store and employee basis;
•		detecting and preventing fraud and other losses, including cash differences, forgery and employee theft;
•		planning and managing optimal store cash levels and store personnel scheduling; and
•		facilitating compliance with regulatory requirements.

     By maintaining interactive and flexible information systems, we provide more services in a standardized and efficient manner, which we believe allows us to operate our stores with fewer personnel than many of our competitors.

     Proven Acquisition Strategy. From 1991 to present, we grew from 181 to 1,026 company-owned stores, in large part, as a result of a disciplined acquisition strategy. Of our 1,026 stores, 399 were acquired in 100 separate transactions. Acquired stores are quickly integrated into our existing store base following the deployment of our proprietary point-of-sale system. By implementing our Operational Goals and information systems, we are typically able to increase revenue and gross margin in our acquired stores and to enhance the acquired stores’ service offerings. The average cost of converting an acquired store to an ACE store consists primarily of expenditures related to new signage, implementation of our point-of-sale system and minor store remodeling. We believe there are opportunities to continue to improve the results in some of our recently acquired stores.

     Experienced Management Team. Our executive management team is a blend of company veterans and recent key additions that have experience in the check cashing industry as well as other retail-based businesses. These employees have demonstrated an ability to grow retail businesses profitably through new store openings, acquisitions and franchising. Jay Shipowitz, our Chief Executive Officer, who was promoted from President and Chief Operating Officer to Chief Executive Officer on July 1, 2004, has been with us since 1997 and has managed all areas of operations and finance during his tenure. Barry Barron, our Executive Vice President of Operations, has been with us since 2001 and has extensive experience operating company-owned and franchised restaurant locations. In addition, since June 2003, we added three senior managers in finance and operations, with more than 50 combined years of experience in their respective areas of expertise. The additions included William McCalmont as our Executive Vice President and Chief Financial Officer, Walter Evans as our Senior Vice President and General Counsel and Gerard Schroepfer as our Chief Marketing Officer. We believe that our executive management team’s experience has allowed us to deliver a consistent service offering to our customers, which in turn has generated higher levels of customer loyalty and positioned us to capitalize on future growth opportunities.

Growth Strategy

     A key objective of our growth strategy is to have the most locations in each market and to offer the broadest selection of financial services in our industry. We believe that by offering the convenience of high-density store locations, exceptional customer service and a broad suite of retail financial services, we will achieve a high level of customer satisfaction. The key elements of our growth strategy are as follows:

     Open Company-Owned Stores. We opened 53 company-owned stores in fiscal 2004 (including 11 ACE Cash Advance stores), compared to 14 stores in fiscal 2003 and 39 stores in fiscal 2002. Our company-owned store growth in fiscal 2003 was less than our historical new store growth primarily due to limitations on capital expenditures imposed by our bank credit agreement through March 31, 2003. Our current bank credit agreement enables us to pursue our company-owned store growth strategy more aggressively. We expect to open approximately 60 new company-owned stores, with a net gain of approximately 40 to 45 company-owned stores after store closures, in fiscal 2005. We are still targeting an aggregate net gain of approximately 300 company-owned stores for the five-year period ending June 30, 2008.

     Accelerate Franchise Store Development. We opened 32 franchised stores in fiscal 2004, compared to 26 stores in fiscal 2003 and 22 stores in fiscal 2002. Our goal is to be the industry leader in offering quality franchising opportunities and exceptional support systems and services to existing and potential franchisees. We believe that by offering attractive investment opportunities and exceptional franchisee support systems and services, we will attract potential franchisees to partner with us rather than other franchisors. As of June 30, 2004, we had 204 franchised stores and we believe our targeted markets could potentially support an additional 1,800 ACE franchise stores across the United States. We expect to open approximately 50 new franchised stores, with a net gain of approximately 40 franchised stores after store closures, in fiscal 2005. Currently, we have franchise agreements for the development of over 100 new franchise stores and we are still targeting an aggregate net gain of approximately 200 franchise stores for the five year period ending June 30, 2008.

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     Pursue Opportunistic Acquisitions. Since 1991, we have acquired over 500 stores. We believe that our extensive experience with acquisitions allows us to successfully integrate acquired stores into our network. We believe that growth through acquisitions is attractive because:

•		acquiring stores provides access to an existing customer base and source of revenue and cash flow;
•		introducing our proprietary information systems and Operational Goals generates operating efficiencies;
•		offering our additional services in the acquired stores drives revenue growth; and
•		acquiring stores allows us to enter new markets with scale or increase our share in existing markets.

     In evaluating potential acquisition candidates, we consider a number of factors, including:

•		strategic fit and desirability of location in both new and existing markets;
•		existing customer base, revenue history and rent;
•		ability to improve productivity and profitability; and
•		anticipated returns on investment.

