MoneyGram International Reports First Quarter 2017 Financial Results
First Quarter Financial Results
- Total revenue of
$386.1 million was flat on a reported basis and increased 1% on a constant currency basis as compared to first quarter 2016. - Money transfer revenue was
$341.7 million , representing a decrease of 1% on a reported basis and an increase of 1% on a constant currency basis as compared to first quarter 2016. - Digital money transfer revenue grew 13% on a reported basis over the prior year, and represented 15% of total money transfer revenue.
- Net income was
$8.8 million , an increase of$13.0 million as compared to first quarter 2016. EBITDA was$53.4 million , a decrease of 9% as compared to the year-ago period. Net income and EBITDA in the first quarter of 2016 included a$5.5 million benefit from foreign currency gains net of one-time charges. - Adjusted EBITDA was
$66.3 million , a 2% decrease on a constant currency basis. Excluding the$5.5 million benefit from net foreign currency gains in the year-ago period, Adjusted EBITDA grew 3%. - Adjusted Free Cash Flow was
$26.8 million , a decrease of$4.8 million from the prior year. - Ending cash and cash equivalent balance of
$127.4 million atMarch 31, 2017 compared to$157.2 million at end of 2016. - Operating income was
$22.1 million , a decrease of 4%. Excluding the impact of net foreign currency gains in 2016, operating income increased 26%. - Income tax expense was
$2.5 million , representing a 22% tax rate. - Diluted earnings per share was
$0.13 compared to a loss of$0.07 last year. Adjusted diluted earnings per share was$0.26 compared to$0.17 last year.
"Revenue growth in the first quarter was flat as economic and geopolitical challenges in certain markets continue to hamper our top-line performance. Our commitment to growing profitability, however, led to improvement in both net income and earnings per share, despite the significant one-time foreign currency gain in the year-ago period," said
As recently announced,
Forward-Looking Statements
This communication contains forward-looking statements which are protected as forward-looking statements under the Private Securities Litigation Reform Act of 1995 that are not limited to historical facts, but reflect
Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in
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 certain 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 Statements of Cash Flows |
About
MoneyGram is a global provider of innovative money transfer services and is recognized worldwide as a financial connection to friends and family. Whether online, or through a mobile device, at a kiosk or in a local store, we connect consumers any way that is convenient for them. We also provide bill payment services, issue money orders and process official checks in select markets. More information about MoneyGram International, Inc. is available at moneygram.com.
TABLE ONE | ||||||||||||
| ||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
(Unaudited) | ||||||||||||
(Amounts in millions, except percentages and per share data) |
Three Months Ended |
