The payday cash advance services industry has grown steadily since the early 1990s in response to a shortage of available short-term consumer credit alternatives from traditional banking institutions. The rapid increase in the charges associated with having insufficient funds in one's bank account, as well as other late/penalty fees charged by financial institutions and merchants, have also helped increase customer demand for payday cash advances. A payday cash advance typically involves a single charge, unlike other alternatives that often require collateral, origination and administration fees, prepayment penalties and charges for other services such as credit life insurance, interest payments and additional incremental charges. Other alternatives, such as bounced checks and late bill payments, may also have negative credit consequences. It is believed that customers use short-term payday cash advances because they provide a simple, quick and confidential way to meet short-term cash needs between paydays while avoiding the potentially higher costs and negative credit consequences of other alternatives.

It is believed that many banks and other traditional financial institutions have reduced or eliminated their provision of small-denomination, short-term consumer loans, in part due to the costs associated with originating these loans. As a result, a significant number of companies have begun to offer such loans, or payday cash advances, to lower-income and middle-income individuals. The providers of these types of loans are fragmented and range from specialty finance offices to retail stores in other industries that offer these types of loans as ancillary services. Because of the relatively low cost of entry and the regulatory safe harbor that many state statutes provide for payday cash advances, the payday cash advance services industry has experienced significant growth in the number of payday cash advance centers. Recently, businesses offering payday cash advances and short-term loans over the internet as well as by telephone have also begun to compete in the payday cash advance services industry.

In most states in which the Company conducts business it makes payday cash advances directly to its customers. In other states in which the Company conducts business it acts as a processing, marketing and servicing agent through its payday cash advance centers for FDIC insured, state-chartered banks that make payday cash advances to their customers pursuant to the authority of federal interstate banking laws, regulations and guidelines. Under the agency business model, federal interstate banking laws, regulations and guidelines enable a FDIC insured, state-chartered bank headquartered in one state to make loans to a consumer in another state and to charge fees and/or interest allowed by the lending bank's home state even if the fees and/or interest exceed what may be charged in the consumer's state.

Salaries and related payroll costs increased 22.2% in the six months ended June 30, 2004 compared to the comparable period in 2003.

Occupancy costs increased $6.6 million, or 26.5%, in the first six months of 2004 compared to the comparable period in 2003.

General and administrative expenses increased $3.7 million, or 20.8%, in the first six months of 2004 compared to the first six months of 2003. General and administrative expenses as a percentage of revenues increased to 9.5% in the first six months of 2004 from 8.9% in the first six months of 2003.

Interest expense, net, decreased $134,000, or 1.7%, in the first six months of 2004 to $8.0 million compared to $8.1 million in the first six months of 2003.