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| Case Studies |
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| Dealers' Financial Services |
| Investment Date: |
November 2006 |
| Headquarters: |
Lexington, KY |
| Website: |
www.usmiles.com |
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| Dealers’ Financial Services (DFS) is a leading provider of sub-prime auto loans, ancillary services and related financial education to active service members in the U.S. military through the MILES (Military Installment Loan and Educational Services) Program. |
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| Investment Highlights |
- Large market opportunity for both sub-prime automobile loans as well as additional products
- Strong dealer network supported by excellent reputation and brand recognition in the marketplace
- Unique, capable sales force with extensive military background
- Credit enhancements provided by military status
- Highly profitable, stable cash flow business model
- Competitive product offering
- Experienced and deep management team
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| Growth and Operating Initiatives |
- Expanded the dealer network while maintaining DFS’ strict guidelines for certification
- Upgraded the IT infrastructure, including the loan origination system and deal tracking RouteOne interface
- Enhanced reporting to allow for accurate measurement of performance metrics
- Introduced new products to existing markets
- Added new markets and increased penetration of existing markets
- Restructured management team to include full time CEO & CFO; promoted National Sales Manager to the executive suite
- Improved efficacy of the business model by increasing the company’s hours of operation
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| Results |
- Significant increase in applications received and contracts cashed due to implementation of new IT systems
- Marked growth in ancillary product income due to improved penetration rates
- Introduced the STRIPES product, targeted at more senior enlisted personnel
- Successfully entered new markets, including California and Alaska
- From 2006 to 2009, revenue and EBITDA increased 2.0x and 2.4x, respectively.
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