DFC Global Corp. Announces Fiscal Fourth Quarter and Full-Year 2013 Results

  DFC Global Corp. Announces Fiscal Fourth Quarter and Full-Year 2013 Results

Business Wire

BERWYN, Pa. -- August 22, 2013

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 its results for the fiscal fourth quarter and
full year ended June 30, 2013.

Fiscal Year 2013 Financial Highlights

  *Total consolidated revenue was $1.1 billion for the fiscal year, an
    increase of 5.7%, or $60.6 million, compared to the prior-year period. On
    a constant currency basis, total consolidated revenue increased 6.4%.
  *Total unsecured consumer lending revenue was $728.3 million for the fiscal
    year, representing an increase of $87.4 million, or 13.5%, on a constant
    currency basis compared to the prior-year period. Revenue from
    internet-based loans was $298.4 million for the fiscal year, representing
    an increase of $42.2 million, or 16.2%, on a constant currency basis
    compared to the prior-year period.
  *Total revenue from pawn lending for the fiscal year was $81.9 million, an
    increase of $1.5 million, or 1.9%, on a constant currency basis. Pawn
    lending interest and the margin on the disposition of unredeemed pawn
    pledge inventory was unfavorably impacted by a year-over-year decline in
    gold prices.
  *Consolidated adjusted EBITDA was $274.5 million for the twelve months
    ended June 30, 2013 compared to $303.7 million for the prior-year period.
    On a constant currency basis, consolidated adjusted EBITDA decreased by
    $27.8 million compared to the prior-year period.
  *Diluted pro forma operating earnings per share was $1.76 for fiscal year
    2013 compared to $2.16 for the prior-year period.
  *Diluted earnings per share on a GAAP basis was a loss of $0.02 for fiscal
    year 2013 compared to a positive $1.16 for the prior-year period
  *The Company repurchased 3.5 million shares of its common stock at an
    average share price of $15.53 during the twelve months ended June 30,
    2013. Since June 30, the Company repurchased an additional 0.4 million
    shares at an average price of $15.49.

A table reconciling pro forma income before income taxes and diluted pro forma
operating earnings per share to GAAP basis income before income taxes and
adjusted EBITDA is presented on pages 11 and 12 of this news release.

“Fiscal 2013 presented our Company with a number of unique challenges,
particularly in the United Kingdom,” said Jeff Weiss, the Company’s Chairman
and Chief Executive Officer. “The Company’s retail and internet businesses
have recently transitioned to more restrictive regulatory requirements in the
United Kingdom. The new requirements provide guidance principally with respect
to loan disclosures, loan affordability assessments, loan extension
limitations, and collection practices. The industry association shift to a
three loan roll-over limitation, which we believe is more restrictive than the
current policies of many of our competitors, is causing many of the
outstanding short-term consumer loans in the United Kingdom to become due.
Consequently, we have experienced higher loan defaults in our U.K. business
during the second half of the fiscal year. Accordingly, the Company tightened
its underwriting criteria which resulted in decreased loan originations in
fiscal 2013 in the United Kingdom and, while the transition to the new
regulatory guidelines proceeds, we expect to maintain lower loan originations
at least through the first half of fiscal 2014 in order to reduce the risk of
higher loan defaults during this period.”

“Furthermore, the Company expects to be at a continuing competitive
disadvantage in the United Kingdom until all industry providers are required
to operate consistently under the new regulatory framework,” added Mr. Weiss.
“Over the long-term, we expect sustained growth and an opportunity to expand
the Company’s market share to materialize in the United Kingdom, as we believe
some of our competitors will naturally struggle to operate under the new
restrictive regulatory framework and exit the market. This process has already
started, as a number of lenders recently left the market, while the Office of
Fair Trading (OFT) has also rescinded the licenses of several other loan
providers. In the meantime, however, the internet lending market has become
highly competitive, with some providers bidding up new customer leads to cover
shortfalls in revenue stemming from limitations on roll-overs. That being
said, we anticipate revenue growth will continue to be dampened until this
transition runs its course, and the consumer and competitive landscape
normalizes. In addition, the Company expects to continue to incur additional
costs in fiscal 2014 to support global regulatory activities, including
regulatory advisory consulting, legal opinions and analysis, and regulatory
compliance. These regulatory costs should be somewhat offset by ongoing cost
savings from the business restructuring we completed during fiscal year 2013,
as we streamlined our workforce in line with the reorganization and
segmentation of our global business operations between retail and internet
distribution channels.”

