DFC Global Shares Sink as Co. Issues Concerning Prelim. Q3 Results, Cuts FY13 Outlook

DFC Global Corp.

, 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.”