2017 vs | ||||||||||
2017 |
2016 |
2016 | ||||||||||
REVENUE |
||||||||||||
Fee and other revenue |
$ |
380.3 |
$ |
383.4 |
$ |
(3.1) |
||||||
Investment revenue |
5.8 |
3.7 |
2.1 |
|||||||||
Total revenue |
386.1 |
387.1 |
(1.0) |
|||||||||
Total revenue growth, as reported |
— |
% |
9 |
% |
||||||||
Total revenue growth, constant currency |
1 |
% |
11 |
% |
||||||||
OPERATING EXPENSES |
||||||||||||
Commissions expense |
187.3 |
191.5 |
(4.2) |
|||||||||
Compensation and benefits |
71.5 |
71.7 |
(0.2) |
|||||||||
Transaction and operations support |
71.6 |
64.5 |
7.1 |
|||||||||
Occupancy, equipment and supplies |
15.3 |
15.2 |
0.1 |
|||||||||
Depreciation and amortization |
18.3 |
21.1 |
(2.8) |
|||||||||
Total operating expenses |
364.0 |
364.0 |
— |
|||||||||
OPERATING INCOME |
22.1 |
23.1 |
(1.0) |
|||||||||
Other expense |
||||||||||||
Interest expense |
10.8 |
11.3 |
(0.5) |
|||||||||
Total other expense |
10.8 |
11.3 |
(0.5) |
|||||||||
Income before income taxes |
11.3 |
11.8 |
(0.5) |
|||||||||
Income tax expense |
2.5 |
16.0 |
(13.5) |
|||||||||
NET INCOME (LOSS) |
$ |
8.8 |
$ |
(4.2) |
$ |
13.0 |
||||||
EARNINGS (LOSS) PER COMMON SHARE |
||||||||||||
Basic |
$ |
0.14 |
$ |
(0.07) |
$ |
0.21 |
||||||
Diluted |
$ |
0.13 |
$ |
(0.07) |
$ |
0.20 |
||||||
Weighted-average outstanding common shares and equivalents used in computing earnings (loss) per share |
||||||||||||
Basic (1) |
62.1 |
62.4 |
(0.3) |
|||||||||
Diluted (1) |
66.1 |
62.4 |
3.7 |
|||||||||
(1) Includes common stock equivalents of 8.9 million for the three months ended | ||||||||||||
Shares related to stock options |
1.9 |
3.0 |
||||||||||
Shares related to restricted stock units |
0.2 |
4.1 |
TABLE TWO | ||||||||||||
| ||||||||||||
SEGMENT RESULTS | ||||||||||||
(Unaudited) | ||||||||||||
Global Funds Transfer |
||||||||||||
(Amounts in millions, except percentages) |
Three Months Ended |
2017 vs | ||||||||||
2017 |
2016 |
2016 | ||||||||||
Money transfer revenue |
$ |
341.7 |
$ |
344.9 |
$ |
(3.2) |
||||||
Bill payment revenue |
25.1 |
24.1 |
1.0 |
|||||||||
Total revenue |
$ |
366.8 |
$ |
369.0 |
$ |
(2.2) |
||||||
Total commissions expense |
$ |
185.6 |
$ |
190.9 |
$ |
(5.3) |
||||||
Operating income |
$ |
26.1 |
$ |
23.7 |
$ |
2.4 |
||||||
Operating margin |
7.1 |
% |
6.4 |
% |
||||||||
Money transfer revenue growth, as reported |
(1) |
% |
11 |
% |
||||||||
Money transfer revenue growth, constant currency |
1 |
% |
13 |
% |
||||||||
Financial Paper Products |
||||||||||||
Three Months Ended |
2017 vs | |||||||||||
(Amounts in millions, except percentages) |
2017 |
2016 |
2016 | |||||||||
Money order revenue |
$ |
12.5 |
$ |
12.7 |
$ |
(0.2) |
||||||
Official check revenue |
6.8 |
5.4 |
1.4 |
|||||||||
Total revenue |
$ |
19.3 |
$ |
18.1 |
$ |
1.2 |
||||||
Total commissions expense |
$ |
1.7 |
$ |
0.6 |
$ |
1.1 |
||||||
Operating income |
$ |
4.8 |
$ |
4.5 |
$ |
0.3 |
||||||
Operating margin |
24.9 |
% |
24.9 |
% |
||||||||
TABLE THREE | ||||||||||||
| ||||||||||||
SEGMENT RECONCILIATIONS | ||||||||||||
(Unaudited) | ||||||||||||
Global Funds Transfer |
||||||||||||
(Amounts in millions, except percentages) |