Concluded Mr. Weiss, “With respect to our U.K. business, the Company’s
approach in fiscal 2014 is to complete the implementation of the regulatory
changes in the first quarter, then hone the store and internet-based platforms
within these new guidelines over the course of the first half of the fiscal
year. We intend to continue moderating loan book growth until the industry
transition is judged to be nearly complete and customer credit performance
follows a more expected and predictable pattern. New internet-based
multi-payment loan products, while presently still in the latter stages of
testing, are expected to contribute a significant amount of year-over-year
revenue growth. However, these products are expected to generate marginal
EBITDA contribution in fiscal 2014, due to a larger mix of new customers
without a defined credit history with us, and therefore at a higher risk of
potential default. While we were naturally disappointed with our financial
results in the United Kingdom for the year, as many of our shareholders know,
we have been down this road before with regulatory transitions in the United
States and Canada. Similarly, we fully expect our U.K. business will also
reemerge from this transition period a much stronger business operating in a
clarified marketplace that is even better positioned for success against our
competitors in meeting the needs of our customers.”

Fiscal 2013 Fourth Quarter Financial Results

For the quarter ended June 30, 2013, the Company recorded revenue of $269.1
million, an increase of 2.6% on a constant currency basis compared to the
prior-year period. Total unsecured consumer lending revenue was $178.5
million, up 9.4% on a constant currency basis over the prior-year period, and
includes revenue from internet-based loans of $69.3 million, which decreased
0.6% on a constant currency basis compared to the prior-year period. Secured
pawn lending, which was unfavorably impacted by lower gold prices, contributed
$19.1 million of total revenue, an increase of 2.4% compared to the prior-year
period, excluding the impact of currency exchange rates.

The consolidated loan loss provision for unsecured loans, expressed as a
percentage of gross consumer lending revenue, was 25.7% for the quarter ended
June 30, 2013 compared to 20.8% for the three months ended June 30, 2012. The
loan loss provision for the quarter was unfavorably impacted by higher loan
defaults in the United Kingdom principally resulting from the continuing
effects of the implementation of the three loan roll-over limitation, in
addition to a modification of the Company’s collection practices, which place
additional limitations on the number and duration of direct debits to a
customer’s account. The Company anticipates that loan losses will be higher
over the near-term because of the change in collection practices, but believes
a portion of the provisioned loans may eventually be collected manually by
in-house collectors, as the Company begins to leverage the significant
investments it has made in global dialer technology and new collections and
call center facilities. The Company expects the loan loss provision for its
short-term loan products in the United Kingdom will likely improve each
sequential quarter in fiscal year 2014, as other loan providers in the country
transition to similar regulatory restrictions, and the consumer credit
environment begins to normalize. However, the Company’s new internet-based
multi-payment loan products in the U.K. are expected to carry a higher-loan
loss provision in the near-term as a result of a significant mix of new
customers who do not have a credit history with the Company. As a percentage
of total unsecured loan originations or principal lent, the consolidated loan
loss provision for the quarter ended June 30, 2013 was 6.2%.

Included in the loan loss provision, the Company also recorded a $7.1 million
provision during the quarter to reserve for the decreased current value of
potential unredeemed pawned gold inventory as a result of the decline in the
market price of gold as measured at the end of the fiscal year. This provision
was added back in the calculation of adjusted EBITDA and diluted pro forma
operating earnings per share. The Company continually adjusts the amount it is
willing to loan on new pawned items in relation to the current spot price of
gold.

Collectively, including a net $14.2 million in non-operating and unusual
charges for the three months ended June 30, 2013, and $31.5 million of net
non-operating and unusual charges for the three months ended June 30, 2012,
income before income taxes on a GAAP basis was $15.9 million for the quarter
ended June 30, 2013 compared to income before income taxes of $7.1 million for
the prior-year period, resulting in net income of $7.4 million for the quarter
compared to a net loss of $4.2 million for the prior-year period. Diluted
earnings per share on a GAAP basis was $0.18 for the three months ended June
30, 2013 compared to a net loss per share of $0.09 for the three months ended
June 30, 2012.

