Exhibit 99.1
MoneyGram International Announces Second Quarter 2009 Results
Company adds global agents and strengthens distribution network
MINNEAPOLIS--(BUSINESS WIRE)--August 6, 2009--MoneyGram International, Inc. (NYSE:MGI) reported a net loss of $3.3 million in the second quarter of 2009. The net loss included a pre-tax $12.0 million legal accrual and a pre-tax increase in the provision for loss of $9.0 million. The loss compares with net income of $15.2 million in the second quarter of 2008. Revenue totaled $291.2 million in the second quarter 2009 as compared with revenue of $286.1 million a year earlier. Year-to-date total revenue in 2009 was $571.1 million compared with $303.2 million in the first half of 2008. Revenue in the first half of 2008 was adversely impacted by net securities losses of $337.6 million.
“We continue to execute our strategy and, despite the loss in the second quarter of 2009, we demonstrated meaningful progress in positioning MoneyGram for accelerated long-term growth. We remain focused on aggressively managing our balance sheet, becoming more efficient, and making disciplined investments in our global network,” said Pamela H. Patsley, MoneyGram International executive chairman. “During the quarter, we expanded our distribution in all corners of the world, increased our global agent network by 15 percent over the prior year, and we ended the quarter with unrestricted assets of $386.9 million at June 30, 2009.”
During the quarter the Company signed National Commercial Bank in Saudi Arabia, the largest bank in the Middle East. In South Korea, the Company recently launched Shinhan Bank, providing the MoneyGram service in 850 of its locations. In Canada, MoneyGram completed the successful rollout of 2,000 additional Canada Post locations and received commitment to roll out several thousand more locations over the next year, significantly expanding MoneyGram’s agent network from coast to coast. In the very important Latin America region, the Company added more than 1,300 locations, reaching the significant milestone of 25,000 agent locations.
Total fee and other revenue in the quarter was $278.5 million down from $281.9 million in the second quarter of 2008. Money transfer fee and other revenue was $249.7 million in the second quarter of 2009, versus $254.7 million in the second quarter of 2008. The current quarter results were impacted by a lower euro rate, and a decline in money transfer average principal, partially offset by an increase in money transfer transaction volume.
EBITDA (earnings before interest, taxes, depreciation and amortization, and amortization of agent signing bonuses) was $46.6 million and Adjusted EBITDA (EBITDA adjusted for net securities gains and severance-related costs) was $43.4 million in the second quarter of 2009 compared with Adjusted EBITDA of $58.2 million in the comparable period last year. The second quarter of 2009 Adjusted EBITDA was impacted by the $12.0 million legal accrual and the $9.0 million increase in the provision for loss.
”Our steadfast focus is on delivering a compelling value to our consumers and creating long-term value for our shareholders,” said Anthony P. Ryan, MoneyGram International president and chief executive officer. “In the quarter, we entered the mobile money transfer business through an agreement with Affinity Global Services, and we expanded our MoneyGram Rewards loyalty program in France, Germany and Spain. We are optimistic about the opportunities to further grow our core business, introduce new products and services, and generate greater operating efficiencies.”
Global Funds Transfer Results
Total revenue for the Global Funds Transfer segment decreased to $269.7 million in the second quarter of 2009 from $272.3 million in the comparable period last year. Segment results were impacted by a lower euro rate and a decline in money transfer average principal, partially offset by a 4 percent increase in money transfer transaction volume excluding bill payment. The segment reported operating income of $10.9 million, and an operating margin of 4.0 percent in the second quarter, after giving affect to the legal accrual and provision for loss.
Money transfer fee and other revenue including bill payment declined 2 percent, or when adjusted for the change in the value of the euro, increased 1 percent. Total money transfer transaction volume was up 1 percent, as a result of a year-over-year decline in bill payment transactions, which continue to be adversely affected by the slowdown in the U.S. economy.
