MoneyGram International Reports Fourth Quarter and Fiscal 2013 Financial Results
Strong Money Transfer Growth Pushes Annual Revenue to
Fourth Quarter Self-Service Revenue Grew 38 Percent, Now 7 Percent of Money Transfer Revenue
Company Sets Goal for
Full year highlights:
-
Total revenue was
$1,474.4 million , an increase of 10 percent on a reported and constant currency basis. -
Money transfer revenue increased 12 percent over the prior year to
$1,287.8 million , both on a reported and constant currency basis. -
Money transfer transaction volume increased 13 percent over the prior
year, led by:
- 18 percent growth in U.S. outbound sends
- 13 percent growth in sends originated outside of the U.S.
- 7 percent growth in U.S.-to-U.S. sends.
- Self-service money transfer revenue grew 30 percent, and represented 6 percent of money transfer revenue.
- MoneyGram Online money transfer and bill payment transaction volume increased 44 percent and revenue was up 24 percent over the prior year.
-
The Company reported EBITDA of
$226.1 million and net income of$52.4 million . Both EBITDA and net income were primarily impacted by:-
$45.3 million of debt extinguishment costs related to the 2013 refinancing -
$14.1 million of stock-based and contingent performance compensation expense -
$4.7 million of reorganization and restructuring and severance related costs -
$2.8 million of expenses related to the compliance enhancement program -
$2.5 million of legal expenses related to certain ongoing matters.
-
-
Adjusted EBITDA for the year was
$295.5 million , an increase of 6 percent on a reported basis and 5 percent in constant currency. Adjusted EBITDA margin was 20 percent, down from 20.8 percent in the prior year. Adjusted EBITDA was negatively impacted 40 basis points by the direct monitor costs. Increased commission expense and higher compliance related investments also negatively impacted margins. -
Diluted earnings per common share was
$0.73 , including a negative$0.40 per share impact due to the aforementioned debt extinguishment costs, a negative$0.12 per share impact from stock-based and contingent performance compensation, a negative$0.04 per share impact from reorganization and restructuring and severance related costs, a negative$0.02 per share impact from the compliance enhancement program and$0.02 per share impact for legal expenses related to certain ongoing matters. -
Adjusted free cash flow was
$149.8 million , up 29 percent from the prior year period driven by strong growth in revenue and EBITDA and lower debt interest payments.
Fourth quarter highlights:
-
Total revenue was
$385.8 million , an increase over the prior year of 9 percent on a reported basis and 8 percent in constant currency. -
Money transfer revenue increased to
$340.0 million , representing growth of 11 percent over the prior year on a reported basis and 10 percent in constant currency. -
Money transfer transaction volume increased 11 percent over the prior
year, led by:
- 18 percent growth in U.S. outbound sends
- 8 percent growth in sends originated outside of the U.S.
- 7 percent growth in U.S.-to-U.S. sends.
- Global agent locations increased 8 percent over the prior year to 336,000.
- Self-service money transfer revenue grew 38 percent in the quarter and represented 7 percent of money transfer revenue.
- MoneyGram Online money transfer and bill payment transaction volume increased 32 percent and revenue was up 27 percent over the prior year.
-
The Company reported EBITDA of
$69.2 million and net income of$23.4 million , which was impacted by:-
$4.0 million of stock-based and contingent performance compensation -
$2.8 million of expenses related to the compliance enhancement program -
$0.4 million of legal expenses related to certain ongoing matters.
-
-
Adjusted EBITDA for the fourth quarter was
$76.4 million , up 7 percent on a reported basis and 5 percent on a constant currency basis. In the quarter, adjusted EBITDA margin was 19.8 percent, down from 20.2 percent in the fourth quarter of the prior year. Direct monitor costs negatively impacted the margin by 65 basis points. -
Diluted earnings per common share was
$0.33 , including a negative$0.04 per share impact from stock-based and contingent performance compensation and$0.02 related to the compliance enhancement program. -
Adjusted free cash flow for the quarter was
$21.7 million , down 10 percent from$24.2 million in the prior year quarter.
"2013 was a great year for
Balance Sheet Items and Adjusted Free Cash Flow Items
Market Developments
-
Renewed an agreement with
Albertson's LLC and entered into a new agreement withNew Albertson's Inc. to offer a full suite of services in all of their 1,000 locations. -
Signed a contract with Bank Aljazira, one of Saudi Arabia's leading
financial institutions. Saudi Arabia is the second largest
remittance-sending country in the world with an estimated
$29.5 billion in outbound remittances in 2012. -
Signed an agreement with Commercial Bank of Ceylon (CBC) providing
MoneyGram customers the ability to deposit funds into nearly all of the bank accounts in Sri Lanka using CBC as the link to the Sri Lankan clearing system. -
Rolled out a new service in
Japan withD. Communications, Inc. (DCOM) enabling DCOM customers to send and receive funds virtually across theMoneyGram network. The service offers consumers choice in sending and receiving directly from their bank accounts or receiving cash at a DCOM location. - Entered into a new global agreement with Vodafone that will allow customers to load funds directly into millions of M-Pesa user accounts.
-
Reached a company milestone of offering services in more than 200
countries and territories worldwide following the launch of money
transfer services in
Equatorial Guinea andMyanmar . - Enabled more than 200 healthcare companies in the Company's biller network to allow consumers to pay their healthcare premiums online or at any U.S. bill pay location, providing health insurance companies with a cash-based payment solution convenient for their customers.
- Continued the local marketing of our global brand by launching new websites in over 100 countries. These new websites include many features and technical improvements that allow country-specific communication on products, services, and promotions.
-
Other network expansion activities during the quarter:
-
Reached 20,000 locations in
China with the signing of Postal Savings Bank ofChina , a large commercial retail bank with more than 3,700 locations. -
Re-signed with
Thomas Cook Co-operative Travel Group , one of the UK's leading leisure travel groups with over 800 locations and over 6 million customers. The renewal was expanded to include an additional 275Co-operative Travel locations that will come on board in early 2015. -
Launched money transfer services at 44 foreign exchange bureaus
with Debenhams, a leading department store in the
UK . -
Renewed a multi-year agreement with long-standing agent
Cape Verde Post Office . -
Renewed an agreement with Calimax, a grocery store chain operating
in
Mexico , and expanded the agreement to include send capabilities. -
Expanded our reach in
Central America with the signing of Banco Ficohsa inGuatemala , Farmacias Economicas inEl Salvador and Servicentro inNicaragua .
-
Reached 20,000 locations in
Global Funds Transfer Segment Results
For the quarter, total revenue for the Global Funds Transfer segment was
During the quarter, the segment reported operating income of
For the full year, total revenue for the Global Funds Transfer segment
was
For the full year, the segment reported operating income of
Financial Paper Products Segment Results
For the quarter, total revenue in the Financial Paper Products segment
decreased 2 percent to
For the full year, total revenue in the Financial Paper Products segment
was
Global Transformation Program
-
Enhancing compliance. The legal and regulatory requirements for
the financial services industry continue to increase. Since 2009,
MoneyGram has invested more than$120 million in its compliance and anti-fraud programs and has successfully prevented more than$365 million in fraud losses, with$135 million prevented in 2013. The Company will continue to advance its leadership in global compliance by implementing market-leading systems, technology and processes, and increasing agent oversight around the world. This program now incorporates an accelerated timeline and certain additional enhancements which were recommended by the monitor. At this time, the Company expects to incur cash outlays of approximately$80 to$90 million over the next three years. -
Investing for growth.
MoneyGram is accelerating investment in its market-leading self-service products with the goal of generating 15 to 20 percent of money transfer revenue from these channels in 2017. -
Reorganization and restructuring.
MoneyGram will commence a reorganization and restructuring initiative to enhance operating efficiencies and reduce the Company's cost structure. At this time, the Company anticipates that the initiative will result in annual pre-tax cost savings of approximately$15 million to$20 million on a run-rate basis exiting 2015, resulting from expense reductions and the realignment of certain business functions. The Company currently estimates that it will incur cash outlays over the next two years of approximately$30 million to$40 million in connection with these actions.
"The launch of our global transformation program will position
Outlook
For 2014 the Company estimates total constant currency revenue growth of 8 to 10 percent. Constant currency adjusted EBITDA growth is estimated to be 7 to 9 percent. Direct monitor costs will be adjusted in 2014 to provide investors with clear operating metrics. If direct monitor costs had been adjusted in 2013, the comparable estimated adjusted constant currency EBITDA growth for 2014 would be 5 to 7 percent.
Non-GAAP Measures
In addition to results presented in accordance with GAAP, this press 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 and Adjusted Free Cash Flow (Adjusted EBITDA less cash interest expense, cash tax expense, cash payments for capital expenditures and agent signing bonuses), and constant currency measures. In addition, we also present Adjusted Operating Income and Adjusted Operating Margin for our two reporting segments. The following tables include a full reconciliation of actual non-GAAP financial measures to the related GAAP financial measures. The equivalent GAAP financial measures for projected results are not provided as we are not able to predict results inclusive of currency changes.
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, including our ability to
service debt and fund capital expenditures, acquisitions and operations.
These calculations are commonly used as a basis for investors, analysts
and credit rating agencies 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, and
constant currency figures are financial measures used by management in
reviewing results of operations, forecasting, assessing cash flow and
capital, allocating resources or establishing employee incentive
programs. Although
Description of Tables
Table One - Consolidated Statements of Operations
Table Two -
Segment Results
Table Three - Segment Reconciliations
Table
Four - EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Free
Table Five - Consolidated Balance Sheets
Table Six -
Assets in Excess of Payment Service Obligations
Table Seven -
Constant Currency Measures
Conference Call
About
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
TABLE ONE | ||||||||||||||||||||||||
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||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Three Months Ended |
2013 vs |
Twelve Months Ended |
2013 vs | |||||||||||||||||||||
(Amounts in millions, except per share data) | 2013 | 2012 | 2012 | 2013 | 2012 | 2012 | ||||||||||||||||||
REVENUE | ||||||||||||||||||||||||
Fee and other revenue | $ | 381.7 | $ | 351.3 | $ | 30.4 | $ | 1,456.8 | $ | 1,328.6 | $ | 128.2 | ||||||||||||
Investment revenue | 4.1 | 3.1 | 1.0 | 17.6 | 12.6 | 5.0 | ||||||||||||||||||
Total revenue |
385.8 | 354.4 | 31.4 | 1,474.4 | 1,341.2 | 133.2 | ||||||||||||||||||
OPERATING EXPENSES | ||||||||||||||||||||||||
Fee and other commissions expense | 175.3 | 158.2 | 17.1 | 677.8 | 599.2 | 78.6 | ||||||||||||||||||
Investment commissions expense | 0.1 | 0.1 | — | 0.4 | 0.3 | 0.1 | ||||||||||||||||||
Total commissions expense | 175.4 | 158.3 | 17.1 | 678.2 | 599.5 | 78.7 | ||||||||||||||||||
Compensation and benefits | 66.8 | 68.7 | (1.9 | ) | 264.9 | 241.6 | 23.3 | |||||||||||||||||
Transaction and operations support | 74.4 | 63.9 | 10.5 | 253.7 | 355.7 | (102.0 | ) | |||||||||||||||||
Occupancy, equipment and supplies | 12.0 | 11.1 | 0.9 | 49.0 | 47.7 | 1.3 | ||||||||||||||||||
Depreciation and amortization | 14.2 | 11.7 | 2.5 | 50.7 | 44.3 | 6.4 | ||||||||||||||||||
Total operating expenses | 342.8 | 313.7 | 29.1 | 1,296.5 | 1,288.8 | 7.7 | ||||||||||||||||||
OPERATING INCOME | 43.0 | 40.7 | 2.3 | 177.9 | 52.4 | 125.5 | ||||||||||||||||||
Other (income) expense | ||||||||||||||||||||||||
Net securities gains | — | (10.0 |
) |
10.0 | — | (10.0 | ) | 10.0 | ||||||||||||||||
Interest expense | 10.0 | 17.7 | (7.7 | ) | 47.3 | 70.9 | (23.6 | ) | ||||||||||||||||
Debt extinguishment costs | — | — | — | 45.3 | — | 45.3 | ||||||||||||||||||
Other costs | — | — | — | — | 0.4 | (0.4 | ) | |||||||||||||||||
Total other expenses, net | 10.0 | 7.7 | 2.3 | 92.6 | 61.3 | 31.3 | ||||||||||||||||||
Income (loss) before income taxes | 33.0 | 33.0 | — | 85.3 | (8.9 | ) | 94.2 | |||||||||||||||||
Income tax expense | 9.6 | 12.8 | (3.2 | ) | 32.9 | 40.4 | (7.5 | ) | ||||||||||||||||
NET INCOME (LOSS) | $ | 23.4 | $ | 20.2 | $ | 3.2 | $ | 52.4 | $ | (49.3 | ) | $ | 101.7 | |||||||||||
Earnings (loss) per common share: | ||||||||||||||||||||||||
Basic | $ | 0.33 | $ | 0.28 | $ | 0.05 | $ | 0.73 | $ | (0.69 | ) | $ | 1.42 | |||||||||||
Diluted | $ | 0.33 | $ | 0.28 | $ | 0.05 | $ | 0.73 | $ | (0.69 | ) | $ | 1.42 | |||||||||||
Weighted-average outstanding common shares and equivalents used in computing earnings (loss) per share: | ||||||||||||||||||||||||
Basic (1) | 71.6 | 71.5 | 0.1 | 71.6 | 71.5 | 0.1 | ||||||||||||||||||
Diluted (1) | 71.9 | 71.6 | 0.3 | 71.9 | 71.5 | 0.4 | ||||||||||||||||||
(1) Includes common stock equivalents of 13.7 million for
the three and twelve months ended |
||||||||||||||||||||||||
Shares related to stock options | 3.4 | 3.9 | 3.6 | 4.9 | ||||||||||||||||||||
Shares related to restricted stock and restricted stock units | 0.9 | 0.5 | 0.8 | 0.5 | ||||||||||||||||||||
TABLE TWO | ||||||||||||||||||||||||
|
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SEGMENT RESULTS | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Global Funds Transfer | ||||||||||||||||||||||||
Three Months Ended |
2013 vs |
Twelve Months Ended |
2013 vs | |||||||||||||||||||||
(Amounts in millions) | 2013 | 2012 | 2012 | 2013 | 2012 | 2012 | ||||||||||||||||||
Money transfer revenue: | ||||||||||||||||||||||||
Fee and other revenue | $ | 339.9 | $ | 306.9 | $ | 33.0 | $ | 1,287.5 | $ | 1,148.5 | $ | 139.0 | ||||||||||||
Investment revenue | 0.1 | — | 0.1 | 0.3 | 0.6 | (0.3 | ) | |||||||||||||||||
Bill payment revenue: | ||||||||||||||||||||||||
Fee and other revenue | 25.4 | 26.0 | (0.6 | ) | 102.0 | 106.1 | (4.1 | ) | ||||||||||||||||
Investment revenue | — | — | — | — | — | — | ||||||||||||||||||
Total revenue | $ | 365.4 | $ | 332.9 | $ | 32.5 | $ | 1,389.8 | $ | 1,255.2 | $ | 134.6 | ||||||||||||
Total commissions expense | $ | 175.1 | $ | 157.8 | $ | 17.3 | $ | 676.9 | $ | 597.6 | $ | 79.3 | ||||||||||||
Operating income | $ | 40.1 | $ | 38.4 | $ | 1.7 | $ | 162.6 | $ | 149.6 | $ | 13.0 | ||||||||||||
Operating margin | 11.0 | % | 11.5 | % | 11.7 | % | 11.9 | % | ||||||||||||||||
Financial Paper Products | ||||||||||||||||||||||||
Three Months Ended |
2013 vs |
Twelve Months Ended |
2013 vs | |||||||||||||||||||||
(Amounts in millions) | 2013 | 2012 | 2012 | 2013 | 2012 | 2012 | ||||||||||||||||||
Money order revenue: | ||||||||||||||||||||||||
Fee and other revenue | $ | 12.5 | $ | 13.6 | $ | (1.1 | ) | $ | 51.1 | $ | 55.4 | $ | (4.3 | ) | ||||||||||
Investment revenue | 1.2 | 0.5 | 0.7 | 4.0 | 2.1 | 1.9 | ||||||||||||||||||
Official check revenue: | ||||||||||||||||||||||||
Fee and other revenue | 3.9 | 4.6 | (0.7 | ) | 16.2 | 18.3 | (2.1 | ) | ||||||||||||||||
Investment revenue | 2.9 | 2.3 | 0.6 | 12.7 | 8.7 | 4.0 | ||||||||||||||||||
Total revenue | $ | 20.5 | $ | 21.0 | $ | (0.5 | ) | $ | 84.0 | $ | 84.5 | $ | (0.5 | ) | ||||||||||
Total commissions expense | $ | 0.2 | $ | 0.5 | $ | (0.3 | ) | $ | 1.2 | $ | 1.9 | $ | (0.7 | ) | ||||||||||
Operating income | $ | 5.9 | $ | 8.1 | $ | (2.2 | ) | $ | 30.9 | $ | 32.7 | $ | (1.8 | ) | ||||||||||
Operating margin | 28.8 | % | 38.6 | % | 36.8 | % | 38.7 | % | ||||||||||||||||
TABLE THREE | ||||||||||||||||||||||||
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SEGMENT RECONCILIATIONS | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Global Funds Transfer | ||||||||||||||||||||||||
Three Months Ended |
2013 vs |
Twelve Months Ended |
2013 vs | |||||||||||||||||||||
(Amounts in millions) | 2013 | 2012 | 2012 | 2013 | 2012 | 2012 | ||||||||||||||||||
Revenue (as reported) | $ | 365.4 | $ | 332.9 | $ | 32.5 | $ | 1,389.8 | $ | 1,255.2 | $ | 134.6 | ||||||||||||
Adjusted operating income | $ | 46.0 | $ | 45.3 | $ | 0.7 | $ | 178.6 | $ | 176.2 | $ | 2.4 | ||||||||||||
Reorganization and restructuring costs | — | (5.4 | ) | 5.4 | (3.0 | ) | (18.3 | ) | 15.3 | |||||||||||||||
Compliance enhancement program | (2.8 | ) | — | (2.8 | ) | (2.8 | ) | — | (2.8 | ) | ||||||||||||||
Stock-based compensation expense | (3.1 | ) | (1.5 | ) | (1.6 | ) | (10.2 | ) | (8.3 | ) | (1.9 | ) | ||||||||||||
Total adjustments |
(5.9 | ) | (6.9 | ) | 1.0 | (16.0 | ) | (26.6 | ) | 10.6 | ||||||||||||||
Operating income (as reported) | $ | 40.1 | $ | 38.4 | $ | 1.7 | $ | 162.6 | $ | 149.6 | $ | 13.0 | ||||||||||||
Adjusted operating margin | 12.6 | % | 13.6 | % | 12.9 | % | 14.0 | % | ||||||||||||||||
Total adjustments | (1.6 | )% | (2.1 | )% | (1.2 | )% | (2.1 | )% | ||||||||||||||||
Operating margin (as reported) | 11.0 | % | 11.5 | % | 11.7 | % | 11.9 | % | ||||||||||||||||
Financial Paper Products | ||||||||||||||||||||||||
Three Months Ended |
2013 vs |
Twelve Months Ended |
2013 vs | |||||||||||||||||||||
(Amounts in millions) | 2013 | 2012 | 2012 | 2013 | 2012 | 2012 | ||||||||||||||||||
Revenue (as reported) | $ | 20.5 | $ | 21.0 | $ | (0.5 | ) | $ | 84.0 | $ | 84.5 | $ | (0.5 | ) | ||||||||||
Adjusted operating income | $ | 6.2 | $ | 8.5 | $ | (2.3 | ) | $ | 32.4 | $ | 35.0 | $ | (2.6 | ) | ||||||||||
Reorganization and restructuring costs | — | (0.2 | ) | 0.2 | (0.3 | ) | (1.3 | ) | 1.0 | |||||||||||||||
Stock-based compensation expense | (0.3 | ) | (0.2 | ) | (0.1 | ) | (1.2 | ) | (1.0 | ) | (0.2 | ) | ||||||||||||
Total adjustments | (0.3 | ) | (0.4 | ) | 0.1 | (1.5 | ) | (2.3 | ) | 0.8 | ||||||||||||||
Operating income (as reported) | $ | 5.9 | $ | 8.1 | $ | (2.2 | ) | $ | 30.9 | $ | 32.7 | $ | (1.8 | ) | ||||||||||
Adjusted operating margin | 30.2 | % | 40.5 | % | 38.6 | % | 41.4 | % | ||||||||||||||||
Total adjustments | (1.5 | )% | (1.9 | )% | (1.8 | )% | (2.7 | )% | ||||||||||||||||
Operating margin (as reported) | 28.8 | % | 38.6 | % | 36.8 | % | 38.7 | % | ||||||||||||||||
TABLE FOUR | ||||||||||||||||||||||||
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EBITDA, ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN AND ADJUSTED FREE
|
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(Unaudited) | ||||||||||||||||||||||||
Three Months Ended |
2013 vs |
Twelve Months Ended |
2013 vs | |||||||||||||||||||||
(Amounts in millions) | 2013 | 2012 | 2012 | 2013 | 2012 | 2012 | ||||||||||||||||||
Income (loss) before income taxes | $ | 33.0 | $ | 33.0 | $ | — | $ | 85.3 | $ | (8.9 | ) | $ | 94.2 | |||||||||||
Interest expense | 10.0 | 17.7 | (7.7 | ) | 47.3 | 70.9 | (23.6 | ) | ||||||||||||||||
Depreciation and amortization | 14.2 | 11.7 | 2.5 | 50.7 | 44.3 | 6.4 | ||||||||||||||||||
Amortization of agent signing bonuses | 12.0 | 8.9 | 3.1 | 42.8 | 33.6 | 9.2 | ||||||||||||||||||
EBITDA | 69.2 | 71.3 | (2.1 | ) | 226.1 | 139.9 | 86.2 | |||||||||||||||||
Significant items impacting EBITDA: | ||||||||||||||||||||||||
Net securities gains | — | (10.0 | ) | 10.0 | — | (10.0 | ) | 10.0 | ||||||||||||||||
Severance and related costs (1) | — | — | — | 1.5 | 1.0 | 0.5 | ||||||||||||||||||
Reorganization and restructuring costs | — | 5.1 | (5.1 | ) | 3.2 | 19.3 | (16.1 | ) | ||||||||||||||||
Compliance enhancement program | 2.8 | — |
|
2.8 | 2.8 | — | 2.8 | |||||||||||||||||
Contribution from investors (2) | — | — | — | — | 0.3 | (0.3 | ) | |||||||||||||||||
Debt extinguishment (3) | — | — | — | 45.3 | — | 45.3 | ||||||||||||||||||
Stock-based and contingent performance compensation (4) | 4.0 | 1.6 | 2.4 | 14.1 | 9.2 | 4.9 | ||||||||||||||||||
Legal expenses (5) | 0.4 | 3.7 | (3.3 | ) | 2.5 | 119.2 | (116.7 | ) | ||||||||||||||||
Adjusted EBITDA | $ | 76.4 | $ | 71.7 | $ | 4.7 | $ | 295.5 | $ | 278.9 | $ | 16.6 | ||||||||||||
Adjusted EBITDA margin (6) | 19.8 | % | 20.2 | % | (0.4 | )% | 20.0 | % | 20.8 | % | (0.8 | )% | ||||||||||||
Foreign currency impact | (0.9 | ) | (2.0 | ) | ||||||||||||||||||||
Adjusted EBITDA, constant currency adjusted | $ | 75.5 | $ | 293.5 | ||||||||||||||||||||
Adjusted EBITDA growth, as reported | 7 | % | 6 | % | ||||||||||||||||||||
Adjusted EBITDA growth, constant currency adjusted | 5 | % | 5 | % | ||||||||||||||||||||
Adjusted EBITDA | $ | 76.4 | $ | 71.7 | $ | 4.7 | $ | 295.5 | $ | 278.9 | $ | 16.6 | ||||||||||||
Cash interest expense | (9.3 | ) | (15.5 | ) | 6.2 | (43.9 | ) | (64.4 | ) | 20.5 | ||||||||||||||
Cash tax expense | (7.8 | ) | (2.0 | ) | (5.8 | ) | (8.0 | ) | (2.9 | ) | (5.1 | ) | ||||||||||||
Cash payments for capital expenditures | (11.6 | ) | (16.4 | ) | 4.8 | (48.8 | ) | (59.6 | ) | 10.8 | ||||||||||||||
Cash payments for agent signing bonuses | (26.0 | ) | (13.6 | ) | (12.4 | ) | (45.0 | ) | (36.2 | ) | (8.8 | ) | ||||||||||||
Adjusted Free Cash Flow | $ | 21.7 | $ | 24.2 | $ | (2.5 | ) | $ | 149.8 | $ | 115.8 | $ | 34.0 | |||||||||||
(1) Severance and related costs primarily from executive terminations. |
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(2) Expense resulting from payment by an investor to Walmart upon liquidation of such investor's investment as required by the Participation Agreement. | ||||||||||||||||||||||||
(3) Debt extinguishment costs relate to the termination of our 2011 Credit Agreement and second lien notes in connection with the 2013 Credit Agreement. | ||||||||||||||||||||||||
(4) Stock based compensation and one-time contingent performance award payable after three years based on achievement of revenue growth targets. | ||||||||||||||||||||||||
(5) Legal expenses are primarily in connection with the settlement related to the MDPA/U.S. DOJ investigation and certain ongoing legal matters. | ||||||||||||||||||||||||
(6) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenue. | ||||||||||||||||||||||||
TABLE FIVE | ||||||||
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CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited) | ||||||||
(Amounts in millions, except share data) |
|
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ASSETS | ||||||||
Cash and cash equivalents | $ | — | $ | — | ||||
Cash and cash equivalents (substantially restricted) | 2,228.5 | 2,683.2 | ||||||
Receivables, net (substantially restricted) | 767.7 | 1,206.5 | ||||||
Interest-bearing investments (substantially restricted) | 1,011.6 | 450.1 | ||||||
Available-for-sale investments (substantially restricted) | 48.1 | 63.5 | ||||||
Property and equipment, net | 134.8 | 127.9 | ||||||
Goodwill | 435.2 | 428.7 | ||||||
Other assets | 161.0 | 190.7 | ||||||
Total assets | $ | 4,786.9 | $ | 5,150.6 | ||||
LIABILITIES | ||||||||
Payment service obligations | $ | 3,737.1 | $ | 4,175.4 | ||||
Debt | 842.9 | 809.9 | ||||||
Pension and other postretirement benefits | 98.4 | 126.8 | ||||||
Accounts payable and other liabilities | 185.5 | 199.9 | ||||||
Total liabilities | 4,863.9 | 5,312.0 | ||||||
STOCKHOLDERS' DEFICIT | ||||||||
Participating Convertible Preferred Stock - Series D, |
281.9 | 281.9 | ||||||
Common Stock, |
0.6 | 0.6 | ||||||
Additional paid-in capital | 1,011.8 | 1,001.0 | ||||||
Retained loss | (1,214.4 | ) | (1,265.9 | ) | ||||
Accumulated other comprehensive loss | (33.0 | ) | (52.3 | ) | ||||
Treasury stock: 4,300,782 and 4,407,038 shares at |
(123.9 | ) | (126.7 | ) | ||||
Total stockholders' deficit | (77.0 | ) | (161.4 | ) | ||||
Total liabilities and stockholders' deficit | $ | 4,786.9 | $ | 5,150.6 | ||||
TABLE SIX | ||||||||||||||||
|
||||||||||||||||
ASSETS IN EXCESS OF PAYMENT SERVICE OBLIGATIONS | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(Amounts in millions) |
|
|
|
|
||||||||||||
Cash and cash equivalents (1) | $ | 2,228.5 | $ | 2,222.4 | $ | 2,202.4 | $ | 2,430.2 | ||||||||
Receivables, net (1) | 767.7 | 959.7 | 1,178.5 | 1,170.4 | ||||||||||||
Interest-bearing investments (1) | 1,011.6 | 941.8 | 902.3 | 501.9 | ||||||||||||
Available-for-sale investments (1) | 48.1 | 50.7 | 50.5 | 56.2 | ||||||||||||
4,055.9 | 4,174.6 | 4,333.7 | 4,158.7 | |||||||||||||
Payment service obligations | (3,737.1 | ) | (3,864.9 | ) | (4,076.4 | ) | (3,939.0 | ) | ||||||||
Assets in excess of payment service obligations | $ | 318.8 | $ | 309.7 | $ | 257.3 | $ | 219.7 | ||||||||
(1) Substantially restricted | ||||||||||||||||
TABLE SEVEN | ||||||||
|
||||||||
CONSTANT CURRENCY MEASURES | ||||||||
(Unaudited) | ||||||||
(Amounts in millions) |
Three months ended |
Twelve months ended |
||||||
Total revenue, as reported (GAAP) | $ | 385.8 | $ | 1,474.4 | ||||
Foreign currency impact | (2.2 | ) | (5.4 | ) | ||||
Total revenue, constant currency adjusted | $ | 383.6 | $ | 1,469.0 | ||||
Prior year total revenue, as reported (GAAP) | $ | 354.4 | $ | 1,341.2 | ||||
Revenue change, as reported (GAAP) | 9 | % | 10 | % | ||||
Total revenue growth, constant currency adjusted | 8 | % | 10 | % | ||||
(Amounts in millions) |
Three months ended |
Twelve months ended |
||||||
Money transfer revenue, as reported (GAAP) | $ | 340.0 | $ | 1,287.8 | ||||
Foreign currency impact | (2.2 | ) | (5.4 | ) | ||||
Money transfer revenue, constant currency adjusted | $ | 337.8 | $ | 1,282.4 | ||||
Prior year money transfer revenues, as reported (GAAP) | $ | 306.9 | $ | 1,149.1 | ||||
Revenue change, as reported (GAAP) | 11 | % | 12 | % | ||||
Money transfer revenue growth, constant currency adjusted | 10 | % | 12 | % | ||||
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