With respect to the Company’s operating earnings, excluding net non-operating
and unusual charges for both periods, pro forma income before income taxes was
$30.1 million for the fiscal 2013 fourth quarter, compared to pro forma income
before income taxes of $38.6 million for the prior-year period. Considering a
pro forma effective income tax rate from operations of 32.0%, diluted pro
forma operating earnings per share was $0.49 for the fiscal 2013 fourth
quarter compared to $0.58 per share for the prior-year period. A table
reconciling pro forma income before income taxes and diluted pro forma
operating earnings per share to GAAP basis income before income taxes and GAAP
basis diluted earnings per share is presented on page 11 of this news release.

Fiscal Year 2014 Outlook

“We anticipate that fiscal 2014 will be a transition year for our businesses
in the United Kingdom with improving performance there each successive
quarter, as the regulatory transition runs its course,” stated Randy
Underwood, Executive Vice President and Chief Financial Officer. “However, it
is difficult to forecast with precision the impact and timing our loan program
modifications will have on our business in the U.K. in the midst of an
evolving marketplace. Furthermore, the recent significant volatility in
worldwide gold prices makes it a challenge to reasonably project the expected
profit contribution of our purchased gold and pawn lending products in fiscal
2014. In addition, the Company expects to incur approximately $10.0 million to
$15.0 million of expense in fiscal 2014 to support ongoing regulatory related
activities, including regulatory advisory costs, legal opinions and analysis,
and audit and regulatory compliance costs in fiscal 2014. Given the
significant fluidity of these aspects of our business, which would require a
very wide and therefore less meaningful earnings per share range given the
compounding tax consequences of each issue, we have decided to provide
adjusted EBITDA guidance until we have clearer visibility as to the amount and
timing of these issues. As the fiscal year progresses and the outlook for
fiscal 2014 becomes clearer, we hope to once again provide earnings per share
guidance. Therefore, for fiscal 2014, we are projecting adjusted EBITDA of
between $200.0 million and $240.0 million.”

Company Liquidity

As of June 30, 2013, the Company had drawn $50.0 million of its $235.0 million
global revolving credit facility. Furthermore, as of June 30, 2013, the
Company had drawn £1.8 million of its £2.5 million credit facilities in the
United Kingdom, and had drawn SEK 25.0 million and EUR 4.0 million of its
total SEK 125.0 million and EUR 10.8 million credit facilities in Scandinavia.

After repurchasing 1.7 million shares of its common stock at an average share
price of $14.16 during the three months ended June 30, 2013, the Company had
$30.3 million of excess investible cash on its balance sheet at June 30, 2013.
As of June 30, 2013, the Company was authorized to repurchase approximately
500,000 additional shares of its common stock under its existing share
repurchase plan. Subsequent to June 30, 2013, the Company purchased an
additional approximate 400,000 shares at an average price of $15.49 through
August 21, 2013. Furthermore, on August 21, 2013, the Company’s Board of
Directors authorized an additional 5,000,000 shares that the Company can
purchase on a discretionary basis in future periods.

Investors Conference Call

The Company will be holding an investor’s conference call on August 22, 2013
at 5:00 pm ET to discuss its results for the fiscal fourth quarter and fiscal
year ended June 30, 2013, and its guidance for fiscal year 2014. Investors can
participate in the conference call by dialing (877) 723-9518 (U.S. and Canada)
or (719) 325-4752 (International); use the confirmation code “6931255”.
Hosting the call will be Jeffrey A. Weiss, Chairman and CEO, and Randy
Underwood, Executive Vice President and CFO. Norman Miller, the Company’s
President and Chief Operating Officer, will also provide an update on the
evolving regulatory environment in the United Kingdom. For your convenience,
the conference call can be replayed in its entirety beginning from two hours
after the end of the call through August 29, 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 “6931255.”

