MoneyGram International Reports First Quarter 2021 Results
First Quarter 2021 Business Highlights
"Our customer-centric strategy helped drive a strong start to the year with money transfer revenue growth accelerating to 12% as the digital business continues to overperform reaching 32% of total money transfer transactions at the end of March," said
Digital performance in the first quarter was led by
• MGO delivered a record quarter for customers, transactions and revenue, exceeding its all-time high achieved in the fourth quarter of 2020 |
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° Year-over-year, MGO delivered 119% revenue growth and 102% transaction growth on the strength of new app downloads and customer retention rates |
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° Year-over-year, cross-border online revenue grew an impressive 131% and transactions grew an equally impressive 130% |
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• Total digital, which includes MGO, reported year-over-year transaction growth of 86% in the first quarter |
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° Digital revenue reached a new record of |
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° Digital partnerships delivered transaction growth of 47% year-over-year |
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° Payouts through account deposit, Visa Direct and mobile wallets increased 128% year-over-year |
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• Digital transactions accounted for 32% of all money transfer transactions at the end of March |
First Quarter 2021 Financial Results, Year-Over-Year
• Total revenue of |
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° Money transfer revenue was |
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° Investment revenue was |
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• Gross Profit was |
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• Total operating expenses were |
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° Transaction and Operations Support expenses increased |
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▪ The elimination of the |
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° Compensation and Benefits were |
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• Operating Income was |
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• Net loss of |
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• Diluted loss per share was |
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• Adjusted EBITDA decreased 3% to |
Holmes concluded, "As part of the next phase of our digital transformation and in response to market demand to access our leading capabilities, we launched a new business line to open our platform to new customers and use cases. Over the last few years, we've built an API-driven infrastructure that enables us to seamlessly scale volume through our global network, and we're excited about this strategic growth opportunity to monetize our capabilities in new ways."
Balance Sheet and Liquidity
• Cash and cash equivalents was |
• First quarter interest expense was |
In addition, the joint status report states that on
Second Quarter 2021 Outlook
The Company is providing the following outlook for the quarter ending
The Company anticipates total revenue in the range of
The Company anticipates Adjusted EBITDA in the range of
Conference Call
Participant Dial-In Numbers: |
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1-800-239-9838 |
International: |
1-929-477-0402 |
Webcast: |
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Replay: |
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Replay ID: |
7162032 |
Replay is available through |
About
The Company leverages its modern, mobile, and API-driven platform and collaborates with the world's leading brands to serve consumers through MoneyGram Online (MGO), its direct-to-consumer digital business, its global retail network and its emerging embedded finance business for enterprise customers,
For more information, please visit ir.moneygram.com and follow @MoneyGram.
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
These risks and uncertainties include, but are not limited to:
• the impact of the COVID-19 pandemic or future pandemics on our business, including the potential for work stoppages, lockdowns, shelter-in-place, or restricted movement guidelines, service delays, lower consumer and commercial activity; |
• our ability to compete effectively; |
• our ability to maintain key agent or biller relationships, or a reduction in business or transaction volume from these relationships, including our largest agent, Walmart, whether through the introduction by Walmart of additional competing "white label" branded money transfer products or otherwise; |
• our ability to manage fraud risks from consumers or agents; |
• the ability of us and our agents and other commercial relationships to comply with |
• litigation or investigations involving us or our agents and other commercial relationships, which could result in material settlements, fines or penalties, termination of contracts, other administrative actions or lawsuits and negative publicity; |
• regulations addressing consumer privacy, data use and security; |
• our ability to successfully develop and timely introduce new and enhanced products and services and our investments in new products, services or infrastructure changes; |
• our ability to manage risks associated with our international sales and operations; |
• our offering of money transfer services through agents in regions that are politically volatile; |
