Dollar Financial Corp Announces Record First Quarter Results

Business Wire,  Oct 30, 2007  

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*Record Revenue and Net Income Driven by Strong International Growth

*Pro Forma Fully Diluted Earnings Per Share Increased 44 Percent to $0.52

BERWYN, Pa. -- Dollar Financial Corp (NASDAQ:DLLR), a leading international financial services company serving under-banked consumers, today announced results for the fiscal first quarter ended September 30, 2007.

Fiscal first quarter highlights (compared to the prior year period):

* Consolidated revenue was $116.1 million, an increase of 26.5% or $24.3 million.

* Store and regional margin, as a percentage of total revenue, increased to 40.3%, compared to 37.1% for the prior year's quarter.

* Consolidated Adjusted EBITDA was $33.7 million, an increase of 42.1% or $10.0 million.

* Adjusted EBITDA margin, as a percentage of total revenue, increased to 29.0%, compared to 25.9% for the prior year's quarter.

* The consolidated loan loss provision, as a percentage of gross consumer lending revenue, was stable at 21.6% for the quarter.

* Net income was $12.1 million as compared to a loss of $1.7 million for the prior year's quarter.

* Opened 20 de novo stores and acquired 34 additional stores across the U.S., Canadian and U.K. markets.

Commenting on the financial results for the quarter, Jeff Weiss, the Company's Chairman and Chief Executive Officer, stated, "We are very pleased to achieve another quarter of record results. Total revenue growth of 26.5% and pro forma net income growth of 46.7% underscore the continued success of our multi-country, multi-product, multi-channel strategy. In addition, it also demonstrates our ability to leverage the Company's infrastructure and cost structure to achieve excellent flow through of incremental revenue to earnings."

Mr. Weiss continued, "Our success continues to be driven by the consistent execution of our growth strategy. During the quarter, we opened twenty de novo stores and completed the acquisition of thirty-four additional stores across the U.S., Canada and U.K. as we continue to pursue the most strategic investment opportunities across all three of our geographic markets. The Company's momentum continues to accelerate with the recent agreement to acquire eighty-two financial services stores in southeast Florida. This acquisition, which is expected to close in the next 30 to 45 days, will give us a significant presence in a market with a stable regulatory climate and very strong demographic trends that is dominated by multi-product stores. In addition, our existing NOL tax loss carry-forwards will help to enhance the returns from this transaction. Overall, I am pleased with the progress we have made during the quarter and our strong start to fiscal 2008."

Consolidated check cashing revenue increased by 18.9%, or $7.3 million, year-over-year. The Canadian business segment grew by 36.5%, while the U.K. business realized growth of 15.8%. On a consolidated basis, the face amount of the average check cashed increased 10.3% to $525 for the first quarter of 2008 compared to $476 for the prior year period, and the average fee per check cashed increased by 11.4% to $20.16.

Consolidated net consumer lending revenue was $53.7 million for the first quarter, representing an increase of 36.8% or $14.5 million compared to the prior year period. The increase was primarily driven by strong performance in the international businesses as the Canadian market grew 64.7%, while the U.K. business realized growth of 61.9% over the prior year's quarter. The consolidated loan loss provision for the first quarter, as a percentage of gross consumer lending revenue, was in line with the Company's expectations at 21.6% compared to 21.3% for the fourth quarter of fiscal 2007.

Total Company funded loan originations were $436.8 million for the quarter, representing an increase of 55.7%, or $156.2 million, compared to the prior year period. Company funded loan originations in Canada increased by 62.5% or $100.1 million and U.K. loan originations increased by 38.5% or $22.4 million. U.S. loan originations for the quarter increased by 54.2% or $33.7 million compared to the prior year's quarter, driven primarily by the transition of a portion of the U.S. loan portfolio from bank-funded to Company funded loans.

Money transfer fees for the quarter increased 27.7% year-over-year, driven by continued strong growth in the Company's international markets. Other revenue increased by 14.0% for the quarter, principally due to the success of the Company's MasterCard[R] and Visa[R] branded debit-card sales across its three key markets, as well as growth in the foreign currency product in Canada and the U.K.

Comparable store sales increased 7.3% or $6.4 million for the fiscal 2008 first quarter. On a local currency basis, the Company's U.K. business segment realized comparable store sales growth of 19.0%, while the Canadian operation generated comparable store sales growth of 7.0%.

The Company achieved a store and regional margin of $46.8 million for the quarter, representing an increase of 37.7% or $12.8 million over the prior year's quarter. As a percentage of total revenue, store and regional margin increased to 40.3%, compared to 37.1% for the prior year period. Corporate expenses, as a percentage of total revenue, increased to 15.4% as compared to the previous year's quarter of 14.1%, reflecting increased stock compensation charges as well as increased investment in infrastructure to support the Company's acquisitions and store growth program.