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 non-bank provider of alternative
financial services, principally unsecured short term consumer loans, secured
pawn loans, check cashing, gold buying, money transfers and reloadable prepaid
debit cards, serving primarily unbanked and under-banked consumers through our
over 1,500 current retail storefront locations and our multiple Internet
platforms in ten countries across Europe and North America: the United
Kingdom, Canada, the United States, Sweden, Finland, Poland, Spain, Romania,
the Czech Republic and the Republic of Ireland. Our networks of retail
locations in the United Kingdom and Canada are the largest of their kind by
revenue in each of those countries. We believe we operate one of the largest
online unsecured short-term consumer lending businesses by revenue in the
United Kingdom. We also believe that, by virtue of our secured pawn lending
operations in the United Kingdom, Scandinavia, Poland, Romania and Spain, we
are the largest pawn lender in Europe measured by loan portfolio.

We believe that our customers, many of whom receive income on an irregular
basis or from multiple employers, choose to conduct their personal financial
business with us rather than with banks or other financial institutions due to
the range and convenience of services that we offer, the multiple ways in
which they may conduct business with us and our high-quality customer service.
Our products and services, principally our unsecured short-term consumer
loans, secured pawn loans and check cashing and gold buying services, provide
customers with convenient access to cash for living expenses and other needs.
In addition to these core offerings, we strive to offer our customers
additional high-value ancillary services, including Western Union® money
orders and money transfers, reloadable VISA® and MasterCard® prepaid debit
cards and foreign currency exchange. 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: 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
and fluctuations in the price of gold 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 respective
regulatory environments, including reviews of our operations principally by
the CFPB in the U.S. and the Office of Fair Trading in the U.K., and the
effect of legislation in Finland that will restrict our business in that
country; current and potential future litigation; the identification of
acquisition targets; the integration and performance of acquired stores and
businesses; the performance of new stores and internet businesses; 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;
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 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, U.S. Federal or state,
U.K., Canadian, Scandinavian, 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.

Presentation of Information in this Press Release

In an effort to provide investors with additional information regarding the
Company’s results, the Company has disclosed in this press release the
following information which management believes provides useful information to
investors:

  *Selected local currency results (the reported results for each country in
    their respective native currencies).
  *Constant currency results (the Company calculates constant currency
    operating results by comparing current period operating results with prior
    period operating results, with both periods converted at the currency
    exchange rates for the prior period).
  *Pro forma operating results excluding non-operating, unusual and non-cash
    charges and credits and adjusted for pro forma effective income tax rates.

                                                              
DFC GLOBAL CORP.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In millions)
                                                                   
                                                   June 30,        June 30,
                                                    2012          2013    
Assets:
Cash and cash equivalents                          $ 224.0         $ 196.2
Consumer loans, net:
Consumer loans                                       206.4           229.9
Less: Allowance for loan losses                     (19.8   )      (39.7   )
Consumer loans, net                                  186.6           190.2
Pawn loans, net                                      153.9           152.0
Loans in default, net                                29.6            31.2
Prepaid expenses and other current assets            83.8            84.0
Fair value of derivatives                            -               31.2
Deferred tax assets, net                             22.0            17.6
Property and equipment, net                          120.6           122.8
Goodwill and other intangibles, net                  902.8           866.4
Debt issuance costs, net and other assets           43.2          37.6    
Total Assets                                       $ 1,766.5      $ 1,729.2 
                                                                   
Liabilities:
Accounts and income taxes payable                  $ 67.8          $ 65.1
Accrued expenses and other liabilities               152.4           128.9
Fair value of derivatives                            11.2            -
Deferred tax liability                               62.3            62.5
Revolving credit facilities and other                73.7            67.0
short-term debt
Total long-term debt                                938.9         975.0   
Total Liabilities                                   1,306.3       1,298.5 
                                                                   
Stockholders' Equity:
Additional paid-in capital                           491.5           447.3
Retained earnings (accumulated deficit)              (0.8    )       (1.5    )
Accumulated other comprehensive loss                (29.4   )      (15.1   )
Total DFC Global Corp. Stockholders' Equity          461.3           430.7
Non-controlling interest                            (1.1    )      -       
Total Stockholders' Equity                          460.2         430.7   
Total Liabilities and Stockholders' Equity         $ 1,766.5      $ 1,729.2 
                                                                             

