MoneyGram International Reports First Quarter 2016 Financial Results
"We delivered strong revenue and adjusted EBITDA growth in the quarter. Our strategic focus on targeted corridor development, optimization of the customer experience, and prudent expense controls were key to these results," said
First Quarter Financial Results
- Total revenue for the first quarter was
$358.4 million , an increase of 8% on a reported basis and 10% on a constant currency basis. - The Company reported EBITDA of
$58.5 million and pre-tax income of$11.8 million . - Adjusted EBITDA was
$69.8 million , an increase of 28% on a reported basis and 29% on a constant currency basis. Adjusted EBITDA benefited from incremental foreign currency income, favorable commission rates, and lower marketing spend. Adjusted EBITDA margin was 19.5%. - Adjusted diluted earnings per share was
$0.17 . Diluted loss per share was ($0.07 ) which included tax expense of$7.7 million , or$0.12 , related to the settlement of certain prior yearU.S. tax deductions. - Adjusted Free Cash Flow for the quarter was
$31.6 million .
First Quarter Money Transfer Highlights
- Money transfer transactions grew 7% in the first quarter.
- Money transfer revenue was
$316.2 million , representing 10% growth on a reported basis and 12% growth on a constant currency basis compared to the prior year. - Money transfer revenue growth reflects the continued strength in the Company's Non-
U.S. andU.S. Outbound sends.- Non-
U.S. revenue grew 16% led byAfrica andWestern Europe . U.S. Outbound revenue grew 11% led by sends toLatin America andAfrica .U.S. toU.S. revenue declined 1% primarily due to lower volume of transactions under$100 .
- Non-
- Money transfer revenue from
U.S. Outbound and Non-U.S. sends grew 15% on a constant currency basis in the quarter and accounted for 87% of total money transfer revenue.
First Quarter Digital Highlights
- Customer adoption of
MoneyGram's award-winning innovative kiosks and moneygram.com, mobile solutions and account deposit services led to solid Digital money transfer results in the first quarter.- Digital money transfer transactions increased 23%, and represented 15% of total money transfer transactions.
- Digital money transfer revenue grew 31% over the prior year, and represented 13% of money transfer revenue.
- moneygram.com attracted more than 225,000 new active customers.
Full Year 2016 Outlook
For the full year 2016, the Company's estimate of 8%-10% constant currency revenue growth is unchanged. Due to the first quarter outperformance, the Company is increasing its outlook for full year constant currency adjusted EBITDA growth to 9%-11%.
Forward-Looking Statements
This release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements with respect to, among other things, the financial condition, results of operations, plans, objectives, future performance and business of
Non-GAAP Measures
In addition to results presented in accordance with GAAP, this news release and related tables include certain non-GAAP financial measures, including a presentation of EBITDA (earnings before interest, taxes, depreciation and amortization, including agent signing bonus amortization), Adjusted EBITDA (EBITDA adjusted for significant items), Adjusted EBITDA margin, Adjusted Free Cash Flow (Adjusted EBITDA less cash interest, cash taxes, cash payments related to an