Money transfer transactions excluding bill payment originating in the United States and Canada, increased 8 percent in the second quarter of 2009. Including bill payment, transactions increased 2 percent in the quarter from the prior year. Transactions originating outside of North America increased 2 percent from the prior year. Spain’s severe economic downturn continues to have a significant impact on our international transaction growth. Excluding Spain, international transactions increased 11 percent from the prior year.
In the second quarter, MoneyGram’s transaction volume to Mexico decreased 9.4 percent, consistent with the industry-wide remittance volume decline into Mexico as measured by Banco de Mexico.
Payment Systems Results
Total Payment Systems net revenue for the quarter increased to $19.5 million from $18.5 million in the second quarter of 2008. Net revenue in 2009 reflects net investment revenue of $6.0 million and a net securities gain of $3.2 million, while 2008 net revenue reflects $34.5 million of net investment revenue and $25.7 million in net securities losses. The segment reported operating income of $9.4 million in the second quarter of 2009, up from $3.9 million in the second quarter of 2008.
Legal Accrual / Provision for Loss
In the second quarter, the Company recorded an accrual of $12.0 million related to the potential resolution of ongoing discussions with the staff of the Federal Trade Commission regarding customer complaints that third parties have inappropriately used MoneyGram’s money transfer services in conjunction with consumer fraud activities. There can be no assurance that the Company will reach an agreement with the staff of the Federal Trade Commission or that this matter will not result in future litigation. MoneyGram continues to implement additional systems and processes to further safeguard consumers against fraud.
Also in the second quarter, the Company increased its provision for loss by $9.0 million as a result of the closure of an international agent. The receivable from this international agent is fully reserved at June 30, 2009 and there is no additional exposure.
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 and Adjusted EBITDA. The following tables include a full reconciliation of these non-GAAP financial measures to the related GAAP financial measures.
MoneyGram believes these non-GAAP financial measures provide information useful to investors in understanding the underlying operations of the Company and its business and performance trends, as well as in facilitating comparisons with other companies in the money transfer industry. Specifically, MoneyGram believes the exclusion of net securities gains (losses) and the valuation gains on embedded derivatives permits evaluation and comparison of results for ongoing business operations. This adjusted view is used by management to internally assess the Company’s performance at both a consolidated and segment level, forecast results and allocate resources. Management does not find the GAAP financial measures particularly relevant or useful in evaluating the operating performance of our segments as they do not represent future period recurring costs or are costs outside of the Company’s control at this time.
We believe that EBITDA and Adjusted EBITDA provide useful information to investors because they are an indicator of the strength and performance of ongoing business operations, including our ability to fund capital expenditures, acquisitions and operations and to service debt. 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. In addition, the Company’s debt agreements require compliance with financial measures based on EBITDA and Adjusted EBITDA. Finally, EBITDA and Adjusted EBITDA are financial measures used by management in reviewing results of operations, forecasting, assessing cash flow and capital, allocating resources and establishing employee incentive programs.
Although MoneyGram believes the above non-GAAP financial measures enhance investors’ understanding of its business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP financial measures.
Description of Tables
Table One – Consolidated Statements of (Loss) Income
Table Two - Consolidated Balance Sheets
Table Three – Unrestricted Assets
Table Four – Consolidated Statements of (Loss) Income (as Adjusted)
Table Five – Global Funds Transfer Segment Results (as Adjusted)
Table Six – Payment Systems Segment Results (as Adjusted)
Table Seven – EBITDA and Adjusted EBITDA
Conference Call
MoneyGram International will have a conference call today at 5:00 p.m. ET, 4:00 p.m. CT to discuss the second quarter of 2009. Pamela H. Patsley, executive chairman, and Anthony Ryan, president and chief executive officer, will speak on the call. The conference call can be accessed by calling (877) 419-6600 in the U.S. The participant confirmation number is 7154330. A replay of the conference call will be available one hour after the call concludes through 5:00 p.m. ET on Aug. 13, 2009. The replay of the call is available at (888) 203-1112 for U.S. callers or 1-719-457-0820 for international callers. The confirmation code will be 7154330.
