EX-99 2 exhibit991_102904.txt EXHIBIT 99.1 - PRESS RELEASE NEWS RELEASE Contact: Donald F. Gayhardt President Dollar Financial Group, Inc. FOR IMMEDIATE RELEASE (610) 640-5925 DOLLAR FINANCIAL GROUP ANNOUNCES RECORD FISCAL 2005 FIRST QUARTER OPERATING RESULTS; COMPARABLE STORE SALES INCREASE 15.9% BERWYN, Pennsylvania, October 29, 2004 - Dollar Financial Group, Inc., ("Dollar" or the "Company"), a leading international financial services company serving under-banked customers, today announced record revenues of $66.2 million and net income of $3.4 million for the fiscal first quarter ended September 30, 2004 compared to revenues of $57.0 million and net income of $1.1 million for the same period in the prior year. Commenting on the operating results, Jeff Weiss, the Company's Chairman and Chief Executive Officer said, "We are very pleased with the continued performance from our domestic and international (Canada and the United Kingdom) operations. The results are a clear indication of our continued ability to focus on providing our customers with the right product mix and fast, courteous service. In addition, we continued making enhancements to our technology platform, our loan servicing capabilities and our underwriting practices, all of which directly impact our ability to drive diversified revenue growth while keeping our key credit ratios in line with our expectations. Our new product offerings continue to produce results, most notably in the areas of debit cards and installment loans. Specifically, we completed the introduction of our Visa(R) branded prepaid card products to approximately two-thirds of our U.S. locations." Don Gayhardt, the Company's President commented, "We continue to achieve strong performance from our international operations as indicated by a 28.8% increase in total foreign revenues to $39.8 million for the 2005 fiscal first quarter from $30.9 million for the prior year period. In the fiscal 2005 first quarter we increased our company-operated and franchised locations in Canada and the United Kingdom by 11 units, as well as acquiring one unit in the United Kingdom. For the full fiscal year we plan to open 25-35 new company-owned stores and 20-25 new franchise locations. Additionally we continue to search for attractive well-managed, geographically interesting acquisitions. We also continue to benefit from higher international earnings as the dollar remains lower in relation to the Canadian and U.K. currencies." 1 First Quarter Results Led primarily by consumer loan revenues, total revenues increased 16.1 % for the fiscal first quarter ended September 30, 2004 to $66.2 million from $57.0 million for the same period last year. Total revenues for comparable retail stores (defined as company owned stores that were open for at least 15 continuous months prior to September 30, 2004), franchised store and document transmitter revenues increased 15.9%, or $9.1 million, for the 2005 fiscal first quarter. Total store and regional expenses decreased as a percentage of total revenues to 64.1% for the 2005 fiscal first quarter from 66.8% for the prior year period. The decrease was primarily due to increased revenues, specifically the Company's consumer loan products, as well as decreases in salaries and benefits, occupancy, returned checks, net and cash shortages, telecommunications, bank charges and armored carrier services as a percentage of total revenues. Corporate expenses for the 2005 fiscal first quarter were $9.5 million or 14.4% of total revenues compared to $7.2 million or 12.7% of total revenues for the prior year period. The increase as a percentage of total revenues was primarily related to increased salaries and benefits, professional fees and other expenses. Adjusted EBITDA for the fiscal first quarter ended September 30, 2004 increased $3.0 million, or 23.0%, to $16.1 million from $13.1 million for the prior fiscal year. Adjusted EBITDA as a percentage of total revenues increased to 24.3% for the fiscal first quarter ended September 30, 2004 from 23.0% for the prior fiscal year. Adjusted EBITDA is not an item prepared in accordance with GAAP. Adjusted EBITDA is earnings before interest expense, income tax provision, depreciation, amortization and other items as described in the attached table. Net income increased $2.2 million, or 195.2%, to $3.4 million for the fiscal first quarter from $1.1 million for the prior year period. About the Company Dollar is a leading international financial services company serving under-banked consumers. Dollar's customers are typically lower- and middle-income working-class individuals who require basic financial services but, for reasons of convenience and accessibility, purchase some or all of their financial services from the Company rather than from banks and other financial institutions. This release does not include the operations of the Company's parent company Dollar Financial Corp. Additional information about the Company can be found on its website at www.DFG.com. Forward Looking Statement This release contains forward-looking statements regarding the Company's estimated performance for historical periods. Actual results for such periods may materially differ. Such forward-looking statements involve risks and uncertainties, including risks related to depository institutions and of changing market conditions in the overall economy and the industry, consumer demand, the opening of new stores, the success of the Company's acquisition strategy and other factors detailed from time to time in the Company's annual and other reports filed with the Securities and Exchange Commission. 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. 