DFC Global Corp.
) reported operating earnings of 47 cents per share for fiscal
first quarter 2013 (ending September 30, 2012), which lagged the
Zacks Consensus Estimate by a penny as well as the year-ago
quarter's earnings of 52 cents. Post-tax operating income
amounted to $20.8 million in the reported quarter, compared with
$23.8 million in the year-ago quarter.
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, reported net income came in at $8.6
million or 19 cents per share in the quarter, substantially
exceeding the reported net loss of $1.8 million or 4 cents in the
Total revenue for the quarter climbed 5.8% year over year to
$276.7 million, almost at par with the Zacks Consensus Estimate.
Higher consumer lending revenue largely aided the upside, which
was partly offset by lower revenues from check cashing fees, pawn
service fees and sales, purchased gold sales and money transfer
Operating expenses escalated 11% year over year to $182.5
million, primarily attributable to higher salaries and benefits,
provision for loan losses, depreciation, advertising and
The magnitude of increase in operating costs more than offset
the rise in revenue, driving operating income to shrink 3% year
over year to $94.2 million in the reported quarter.
Evaluation of Capital and Balance Sheet
At the end of September 2012, the debt structure of DFC Global
comprised $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 before December 2016 and $36.6 million
(SEK 240.0 million) term loan in Sweden due July 2016.
As of September 30, 2012, DFC Global had drawn $8 million from
its $235.0 million global revolving credit facility. The company
had also drawn £5.3 million of its £6.0 million credit facility
in the U.K. and had drawn SEK 50.0 million and EUR 15.9 million
of its respective SEK 125.0 million and EUR 18.8 million credit
facilities in Scandinavia, to fund pawn pledge books in U.K. and
The company affirmed its operating earnings guidance of 2013
between $2.35 and $2.55 per share.
DFC Global's close peer
MoneyGram International Inc.
) is expected to report third-quarter 2012 financial results
before the opening bell on November 5, 2012.
Euronet Worldwide Inc.
) reported its third quarter earnings of 42 cents per share,
beating the Zacks Consensus Estimate of 35 cents and the year-ago
quarter's earnings of 37 cents. Operating earnings of $23.7
million in the reported quarter was 22.2% higher than $19.4
million recorded in the prior-year quarter.
We maintain our 'Neutral' recommendation on DFC Global. The
quantitative Zacks #4 Rank (short-term Sell rating) for the
company indicates a slight downward pressure on the shares over
the near term.
DFC GLOBAL CORP (DLLR): Free Stock Analysis
EURONET WORLDWD (EEFT): Free Stock Analysis
MONEYGRAM INTL (MGI): Free Stock Analysis
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