• changes in tax laws or an unfavorable outcome with respect to the audit of our tax returns or tax positions, or a failure by us to establish adequate reserves for tax events; |
• our substantial debt service obligations, significant debt covenant requirements and credit ratings; |
• major bank failure or sustained financial market illiquidity, or illiquidity at our clearing, cash management and custodial financial institutions; |
• the ability of us and our agents to maintain adequate banking relationships; |
• a security or privacy breach in systems, networks or databases on which we rely and disruptions to our computer network systems and data centers; |
• weakness in economic conditions, in both the |
• a significant change, material slow down or complete disruption of international migration patterns; |
• the financial health of certain European countries or the secession of a country from the |
• our ability to manage credit risks from our agents and official check financial institution consumers; |
• our ability to adequately protect our brand and intellectual property rights and to avoid infringing on the rights of others; |
• our ability to manage risks related to the operation of retail locations and the acquisition or start-up of businesses; |
• any restructuring actions and cost reduction initiatives that we undertake may not deliver the expected results and these actions may adversely affect our business; |
• our capital structure; |
• and uncertainties described in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of |
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, diluted adjusted income (loss) per share and adjusted net income (loss) 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 |
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Condensed Consolidated Statements of Operations |
Table Two |
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Segment Results |
Table Three |
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Segment Reconciliations |
Table Four |
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Reconciliation of Certain Non-GAAP Measures to Relevant GAAP Measures - EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Free Cash Flow |
Table Five |
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Reconciliation of Certain Non-GAAP Measures to Relevant GAAP Measures - Adjusted Net Loss and Adjusted Diluted EPS |
Table Six |
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Condensed Consolidated Balance Sheets |
Table Seven |
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Condensed Consolidated Statements of Cash Flows |
CONTACTS |
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Investor Relations: |
Media Relations: |
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214-979-1400 |
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TABLE ONE |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||
(Unaudited) |
||||||||||||
(Amounts in millions, except percentages and per share data) |
Three Months Ended |
2021 vs |
||||||||||
2021 |
2020 |
2020 |
||||||||||
REVENUE |
||||||||||||
Fee and other revenue |
$ |
308.1 |
$ |
280.8 |
$ |
27.3 |
||||||
Investment revenue |
2.0 |
10.1 |
(8.1) |
|||||||||
Total revenue |
310.1 |
290.9 |
19.2 |
|||||||||
Total revenue change, as reported |
7 |
% |
(8) |
% |
||||||||
Total revenue change, constant currency |
3 |
% |
(7) |
% |
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COST OF REVENUE |
||||||||||||
Commissions and other fee expense |
149.9 |
143.2 |
6.7 |
|||||||||
Investment commissions expense |
0.2 |
3.0 |
(2.8) |
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Direct transaction expense |
15.2 |
8.2 |
7.0 |
|||||||||
Total cost of revenue |
165.3 |
154.4 |
10.9 |
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GROSS PROFIT |
144.8 |
136.5 |
8.3 |
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OPERATING EXPENSES |
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Compensation and benefits |
62.2 |
53.4 |
8.8 |
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Transaction and operations support (1) |
43.4 |
38.0 |
5.4 |
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Occupancy, equipment and supplies |
15.5 |
14.9 |
0.6 |
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Depreciation and amortization |
15.3 |
17.1 |
(1.8) |
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Total operating expenses |
136.4 |
123.4 |
13.0 |
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OPERATING INCOME |
8.4 |
13.1 |
(4.7) |
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Other expenses |
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Interest expense |
22.3 |
23.8 |
(1.5) |
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Other non-operating expense |
1.0 |
1.1 |
(0.1) |
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Total other expenses |
23.3 |
24.9 |
(1.6) |
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Loss before income taxes |
(14.9) |
(11.8) |
(3.1) |
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Income tax expense |
0.5 |
9.7 |
(9.2) |
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NET LOSS |
$ |
(15.4) |
$ |
(21.5) |
$ |
6.1 |
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Basic and diluted loss per common share |
$ |
(0.19) |
$ |
(0.28) |
$ |
0.09 |
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Basic and diluted weighted-average outstanding common shares and equivalents used in computing loss per common share |
79.6 |
77.4 |
2.2 |
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(1) Three months ended |
