DFC Global Corp. (NASDAQ: DLLR), a leading international
diversified financial services company serving primarily unbanked
and under-banked consumers for over 30 years, today announced
selected, preliminary financial results for the fiscal third
quarter ended March 31, 2013.
- Consolidated adjusted EBITDA for the
fiscal 2013 third quarter is expected to be in the range of $52 to
$54 million.
- Diluted operating earnings per share
for the fiscal 2013 third quarter is expected to be in the range of
$0.20 to $0.24 per share.
- Company lowers its fiscal 2013 diluted
operating earnings guidance, which excludes any one-time charges or
gains that may occur, the non-cash impact of ASC-470-20, and the
non-cash amortization associated with legacy cross-currency
interest rate swap agreements, to between $1.70 to $1.80 per share
from the Company’s previous estimate of $2.35 to $2.45 per
share.
The ranges provided above do not include any one-time
restructuring charges, which the Company expects to report for the
fiscal third quarter ended March 31, 2013 as a result of
streamlining its workforce in line with the reorganization and
segmentation of the Company’s global business between retail and
internet platforms.
“While we believe we are in general compliance with the new
lending guidelines promulgated by our industry association in the
United Kingdom, and that any subsequent changes to our lending
practices, if necessary, can be implemented quickly and without
significant business interruption, it is difficult to predict when
all of the industry providers will adopt similar measures,” said
Jeff Weiss, the Company’s Chairman and Chief Executive Officer. “In
particular, as the various industry lenders transition to the new
loan rollover limitations stipulated in the lending guidelines
agreed upon by both our trade association and the regulators, many
of the outstanding short-term consumer loans have now become
immediately due. We believe this transition is causing a temporary
‘credit crunch’ for consumers in the United Kingdom, many of which
currently have multiple short-term loans outstanding. Consequently,
we have already begun to experience increasing loan defaults across
our U.K. business. In response to these developments, we have
tightened our underwriting criteria during the fiscal third quarter
to minimize the impact of the anticipated rising loan defaults. It
is difficult to ascertain how long this regulatory transition
period will last, but our current conservative underwriting posture
had a significant effect on our store-based and internet loan
growth in the United Kingdom during the fiscal third quarter ended
March 31, 2013, and we expect this will continue for the
foreseeable future. While we are naturally disappointed with our
fiscal third quarter performance, we still believe we are well
positioned to meet the growing needs of our customers in the United
Kingdom once we move beyond this transitory period.”
Conference Call
The Company will be holding a conference call this morning at
8:30 am ET to discuss the preliminary results for the fiscal third
quarter ended March 31, 2013 and fiscal 2013 earnings guidance. To
participate in the conference call, please dial (877) 718-5111
(U.S. and Canada) or (719) 325-4880 (International); use the
confirmation code “5785742”. Hosting the call will be Jeffrey A.
Weiss, Chairman and CEO, and Randy Underwood, Executive Vice
President and CFO. For your convenience, the conference call can be
replayed in its entirety beginning from two hours after the end of
the call through April 8, 2013. If you wish to listen to the replay
of this conference call, please dial (877) 870-5176 (U.S. and
Canada) or (858) 384-5517 (International) and enter passcode
“5785742.”
The conference call will also be broadcast live through a link
on the Investor Relations page on the Company’s web site at
http://www.dfcglobalcorp.com. Please go to the web site at least 15
minutes prior to the call to register, download and install any
necessary audio software.
About DFC Global Corp.
DFC Global Corp. is a leading international diversified
financial services company serving primarily unbanked and
under-banked consumers who, for reasons of convenience and
accessibility, purchase some or all of their financial services
from the Company rather than from banks and other financial
institutions. Through its over 1,400 retail storefront locations
and multiple Internet, mobile phone and other remote platforms, the
Company provides a variety of consumer financial products and
services in nine countries across North America and Europe—the
United Kingdom, Canada, the United States, Sweden, Finland, Poland,
Spain, Czech Republic and the Republic of Ireland. The Company
believes that its customers, many of whom receive income on an
irregular basis or from multiple employers, are drawn to the range
of financial services it offers, the convenience of its products,
the multiple ways in which they may conduct business with the
Company and its high-quality customer service.