Three Months Ended |
2017 vs | ||||||||||
2017 |
2016 |
2016 | ||||||||||
Revenue (as reported) |
$ |
366.8 |
$ |
369.0 |
$ |
(2.2) |
||||||
Adjusted operating income |
$ |
34.3 |
$ |
32.9 |
$ |
1.4 |
||||||
Compliance enhancement program |
(1.8) |
(2.8) |
1.0 |
|||||||||
Direct monitor costs |
(2.8) |
(1.9) |
(0.9) |
|||||||||
Stock-based compensation expense |
(3.6) |
(4.5) |
0.9 |
|||||||||
Total adjustments |
(8.2) |
(9.2) |
1.0 |
|||||||||
Operating income (as reported) |
$ |
26.1 |
$ |
23.7 |
$ |
2.4 |
||||||
Adjusted operating margin |
9.4 |
% |
8.9 |
% |
||||||||
Total adjustments |
(2.2) |
% |
(2.5) |
% |
||||||||
Operating margin (as reported) |
7.1 |
% |
6.4 |
% |
||||||||
Financial Paper Products |
||||||||||||
(Amounts in millions, except percentages) |
Three Months Ended |
2017 vs | ||||||||||
2017 |
2016 |
2016 | ||||||||||
Revenue (as reported) |
$ |
19.3 |
$ |
18.1 |
$ |
1.2 |
||||||
Adjusted operating income |
$ |
5.5 |
$ |
5.2 |
$ |
0.3 |
||||||
Compliance enhancement program |
(0.3) |
(0.2) |
(0.1) |
|||||||||
Stock-based compensation expense |
(0.4) |
(0.5) |
0.1 |
|||||||||
Total adjustments |
(0.7) |
(0.7) |
— |
|||||||||
Operating income (as reported) |
$ |
4.8 |
$ |
4.5 |
$ |
0.3 |
||||||
Adjusted operating margin |
28.5 |
% |
28.7 |
% |
||||||||
Total adjustments |
(3.6) |
% |
(3.9) |
% |
||||||||
Operating margin (as reported) |
24.9 |
% |
24.9 |
% |
||||||||
TABLE FOUR | ||||||||||||
| ||||||||||||
EBITDA, ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN AND ADJUSTED FREE CASH FLOW | ||||||||||||
(Unaudited) | ||||||||||||
(Amounts in millions, except percentages) |
Three Months Ended |
2017 vs | ||||||||||
2017 |
2016 |
2016 | ||||||||||
Income before income taxes |
$ |
11.3 |
$ |
11.8 |
$ |
(0.5) |
||||||
Interest expense |
10.8 |
11.3 |
(0.5) |
|||||||||
Depreciation and amortization |
18.3 |
21.1 |
(2.8) |
|||||||||
Signing bonus amortization |
13.0 |
14.3 |
(1.3) |
|||||||||
EBITDA |
53.4 |
58.5 |
(5.1) |
|||||||||
Significant items impacting EBITDA: |
||||||||||||
Stock-based, contingent and incentive compensation |
4.0 |
6.2 |
(2.2) |
|||||||||
Merger-related costs (1) |
2.8 |
— |
2.8 |
|||||||||
Direct monitor costs |
2.8 |
1.9 |
0.9 |
|||||||||
Compliance enhancement program |
2.1 |
3.0 |
(0.9) |
|||||||||
Legal and contingent matters |
1.2 |
0.2 |
1.0 |
|||||||||
Adjusted EBITDA |
$ |
66.3 |
$ |
69.8 |
$ |
(3.5) |
||||||
Adjusted EBITDA margin (2) |
17.2 |
% |
18.0 |
% |
(0.8) |
% | ||||||
Adjusted EBITDA growth, as reported |
(5) |
% |
||||||||||
Adjusted EBITDA growth, constant currency adjusted |
(2) |
% |
||||||||||
Adjusted EBITDA |
$ |
66.3 |
$ |
69.8 |
$ |
(3.5) |
||||||
Cash payments for interest |
(10.0) |
(10.4) |
0.4 |
|||||||||
Cash taxes, net |
(0.7) |
(2.4) |
1.7 |
|||||||||
Cash payments for capital expenditures |
(18.6) |
(18.0) |
(0.6) |
|||||||||
Cash payments for agent signing bonuses |
(10.2) |
(7.4) |
(2.8) |
|||||||||
Adjusted Free Cash Flow |
$ |
26.8 |
$ |
31.6 |
$ |
(4.8) |
||||||
(1) These merger-related costs include, but are not limited to, legal, bank and consultant fees. | ||||||||||||
