Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Dennis Telzrow - Stephens.
Dennis Telzrow - Stephens
Tom, is inventory still being impacted by the transition from the 90 to 60-day loans in Texas?
Thomas A. Bessant, Jr.
Dennis, actually we saw an improvement in our forfeiture rate in the first quarter. Inventory levels are up, again that would be, as you conclude, a function of the shorter inventory period. The disposition activities are very strong in the quarter and actually profits on a sequential trend were up from Q4 to Q1, up about 100 basis points. So our mix of inventory to loans remains very positive.
Dennis Telzrow - Stephens
And obviously the loss rate at the storefronts was tremendous, the reduction, is there any feeling that you’re getting a little too tight or are you are happy what’s going on or are you going to just wait and see for this new scoring model to see how that works?
Daniel R. Feehan
I think our strategy that we’ve adopted, Dennis, is continuing to be cautious. We’re going to roll out the scoring model as I indicated in our comments here in May and get that out into all of our storefront locations, not only on the cash advance segment, those 300 plus locations. But as well as the pawnshops and so I think we’re going wait and see how that impacts our business.
Our expectations are that we’ll get obviously improved marginal profitability from that scoring model. We would expect that we would lose some volume of business on the lower end of the scale, but have an opportunity to mitigate or fully offset that at the upper end of the scale perhaps by higher average loan amount to customers that we judge to be a solid risk.
So I’m pretty optimistic about given the performance of similar modeling in the online platform, I’m pretty optimistic that we can manage our way through this economy successfully, again focusing primarily on profitability.
Dennis Telzrow - Stephens
Tom, some of your competitors have or saw loss rates impacted by the fact that previously charged-off cash advance loans were not paid off like they were in the past from tax refunds. Were you able to measure that or is that a metric you look at?
Thomas A. Bessant, Jr.
We don’t really measure it from that perspective, Dennis. We’re looking at absolute performance and I can tell you our collections activities during the quarter were very strong particularly from our storefront operations, but as well in our online business, so I can’t say that we observed that same trend.
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