                  
DFC GLOBAL CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions except per share amounts)
                                                          
                      Three Months Ended           Twelve Months Ended
                      June 30,                     June 30,
                       2012         2013        2012          2013    
                                                                   
Revenues:
Fees from             $ 166.2        $ 178.5       $ 645.9         $ 728.3
consumer lending
Check cashing           32.5           30.6          138.7           128.0
fees
Pawn service fees       18.6           19.1          80.9            81.9
and sales
Purchased gold          18.4           12.3          70.9            63.3
sales
Money transfer          9.6            8.8           38.4            36.7
fees
Other                  21.4         19.8        86.9          84.1    
Total revenues         266.7        269.1       1,061.7       1,122.3 
                                                                   
Operating
expenses:
Salaries and            56.5           57.6          221.4           238.6
benefits
Provision for           34.6           52.9          131.5           181.1
loan losses
Occupancy costs         16.1           17.5          61.7            68.9
Advertising             9.4            12.5          49.6            62.9
Depreciation            5.9            6.5           22.1            26.4
Bank charges and
armored carrier         5.0            5.5           21.2            23.0
services
Maintenance and         4.2            4.8           16.7            18.1
repairs
COGS - purchased        15.1           10.8          56.9            51.2
gold
Other                  21.1         33.7        93.3          118.1   
Total operating        167.9        201.8       674.4         788.3   
expenses
Operating margin       98.8         67.3        387.3         334.0   
                                                                   
Corporate and
other expenses:
Corporate               28.9           18.0          120.0           109.4
expenses
Interest expense,       29.1           28.6          102.8           119.9
net
Other
depreciation and        6.8            5.9           26.3            24.7
amortization
Unrealized
foreign exchange        (6.8   )       (1.6  )       11.5            (1.2    )
(gain) loss
(Gain) loss on
derivatives not         3.4            -             (2.9    )       -
designated as
hedges
Goodwill and
intangible assets       27.7           (0.2  )       27.7            36.4
impairment charge
Provision for
litigation              0.1            0.1           4.1             2.8
settlements
Restructuring and
other related           -              1.5           -               8.5
charges
Loss on store
closings and           2.5          (0.9  )      1.6           5.1     
other costs
Income before
income taxes
(incl.                  7.1            15.9          96.2            28.4
non-controlling
interest)
Income tax             11.3         8.5         43.8          29.1    
provision
Net income (loss)     $ (4.2   )     $ 7.4        $ 52.4         $ (0.7    )
                                                                   
Net income (loss)
per share
Basic                   ($0.09 )     $ 0.18        $ 1.20            ($0.02  )
Diluted                 ($0.09 )     $ 0.18        $ 1.16            ($0.02  )
                                                                   
Weighted average
shares
outstanding
Basic                   43.6           40.8          43.8            42.3
Diluted                 43.6           41.5          45.2            42.3
                                                                   

             
Revenue Breakdown by Channel and Product
                
                Revenue By Channel ($M)
                Three Months Ended June 30, 2013
                                               Year-over-Year
                                                     Constant Currency Growth
                Retail/                              Retail/             
Region          Other       Internet     Total       Other       Internet     Total
                                                                              
United          $ 78.8      $  56.5      $ 135.3     11.8  %     -2.9  %      5.2  %
Kingdom
                                                                              
Canada            77.7         2.7         80.4      2.2   %     60.0  %      3.5  %
                                                                              
United            29.8         N/A         29.8      -3.0  %     N/A          -3.0 %
States (1)
                                                                              
Continental       13.5         10.1        23.6      -12.9 %     2.3   %      -6.9 %
Europe (2)
                                                                         
Total           $ 199.8     $  69.3      $ 269.1     3.8   %     -0.6  %      2.6  %
Revenue
                                                                              

1) Decreased loan volume for the DFS military lending services business is the
primary contributor of the lower U.S. business performance.

2) Gold price decline significantly impacted pawn lending and purchased gold
revenue in continental Europe.

