MoneyGram International Reports First Quarter 2019 Financial Results
Business Update
"The financial results for the first quarter are in line with the Company's expectations and include the impact of seasonality as the first quarter of the year generally represents a seasonal low point for revenue. The comparisons to last year's first quarter results were further compounded by the de-risking initiatives that began in 2018," said
Holmes added: "Importantly, first quarter results include the continued success of the Company's cost reduction and efficiency efforts, which exceeded expectations, along with the commencement of growth trends in several of our major corridors on a year-over-year basis. As we continue our journey of transformation, we remain focused on executing our corporate strategy to return to growth in the second half of this year."
First Quarter 2019 Financial Results
- Total revenue was
$315.4 million and$380.0 million for the three months endedMarch 31, 2019 and 2018, respectively. - Money transfer revenue was
$273.3 million for the quarter compared to$336.6 million for the three months endedMarch 31, 2018 . - Total digital revenue represented 16% of money transfer revenue.
- Investment revenue was
$14.4 million . - Net loss was
$13.5 million compared to net income of$7.1 million for the first quarter of 2018. EBITDA was$37.7 million , a decrease of$28.6 million as compared to the year-ago period. The prior-year period included$30.0 million of income related to the terminated merger with Ant Financial. - Adjusted EBITDA was
$50.1 million for the three months endedMarch 31, 2019 . Adjusted EBITDA was$66.6 million for the three months endedMarch 31, 2018 . - Adjusted EBITDA margin was 15.9%.
- Diluted loss per share was
$0.21 . Adjusted diluted loss per share was$0.06 . - Adjusted Free Cash Flow was
$13.3 million for the quarter.
Balance Sheet Highlights
The Company ended the first quarter of 2019 with a cash and cash equivalents balance of
Capital Structure Update
As announced today,
Full Year 2019 Outlook
For the full year 2019, the Company is projecting revenue to decline approximately 2 to 4 percent on a constant currency basis and Adjusted EBITDA is expected to decline approximately 8 to 12 percent on a constant currency basis.
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 accounting principles generally accepted in
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 |
- |
Reconciliation of Certain Non GAAP Measures to Relevant GAAP Measures - EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Free Cash Flow |
Table Five |
- |
Reconciliation of Certain Non GAAP Measures to Relevant GAAP Measures - Adjusted Net Income and Adjusted Diluted EPS |
Table Six |
- |
Condensed Consolidated Balance Sheets |
Table Seven |
- |
Condensed Consolidated Statements of Cash Flows |
Conference Call
Participant Dial-In Numbers: |
|
U.S.: |
1-800-458-4148 |
International: |
1-929-477-0324 |
Webcast: |
|
Replay: |
1-844-512-2921 or 1-412-317-6671 |
Replay ID: |
2681217 |
Replay is available through May 15, 2019 |
About
CONTACT:
Investor Relations:
214-979-1400
ir@moneygram.com
Media Relations:
214-999-7687
media@moneygram.com
TABLE ONE |
||||||||||||
MONEYGRAM INTERNATIONAL, INC. |
||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||
(Unaudited) |
||||||||||||
(Amounts in millions, except percentages and per share data) |
Three Months |
2019 |
||||||||||
2019 |
2018 |
2018 |
||||||||||
REVENUE |
||||||||||||
Fee and other revenue |
$ |
301.0 |
$ |
370.1 |
$ |
(69.1) |
||||||
Investment revenue |
14.4 |
9.9 |
4.5 |
|||||||||
