Attached files
file | filename |
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8-K/A - FORM 8-K/A - DFC GLOBAL CORP. | w81926e8vkza.htm |
EX-23.1 - EX-23.1 - DFC GLOBAL CORP. | w81926exv23w1.htm |
EX-99.1 - EX-99.1 - DFC GLOBAL CORP. | w81926exv99w1.htm |
Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
On December 31, 2010, Dollar Financial Corp. (Dollar) announced that its wholly
owned subsidiary, Dollar Financial U.K. Limited (the Company), had completed its acquisition (the
Acquisition) of all of the outstanding capital stock of Sefina Finance AB (Sefina) pursuant to
a share purchase agreement dated December 2, 2010 (the Purchase Agreement) with NSF Nordic
Special Finance AB (the Seller).
Sefina, a Scandinavian pawn lending business with its headquarters in Stockholm, Sweden and a
more than 125 year operating history, provides pawn loans primarily secured by gold jewelry,
diamonds and watches through its 16 retail store locations in Sweden and 12 retail store locations
in Finland.
The total cash consideration for the Acquisition is approximately $91.2 million, of which
approximately $59.1 million was cash paid at closing. Additionally, approximately $14.9 million of additional cash is payable in equal installments on each of March 31,
2011, June 30, 2011 and September 30, 2011. Furthermore, the Company is obligated to pay the Seller
additional contingent consideration based on the financial performance of Sefina during the each of
the two successive 12 month periods following the closing of the
Acquisition, the aggregate amount of which the Company currently estimates to be approximately $17.2 million. As a part of the
Acquisition, the Company also assumed Sefinas existing working capital lines of credit associated
with a number of Scandinavian banks, the outstanding balances on which aggregated to approximately
$61.8 million as of the closing of the Acquisition, are secured
primarily by the value of Sefinas pawn
pledge stock, and have average interest rates of approximately 4%.
The following unaudited pro forma condensed consolidating financial statements are based
on our historical financial statements and those of Sefina after giving effect to the Acquisition.
These pro forma financial statements have been prepared applying the assumptions and adjustments
described in the accompanying notes.
The unaudited pro forma condensed consolidating statements of operations data for the periods
presented give effect to the Acquisition as if it had been consummated on July 1, 2009. The
unaudited condensed consolidating balance sheet of Dollar as of December 31, 2010 includes the
effect of the Acquisition and is presented in Dollar Financial Corp.s Quarterly Report on Form
10-Q for the period ended December 31, 2010. Accordingly, the accompanying unaudited pro forma
combined condensed financial data should be read in conjunction with the historical financial
statements and the accompanying disclosures of Dollar for the six-months ended December 31, 2010,
which include a discussion of the preliminary purchase price allocation. We describe
the assumptions underlying the pro forma adjustments in the accompanying notes, which should also
be read in conjunction with these unaudited pro forma condensed consolidating financial statements.
You should also read this information in conjunction with the:
| separate unaudited historical consolidated financial statements of Dollar Financial Corp. as of and for the six-month period ended December 31, 2010, included in the Companys Quarterly Report on Form 10-Q for the six months ended December 31, 2010; | ||
| separate audited historical consolidated financial statements of Dollar Financial Corp. as of and for the fiscal year ended June 30, 2010, included in the Companys Annual Report on Form 10-K for the fiscal year ended June 30, 2010; and | ||
| separate historical financial statements of Sefina as of and for the year ended December 31, 2010, filed as Exhibit 99.1 herewith. |
The pro forma adjustments related to the purchase price allocation of the Acquisition are
preliminary and based on information obtained to date by management, and are subject to revision as
additional information becomes available as to, among other things, the fair value of acquired
assets and liabilities as well as any pre-acquisition contingencies. Since these unaudited pro
forma combined condensed financial statements have been prepared based on preliminary estimates of
purchase consideration and fair values attributable to the Acquisition, the actual amounts
1
recorded for the Acquisition may differ from the information presented. The estimation and
allocations of purchase consideration are subject to change pending further review of the fair
value of the assets acquired and liabilities assumed. Revisions to the preliminary purchase price
allocation may have a significant impact on the pro forma amounts of total assets, total
liabilities and stockholders equity, operating expense and costs, depreciation and amortization
and interest expense.
The unaudited pro forma condensed consolidating financial statements should not be
considered indicative of actual results that would have been achieved had the Acquisition been
consummated on the date or for the periods indicated, and do not purport to indicate consolidated
balance sheet data or results of operations as of any future date or any future period.
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Dollar Financial Corp.