     Introduce New Services. In addition to our current broad service offering, we continuously evaluate new services for possible introduction into our stores. For example, in fiscal 2002, we introduced prepaid debit cards into our stores through a relationship with NetSpend Corporation, a prepaid payments company. NetSpend’s All-Access® MasterCard® Debit Card allows our customers to “load” cash onto a MasterCard debit card and use it wherever MasterCard debit cards are accepted. We receive a fee when customers purchase the card, load cash on the card, use it for a purchase, or use it at an automated teller machine for a cash withdrawal. During fiscal 2004, we and our franchisees sold approximately 149,000 cards and loaded a total face value of more than $268 million. We believe that our distribution network, with 1,230 network stores in 36 states and the District of Columbia, makes us an ideal partner for financial service companies seeking to gain immediate access to our customer base. Our distribution network allows us to offer our customers new services through third parties, without incurring the costs associated with a proprietary research and development process.

     Continue Comparable Store Revenue Growth. We believe we have an opportunity to continue comparable store revenue growth. To increase comparable store revenues, we employ a variety of advertising and marketing programs, with a focus on in-store programs that allow us to combine the selling efforts of store personnel with various selling messages displayed on point-of-purchase material. We also employ seasonal marketing campaigns around specific annual events, such as a loan program around the holidays and a tax season promotion at the beginning of the calendar year. In addition to adding new services, we seek to attract additional customers. For example, we recognize the importance of the growing Hispanic demographic and have designed specific advertising and point-of-purchase materials to meet their needs.

     Improve Operating Efficiency. As our business grows, we seek to further improve our operating efficiency. We have outlined a list of Operational Goals to maximize the profitability potential of our stores. Our employees are evaluated and compensated, in part, based on their achievement of these goals, which we adjust each year to account for the continued improvement in our business. We believe that by focusing on these specific goals and tying them to employee compensation, we can further enhance the operating efficiency of our stores as well as overall operating margins. As a result of continued improvement in our operating model, we increased our gross margin by over 50 basis points during fiscal 2004 as compared to fiscal 2003.

Our Customers

     We primarily serve the nation’s approximately 60 million unbanked and underbanked individuals with services to help them manage their day-to-day financial needs. Our customers generally do not participate in the traditional banking and financial services system and require alternative solutions to gain convenient and immediate access to cash, short-term consumer loans, bill payments, money transfers and prepaid debit cards.

     Our customer profile is diverse. Based on a recent survey of our customers, we believe the demographic composition of our customer base to be as follows:

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approximately 50% Caucasian; 25% Hispanic; 20% African American; 5% Other;

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•		a majority ranging in age from 25 to 45;
•		an average household annual income of approximately $30,000, with approximately 40% above $40,000;
•		approximately half are male and half are female, with our check cashing customers skewed towards younger males and our short-term consumer loan customers skewed towards older females;
•		generally rent their housing and move more frequently than the national average; and
•		pay bills with walk-in payments or money orders.

     We believe that the Hispanic population, while an estimated 25% of our customer base today, offers significant growth potential for us. According to the U.S. Census Bureau, Hispanics are the largest minority group in the United States, numbering approximately 39 million and representing the fastest growing demographic segment in the United States, with 58% population growth between 1990 and 2000.

Our Services

     We offer convenient, fee-based services to meet the needs of our customers, including check cashing, short-term consumer loans, bill payment, money transfer and money order services and other retail financial services. The following table reflects the major categories of services that we currently offer and the revenues (in thousands) from these services for the indicated fiscal years:

     Check cashing. Our primary business is cashing checks for a fee. We primarily cash payroll checks, but we also cash government assistance, tax refund and insurance checks or drafts. Subject to market conditions at different locations, our check cashing fees for payroll checks are approximately 2.3% of the face amount of the check. We may charge higher rates for cashing out-of-state checks, handwritten checks, money orders and insurance checks or drafts, depending on risk and market factors. Unlike many of our competitors, we display our check cashing fees in full view of our customers on a menu board in each store and provide a detailed receipt for each transaction. Although we have established guidelines for approving check cashing transactions, we have no preset limit on the size of the checks we will cash.

     During fiscal 2004, we cashed approximately 13.2 million checks with an aggregate face amount of approximately $5.1 billion. The face amount of the average check was $388 and our average fee per check was $9.91, or 2.6%, of the average check.

     If a check cashed by us is not paid for any reason, we account for the amount of the check as a loss in the period in which it is returned. We then transfer the check to our collection department, which contacts the maker and payee of each returned check to initiate the collection process. Our collection department utilizes a proprietary automated tracking system to monitor the status of all returned items. For the fiscal years ended June 30, 2004, 2003 and 2002, our net write-off as a percentage of the face amount of checks cashed was 0.15%, 0.14% and 0.16%, respectively.