We believe that these non-GAAP financial measures provide useful information to investors because they are an indicator of the strength and performance of ongoing business operations. These calculations are commonly used as a basis for investors, analysts and other interested parties to evaluate and compare the operating performance and value of companies within our industry. Finally, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Free Cash Flow, constant currency, adjusted diluted earnings per share and adjusted net income figures are financial and performance measures used by management in reviewing results of operations, forecasting, allocating resources or establishing employee incentive programs. Although
Description of Tables
Table One |
- |
Condensed Consolidated Statements of Operations |
Table Two |
- |
Segment Results |
Table Three |
- |
Segment Reconciliations |
Table Four |
- |
EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Free Cash Flow |
Table Five |
- |
Adjusted Net Income and Adjusted Diluted EPS |
Table Six |
- |
Condensed Consolidated Balance Sheets |
Table Seven |
- |
Condensed Consolidated Statement of Cash Flows |
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TABLE ONE | |||||||||||||
| |||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||
(Unaudited) | |||||||||||||
Three Months Ended |
2016 vs |
||||||||||||
(Amounts in millions, except per share data) |
2016 |
2015 |
2015 |
||||||||||
REVENUE |
|||||||||||||
Fee and other revenue |
$ |
354.7 |
$ |
327.7 |
$ |
27.0 |
|||||||
Investment revenue |
3.7 |
2.9 |
0.8 |
||||||||||
Total revenue |
358.4 |
330.6 |
27.8 |
||||||||||
Total revenue growth, as reported |
8% |
(12)% |
|||||||||||
Total revenue growth, constant currency |
10% |
(8)% |
|||||||||||
OPERATING EXPENSES |
|||||||||||||
Commissions expense |
162.8 |
153.5 |
9.3 |
||||||||||
Compensation and benefits |
71.7 |
74.7 |
(3.0) |
||||||||||
Transaction and operations support |
64.5 |
70.4 |
(5.9) |
||||||||||
Occupancy, equipment and supplies |
15.2 |
15.5 |
(0.3) |
||||||||||
Depreciation and amortization |
21.1 |
14.8 |
6.3 |
||||||||||
Total operating expenses |
335.3 |
328.9 |
6.4 |
||||||||||
OPERATING INCOME |
23.1 |
1.7 |
21.4 |
||||||||||
Other expense |
|||||||||||||
Interest expense |
11.3 |
11.1 |
0.2 |
||||||||||
Total other expense |
11.3 |
11.1 |
0.2 |
||||||||||
Income (loss) before income taxes |
11.8 |
(9.4) |
21.2 |
||||||||||
Income tax expense |
16.0 |
62.6 |
(46.6) |
||||||||||
NET LOSS |
$ |
(4.2) |
$ |
(72.0) |
$ |
67.8 |
|||||||
LOSS PER COMMON SHARE |
|||||||||||||
Basic |
$ |
(0.07) |
$ |
(1.16) |
$ |
1.09 |
|||||||
Diluted |
$ |
(0.07) |
$ |
(1.16) |
$ |
1.09 |
|||||||
Weighted-average outstanding common shares and equivalents used in computing loss per share |
|||||||||||||
Basic (1) |
62.4 |
62.0 |
0.4 |
||||||||||
Diluted (1) |
62.4 |
62.0 |
0.4 |
||||||||||
(1) Includes common stock equivalents of 8.9 million for the three months ended | |||||||||||||
Shares related to stock options |
3.0 |
3.7 |
|||||||||||
Shares related to restricted stock units |
4.1 |
2.7 |
TABLE TWO | ||||||||||||
| ||||||||||||
SEGMENT RESULTS | ||||||||||||
(Unaudited) | ||||||||||||
Global Funds Transfer |
||||||||||||
Three Months Ended |
2016 vs | |||||||||||
(Amounts in millions) |
2016 |
2015 |
2015 | |||||||||
Money transfer revenue |
$ |
316.2 |
$ |
286.8 |
$ |
29.4 |
||||||
Bill payment revenue |
24.1 |
25.5 |
(1.4) |
|||||||||
Total revenue |
$ |
340.3 |
$ |
312.3 |
$ |
28.0 |
||||||
Total commissions expense |
$ |
162.2 |
$ |
153.3 |
$ |
8.9 |
||||||
Operating income |
$ |
23.7 |
$ |
0.2 |
$ |
23.5 |
||||||
Operating margin |
7.0% |
0.1% |
||||||||||
Money transfer revenue growth, as reported |
10% |
(12)% |
||||||||||
Money transfer revenue growth, constant currency |
12% |
(7)% |
||||||||||
Financial Paper Products |
||||||||||||
Three Months Ended |
2016 vs | |||||||||||
(Amounts in millions) |
2016 |
2015 |
2015 | |||||||||
Money order revenue |
$ |
12.7 |
$ |
13.1 |
$ |