(2) 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) |
2017 |
2016 | ||||||
Net income (loss) |
$ |
8.8 |
$ |
(4.2) |
||||
Total adjustments (1) |
12.9 |
11.3 |
||||||
Tax impacts of adjustments (2) |
(4.7) |
(4.1) |
||||||
Tax adjustments (3) |
— |
7.7 |
||||||
Adjusted net income |
$ |
17.0 |
$ |
10.7 |
||||
Diluted earnings (loss) per common share |
$ |
0.13 |
$ |
(0.07) |
||||
Diluted adjustments per common share |
0.13 |
0.24 |
||||||
Diluted adjusted earnings per common share |
$ |
0.26 |
$ |
0.17 |
||||
Diluted weighted-average outstanding common shares and equivalents |
66.1 |
62.4 |
||||||
(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 an |
TABLE SIX | ||||||||
| ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited) | ||||||||
(Amounts in millions, except share data) |
|
| ||||||
ASSETS |
||||||||
Cash and cash equivalents |
$ |
127.4 |
$ |
157.2 |
||||
Settlement assets |
3,492.9 |
3,634.3 |
||||||
Property and equipment, net |
204.8 |
201.0 |
||||||
|
442.2 |
442.2 |
||||||
Other assets |
170.2 |
162.7 |
||||||
Total assets |
$ |
4,437.5 |
$ |
4,597.4 |
||||
LIABILITIES |
||||||||
Payment service obligations |
$ |
3,492.9 |
$ |
3,634.3 |
||||
Debt, net |
913.4 |
915.2 |
||||||
Pension and other postretirement benefits |
79.6 |
87.6 |
||||||
Accounts payable and other liabilities |
150.9 |
168.7 |
||||||
Total liabilities |
4,636.8 |
4,805.8 |
||||||
STOCKHOLDERS' DEFICIT |
||||||||
Participating convertible preferred stock - series D, |
183.9 |
183.9 |
||||||
Common stock, |
0.6 |
0.6 |
||||||
Additional paid-in capital |
1,024.3 |
1,020.3 |
||||||
Retained loss |
(1,283.5) |
(1,247.6) |
||||||
Accumulated other comprehensive loss |
(50.9) |
(53.9) |
||||||
|
(73.7) |
(111.7) |
||||||
Total stockholders' deficit |
(199.3) |
(208.4) |
||||||
Total liabilities and stockholders' deficit |
$ |
4,437.5 |
$ |
4,597.4 |
||||
TABLE SEVEN | ||||||||
| ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
(Amounts in millions) |
2017 |
2016 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
Net income (loss) |
$ |
8.8 |
$ |
(4.2) |
||||
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: |
(18.4) |
4.3 |
||||||
Net cash (used in) provided by operating activities |
(9.6) |
0.1 |
||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
Purchases of property and equipment |
(18.6) |
(18.0) |
||||||
Net cash used in investing activities |
(18.6) |
(18.0) |
||||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
Principal payments on debt |
(2.5) |
(2.5) |
||||||
Proceeds from exercise of stock options |
0.9 |
— |
||||||
Stock repurchases |
— |
(1.9) |
||||||
Payments to tax authorities for stock-based compensation |
— |
(0.7) |
||||||
Net cash used in financing activities |
(1.6) |
(5.1) |
||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS |
(29.8) |
(23.0) |
||||||
CASH AND CASH EQUIVALENTS—Beginning of period |
157.2 |
164.5 |
||||||
CASH AND CASH EQUIVALENTS—End of period |
$ |
127.4 |
$ |
141.5 |
||||
CONTACT:
214-979-1400
ir@moneygram.com
Media Relations:
214-979-1418
media@moneygram.com
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