About MoneyGram International, Inc.
MoneyGram International, Inc. is a leading global payment services company. The Company's major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram is a New York Stock Exchange listed company with approximately 180,000 global money transfer agent locations in 190 countries and territories. For more information, visit the Company's website at www.moneygram.com.
Forward Looking Statements
The statements contained in this press release regarding MoneyGram International, Inc. that are not historical facts are forward-looking statements and are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances due to a number of factors, including, but not limited to: (a) our substantial dividend and debt service obligations and our covenant requirements which could impact our ability to obtain additional financing and to operate and grow our business; (b) the continued volatility and disruption of global capital and credit markets which may adversely affect our liquidity and our agents’ liquidity, our access to credit and capital and our agents’ access to credit and capital and our earnings on our investment portfolio; (c) negative economic conditions generally and in geographic areas or industries that are important to our business which may cause a decline in our money transfer growth rate and transaction volume and/or revenue; (d) a material slow down or complete disruption of international migration patterns which could adversely affect our money transfer volume and growth rate; (e) a loss of material retail agent relationships or a reduction in transaction volume from them; (f) our ability to develop and implement successful pricing strategies for our services; (g) stockholder lawsuits and other litigation or government investigations of the Company or its agents which could result in material costs, settlements, fines or penalties; (h) our ability to maintain sufficient banking relationships; (i) our ability to attract and retain key employees; (j) our ability to maintain capital sufficient to pursue our growth strategy, fund key strategic initiatives and meet evolving regulatory requirements; (k) our ability to successfully and timely implement new or enhanced technology and infrastructure, delivery methods and product and service offerings and to invest in products, services and infrastructure; (l) our ability to adequately protect our brand and our other intellectual property rights and to avoid infringing on third-party intellectual property rights; (m) competition from large competitors, niche competitors or new competitors that may enter the markets in which we operate; (n) the impact of laws, regulatory requirements, and other industry practices in the U.S. and abroad, including changes in laws, regulations or other industry practices and standards that may increase our costs of doing business or reduce the market for or value of our services; (o) our offering of money transfer services through agents in regions that are politically volatile or, in a limited number of cases, are subject to certain Office of Foreign Assets Control (“OFAC”) restrictions which could result in contravention of U.S. law or regulations by us or our agents which could subject us to fines and penalties and cause us reputational harm; (p) a breakdown, catastrophic event, security breach, privacy breach, improper operation or other event impacting our systems or processes or our vendors’, agents’ or financial institution customers’ systems or processes, which could result in financial loss, loss of customers, regulatory sanctions and damage to our brand and reputation; (q) our ability to scale our technology to match our business and transactional growth; (r) our ability to manage our credit exposure to retail agents and financial institution customers which exposure may increase during an economic downturn; (s) our ability to mitigate fraud risks from consumers and agents which risks may increase during an economic downturn; (t) our ability to successfully manage risks associated with running Company-owned retail locations and acquiring new businesses; (u) our ability to successfully manage risks associated with our international sales and operations including the potential for political, economic or other instability in countries that are important to our business; (v) our compliance with the internal control provisions of Section 404 of the Sarbanes-Oxley Act of 2002; (w) the outcome of positions we take with respect to federal, state, local and international taxation; (x) additional risk factors described in our other filings with the Securities and Exchange Commission from time to time.