(0.4) |
||||||
Official check revenue |
5.4 |
5.2 |
0.2 |
|||||||||
Total revenue |
$ |
18.1 |
$ |
18.3 |
$ |
(0.2) |
||||||
Total commissions expense |
$ |
0.6 |
$ |
0.2 |
$ |
0.4 |
||||||
Operating income |
$ |
4.5 |
$ |
5.4 |
$ |
(0.9) |
||||||
Operating margin |
24.9% |
29.5% |
TABLE THREE | ||||||||||||
| ||||||||||||
SEGMENT RECONCILIATIONS | ||||||||||||
(Unaudited) | ||||||||||||
Global Funds Transfer |
||||||||||||
Three Months Ended |
2016 vs | |||||||||||
(Amounts in millions) |
2016 |
2015 |
2015 | |||||||||
Revenue (as reported) |
$ |
340.3 |
$ |
312.3 |
$ |
28.0 |
||||||
Adjusted operating income |
$ |
32.9 |
$ |
19.3 |
$ |
13.6 |
||||||
Reorganization and restructuring costs (1) |
— |
(8.4) |
8.4 |
|||||||||
Compliance enhancement program |
(2.8) |
(5.1) |
2.3 |
|||||||||
Direct monitor costs |
(1.9) |
(1.9) |
— |
|||||||||
Stock-based compensation expense |
(4.5) |
(3.7) |
(0.8) |
|||||||||
Total adjustments |
(9.2) |
(19.1) |
9.9 |
|||||||||
Operating income (as reported) |
$ |
23.7 |
$ |
0.2 |
$ |
23.5 |
||||||
Adjusted operating margin |
9.7% |
6.2% |
||||||||||
Total adjustments |
(2.7)% |
(6.1)% |
||||||||||
Operating margin (as reported) |
7.0% |
0.1% |
||||||||||
Financial Paper Products |
||||||||||||
Three Months Ended |
2016 vs | |||||||||||
(Amounts in millions) |
2016 |
2015 |
2015 | |||||||||
Revenue (as reported) |
$ |
18.1 |
$ |
18.3 |
$ |
(0.2) |
||||||
Adjusted operating income |
$ |
5.2 |
$ |
7.2 |
$ |
(2.0) |
||||||
Reorganization and restructuring costs (1) |
— |
(1.0) |
1.0 |
|||||||||
Compliance enhancement program |
(0.2) |
(0.4) |
0.2 |
|||||||||
Stock-based compensation expense |
(0.5) |
(0.4) |
(0.1) |
|||||||||
Total adjustments |
(0.7) |
(1.8) |
1.1 |
|||||||||
Operating income (as reported) |
$ |
4.5 |
$ |
5.4 |
$ |
(0.9) |
||||||
Adjusted operating margin |
28.7% |
39.3% |
||||||||||
Total adjustments |
(3.9)% |
(9.8)% |
||||||||||
Operating margin (as reported) |
24.9% |
29.5% |
||||||||||
(1) Reorganization and restructuring costs are no longer being adjusted effective
|
TABLE FOUR | ||||||||||||
| ||||||||||||
EBITDA, ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN AND ADJUSTED FREE CASH FLOW | ||||||||||||
(Unaudited) | ||||||||||||
Three Months Ended |
2016 vs | |||||||||||
(Amounts in millions) |
2016 |
2015 |
2015 | |||||||||
Income (loss) before income taxes |
$ |
11.8 |
$ |
(9.4) |
$ |
21.2 |
||||||
Interest expense |
11.3 |
11.1 |
0.2 |
|||||||||
Depreciation and amortization |
21.1 |
14.8 |
6.3 |
|||||||||
Amortization of agent signing bonuses |
14.3 |
14.6 |
(0.3) |
|||||||||
EBITDA |
58.5 |
31.1 |
27.4 |
|||||||||
Significant items impacting EBITDA: |
||||||||||||
Stock-based, contingent and incentive compensation (1) |
6.2 |
6.1 |
0.1 |
|||||||||
Compliance enhancement program |
3.0 |
5.5 |
(2.5) |
|||||||||
Direct monitor costs |
1.9 |
1.9 |
— |
|||||||||
Legal and contingent matters (2) |
0.2 |
0.1 |
0.1 |
|||||||||
Reorganization and restructuring costs (3)
|
— |
9.9 |
(9.9) |
|||||||||
Adjusted EBITDA |
$ |
69.8 |
$ |
54.6 |
$ |
15.2 |
||||||
Adjusted EBITDA margin (4) |
19.5% |
16.5% |
3.0% |
|||||||||
Adjusted EBITDA growth, as reported |
28% |
|||||||||||
Adjusted EBITDA growth, constant currency adjusted |
29% |
|||||||||||
Adjusted EBITDA |
$ |
69.8 |
$ |
54.6 |
$ |
15.2 |
||||||
Cash payments for interest |
(10.4) |
(10.4) |
— |
|||||||||
Cash taxes, net |
(2.4) |
(7.6) |
5.2 |
|||||||||
Cash payments for capital expenditures |
(18.0) |
(26.9) |
8.9 |
|||||||||
Cash payments for agent signing bonuses |
(7.4) |
(44.0) |
36.6 |
|||||||||
Adjusted Free Cash Flow |
$ |
31.6 |
$ |
(34.3) |
$ |
65.9 |
||||||