Total revenue |
315.4 |
380.0 |
(64.6) |
|||||||||
Total revenue change, as reported |
(17) |
% |
||||||||||
Total revenue change, constant currency |
(15) |
% |
||||||||||
OPERATING EXPENSES |
||||||||||||
Total commissions and direct transaction expenses |
160.9 |
185.5 |
(24.6) |
|||||||||
Compensation and benefits |
59.4 |
79.3 |
(19.9) |
|||||||||
Transaction and operations support (1) |
52.1 |
74.8 |
(22.7) |
|||||||||
Occupancy, equipment and supplies |
15.4 |
16.6 |
(1.2) |
|||||||||
Depreciation and amortization |
19.0 |
18.1 |
0.9 |
|||||||||
Total operating expenses |
306.8 |
374.3 |
(67.5) |
|||||||||
OPERATING INCOME |
8.6 |
5.7 |
2.9 |
|||||||||
Other expenses (income) |
||||||||||||
Interest expense |
13.9 |
12.3 |
1.6 |
|||||||||
Other non-operating expense (income) |
1.6 |
(28.5) |
30.1 |
|||||||||
Total other expenses (income) |
15.5 |
(16.2) |
31.7 |
|||||||||
(Loss) income before income taxes |
(6.9) |
21.9 |
(28.8) |
|||||||||
Income tax expense |
6.6 |
14.8 |
(8.2) |
|||||||||
NET (LOSS) INCOME |
$ |
(13.5) |
$ |
7.1 |
$ |
(20.6) |
||||||
(LOSS) INCOME PER COMMON SHARE |
||||||||||||
Basic |
$ |
(0.21) |
$ |
0.11 |
$ |
(0.32) |
||||||
Diluted |
$ |
(0.21) |
$ |
0.11 |
$ |
(0.32) |
||||||
Weighted-average outstanding common shares and equivalents used in computing (loss) income per share |
||||||||||||
Basic |
64.8 |
63.8 |
1.0 |
|||||||||
Diluted |
64.8 |
66.2 |
(1.4) |
|||||||||
(1) Three months ended March 31, 2018 include an accrual of $10.0 million related to the resolution of the DPA matter. |
TABLE TWO |
||||||||||||
MONEYGRAM INTERNATIONAL, INC. |
||||||||||||
SEGMENT RESULTS |
||||||||||||
(Unaudited) |
||||||||||||
Global Funds Transfer |
||||||||||||
(Amounts in millions, except percentages) |
Three Months |
2019 vs |
||||||||||
2019 |
2018 |
2018 |
||||||||||
Money transfer revenue |
$ |
273.3 |
$ |
336.6 |
$ |
(63.3) |
||||||
Bill payment revenue |
15.9 |
20.8 |
(4.9) |
|||||||||
Total revenue |
$ |
289.2 |
$ |
357.4 |
$ |
(68.2) |
||||||
Commissions and direct transaction expenses |
$ |
154.3 |
$ |
181.7 |
$ |
(27.4) |
||||||
Operating income |
$ |
1.1 |
$ |
1.4 |
$ |
(0.3) |
||||||
Operating margin |
0.4 |
% |
0.4 |
% |
||||||||
Money transfer revenue change, as reported |
(19) |
% |
||||||||||
Money transfer revenue change, constant currency |
(16) |
% |
||||||||||
Financial Paper Products |
||||||||||||
(Amounts in millions, except percentages) |
Three Months |
2019 vs |
||||||||||
2019 |
2018 |
2018 |
||||||||||
Money order revenue |
$ |
13.9 |
$ |
13.4 |
$ |
0.5 |
||||||
Official check revenue |
12.3 |
9.2 |
3.1 |
|||||||||
Total revenue |
$ |
26.2 |
$ |
22.6 |
$ |
3.6 |
||||||
Total commissions expense |
$ |
6.6 |
$ |
3.8 |
$ |
2.8 |
||||||
Operating income |
$ |
8.2 |
$ |
5.6 |
$ |
2.6 |
||||||
Operating margin |
31.3 |
% |
24.8 |
% |
||||||||
TABLE THREE |
||||||||||||
MONEYGRAM INTERNATIONAL, INC. |
||||||||||||
SEGMENT RECONCILIATIONS |
||||||||||||
(Unaudited) |
||||||||||||
Global Funds Transfer |
||||||||||||
(Amounts in millions, except percentages) |
Three Months |
2019 |
||||||||||
2019 |
2018 |
2018 |
||||||||||
Revenue (as reported) |
$ |
289.2 |
$ |
357.4 |
$ |
(68.2) |
||||||
Adjusted operating income |
$ |
12.3 |
$ |
29.9 |
$ |
(17.6) |
||||||
Legal and contingent matters |
— |
(11.4) |
11.4 |
|||||||||
Restructuring and reorganization costs |
(3.6) |
(7.3) |
3.7 |
|||||||||
Compliance enhancement program |
(1.1) |
(2.4) |
1.3 |
|||||||||
Direct monitor costs |
(4.1) |
(3.1) |
(1.0) |
|||||||||
Stock-based compensation expense |
(2.4) |
(4.3) |
1.9 |
|||||||||
Total adjustments |
(11.2) |