     Short-term consumer loans. We are engaged in the short-term consumer loan business because we believe that many consumers have limited access to other sources of consumer credit. In general, the short-term consumer loans offered at our stores involve providing a customer with cash in exchange for the customer’s check or an authorization to debit the customer’s bank account, along with an agreement to defer the deposit of that check or the initiation of that debit on the customer’s account, as the case may be, until the customer’s next payday, typically two to four weeks later. If the customer returns to the store and repays the loan, we return the check to the customer. If the customer fails to repay the loan, we deposit the check or debit the customer’s checking account. If the check is returned or the debit is rejected for insufficient funds or any other reason, we contact the customer and initiate collection efforts. Customers must have a checking account in

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order to apply for a short-term consumer loan.

     The amount of the customer’s check or debit authorization is the amount of the cash provided to the customer plus our fee. Our short-term consumer loans are authorized by statute or rule in the states in which we offer them and are subject to extensive regulation. The scope of that regulation, including the terms on which short-term consumer loans may be made, by the states is not consistent. All states in which we offer short-term consumer loans establish maximum allowable fees and other charges to consumers for these short-term consumer loans. In addition, many of the states regulate the maximum amount, maturity and renewal or extension of these short-term consumer loans. To comply with the laws and regulations of the states in which short-term consumer loans are offered at our stores, the terms of our short-term consumer loans must vary from state to state. As required, we are licensed to offer short-term consumer loans under the laws and regulations of the states.

     Since January 1, 2003, all of the short-term consumer loans offered at our company-owned stores have consisted of either short-term consumer loans made by us or short-term consumer loans made by Republic Bank & Trust Company, a Kentucky state-chartered bank. As of June 30, 2004, we were offering short-term consumer loans in 561 of our owned stores and Republic Bank was offering short-term consumer loans in 359 of our company-owned stores in Texas, Pennsylvania and Arkansas. As of June 30, 2004, we did not offer short-term consumer loans in 106 of our company-owned stores in Alabama, Georgia, Maryland and North Carolina due to an unfavorable regulatory environment in those states. During the fiscal year ended June 30, 2004, we made approximately 1.4 million short-term consumer loans and Republic Bank made approximately 541,000 short-term consumer loans through our stores. The average advance provided to a customer in our short-term consumer loan transactions was $269 and the average finance charge paid to us was $39.40. The average advance provided to a customer by Republic Bank loan made through our stores was $296 and the average finance charge was $52.11. As of June 30, 2004, the gross receivable for short-term consumer loans made by us was approximately $27.7 million. In addition, we are obligated to pay Republic Bank for loan losses in an amount up to the total outstanding amount of Republic Bank loans recorded on Republic Bank’s financial statements, which was $9.4 million as of June 30, 2004.

     For the short-term consumer loans we offer, the customer’s application data is electronically transmitted to our centralized computer system, which scores the loan with a proprietary loan-scoring system. An approval or denial is communicated back to the store, where the required loan documentation or adverse action form is printed for the customer. Loans made by Republic Bank are scored in a similar process, but Republic Bank is responsible for reviewing each loan application and determining whether such application is approved for a loan. We are not involved in the loan approval process or the determination of the Republic Bank loan approval procedures or criteria. For our fiscal year ended June 30, 2004, our provision for loan losses as a percentage of matured loan volume for our loans and for Republic Bank loans combined was 4.7%.

     Bill payments. Our stores serve as payment locations for customers to pay many of their utility, telephone and other bills to third parties and also serve as a distribution point for bank-issued prepaid debit cards.

     Upon acceptance of the customer’s bill payment in cash, we remit the amount owed to the third party under an agreement with that payee and either receive a service fee from the payee or collect a fee from the consumer. We offer these services primarily through agreements directly with various product and service providers, such as Verizon, Sprint, TXU (a Texas utility company), and Baltimore Gas & Electric. In fiscal 2004 and 2003, we processed approximately 8.6 million and 6.8 million bill payment transactions, respectively.

     Our stores also offer NetSpend’s ACE MasterCard debit card, which allows customers to “load” cash onto a MasterCard debit card and use it wherever MasterCard debit cards are accepted. We receive a fee when customers purchase the card, load cash on the card, use it for a purchase or use it at an automated teller machine for a cash withdrawal. During fiscal 2004, we and our franchisees sold more than 149,000 cards and loaded more than $268 million onto these cards, compared to fiscal 2003, when we and our franchisees sold more than 34,000 cards and loaded more than $59 million onto these cards.

     Money transfers. We are an agent for the transmission and receipt of wire transfers through the MoneyGram® network, the second largest wire transfer provider after Western Union. Through this network, our customers can transfer funds electronically to any of approximately 60,000 MoneyGram agent locations worldwide, including our stores. MoneyGram establishes the fees for this service and pays us a commission.