(1) Stock-based compensation, contingent performance awards and certain incentive compensation. | ||||||||||||
(2) Fees and expenses related to certain legal and contingent matters. | ||||||||||||
(3) Reorganization and restructuring costs are no longer being adjusted effective | ||||||||||||
(4) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenue. |
TABLE FIVE | ||||||||
| ||||||||
ADJUSTED NET INCOME and ADJUSTED DILUTED EPS | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
(Amounts in millions, except per share data) |
2016 |
2015 | ||||||
Net loss |
$ |
(4.2) |
$ |
(72.0) |
||||
Total adjustments (1) |
11.3 |
23.5 |
||||||
Tax impacts of adjustments (2) |
(4.1) |
(8.6) |
||||||
Tax adjustments (3) |
7.7 |
63.7 |
||||||
Adjusted net income |
$ |
10.7 |
$ |
6.6 |
||||
Diluted loss per common share |
$ |
(0.07) |
$ |
(1.16) |
||||
Diluted adjustments per common share |
0.24 |
1.27 |
||||||
Diluted adjusted earnings per common share |
$ |
0.17 |
$ |
0.11 |
||||
Diluted weighted-average outstanding common shares and equivalents |
62.4 |
62.0 |
||||||
(1) See summary of adjustments in Table Four - EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Free Cash Flow. | ||||||||
(2) Tax rates used to calculate the tax expense impact are based on the nature of each adjustment. | ||||||||
(3) Represents adjustments to income tax expense for the |
TABLE SIX | ||||||||
| ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited) | ||||||||
(Amounts in millions, except share data) |
|
| ||||||
ASSETS |
||||||||
Cash and cash equivalents |
$ |
141.5 |
$ |
164.5 |
||||
Settlement assets |
3,311.2 |
3,505.6 |
||||||
Property and equipment, net |
195.5 |
199.7 |
||||||
|
442.2 |
442.2 |
||||||
Other assets |
189.6 |
193.2 |
||||||
Total assets |
$ |
4,280.0 |
$ |
4,505.2 |
||||
LIABILITIES |
||||||||
Payment service obligations |
$ |
3,311.2 |
$ |
3,505.6 |
||||
Debt |
940.8 |
942.6 |
||||||
Pension and other postretirement benefits |
94.0 |
96.3 |
||||||
Accounts payable and other liabilities |
158.3 |
183.5 |
||||||
Total liabilities |
4,504.3 |
4,728.0 |
||||||
STOCKHOLDERS' DEFICIT |
||||||||
Participating convertible preferred stock - series D, |
183.9 |
183.9 |
||||||
Common stock, authorized, 58,823,567 shares issued at |
0.6 |
0.6 |
||||||
Additional paid-in capital |
1,007.4 |
1,002.4 |
||||||
Retained loss |
(1,260.1) |
(1,226.8) |
||||||
Accumulated other comprehensive loss |
(46.7) |
(48.7) |
||||||
|
(109.4) |
(134.2) |
||||||
Total stockholders' deficit |
(224.3) |
(222.8) |
||||||
Total liabilities and stockholders' deficit |
$ |
4,280.0 |
$ |
4,505.2 |
||||
TABLE SEVEN | ||||||
| ||||||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||
(Unaudited) | ||||||
Three Months | ||||||
(Amounts in millions) |
2016 |
2015 | ||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||
Net loss |
$ |
(4.2) |
$ |
(72.0) | ||
Adjustments to reconcile net loss to net cash used in operating activities |
3.6 |
26.0 | ||||
Net cash used in operating activities |
(0.6) |
(46.0) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||
Purchases of property and equipment |
(18.0) |
(26.9) | ||||
Net cash used in investing activities |
(18.0) |
(26.9) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||
Principal payments on debt |
(2.5) |
(2.5) | ||||
Stock repurchase |
(1.9) |
— | ||||
Net cash used in financing activities |
(4.4) |
(2.5) | ||||
NET CHANGE IN CASH AND CASH EQUIVALENTS |
(23.0) |
(75.4) | ||||
CASH AND CASH EQUIVALENTS—Beginning of period |
164.5 |
250.6 | ||||
CASH AND CASH EQUIVALENTS—End of period |
$ |
141.5 |
$ |
175.2 | ||
CONTACT:
214-979-1400
ir@moneygram.com
Media Relations:
214-979-1418
media@moneygram.com
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