TABLE TWO |
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SEGMENT RESULTS |
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(Unaudited) |
||||||||||||
Global Funds Transfer |
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(Amounts in millions, except percentages) |
Three Months Ended |
2021 vs |
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2021 |
2020 |
2020 |
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Money transfer revenue |
$ |
285.4 |
$ |
255.9 |
$ |
29.5 |
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Bill payment revenue |
10.8 |
13.4 |
(2.6) |
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Total revenue |
$ |
296.2 |
$ |
269.3 |
$ |
26.9 |
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Commissions and other fee and direct transaction expenses |
$ |
165.1 |
$ |
151.3 |
$ |
13.8 |
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Gross profit |
$ |
131.1 |
$ |
118.0 |
$ |
13.1 |
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Operating income |
$ |
6.0 |
$ |
6.7 |
$ |
(0.7) |
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Operating margin |
2.0 |
% |
2.5 |
% |
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Money transfer revenue change, as reported |
12 |
% |
(6) |
% |
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Money transfer revenue change, constant currency |
8 |
% |
(5) |
% |
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Financial Paper Products |
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(Amounts in millions, except percentages) |
Three Months Ended |
2021 vs |
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2021 |
2020 |
2020 |
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Money order revenue |
$ |
10.4 |
$ |
12.1 |
$ |
(1.7) |
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Official check revenue |
3.5 |
9.5 |
(6.0) |
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Total revenue |
$ |
13.9 |
$ |
21.6 |
$ |
(7.7) |
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Investment commissions expense |
$ |
0.2 |
$ |
3.1 |
$ |
(2.9) |
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Gross profit |
$ |
13.7 |
$ |
18.5 |
$ |
(4.8) |
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Operating income |
$ |
2.5 |
$ |
7.0 |
$ |
(4.5) |
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Operating margin |
18.0 |
% |
32.4 |
% |
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TABLE THREE |
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SEGMENT RECONCILIATIONS |
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(Unaudited) |
||||||||||||
Global Funds Transfer |
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(Amounts in millions, except percentages) |
Three Months Ended |
2021 vs |
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2021 |
2020 |
2020 |
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Revenue (as reported) |
$ |
296.2 |
$ |
269.3 |
$ |
26.9 |
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Operating income (as reported) |
$ |
6.0 |
$ |
6.7 |
$ |
(0.7) |
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Legal and contingent matters |
— |
0.3 |
(0.3) |
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Restructuring and reorganization costs |
5.7 |
0.5 |
5.2 |
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Compliance enhancement program |
0.9 |
1.6 |
(0.7) |
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Direct monitor costs |
3.8 |
4.8 |
(1.0) |
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Stock-based compensation expense |
1.7 |
1.8 |
(0.1) |
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Total adjustments |
12.1 |
9.0 |
3.1 |
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Adjusted operating income |
$ |
18.1 |
$ |
15.7 |
$ |
2.4 |
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Operating margin (as reported) |
2.0 |
% |
2.5 |
% |
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Total adjustments |
4.1 |
% |
3.3 |
% |
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Adjusted operating margin |
6.1 |
% |
5.8 |
% |
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Financial Paper Products |
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(Amounts in millions, except percentages) |
Three Months Ended |
2021 vs |
||||||||||
2021 |
2020 |
2020 |
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Revenue (as reported) |
$ |
13.9 |
$ |
21.6 |
$ |
(7.7) |
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Operating income (as reported) |
$ |
2.5 |
$ |
7.0 |
$ |
(4.5) |
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Restructuring and reorganization costs |
0.2 |
— |
0.2 |
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Compliance enhancement program |
0.2 |
0.4 |
(0.2) |
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Stock-based compensation expense |
0.1 |
0.2 |
(0.1) |
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Total adjustments |
0.5 |
0.6 |
(0.1) |
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Adjusted operating income |
$ |
3.0 |
$ |
7.6 |
$ |
(4.6) |
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Operating margin (as reported) |
18.0 |
% |
32.4 |
% |
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Total adjustments |
3.6 |
% |
2.8 |
% |
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Adjusted operating margin |
21.6 |
% |
35.2 |
% |
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TABLE FOUR |
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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 Ended |
2021 vs |
||||||||||
2021 |
2020 |
2020 |
