DFC Global Corp. 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.”
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