Unaudited Pro Forma Condensed Consolidating Statement of Operations
For the Year Ended June 30, 2010
(In millions, except share and per share amounts)
Unaudited Pro Forma Condensed Consolidating Statement of Operations
For the Year Ended June 30, 2010
(In millions, except share and per share amounts)
Dollar | Pro Forma | Pro Forma | ||||||||||||||
Financial Corp. | Sefina | Acquisition | Dollar | |||||||||||||
Historical | Finance AB | (Note 2) | Financial Corp. | |||||||||||||
Revenues: |
||||||||||||||||
Fees from consumer lending |
$ | 319.4 | $ | | $ | | $ | 319.4 | ||||||||
Check cashing |
149.5 | | | 149.5 | ||||||||||||
Pawn service fees and sales |
19.9 | 29.2 | | 49.1 | ||||||||||||
Other |
122.1 | | | 122.1 | ||||||||||||
Total revenues |
610.9 | 29.2 | | 640.1 | ||||||||||||
Operating expenses: |
||||||||||||||||
Salaries and benefits |
154.0 | 9.2 | | 163.2 | ||||||||||||
Provision for loan losses |
45.9 | | | 45.9 | ||||||||||||
Occupancy |
43.3 | 2.8 | | 46.1 | ||||||||||||
Returned checks, net and cash shortages |
9.0 | | | 9.0 | ||||||||||||
Bank charges and armored carrier service |
13.9 | | | 13.9 | ||||||||||||
Depreciation |
14.3 | 0.5 | | 14.8 | ||||||||||||
Other |
84.2 | 4.9 | | 89.1 | ||||||||||||
Total operating expenses |
364.6 | 17.4 | | 382.0 | ||||||||||||
Operating margin |
246.3 | 11.8 | | 258.1 | ||||||||||||
Corporate and other expenses: |
||||||||||||||||
Corporate expenses |
86.8 | | | 86.8 | ||||||||||||
Other depreciation and amortization |
7.3 | 2.0 | (2.0 | )A | 7.3 | |||||||||||
Interest expense, net |
68.9 | 3.4 | | 72.3 | ||||||||||||
Provision for litigation settlements |
29.1 | | | 29.1 | ||||||||||||
Loss on extinguishment of debt |
9.5 | | | 9.5 | ||||||||||||
Unrealized foreign exchange loss |
10.2 | | | 10.2 | ||||||||||||
Loss on derivatives not designated as hedges |
12.9 | | | 12.9 | ||||||||||||
Loss on store closings |
3.3 | | | 3.3 | ||||||||||||
Other expense |
2.1 | | | 2.1 | ||||||||||||
Income before income taxes |
16.2 | 6.4 | 2.0 | 24.6 | ||||||||||||
Income tax provision |
21.4 | 1.7 | 0.5 | C | 23.6 | |||||||||||
Net (loss) income |
$ | (5.2 | ) | $ | 4.7 | $ | 1.5 | $ | 1.0 | |||||||
Less: Net loss attributable to non-controlling interests |
(0.3 | ) | | | (0.3 | ) | ||||||||||
Net (loss) income attributable to Dollar Financial
Corp. |
$ | (4.9 | ) | $ | 4.7 | $ | 1.5 | $ | 1.3 | |||||||
Net (loss) income per share: |
||||||||||||||||
Basic |
$ | (0.14 | ) | $ | 0.04 | |||||||||||
Diluted |
$ | (0.14 | ) | $ | 0.03 | |||||||||||
Weighed average shares outstanding |
||||||||||||||||
Basic |
36,159,848 | 36,159,848 | ||||||||||||||
Diluted |
36,159,848 | 37,244,438 |
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Dollar Financial Corp.