             
                
                Revenue By Product ($M)
                Three Months Ended June 30, 2013
                                                            Year-over-Year Constant Currency Growth
                Unsecured     Pawn        Other                      Unsecured   Pawn               
Region          Lending       Lending     Products     Total         Lending       Lending     Other       Total
                                                                                   (1)         (2)
                                                                                                           
United          $  99.7       $  10.8     $  24.8      $ 135.3       9.8    %      14.3  %     -12.5 %     5.2  %
Kingdom
                                                                                                           
Canada             48.8          0.1         31.5        80.4        10.6   %      N/M         -6.1  %     3.5  %
                                                                                                           
United             15.8          N/M         14.0        29.8        3.8    %      N/M         -9.6  %     -3.0 %
States
                                                                                                           
Continental        14.2          8.2         1.2         23.6        8.8    %      -11.4 %     -60.2 %     -6.9 %
Europe
                                                                                                    
Total           $  178.5      $  19.1     $  71.5      $ 269.1       9.4    %      2.4   %     -11.1 %     2.6  %
Revenue
                

1) Gold price decline unfavorably impacted pawn lending revenue during the
quarter.

2) Primary driver of lower "other" revenue is decreased purchased gold sales
in all regions and lower loan volume for the U.S. based DFS military lending
services business.

Pro forma Net Income Reconciliation

Pro forma net income and diluted pro forma operating earnings per share are
not items prepared in accordance with GAAP. The Company defines pro forma net
income as net income adjusted to exclude non-operating, unusual and non-cash
charges and credits as described below, and diluted pro forma operating
earnings per share as pro forma net income divided by weighted average diluted
shares outstanding. The Company presents pro forma net income and diluted pro
forma operating earnings per share as indications of its financial performance
excluding non-operating, unusual and other net non-cash charges and to show
comparative results of its operations. Not all companies calculate pro forma
net income or diluted pro forma operating earnings per share in the same
fashion, and therefore these amounts as presented may not be comparable to
other similarly titled measures of other companies. The table below reconciles
income before income taxes as reported on the Company’s Unaudited Consolidated
Statements of Operations to pro forma net income (dollars in millions) and
diluted pro forma operating earnings per share:


DFC GLOBAL CORP.
PRO FORMA NET INCOME (excluding one-time items & effects of ASC 470-20)
(In millions except per share amounts)
                                                            
                            Three Months Ended         Twelve Months Ended
                            June 30,                   June 30,
                             2012        2013       2012        2013  
                                                                     
Income before income
taxes (incl.                $ 7.1         $ 15.9       $ 96.2        $ 28.4
non-controlling
interest)
                                                                     
Pro forma adjustments:
Non-cash interest on
convertible debt (ASC         4.1           4.2          11.0          17.4
470-20)
Unrealized foreign            (6.8  )       (1.6 )       11.5          (1.2  )
exchange (gain) loss
Unrealized loss on
revaluation of pawned         -             7.1          -             7.1
gold inventory
Non-cash impact of            2.2           -            (17.6 )       -
hedge ineffectiveness
Goodwill and other
intangible assets             27.7          (0.2 )       27.7          36.4
impairment charge
Cross-currency swap           1.6           -            6.5           2.2
amortization
Provision for                 0.1           0.1          4.1           2.8
litigation settlements
Acquisition costs             0.5           0.5          3.4           2.3
expensed
Restructuring and other       -             1.5          -             8.5
related charges
Other items, net             2.1         2.6        2.7         7.7   
Pro forma income before       38.6          30.1         145.5         111.6
income taxes
Pro forma income taxes
(33% for 2012; 32% for       12.7        9.6        48.0        35.7  
2013)
Pro forma net income        $ 25.9       $ 20.5      $ 97.5       $ 75.9  
                                                                     
                                                                     
Weighted average
diluted shares               44.6        41.5       45.2        43.2  
outstanding
                                                                     
Diluted pro forma
operating earnings per      $ 0.58       $ 0.49      $ 2.16       $ 1.76  
share
                                                                     
Diluted GAAP earnings       $ (0.09 )     $ 0.18      $ 1.16       $ (0.02 )
(loss) per share
                                                                             