(28.5) |
17.3 |
|||||||||
Operating income (as reported) |
$ |
1.1 |
$ |
1.4 |
$ |
(0.3) |
||||||
Adjusted operating margin |
4.3 |
% |
8.4 |
% |
||||||||
Total adjustments |
(3.9) |
% |
(8.0) |
% |
||||||||
Operating margin (as reported) |
0.4 |
% |
0.4 |
% |
||||||||
Financial Paper Products |
||||||||||||
(Amounts in millions, except percentages) |
Three Months |
2019 |
||||||||||
2019 |
2018 |
2018 |
||||||||||
Revenue (as reported) |
$ |
26.2 |
$ |
22.6 |
$ |
3.6 |
||||||
Adjusted operating income |
$ |
8.8 |
$ |
6.3 |
$ |
2.5 |
||||||
Compliance enhancement program |
(0.4) |
(0.2) |
(0.2) |
|||||||||
Stock-based compensation expense |
(0.2) |
(0.5) |
0.3 |
|||||||||
Total adjustments |
(0.6) |
(0.7) |
0.1 |
|||||||||
Operating income (as reported) |
$ |
8.2 |
$ |
5.6 |
$ |
2.6 |
||||||
Adjusted operating margin |
33.6 |
% |
27.9 |
% |
||||||||
Total adjustments |
(2.3) |
% |
(3.1) |
% |
||||||||
Operating margin (as reported) |
31.3 |
% |
24.8 |
% |
||||||||
TABLE FOUR |
||||||||||||
MONEYGRAM INTERNATIONAL, INC. |
||||||||||||
RECONCILIATION OF CERTAIN NON GAAP MEASURES TO RELEVANT GAAP MEASURES |
||||||||||||
EBITDA, ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN AND ADJUSTED FREE CASH FLOW |
||||||||||||
(Unaudited) |
||||||||||||
(Amounts in millions, except percentages) |
Three Months |
2019 vs |
||||||||||
2019 |
2018 |
2018 |
||||||||||
(Loss) income before income taxes |
$ |
(6.9) |
$ |
21.9 |
$ |
(28.8) |
||||||
Interest expense |
13.9 |
12.3 |
1.6 |
|||||||||
Depreciation and amortization |
19.0 |
18.1 |
0.9 |
|||||||||
Signing bonus amortization |
11.7 |
14.0 |
(2.3) |
|||||||||
EBITDA |
37.7 |
66.3 |
(28.6) |
|||||||||
Significant items impacting EBITDA: |
||||||||||||
Direct monitor costs |
4.1 |
3.1 |
1.0 |
|||||||||
Restructuring and reorganization costs |
3.5 |
7.3 |
(3.8) |
|||||||||
Stock-based, contingent and incentive compensation |
2.6 |
4.8 |
(2.2) |
|||||||||
Compliance enhancement program |
1.5 |
2.6 |
(1.1) |
|||||||||
Legal and contingent matters (1) |
0.6 |
11.4 |
(10.8) |
|||||||||
Severance and related costs |
0.1 |
0.4 |
(0.3) |
|||||||||
Costs (income) related to the terminated merger with Ant Financial (2) |
— |
(29.3) |
29.3 |
|||||||||
Adjusted EBITDA |
$ |
50.1 |
$ |
66.6 |
$ |
(16.5) |
||||||
Adjusted EBITDA margin (3) |
15.9 |
% |
17.5 |
% |
(1.6) |
% |
||||||
Adjusted EBITDA change, as reported |
(25) |
% |
||||||||||
Adjusted EBITDA change, constant currency adjusted |
(22) |
% |
||||||||||
Adjusted EBITDA |
$ |
50.1 |
$ |
66.6 |
$ |
(16.5) |
||||||
Cash payments for interest |
(12.8) |
(11.5) |
(1.3) |
|||||||||
Cash payments for taxes, net of refunds |
(1.2) |
(1.6) |
0.4 |
|||||||||
Cash payments for capital expenditures |
(12.7) |
(12.3) |
(0.4) |
|||||||||
Cash payments for agent signing bonuses |
(10.1) |
(11.8) |
1.7 |
|||||||||
Adjusted Free Cash Flow |
$ |
13.3 |
$ |
29.4 |
$ |
(16.1) |
||||||
(1) Three months ended March 31, 2018 includes an accrual of $10.0 million related to the resolution of the DPA matter. |
||||||||||||
(2) Costs include, but are not limited to, legal, bank and consultant fees and income includes the $30.0 million merger termination fee. |
||||||||||||
(3) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenue. |
TABLE FIVE |
||||||||
MONEYGRAM INTERNATIONAL, INC. |
||||||||
RECONCILIATION OF CERTAIN NON GAAP MEASURES TO RELEVANT GAAP MEASURES |
||||||||
ADJUSTED NET INCOME AND ADJUSTED DILUTED EPS |
||||||||
(Unaudited) |
||||||||
Three Months |
||||||||
(Amounts in millions, except per share data) |
2019 |
2018 |
||||||
Net (loss) income |
$ |
(13.5) |