TABLE ONE | ||||||||||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF (LOSS) INCOME | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
June 30, |
| June 30, |
| |||||||||||||||||||||
(Amounts in thousands, except per share data) | 2009 | 2008 | 2009 vs | 2009 | 2008 | 2009 vs | ||||||||||||||||||
REVENUE | ||||||||||||||||||||||||
Fee and other revenue | $ | 278,493 | $ | 281,881 | $ | (3,388 | ) | $ | 546,637 | $ | 544,678 | $ | 1,959 | |||||||||||
Investment revenue | 8,455 | 34,498 | (26,043 | ) | 20,146 | 96,063 | (75,917 | ) | ||||||||||||||||
Net securities gains (losses) | 4,233 | (30,291 | ) | 34,524 | 4,289 | (337,591 | ) | 341,880 | ||||||||||||||||
Total revenue | 291,181 | 286,088 | 5,093 | 571,072 | 303,150 | 267,922 | ||||||||||||||||||
Fee commissions expense | 121,764 | 129,098 | (7,334 | ) | 240,308 | 246,330 | (6,022 | ) | ||||||||||||||||
Investment commissions expense | 354 | (5,385 | ) | 5,739 | 753 | 91,504 | (90,751 | ) | ||||||||||||||||
Total commissions expense | 122,118 | 123,713 | (1,595 | ) | 241,061 | 337,834 | (96,773 | ) | ||||||||||||||||
Net revenue (losses) | 169,063 | 162,375 | 6,688 | 330,011 | (34,684 | ) | 364,695 | |||||||||||||||||
EXPENSES | ||||||||||||||||||||||||
Compensation and benefits | 47,639 | 68,136 | (20,497 | ) | 99,271 | 120,435 | (21,164 | ) | ||||||||||||||||
Transaction and operations support | 71,166 | 51,335 | 19,831 | 115,650 | 103,364 | 12,286 | ||||||||||||||||||
Depreciation and amortization | 14,962 | 14,288 | 674 | 29,324 | 28,506 | 818 | ||||||||||||||||||
Occupancy, equipment and supplies | 12,237 | 12,391 | (154 | ) | 23,263 | 23,613 | (350 | ) | ||||||||||||||||
Interest expense | 26,649 | 24,008 | 2,641 | 53,689 | 38,797 | 14,892 | ||||||||||||||||||
Valuation gain on embedded derivative | - | (31,203 | ) | 31,203 | - | (31,203 | ) | 31,203 | ||||||||||||||||
Debt extinguishment loss | - | - | - | - | 1,499 | (1,499 | ) | |||||||||||||||||
Total expenses | 172,653 | 138,955 | 33,698 | 321,197 | 285,011 | 36,186 | ||||||||||||||||||
(Loss) income before income taxes | (3,590 | ) | 23,420 | (27,010 | ) | 8,814 | (319,695 | ) | 328,509 | |||||||||||||||
Income tax (benefit) expense | (273 | ) | 8,259 | (8,532 | ) | 290 | 25,999 | (25,709 | ) | |||||||||||||||
NET (LOSS) INCOME | $ | (3,317 | ) | $ | 15,161 | $ | (18,478 | ) | $ | 8,524 | $ | (345,694 | ) | $ | 354,218 | |||||||||
Basic and diluted loss per common share | $ | (0.40 | ) | $ | (0.11 | ) | $ | (0.29 | ) | $ | (0.60 | ) | $ | (4.51 | ) | $ | 3.91 | |||||||
Net (loss) income as reported | $ | (3,317 | ) | $ | 15,161 | $ | (18,478 | ) | $ | 8,524 | $ | (345,694 | ) | $ | 354,218 | |||||||||
Preferred stock dividends | (27,116 | ) | (23,994 | ) | (3,122 | ) | (52,834 | ) | (25,816 | ) | (27,018 | ) | ||||||||||||
Accretion recognized on preferred stock | (2,540 | ) | - | (2,540 | ) | (5,041 | ) | - | (5,041 | ) | ||||||||||||||
Net loss available to common stockholders | $ | (32,973 | ) | $ | (8,833 | ) | $ | (24,140 | ) | $ | (49,351 | ) | $ | (371,510 | ) | $ | 322,159 | |||||||