2 DOLLAR FINANCIAL GROUP, INC. INTERIM UNAUDITED CONSOLIDATED BALANCE SHEETS (In thousands except share amounts) September 30, June 30, 2004 2004 -------------- ------------- Assets Cash and cash equivalents $81,911 $69,266 Loans receivable: Loans receivable 29,690 29,116 Less: Allowance for loan losses 2,396 2,315 -------------- ------------- Loans receivable, net 27,294 26,801 Other consumer lending receivables 6,617 7,404 Prepaid expenses and other receivables 18,763 19,073 Deferred tax assets, net of valuation allowance of $5,657 and $3,946 150 - Notes and interest receivable-officers 3,662 3,623 Due from parent company 6,103 5,682 Property and equipment, net of accumulated depreciation of $52,947 and $49,540 28,232 27,965 Goodwill and other intangibles, net of accumulated amortization of $22,855 and $23,339 151,647 148,228 Debt issuance costs, net of accumulated amortization of $1,385 and $967 10,773 11,160 Other 2,248 1,832 -------------- ------------- $337,400 $321,034 ============== ============= Liabilities and shareholder's equity Accounts payable $13,879 $14,973 Foreign income taxes payable 4,630 5,979 Accrued expenses and other liabilities 19,123 17,013 Accrued interest payable 9,176 3,876 Revolving credit facilities 3,600 - 9 3/4% Senior Notes due 2011 241,136 241,176 Shareholder's equity: Common stock, $1 par value: 20,000 shares authorized; 100 shares issued and outstanding at September 30, 2004 and June 30, 2004 - - Additional paid-in capital 21,617 21,617 Retained earnings 5,958 2,587 Accumulated other comprehensive income 18,281 13,813 -------------- ------------- Total shareholder's equity 45,856 38,017 -------------- ------------- $337,400 $321,034 ============== =============
3 DOLLAR FINANCIAL GROUP, INC. INTERIM UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands) Three Months Ended September 30, --------------------------- 2004 2003 ----------- ----------- Revenues: Check cashing $30,362 $28,122 Consumer lending: Fees from consumer lending 36,642 28,861 Provision for loan losses and adjustment to servicing revenue (9,437) (7,399) ----------- ----------- Consumer lending, net 27,205 21,462 Money transfer fees 3,508 3,081 Other 5,082 4,325 ----------- ----------- Total revenues 66,157 56,990 ----------- ----------- Store and regional expenses: Salaries and benefits 19,837 18,777 Occupancy 5,391 4,864 Depreciation 1,743 1,448 Returned checks, net and cash shortages 2,481 2,538 Telephone and telecommunication 1,434 1,562 Advertising 2,823 1,618 Bank charges 935 1,103 Armored carrier services 825 729 Other 6,906 5,415 ----------- ----------- Total store and regional expenses 42,375 38,054 Corporate expenses 9,544 7,241 Losses on store closings 86 60 Other depreciation and amortization 943 958 Interest expense, net 6,484 5,247 ----------- ----------- Income before income taxes 6,725 5,430 Income tax provision 3,354 4,288 ----------- ----------- Net income $3,371 $1,142 =========== ===========
4 Dollar Financial Group Inc. Unaudited Selected Statistical Data Three Months Ended September 30, ------------------------------- 2004 2003 ------------ ------------- Consolidated Store Count Beginning 1,110 1,084 Opened 11 2 Acquired 1 - Closed - 1 Franchise, net - (5) ------------ ------------- Ending 1,122 1,080 ============ ============= Company-Operated Store Count Beginning 638 624 Opened 11 2 Acquired 1 - Closed - 1 ------------ ------------- Ending 650 625 ============ ============= Franchise Store Count Beginning 472 460 Net change - (5) ------------ ------------- Ending 472 455 ============ =============
5 Dollar Financial Group Inc. Unaudited Selected Statistical Data Three Months Ended September 30, -------------------------------- 2004 2003 -------------- -------------- Check Cashing Data (Consolidated) Face amount of checks cashed (in millions) $816 $770 Number of checks cashed (in thousands) 2,083 2,097 Face amount of average check $392 $367 Average fee per check cashed $14.58 $13.41 Net write-offs of returned checks (in thousands) $2,227 $2,139 Net write offs as a percentage of check cashing revenue 7.33% 7.61% Consumer Loan Data - Originations U.S. company funded consumer loan originations $18,562 $14,268 Canadian company funded consumer loan originations 107,141 75,574 U.K. company funded consumer loan originations 42,698 26,439 -------------- -------------- Total company funded consumer loan originations $168,401 $116,281 ============== ============== Consumer Loan Data - Net Revenues Servicing revenues, net $12,150 $11,413 Total company funded consumer loan revenues 19,725 12,845 Provision for loan losses on company funded loans (4,670) (2,796) -------------- -------------- Total consumer loan revenues, net $27,205 $21,462 ============== ==============
6 EBITDA Reconciliation Adjusted EBITDA is not an item prepared in accordance with GAAP. Adjusted EBITDA is earnings before interest expense, income tax provision, depreciation, amortization and other items described below. Dollar presents Adjusted EBITDA as an indication of operating performance and its ability to service its debt and capital expenditure requirements. Adjusted EBITDA does not indicate whether Dollar'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. Dollar believes that Adjusted EBITDA amounts should be reviewed by prospective investors because Dollar uses them as one means of analyzing its ability to service its debt and capital expenditure requirements, and Dollar understands that they are used by some investors as one measure of a Company's historical ability to service its debt and capital expenditure requirements. Not all companies calculate EBITDA in the same fashion, and therefore these amounts as presented may not be comparable to other similarly titled measures of other companies. The tables below reconcile net income as reported on Dollar's unaudited Statements of Operations to unaudited Adjusted EBITDA (dollars in thousands): Three Months Ended September 30, --------------------------------- 2004 2003 --------------- ---------------- Net income $ 3,371 $ 1,142 Add: Loss on store closings 86 60 Depreciation and amortization 2,686 2,406 Interest expense 6,484 5,247 Foreign currency loss (gain) 125 (53) Income tax provision 3,354 4,288 --------------- ---------------- Adjusted EBITDA $ 16,106 $ 13,090 =============== ================ # # # 7