DFC Global Corp.
), reported operating earnings of 58 cents per share for fiscal
fourth quarter 2012, ending June 30, beating the Zacks Consensus
Estimate by 3.6% and increasing 26% from the year-ago earnings.
DFC GLOBAL CORP (DLLR): Free Stock Analysis
MONEYGRAM INTL (MGI): Free Stock Analysis
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The operating results exclude non-recurring charges, the non-cash
interest expense resulting from the adoption of ASC 470-20, and the
non-cash amortization associated with the legacy cross-currency
interest rate swap agreements.
Including these charges, GAAP net loss was 8 cents per share in the
reported quarter, compared with 39 cents earned in the prior-year
DFC Global continues to deliver strong numbers on the back of solid
performances at its core business units. Further, successful
diversification of products, geographic expansions and acquisitions
augmented the performance.
Fiscal 2012 operating earnings came in at $2.16 per share, 2.9%
higher than the Zacks Consensus Estimate and 35.8% higher than the
year-ago earnings. Earnings also outperformed management's guidance
GAAP net income was $1.16 per share, down 28% year over year.
Total revenue for the quarter jumped 14% year over year to $266.7
million, missing the Zacks Consensus Estimate by 5.5%. Higher
consumer lending revenue (shooting 21% year over year) and
purchased gold sales revenue (surging 60% year over year) largely
aided the upside.
Additionally, pawn service fees and sales increased 24% year over
year. However, check cashing revenue declined 8.2% from the
Fiscal 2012 top line improved 35% year over year to $1.1 billion.
Operating expenses escalated 18% year over year to $167.9 million,
primarily attributable to higher salaries and benefits, provision
for loan losses, cost of goods sold of purchased gold and occupancy
costs. Fiscal 2012 operating expense shot up 40% year over year to
The magnitude of increase in revenue more than offset the rise in
operating costs, driving operating income to swell 7.6% year over
year to $98.8 million in the fourth quarter. DFC Global's operating
profit in fiscal 2102 improved 26% year over year to $387.2
The company also notched adjusted EBITDA of $303.7 million in
fiscal 2012, up 32% year over year.
Evaluation of Capital and Balance Sheet
At the end of June 30, 2012, the debt structure of DFC Global
consisted of $230.0 million of senior convertible notes due 2017,
$44.8 million of U.S. senior convertible notes due 2027 and $120.0
million of U.S. senior convertible notes due 2028.
In addition, DFC Global has $600.0 million of senior unsecured
notes, which are not due until December 2016 and $34.7 million (SEK
240.0 million) term loan in Sweden due July 2016.
As of June 30, 2012, DFC Global had drawn $22 million of its $235.0
million global revolving credit facility. The company had drawn
£5.3 million of its £6.0 million credit facility in the United
Kingdom, and had drawn SEK 50.0 million and EUR 16.3 million of its
respective SEK 125.0 million and EUR 18.8 million credit facilities
in Scandinavia, to fund pawn pledge books in the U.K. and
The company expects operating earnings between $2.35 and $2.55 per
share in 2013.
MoneyGram International Inc.
) reported second-quarter 2012 earnings per share of 23 cents, in
line with the Zacks Consensus Estimate. However, the reported
earnings soared from the year-ago quarter's loss of $1.37 a share.
Total revenue for the quarter was $330.1 million, up 6.5% from the
year-ago period and was at par with the Zacks Consensus Estimate.
Higher money transfer transaction volumes and higher fee and other
revenue drove the top line, while absence of preferred dividend
payouts, lower interest expenses helped the bottom line and
margins' expansion. However, these were mostly offset by lower
investment income along with higher operating, commissions and tax
We maintain our Neutral recommendation on DFC Global. The
quantitative Zacks #3 Rank (short-term Hold rating) for the company
indicates no clear directional pressure on the shares over the near