Adjusted EBITDA Reconciliation

Adjusted EBITDA is not a financial measure prepared in accordance with GAAP.
The Company defines Adjusted EBITDA as earnings before interest expense,
income tax provision, depreciation and amortization, stock-based compensation
expense, loss on store closings, litigation settlements, and other items
described below. The Company presents Adjusted EBITDA as an indication of
operating performance, as well as its ability to service its future debt and
capital expenditure requirements. Adjusted EBITDA does not indicate whether
the Company’s cash flow will be sufficient to fund all of its cash needs.
Adjusted EBITDA should not be considered in isolation or as a substitute for
net income, cash flows from operating activities, or other measures of
operating performance or liquidity determined in accordance with GAAP. Not all
companies calculate Adjusted EBITDA in the same fashion, and therefore these
amounts as presented may not be comparable to other similarly titled measures
of other companies. The table below reconciles income before income taxes as
reported on the Company’s Unaudited Consolidated Statements of Operations to
Adjusted EBITDA (dollars in millions):

                                                  
                             Three Months Ended        Twelve Months Ended
                             June 30,                  June 30,
                              2012     2013       2012      2013  
                                                                     
Income before income
taxes (incl.                 $ 7.1        $ 15.9       $ 96.2        $ 28.4
non-controlling
interest)
                                                                     
Add:
Depreciation and               12.7         12.4         48.4          51.1
amortization
Interest expense, net          29.1         28.6         102.8         119.9
Stock based compensation       2.6          2.6          10.4          11.9
expense
Unrealized foreign             (6.8 )       (1.6 )       11.5          (1.2  )
exchange (gain) loss
Unrealized loss on
revaluation of pawned          -            7.1          -             7.1
gold inventory
(Gain) loss on
derivatives not                3.4          -            (2.9  )       -
designated as hedges
Goodwill and other
intangible assets              27.7         (0.2 )       27.7          36.4
impairment charge
Provision for litigation       0.1          0.1          4.1           2.8
settlements
Acquisition costs              0.5          0.5          3.4           2.3
expensed
Restructuring and other        -            1.5          -             8.5
related charges
Other items, net              2.1        2.4        2.1         7.3   
Adjusted EBITDA              $ 78.5      $ 69.3      $ 303.7      $ 274.5 
                                                                     

                                
DFC GLOBAL CORP.
UNAUDITED STORE DATA
                                                               
                                    Three Months Ended     Twelve Months Ended
                                    June 30,               June 30.
                                    2012         2013      2012         2013
De novo Store Builds
United States                       1            0         2            0
Canada                              0            2         10           6
United Kingdom                      29           6         91           36
Poland                              2            3         6            19
Romania                             0            0         0            0
Spain                               0            15        0            22
Sweden                              2            0         4            0
Finland                             0            0         1            0
Total                               34           26        114          83
                                                                        
Acquired Stores
United States                       0            0         0            0
Canada                              1            0         9            4
United Kingdom                      9            0         25           31
Poland                              0            0         0            0
Romania                             0            32        0            32
Spain                               0            0         8            0
Sweden                              2            0         2            0
Finland                             0            0         0            0
Total                               12           32        44           67
                                                                        
Closed Stores
United States                       3            1         10           12
Canada                              0            0         0            5
United Kingdom                      0            3         1            4
Poland                              0            0         0            0
Romania                             0            0         0            0
Spain                               0            0         0            0
Sweden                              0            0         0            0
Finland                             0            0         0            0
Total                               3            4         11           21
                                                                        
Ending Company-Operated Stores
United States                       304          292       304          292
Canada                              474          479       474          479
United Kingdom                      515          578       515          578
Poland                              9            28        9            28
Romania                             0            32        0            32
Spain                               8            30        8            30
Sweden                              22           22        22           22
Finland                             13           13        13           13
Total Ending Company-Operated       1,345        1,474     1,345        1,474
Stores
                                                                        
Ending Franchise/Agent Stores
Canada                              14           10        14           10
U.K.                                40           23        40           23
Total Ending Franchise/Agent        54           33        54           33
Stores
                                                                        
Total Ending Store Count            1,399        1,507     1,399        1,507

Contact:

ICR
Investor Relations:
Garrett Edson, 484-320-5800
or
Media:
Phil Denning, 203-682-8200
 
Press spacebar to pause and continue. Press esc to stop.