     Money orders. We sell money orders issued by Travelers Express in any amount up to $1,000. These money orders are generally used by our customers for bill payments, rent payments and other general disbursements. We sold approximately 8.8 million money orders during fiscal 2004. The fees charged for money orders depend on local market conditions and the size of the money order. We remit the face amount of each money order sold to Travelers Express. Our money order revenues include the fee paid by our customers and the recognition of deferred revenue related to contract incentive payments.

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     Franchising. We sell several types of ACE franchises, including: a standard store franchise; a store-within-a-store or kiosk franchise; a small market franchise for market areas with a population under 15,000; and a conversion franchise that permits an existing check cashing business to convert to an ACE franchisee. Our franchise revenues consist of an initial franchise fee of up to $30,000 and monthly royalties of up to 6% of revenue. There were 204 company-franchised stores in operation as of June 30, 2004, compared to 200 as of June 30, 2003, and we currently have franchise agreements with franchisees to develop over 100 new franchise stores.

     We franchise our stores in order to complement our company-owned growth and network expansion plans in a cost effective manner. By expanding into new geographic markets, we increase our brand awareness and create further purchasing power with our vendors and a pipeline for future acquisition opportunities. Typically, we have a right of first refusal to purchase the franchised store. Since fiscal 1996, we have acquired over 100 franchised stores from franchisees.

     Other services. In many company-owned stores, we offer a variety of other retail financial services to our customers, such as public transportation passes, photocopying, fax transmission services, postage stamps and various prepaid services, including long-distance telephone cards.

     We have developed self-service machines, which are able to cash checks, sell prepaid long-distance telephone cards, sell money orders and process third-party bill payments. As June 30, 2004, we had eight machines in company-owned locations, and we placed 219 self-service machines in H&R Block retail locations for use during the 2004 tax season (i.e., January through March.) The machines in H&R Block locations only cash refund anticipation loan checks issued to customers of H&R Block. As of June 30, 2004, we had 61 bill payment self-service machines located at a third-party service provider’s locations.

New Store Economics

     The capital cost of opening a new store varies depending on the size and type of store, but is typically in the range of $65,000 to $75,000, before the Moneygram incentive. This capital cost includes leasehold improvements, signage, computer equipment and security systems. MoneyGram pays us an incentive for each new location opened, which is accounted for as deferred revenue that is recognized over the remaining life of the MoneyGram contract. During fiscal 2004, we opened 53 company-owned stores, including 11 ACE Cash Advance stores. In addition, the typical store requires working capital of $80,000 to $100,000 to fund operating cash and the store’s loan portfolio. It typically takes approximately one year for a store to break even on a store margin basis. First-year losses typically average $15,000 to $25,000 per store.

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     The following tables show the average annual store revenues and the average gross margin for company-owned stores (excluding acquired stores) which were opened in the year indicated and were open as of June 30, 2004:

     Our store construction and facilities planning staff reviews and negotiates leases for store locations, supervises the construction of new stores and the remodeling of existing stores and performs lease management services once the leases are executed. Since many of our stores are built within existing retail space, the work area of each store is a modular-designed unit that can be customized to meet the varying size and other requirements of each location while giving it a consistent appearance.

     We close stores in the normal course of business for various reasons, including inadequate operating performance, lease expirations and shopping center closings. During fiscal 2004 and 2003, we closed 24 and 28 company-owned stores, respectively.

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Company-Owned Store Locations and Operations

     The following map illustrates the number and location of company-owned stores in operation as of June 30, 2004:

     The following table illustrates the development of company-owned stores since June 30, 2000:

     We typically locate our company-owned stores in highly visible, accessible locations and operate during convenient hours for our customers. We locate stores on high traffic streets or intersections. Our stores occupy approximately 1,200 square feet on average and are located in strip shopping centers and free-standing buildings. As of June 30, 2004, we also operate 80 smaller kiosks located inside retail stores. We are focused on increasing the customer’s awareness of ACE by using consistent signage and store design at each location. All but two of our company-owned stores are leased.

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     Normal business hours of our company-owned stores are from 9:00 a.m. until 7:00 p.m., Monday through Thursday, 9:00 a.m. until 8:00 p.m. on Friday and 9:00 a.m. until 6:00 p.m. on Saturday. Approximately 190 stores are also open on Sunday, generally from 10:00 a.m. until 5:00 p.m. The business hours of any store may be changed due to local market conditions. We are open on all holidays except for Thanksgiving, Christmas and New Year’s Day.

Franchised Store Locations

     The following map illustrates the states in which our franchisees operate stores and the number of stores in operation as of June 30, 2004:

     We are the largest franchisor of check cashing stores in the United States. Our franchises are marketed through a dedicated sales force, supplemented by advertising in newspapers, trade journals and other media.

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     The following table illustrates the development of franchised stores since June 30, 2000: