MoneyGram International Reports Second Quarter 2021 Results
Second Quarter 2021 Business Highlights
"We delivered strong top and bottom-line financial performance in the second quarter on revenue growth of 18% driven by a record number of online customers and transactions. During the quarter, we exited our DPA and significantly reduced our cost of capital through the combination of our efficient equity offering and successful execution of our debt refinancing," said Alex Holmes MoneyGram Chairman and CEO. "Our newly improved capital structure, coupled with our second quarter results, represent a significant milestone on our transformational journey. As we enter a new era of growth and improved cash flow, the underlying strength in our business and the execution of our customer-centric strategy highlight the substantial opportunity ahead. I couldn't be more pleased with our accomplishments in the quarter and I'm extremely excited about the future of the Company."
Money Transfer highlights for the quarter include the following:
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Second Quarter 2021 Financial Results, Year-Over-Year
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Balance Sheet and Liquidity
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Third Quarter 2021 Outlook
The Company is providing the following outlook for the quarter ending
The Company expects business conditions to remain consistent with the second quarter which takes into account normal seasonality, ongoing digital growth, the potential impact from a full quarter of Walmart marketplace expansion and the uncertainties concerning COVID. Considering these factors the Company anticipates total revenue to be in the range of $323 to
Consistent with the revenue outlook, the Company anticipates Adjusted EBITDA to be in the range of
Conference Call
Participant Dial-In Numbers: |
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1-800-458-4121 |
International: |
1-929-477-0324 |
Webcast: |
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Replay: |
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Replay ID: |
3760279 |
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:
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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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Reconciliation of Certain Non-GAAP Measures to Relevant GAAP Measures - EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Free Cash Flow |
Table Four |
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Reconciliation of Certain Non-GAAP Measures to Relevant GAAP Measures - Adjusted Net Income and Adjusted Diluted EPS |
Table Five |
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Condensed Consolidated Balance Sheets |
Table Six |
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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 |
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(Unaudited) |
||||||||||||||||||||||||
(Amounts in millions, except percentages and |
Three Months Ended |
2021 vs |
Six Months Ended |
2021 vs |
||||||||||||||||||||
2021 |
2020 |
2020 |
2021 |
2020 |
2020 |
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REVENUE |
||||||||||||||||||||||||
Fee and other revenue |
$ |
327.3 |
$ |
275.5 |
$ |
51.8 |
$ |
635.4 |
$ |
556.3 |
$ |
79.1 |
||||||||||||
Investment revenue |
2.0 |
4.3 |
(2.3) |
4.0 |
14.4 |
(10.4) |
||||||||||||||||||
Total revenue |
329.3 |
279.8 |
49.5 |
639.4 |
570.7 |
68.7 |
||||||||||||||||||
Total revenue change, as reported |
18 |
% |
(14) |
% |
12 |
% |
(11) |
% |
||||||||||||||||
Total revenue change, constant currency |
13 |
% |
(13) |
% |
8 |
% |
(10) |
% |
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COST OF REVENUE |
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Commissions and other fee expense |
161.3 |
141.4 |
19.9 |
311.2 |
284.6 |
26.6 |
||||||||||||||||||
Investment commissions expense |
0.2 |
0.2 |
— |
0.4 |
3.2 |
(2.8) |
||||||||||||||||||
Direct transaction expense |
16.2 |
11.3 |
4.9 |
31.4 |
19.5 |
11.9 |
||||||||||||||||||
Total cost of revenue |
177.7 |
152.9 |
24.8 |
343.0 |
307.3 |
35.7 |
||||||||||||||||||
GROSS PROFIT |
151.6 |
126.9 |
24.7 |
296.4 |
263.4 |
33.0 |
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OPERATING EXPENSES |
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Compensation and benefits |
59.0 |
53.2 |
5.8 |
121.2 |
106.6 |
14.6 |
||||||||||||||||||
Transaction and operations support (1) |
40.3 |
21.3 |
19.0 |
83.7 |
59.3 |
24.4 |
||||||||||||||||||
Occupancy, equipment and supplies |
16.3 |
14.2 |
2.1 |
31.8 |
29.1 |
2.7 |
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Depreciation and amortization |
14.1 |
16.2 |
(2.1) |
29.4 |
33.3 |
(3.9) |
||||||||||||||||||
Total operating expenses |
129.7 |
104.9 |
24.8 |
266.1 |
228.3 |
37.8 |
||||||||||||||||||
OPERATING INCOME |
21.9 |
22.0 |
(0.1) |
30.3 |
35.1 |
(4.8) |
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Other expenses |
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Interest expense |
22.5 |
22.7 |
(0.2) |
44.8 |
46.5 |
(1.7) |
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Loss on early extinguishment of debt |
10.3 |
— |
10.3 |
10.3 |
— |
10.3 |
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Other non-operating expense |
0.8 |
1.2 |
(0.4) |
1.8 |
2.3 |
(0.5) |
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Total other expenses |
33.6 |
23.9 |
9.7 |
56.9 |
48.8 |
8.1 |
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Loss before income taxes |
(11.7) |
(1.9) |
(9.8) |
(26.6) |
(13.7) |
(12.9) |
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Income tax (benefit) expense |
(0.6) |
2.7 |
(3.3) |
(0.1) |
12.4 |
(12.5) |
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NET LOSS |
$ |
(11.1) |
$ |
(4.6) |
$ |
(6.5) |
$ |
(26.5) |
$ |
(26.1) |
$ |
(0.4) |
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Basic and diluted loss per common share |
$ |
(0.13) |
$ |
(0.06) |
$ |
(0.07) |
$ |
(0.32) |
$ |
(0.34) |
$ |
0.02 |
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Basic and diluted weighted-average |
87.2 |
77.8 |
9.4 |
83.4 |
77.6 |
5.8 |
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(1) The three and six months ended |
TABLE TWO |
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SEGMENT RESULTS |
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(Unaudited) |
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Global Funds Transfer |
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(Amounts in millions, except |
Three Months Ended |
2021 vs |
Six Months Ended |
2021 vs |
||||||||||||||||||||
2021 |
2020 |
2020 |
2021 |
2020 |
2020 |
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Money transfer revenue |
$ |
304.9 |
$ |
253.1 |
$ |
51.8 |
$ |
590.3 |
$ |
509.0 |
$ |
81.3 |
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Bill payment revenue |
10.4 |
10.8 |
(0.4) |
21.2 |
24.2 |
(3.0) |
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Total revenue |
$ |
315.3 |
$ |
263.9 |
$ |
51.4 |
$ |
611.5 |
$ |
533.2 |
$ |
78.3 |
||||||||||||
Cost of revenue |
$ |
177.5 |
$ |
152.7 |
$ |
24.8 |
$ |
342.6 |
$ |
304.0 |
$ |
38.6 |
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Gross profit |
$ |
137.8 |
$ |
111.2 |
$ |
26.6 |
$ |
268.9 |
$ |
229.2 |
$ |
39.7 |
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Money transfer revenue change, as |
20 |
% |
(10) |
% |
16 |
% |
8 |
% |
||||||||||||||||
Money transfer revenue change, |
16 |
% |
(9) |
% |
12 |
% |
(7) |
% |
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Financial Paper Products |
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(Amounts in millions, except |
Three Months Ended |
2021 vs |
Six Months Ended |
2021 vs |
||||||||||||||||||||
2021 |
2020 |
2020 |
2021 |
2020 |
2020 |
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Money order revenue |
$ |
10.6 |
$ |
10.8 |
$ |
(0.2) |
$ |
21.0 |
$ |
22.9 |
$ |
(1.9) |
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Official check revenue |
3.4 |
5.1 |
(1.7) |
6.9 |
14.6 |
(7.7) |
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Total revenue |
$ |
14.0 |
$ |
15.9 |
$ |
(1.9) |
$ |
27.9 |
$ |
37.5 |
$ |
(9.6) |
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Investment commissions expense |
$ |
0.2 |
$ |
0.2 |
$ |
— |
$ |
0.4 |
$ |
3.3 |
$ |
(2.9) |
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Gross profit (1) |
$ |
13.8 |
$ |
15.7 |
$ |
(1.9) |
$ |
27.5 |
$ |
34.2 |
$ |
(6.7) |
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(1) In periods of extremely low interest rates, it is possible for commissions to be close to zero, resulting in abnormally high gross margin. |
TABLE THREE |
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RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO RELEVANT GAAP MEASURES |
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EBITDA, ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN AND ADJUSTED FREE CASH FLOW |
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(Unaudited) |
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(Amounts in millions, except percentages) |
Three Months Ended |
2021 vs |
Six Months Ended |
2021 vs |
||||||||||||||||||||
2021 |
2020 |
2020 |
2021 |
2020 |
2020 |
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Loss before income taxes |
$ |
(11.7) |
$ |
(1.9) |
$ |
(9.8) |
$ |
(26.6) |
$ |
(13.7) |
$ |
(12.9) |
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Interest expense |
22.5 |
22.7 |
(0.2) |
44.8 |
46.5 |
(1.7) |
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Depreciation and amortization |
14.1 |
16.2 |
(2.1) |
29.4 |
33.3 |
(3.9) |
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Signing bonus amortization |
14.7 |
12.6 |
2.1 |
29.0 |
25.1 |
3.9 |
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EBITDA |
39.6 |
49.6 |
(10.0) |
76.6 |
91.2 |
(14.6) |
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Significant items impacting EBITDA: |
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Loss on early extinguishment of debt |
10.3 |
— |
10.3 |
10.3 |
— |
10.3 |
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Restructuring and reorganization costs |
2.2 |
0.7 |
1.5 |
8.1 |
1.2 |
6.9 |
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Stock-based, contingent and incentive |
1.5 |
1.6 |
(0.1) |
3.3 |
3.6 |
(0.3) |
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Direct monitor costs |
1.1 |
3.1 |
(2.0) |
4.9 |
7.9 |
(3.0) |
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Compliance enhancement program |
0.2 |
1.2 |
(1.0) |
1.3 |
3.2 |
(1.9) |
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Legal and contingent matters |
(0.1) |
0.2 |
(0.3) |
— |
0.6 |
(0.6) |
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Severance and related costs |
— |
— |
— |
0.2 |
0.2 |
— |
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Adjusted EBITDA |
$ |
54.8 |
$ |
56.4 |
$ |
(1.6) |
$ |
104.7 |
$ |
107.9 |
$ |
(3.2) |
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Adjusted EBITDA margin (1) |
16.6 |
% |
20.2 |
% |
(3.6) |
% |
16.4 |
% |
18.9 |
% |
(2.5) |
% |
||||||||||||
Adjusted EBITDA change, as reported |
(3) |
% |
(3) |
% |
||||||||||||||||||||
Adjusted EBITDA change, constant |
(12) |
% |
(11) |
% |
||||||||||||||||||||
Adjusted EBITDA |
$ |
54.8 |
$ |
56.4 |
$ |
(1.6) |
$ |
104.7 |
$ |
107.9 |
$ |
(3.2) |
||||||||||||
Cash payments for interest |
(27.1) |
(16.8) |
(10.3) |
(39.0) |
(34.4) |
(4.6) |
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Cash payments for taxes, net of |
(1.5) |
(0.4) |
(1.1) |
1.2 |
(2.5) |
3.7 |
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Cash payments for capital expenditures |
(10.0) |
(9.8) |
(0.2) |
(21.2) |
(19.9) |
(1.3) |
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Cash payments for agent signing |
(9.7) |
(4.7) |
(5.0) |
(22.7) |
(29.7) |
7.0 |
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Adjusted Free Cash Flow |
$ |
6.5 |
$ |
24.7 |
$ |
(18.2) |
$ |
23.0 |
$ |
21.4 |
$ |
1.6 |
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(1) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenue. |
TABLE FOUR |
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RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO RELEVANT GAAP MEASURES |
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ADJUSTED NET INCOME AND ADJUSTED DILUTED EPS |
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(Unaudited) |
||||||||||||||||
Three Months Ended |
Six Months Ended |
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(Amounts in millions, except per share data) |
2021 |
2020 |
2021 |
2020 |
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Net loss |
$ |
(11.1) |
$ |
(4.6) |
$ |
(26.5) |
$ |
(26.1) |
||||||||
Total adjustments (1) |
15.2 |
6.8 |
28.1 |
16.7 |
||||||||||||
Tax impacts of adjustments (2) |
(3.5) |
(1.3) |
(6.5) |
(3.6) |
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Valuation allowance (3) |
— |
— |
1.0 |
10.1 |
||||||||||||
Adjusted net income (loss) |
$ |
0.6 |
$ |
0.9 |
$ |
(3.9) |
$ |
(2.9) |
||||||||
Diluted loss per common share |
$ |
(0.13) |
$ |
(0.06) |
$ |
(0.32) |
$ |
(0.34) |
||||||||
Diluted adjustments per common share |
0.14 |
0.07 |
0.27 |
0.30 |
||||||||||||
Diluted adjusted earnings (loss) per common share |
$ |
0.01 |
$ |
0.01 |
$ |
(0.05) |
$ |
(0.04) |
||||||||
Diluted weighted-average outstanding common shares and equivalents |
87.2 |
77.8 |
83.4 |
77.6 |
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(1) See summary of adjustments in Table Three - 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 FIVE |
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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 |
$ |
117.0 |
$ |
196.1 |
||||
Settlement assets |
3,607.2 |
3,702.9 |
||||||
Property and equipment, net |
138.9 |
148.1 |
||||||
|
442.2 |
442.2 |
||||||
Right-of-use assets |
54.3 |
55.1 |
||||||
Other assets |
113.4 |
129.7 |
||||||
Total assets |
$ |
4,473.0 |
$ |
4,674.1 |
||||
LIABILITIES |
||||||||
Payment service obligations |
$ |
3,607.2 |
$ |
3,702.9 |
||||
Debt, net |
766.1 |
857.8 |
||||||
Pension and other postretirement benefits |
74.2 |
74.5 |
||||||
Lease liabilities |
58.3 |
59.1 |
||||||
Accounts payable and other liabilities |
135.4 |
216.8 |
||||||
Total liabilities |
4,641.2 |
4,911.1 |
||||||
STOCKHOLDERS' DEFICIT |
||||||||
Common stock, |
0.9 |
0.7 |
||||||
Additional paid-in capital |
1,396.7 |
1,296.0 |
||||||
Retained loss |
(1,501.9) |
(1,475.3) |
||||||
Accumulated other comprehensive loss |
(60.2) |
(58.4) |
||||||
|
(3.7) |
— |
||||||
Total stockholders' deficit |
(168.2) |
(237.0) |
||||||
Total liabilities and stockholders' deficit |
$ |
4,473.0 |
$ |
4,674.1 |
TABLE SIX |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(Unaudited) |
||||||||
Six Months Ended |
||||||||
(Amounts in millions) |
2021 |
2020 |
||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
Net loss |
$ |
(26.5) |
$ |
(26.1) |
||||
Adjustments to reconcile net loss to net cash (used in) provided by operating |
(18.2) |
33.7 |
||||||
Net cash (used in) provided by operating activities |
(44.7) |
7.6 |
||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
Payments for capital expenditures |
(21.2) |
(19.9) |
||||||
Net cash used in investing activities |
(21.2) |
(19.9) |
||||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
Principal payments on debt |
(103.2) |
(3.2) |
||||||
Prepayment call premium |
(4.0) |
— |
||||||
Proceeds from revolving credit facility |
— |
23.0 |
||||||
Payments on revolving credit facility |
— |
(23.0) |
||||||
Net proceeds from stock issuance |
97.6 |
— |
||||||
Payments to tax authorities for stock-based compensation |
(3.6) |
(0.7) |
||||||
Net cash used in financing activities |
(13.2) |
(3.9) |
||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS |
(79.1) |
(16.2) |
||||||
CASH AND CASH EQUIVALENTS—Beginning of year |
196.1 |
146.8 |
||||||
CASH AND CASH EQUIVALENTS—End of period |
$ |
117.0 |
$ |
130.6 |
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