Weighted-average outstanding common shares | 82,504 | 82,464 | 40 | 82,493 | 82,447 | 46 | ||||||||||||||||||
TABLE TWO | ||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited) | ||||||||
June 30, | December 31, | |||||||
(Amounts in thousands, except share data) | 2009 | 2008 | ||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | - | $ | - | ||||
Cash and cash equivalents (substantially restricted) | 3,973,685 | 4,077,381 | ||||||
Receivables, net (substantially restricted) | 1,098,388 | 1,264,885 | ||||||
Trading investments (substantially restricted) | 13,260 | 21,485 | ||||||
Available-for-sale investments (substantially restricted) | 357,432 | 438,774 | ||||||
Property and equipment | 143,712 | 156,263 | ||||||
Intangible assets | 12,644 | 14,548 | ||||||
Goodwill | 432,591 | 434,337 | ||||||
Other assets | 189,560 | 234,623 | ||||||
Total assets | $ | 6,221,272 | $ | 6,642,296 | ||||
LIABILITIES | ||||||||
Payment service obligations | $ | 5,079,941 | $ | 5,437,999 | ||||
Debt | 909,046 | 978,881 | ||||||
Pension and other postretirement benefits | 132,500 | 130,900 | ||||||
Accounts payable and other liabilities | 110,415 | 121,586 | ||||||
Deferred tax liabilities | 12,671 | 12,454 | ||||||
Total liabilities | 6,244,573 | 6,681,820 | ||||||
MEZZANINE EQUITY | ||||||||
Participating Convertible Preferred Stock-Series B, $0.01 par value, | 496,695 | 458,408 | ||||||
Participating Convertible Preferred Stock-Series B-1, $0.01 par value, | 303,392 | 283,804 | ||||||
Total mezzanine equity | 800,087 | 742,212 | ||||||
STOCKHOLDERS' DEFICIT | ||||||||
Preferred shares - undesignated, $0.01 par value, 5,000,000 authorized, | - | - | ||||||
Preferred shares - junior participating, $0.01 par value, 2,000,000 authorized, | - | - | ||||||
Common shares, $0.01 par value, 1,300,000,000 shares authorized, | 886 | 886 | ||||||
Additional paid-in capital | 6,268 | 62,324 | ||||||
Retained loss | (640,730 | ) | (649,254 | ) | ||||
Unearned employee benefits | (81 | ) | (424 | ) | ||||
Accumulated other comprehensive loss | (36,569 | ) | (42,707 | ) | ||||
Treasury stock: 6,036,846 and 5,999,175 shares at June 30, 2009 and | (153,162 | ) | (152,561 | ) | ||||
Total stockholders' deficit | (823,388 | ) | (781,736 | ) | ||||
Total liabilities, mezzanine equity and stockholders' deficit | $ | 6,221,272 | $ | 6,642,296 | ||||
TABLE THREE | ||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||
UNRESTRICTED ASSETS | ||||||||||||
(Unaudited) | ||||||||||||
June 30, | March 31, | December 31, | ||||||||||
(Amounts in thousands) | 2009 | 2009 | 2008 | |||||||||
Cash and cash equivalents | $ | 3,973,685 | $ | 3,904,783 | $ | 4,077,381 | ||||||
Receivables, net | 1,098,388 | 1,117,184 | 1,264,885 | |||||||||
Government agency securities | 334,727 | 390,573 | 409,246 | |||||||||
5,406,800 | 5,412,540 | 5,751,512 | ||||||||||
Amounts restricted to cover payment service obligations | (5,079,941 | ) | (5,067,167 | ) | (5,437,999 | ) | ||||||
Excess unrestricted assets, excluding trading investments, | ||||||||||||