$ |
7.1 |
||||
Total adjustments (1) |
12.4 |
0.3 |
||||||
Tax impacts of adjustments (2) |
(2.8) |
2.7 |
||||||
Adjusted net (loss) income |
$ |
(3.9) |
$ |
10.1 |
||||
Diluted (loss) income per common share |
$ |
(0.21) |
$ |
0.11 |
||||
Diluted adjustments per common share |
0.15 |
0.04 |
||||||
Diluted adjusted (loss) income per common share |
$ |
(0.06) |
$ |
0.15 |
||||
Diluted weighted-average outstanding common shares and equivalents |
64.8 |
66.2 |
||||||
(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 and jurisdiction of each adjustment. |
TABLE SIX |
||||||||
MONEYGRAM INTERNATIONAL, INC. |
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(Unaudited) |
||||||||
(Amounts in millions, except share data) |
March 31, 2019 |
December 31, 2018 |
||||||
ASSETS |
||||||||
Cash and cash equivalents |
$ |
129.9 |
$ |
145.5 |
||||
Settlement assets |
3,416.3 |
3,373.8 |
||||||
Property and equipment, net |
187.6 |
193.9 |
||||||
Goodwill |
442.2 |
442.2 |
||||||
Other assets (1) |
189.3 |
140.7 |
||||||
Total assets |
$ |
4,365.3 |
$ |
4,296.1 |
||||
LIABILITIES |
||||||||
Payment service obligations |
$ |
3,416.3 |
$ |
3,373.8 |
||||
Debt, net |
899.2 |
901.0 |
||||||
Pension and other postretirement benefits |
71.9 |
76.6 |
||||||
Accounts payable and other liabilities (1) |
260.2 |
213.5 |
||||||
Total liabilities |
4,647.6 |
4,564.9 |
||||||
STOCKHOLDERS' DEFICIT |
||||||||
Participating convertible preferred stock - series D, $0.01 par value, 200,000 shares authorized, 71,282 issued at March 31, 2019 and December 31, 2018 |
183.9 |
183.9 |
||||||
Common stock, $0.01 par value, 162,500,000 shares authorized, 58,823,567 shares issued at March 31, 2019 and December 31, 2018 |
0.6 |
0.6 |
||||||
Additional paid-in capital |
1,049.4 |
1,046.8 |
||||||
Retained loss |
(1,411.5) |
(1,403.6) |
||||||
Accumulated other comprehensive loss |
(84.7) |
(67.5) |
||||||
Treasury stock: 2,508,798 and 3,207,118 shares at March 31, 2019 and December 31, 2018, respectively |
(20.0) |
(29.0) |
||||||
Total stockholders' deficit |
(282.3) |
(268.8) |
||||||
Total liabilities and stockholders' deficit |
$ |
4,365.3 |
$ |
4,296.1 |
||||
(1) 2019 financial information reflects the adoption of ASC 842 - Leases. Other Assets includes $49.6 million of right-of-use assets related to the Company's operating leases and Accounts payable and other liabilities includes $53.0 million of lease liabilities. |
TABLE SEVEN |
||||||||
MONEYGRAM INTERNATIONAL, INC. |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(Unaudited) |
||||||||
Three Months Ended March 31, |
||||||||
(Amounts in millions) |
2019 |
2018 |
||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
Net (loss) income |
$ |
(13.5) |
$ |
7.1 |
||||
Adjustments to reconcile net loss to net cash provided by operating activities |
13.8 |
23.4 |
||||||
Net cash provided by operating activities |
0.3 |
30.5 |
||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
Purchases of property and equipment |
(12.7) |
(12.3) |
||||||
Net cash used in investing activities |
(12.7) |
(12.3) |
||||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
Principal payments on debt |
(2.5) |
(2.4) |
||||||
Payments to tax authorities for stock-based compensation |
(0.7) |
(6.1) |
||||||
Net cash used in financing activities |
(3.2) |
(8.5) |
||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS |
(15.6) |
9.7 |
||||||
CASH AND CASH EQUIVALENTS—Beginning of period |
145.5 |
190.0 |
||||||
CASH AND CASH EQUIVALENTS—End of period |
$ |
129.9 |
$ |
199.7 |
||||
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