Unaudited Pro Forma Condensed Consolidating Statement of Operations
For the Six Months Ended December 31, 2010
(In millions, except share and per share amounts)
Unaudited Pro Forma Condensed Consolidating Statement of Operations
For the Six Months Ended December 31, 2010
(In millions, except share and per share amounts)
Dollar | Pro Forma | Pro Forma | ||||||||||||||
Financial Corp. | Sefina | Acquisition | Dollar | |||||||||||||
Historical | Finance AB | (Note 2) | Financial Corp. | |||||||||||||
Revenues: |
||||||||||||||||
Fees from consumer lending |
$ | 191.3 | $ | | $ | | $ | 191.3 | ||||||||
Check cashing |
72.0 | | | 72.0 | ||||||||||||
Pawn service fees and sales |
13.5 | 15.9 | | 29.4 | ||||||||||||
Other |
79.9 | | | 79.9 | ||||||||||||
Total revenues |
356.7 | 15.9 | | 372.6 | ||||||||||||
Operating expenses: |
||||||||||||||||
Salaries and benefits |
83.5 | 5.5 | | 89.0 | ||||||||||||
Provision for loan losses |
30.4 | | | 30.4 | ||||||||||||
Occupancy |
23.6 | 1.4 | | 25.0 | ||||||||||||
Returned checks, net and cash shortages |
3.9 | | | 3.9 | ||||||||||||
Bank charges and armored carrier service |
7.7 | | | 7.7 | ||||||||||||
Depreciation |
7.5 | 0.4 | | 7.9 | ||||||||||||
Other |
61.8 | 2.4 | | 64.2 | ||||||||||||
Total operating expenses |
218.4 | 9.7 | | 228.1 | ||||||||||||
Operating margin |
138.3 | 6.2 | | 144.5 | ||||||||||||
Corporate and other expenses: |
||||||||||||||||
Corporate expenses |
49.4 | | | 49.4 | ||||||||||||
Other depreciation and amortization |
5.5 | 1.0 | (1.0 | )A | 5.5 | |||||||||||
Interest expense, net |
43.5 | 1.8 | | 45.3 | ||||||||||||
Proceeds from litigation settlements |
(3.9 | ) | | | (3.9 | ) | ||||||||||
Loss on extinguishment of debt |
0.0 | | | 0.0 | ||||||||||||
Unrealized foreign exchange gain |
(32.4 | ) | | | (32.4 | ) | ||||||||||
Loss on derivatives not designated as hedges |
24.6 | | | 24.6 | ||||||||||||
Loss on store closings |
0.5 | | | 0.5 | ||||||||||||
Other expense (income) |
2.6 | (0.1 | ) | (0.8 | )B | 1.7 | ||||||||||
Income before income taxes |
48.5 | 3.5 | 1.8 | 53.8 | ||||||||||||
Income tax provision |
16.6 | 0.9 | 0.5 | C | 18.0 | |||||||||||
Net income |
$ | 31.9 | $ | 2.6 | $ | 1.3 | $ | 35.8 | ||||||||
Less: Net loss attributable to non-controlling
interests |
(0.4 | ) | | | (0.4 | ) | ||||||||||
Net income attributable to Dollar Financial Corp. |
$ | 32.3 | $ | 2.6 | $ | 1.3 | $ | 36.2 | ||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.89 | $ | 0.99 | ||||||||||||
Diluted |
$ | 0.86 | $ | 0.96 | ||||||||||||
Weighed average shares outstanding |
||||||||||||||||
Basic |
36,440,562 | 36,440,562 | ||||||||||||||
Diluted |
37,628,431 | 37,628,431 |
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NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATING
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
Note 1. Basis of Pro Forma Presentation
The unaudited pro forma consolidated financial statements included herein have been
prepared by the Company pursuant to the rules and regulations of the Securities and Exchange
Commission.
Certain information and certain disclosures normally included in financial statements
prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been
condensed or omitted pursuant to such rules and regulations. However, the Company believes that the
disclosures provided herein are adequate to make the information presented not misleading.
The information concerning Dollar has been derived from the audited consolidated
financial statements of the Company for the year ended June 30, 2010, as included in the Companys
Annual Report on Form 10-K for the fiscal year ended June 30, 2010, and from the consolidated
financial statements of the Company as of and for the six months ended December 31, 2010, as
included in the Companys Quarterly Report on Form 10-Q for the six months ended December 31, 2010.
The information concerning Sefina has been derived from the internally prepared financial
statements of Sefina for the twelve months ended June 30, 2010 and as of and for the six months
ended December 31, 2010. Sefinas fiscal year ends on December 31. Sefinas historical statement
of operations for the twelve months ended June 30, 2010 represent a compilation of their quarterly
periods during the twelve month period ended June 30, 2010. As a result, such statement of
operations includes estimates inherent in preparing interim financial statements, such estimates
were based on Sefinas actual fiscal years. Certain reclassifications have been made to Sefinas historical statements of operations to conform to
Dollars presentation.
Article 11 of Regulation S-X requires that pro forma adjustments reflected in the
unaudited pro forma condensed consolidated statements of operations are directly related to the
transaction for which the pro forma financial information is presented and have a continuing impact
on the results of operations.
Note 2. Pro Forma Adjustments
The specific pro forma adjustments related to the Acquisition included in the unaudited pro forma
consolidated financial statements are as follows:
A To reflect the elimination of amortization expense related to Sefinas historical customer list
intangible asset.
B To reflect the elimination of nonrecurring acquisition-related advisory and legal fees incurred by
Dollar during the six months ended December 31, 2010. Nonrecurring charges that do not have a
continuing impact on operations are excluded in the pro forma presentation of the condensed
consolidated statement of operations.
C To reflect the related tax impacts of the elimination of amortization expense related to
Sefinas historical customer list intangible asset and the
elimination of nonrecurring acquisition-related advisory and legal fees.
5