The Company’s products and services, principally its short-term
single-payment consumer loans, secured pawn loans, check cashing
services and gold buying services, provide customers with immediate
access to cash for living expenses or other needs. The Company
strives to offer its customers additional high-value ancillary
services, including Western Union® money order and money transfer
products, foreign currency exchange, reloadable VISA® and
MasterCard® prepaid debit cards and electronic tax filing. In
addition to its core retail products, the Company also provides
fee-based services in the United States to enlisted military
personnel applying for loans to purchase new and used vehicles that
are funded and serviced under agreements with third-party lenders
through the Company’s branded Military Installment Loan and
Education Services, or MILES® program.
The Company’s networks of retail locations in the United Kingdom
and Canada are the largest of their kind by revenue in each of
those countries. The Company believes it is also the largest pawn
lender in Europe by loan portfolio. At December 31, 2012, the
Company’s global retail operations consisted of 1,450 retail
storefront locations, of which 1,409 are company-owned stores,
conducting business primarily under the names The Money Shop®,
Money Mart®, Insta-Cheques®, Suttons and Robertsons®, The Check
Cashing Store®, Sefina®, Helsingin PanttiSM, Optima®, MoneyNow!®,
and Super Efectivo®. In addition to its retail stores, the Company
also offers Internet-based short-term single-payment consumer loans
in the United Kingdom primarily under the brand names Payday
Express® and PaydayUK®, in Canada under the Money Mart name, in
Finland, Sweden, Poland and Czech Republic under the Risicum®, OK
Money® and MoneyNow!® brand names. For more information, please
visit the Company's website at www.dfcglobalcorp.com.
Forward-Looking Statements
This news release contains forward-looking statements,
including, among other things, statements regarding the following:
pending or recent acquisitions and their expected benefits; the
Company’s future results, growth, guidance and operating strategy;
the global economy; the effects of currency exchange rates on
reported operating results; the regulatory environment in Canada,
the United Kingdom, the United States, Scandinavia and other
countries; the impact of future development strategy, new stores
and acquisitions; litigation matters; financing initiatives; and
the performance of new products and services. These forward-looking
statements involve risks and uncertainties, including risks related
to: the regulatory environments, including the review by the
Consumer Financial Protection Bureau of our operations and the
introduction of legislation in the Finnish Parliament that could
restrict our business in that country; current and potential future
litigation; the identification of acquisition targets; the
consummation of pending acquisitions; the integration and
performance of acquired stores and businesses; the performance of
new stores; the impact of debt and equity financing transactions;
the results of certain ongoing income tax appeals; the effects of
new products and services on the Company’s business, results of
operations, financial condition, prospects and guidance; the effect
of the termination of our relationship with the third-party
national bank that currently funds a portion of the MILES program
loans and our ability to replace such lending source on acceptable
terms; and uncertainties related to the effects of changes in the
value of the U.S. Dollar compared to foreign currencies. There can
be no assurance that the Company will attain its expected results,
successfully consummate pending acquisitions, successfully
integrate and achieve anticipated synergies from any of its
acquisitions, obtain acceptable financing, or attain its published
guidance metrics, or that ongoing and potential future litigation
or the various FDIC, CFPB, Federal, state, U.K., Canadian,
Scandinavia, European Union, or other foreign legislative or
regulatory activities affecting the Company or the banks with which
the Company does business will not negatively impact the Company’s
operations. A more complete description of these and other risks,
uncertainties and assumptions is included in the Company’s filings
with the Securities and Exchange Commission, including those
described under the heading “Risk Factors” on the Company’s Annual
Report on Form 10-K for the Company’s fiscal year ended June 30,
2012. You should not place any undue reliance on any
forward-looking statements. The Company disclaims any obligation to
update any such factors or to publicly announce results of any
revisions to any of the forward-looking statements contained herein
to reflect future events or developments.
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