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Loss before income taxes |
$ |
(14.9) |
$ |
(11.8) |
$ |
(3.1) |
||||||
Interest expense |
22.3 |
23.8 |
(1.5) |
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Depreciation and amortization |
15.3 |
17.1 |
(1.8) |
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Signing bonus amortization |
14.3 |
12.5 |
1.8 |
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EBITDA |
37.0 |
41.6 |
(4.6) |
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Significant items impacting EBITDA: |
||||||||||||
Restructuring and reorganization costs |
5.9 |
0.5 |
5.4 |
|||||||||
Direct monitor costs |
3.8 |
4.8 |
(1.0) |
|||||||||
Stock-based, contingent and incentive compensation |
1.8 |
2.0 |
(0.2) |
|||||||||
Compliance enhancement program |
1.1 |
2.0 |
(0.9) |
|||||||||
Severance and related costs |
0.2 |
0.2 |
— |
|||||||||
Legal and contingent matters |
0.1 |
0.4 |
(0.3) |
|||||||||
Adjusted EBITDA |
$ |
49.9 |
$ |
51.5 |
$ |
(1.6) |
||||||
Adjusted EBITDA margin (1) |
16.1 |
% |
17.7 |
% |
(1.6) |
% |
||||||
Adjusted EBITDA change, as reported |
(3) |
% |
||||||||||
Adjusted EBITDA change, constant |
(11) |
% |
||||||||||
Adjusted EBITDA |
$ |
49.9 |
$ |
51.5 |
$ |
(1.6) |
||||||
Cash payments for interest |
(11.9) |
(17.6) |
5.7 |
|||||||||
Cash payments for taxes, net of refunds |
2.7 |
(2.1) |
4.8 |
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Cash payments for capital expenditures |
(11.2) |
(10.1) |
(1.1) |
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Cash payments for agent signing bonuses |
(13.0) |
(25.0) |
12.0 |
|||||||||
Adjusted Free Cash Flow |
$ |
16.5 |
$ |
(3.3) |
$ |
19.8 |
||||||
(1) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenue. |
TABLE FIVE |
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RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO RELEVANT GAAP MEASURES |
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ADJUSTED NET LOSS AND ADJUSTED DILUTED EPS |
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(Unaudited) |
||||||||
Three Months Ended |
||||||||
(Amounts in millions, except per share data) |
2021 |
2020 |
||||||
Net loss |
$ |
(15.4) |
$ |
(21.5) |
||||
Total adjustments (1) |
12.9 |
9.9 |
||||||
Tax impacts of adjustments (2) |
(3.0) |
(2.3) |
||||||
Valuation allowance (3) |
1.0 |
10.1 |
||||||
Adjusted net loss |
$ |
(4.5) |
$ |
(3.8) |
||||
Diluted earnings loss per common share |
$ |
(0.19) |
$ |
(0.28) |
||||
Diluted adjustments per common share |
0.13 |
0.23 |
||||||
Diluted adjusted loss per common share |
$ |
(0.06) |
$ |
(0.05) |
||||
Diluted weighted-average outstanding common shares and equivalents |
79.6 |
77.4 |
||||||
(1) See summary of adjustments in Table Four - EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Free Cash Flow. |
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(2) Tax rates used to calculate the tax expense impact are based on the nature and jurisdiction of each adjustment. |
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(3) Valuation allowance recorded for deferred tax assets existing at the beginning of the year. |
TABLE SIX |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(Unaudited) |
||||||||
(Amounts in millions, except share data) |
|
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ASSETS |
||||||||
Cash and cash equivalents |
$ |
152.8 |
$ |
196.1 |
||||
Settlement assets |
3,667.0 |
3,702.9 |
||||||
Property and equipment, net |
142.7 |
148.1 |
||||||
|
442.2 |
442.2 |
||||||
Right-of-use assets |
54.5 |
55.1 |
||||||
Other assets |
128.4 |
129.7 |
||||||
Total assets |
$ |
4,587.6 |
$ |
4,674.1 |
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LIABILITIES |
||||||||
Payment service obligations |
$ |
3,667.0 |
$ |
3,702.9 |
||||
Debt, net |
858.8 |
857.8 |
||||||
Pension and other postretirement benefits |
75.0 |
74.5 |
||||||
Lease liabilities |
58.0 |
59.1 |
||||||
Accounts payable and other liabilities |
188.0 |
216.8 |
||||||
Total liabilities |
4,846.8 |
4,911.1 |
||||||
STOCKHOLDERS' DEFICIT |
||||||||
Common stock, |
0.8 |
0.7 |
||||||
Additional paid-in capital |
1,297.8 |
1,296.0 |
||||||
Retained loss |
(1,490.8) |
(1,475.3) |
||||||
Accumulated other comprehensive loss |
(63.4) |
(58.4) |
||||||
|
(3.6) |
— |
||||||
Total stockholders' deficit |
(259.2) |
(237.0) |
||||||
Total liabilities and stockholders' deficit |
$ |
4,587.6 |
$ |
4,674.1 |
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TABLE SEVEN |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(Unaudited) |
||||||||
Three Months Ended |
||||||||
(Amounts in millions) |
2021 |
2020 |
||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
Net loss |
$ |
(15.4) |
$ |
(21.5) |
||||
Adjustments to reconcile net loss to net cash used in operating activities: |
(11.5) |
(4.9) |
||||||
Net cash used in operating activities |
(26.9) |
(26.4) |
||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
Payments for capital expenditures |
(11.2) |
(10.1) |
||||||
Net cash used in investing activities |
(11.2) |
(10.1) |
||||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
Principal payments on debt |
(1.6) |
(1.6) |
||||||
Proceeds from revolving credit facility |
— |
23.0 |
||||||
Payments to tax authorities for stock-based compensation |
(3.6) |
(0.7) |
||||||
Net cash (used in) provided by financing activities |
(5.2) |
20.7 |
||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS |
(43.3) |
(15.8) |
||||||
CASH AND CASH EQUIVALENTS—Beginning of year |
196.1 |
146.8 |
||||||
CASH AND CASH EQUIVALENTS—End of period |
$ |
152.8 |
$ |
131.0 |
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