put options and other asset-backed securities | 326,859 | 345,373 | 313,513 | |||||||||
Trading investments | 13,260 | 19,840 | 21,485 | |||||||||
Put options on trading investments | 24,049 | 30,287 | 26,505 | |||||||||
Other asset-backed securities | 22,705 | 25,254 | 29,528 | |||||||||
Excess unrestricted assets | $ | 386,873 | $ | 420,754 | $ | 391,031 | ||||||
TABLE FOUR | |||||||||||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | |||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF (LOSS) INCOME (AS ADJUSTED) | |||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
Reported | Q2 | Adjusted | Reported | Q2 | Adjusted | ||||||||||||||||||||
(Amounts in thousands) | Q2 2009 | Adjustments | Q2 2009 | Q2 2008 | Adjustments | Q2 2008 | |||||||||||||||||||
REVENUE | |||||||||||||||||||||||||
Fee and other revenue | $ | 278,493 | $ | - | $ | 278,493 | $ | 281,881 | $ | - | $ | 281,881 | |||||||||||||
Investment revenue | 8,455 | - | 8,455 | 34,498 | - | 34,498 | |||||||||||||||||||
Net securities gains (losses) | 4,233 | (4,233 | ) | (1) | - | (30,291 | ) | 30,291 | (1) | - | |||||||||||||||
Total revenue | 291,181 | (4,233 | ) | 286,948 | 286,088 | 30,291 | 316,379 | ||||||||||||||||||
Fee commissions expense | 121,764 | - | 121,764 | 129,098 | - | 129,098 | |||||||||||||||||||
Investment commissions expense | 354 | - | 354 | (5,385 | ) | 29,273 | (2) | 23,888 | |||||||||||||||||
Total commissions expense | 122,118 | - | 122,118 | 123,713 | 29,273 | 152,986 | |||||||||||||||||||
Net revenue | 169,063 | (4,233 | ) | 164,829 | 162,375 | 1,018 | 163,393 | ||||||||||||||||||
EXPENSES | |||||||||||||||||||||||||
Compensation and benefits | 47,639 | 2,772 | (3) | 50,411 | 68,136 | (16,524 | ) | (3) | 51,612 | ||||||||||||||||
Transaction and operations support | 71,166 | (3,858 | ) | (4) | 67,308 | 51,335 | (1,129 | ) | (3) | 50,206 | |||||||||||||||
Depreciation and amortization | 14,962 | - | 14,962 | 14,288 | - | 14,288 | |||||||||||||||||||
Occupancy, equipment and supplies | 12,237 | - | 12,237 | 12,391 | - | 12,391 | |||||||||||||||||||
Interest expense | 26,649 | - | 26,649 | 24,008 | 4,235 | (2) | 28,243 | ||||||||||||||||||
Valuation gain on embedded derivative | - | - | - | (31,203 | ) | 31,203 | (5) | - | |||||||||||||||||
Total expenses | 172,653 | (1,086 | ) | 171,568 | 138,955 | 17,785 | 156,740 | ||||||||||||||||||
(Loss) income before income taxes | $ | (3,590 | ) | $ | (3,147 | ) | $ | (6,739 | ) | $ | 23,420 | $ | (16,767 | ) | $ | 6,653 | |||||||||
Reported | Q2 YTD | Adjusted | Reported | Q2 YTD | Adjusted | ||||||||||||||||||||
(Amounts in thousands) | Q2 2009 YTD | Adjustments | Q2 2009 YTD | Q2 2008 YTD | Adjustments | Q2 2008 YTD | |||||||||||||||||||
REVENUE | |||||||||||||||||||||||||
Fee and other revenue | $ | 546,637 | $ | - | $ | 546,637 | $ | 544,678 | $ | - | $ | 544,678 | |||||||||||||
Investment revenue | 20,146 | - | 20,146 | 96,063 | - | 96,063 | |||||||||||||||||||
Net securities gains (losses) | 4,289 | (4,289 | ) | (1) | - | (337,591 | ) | 337,591 | (1) | - | |||||||||||||||
Total revenue | 571,072 | (4,289 | ) | 566,783 | 303,150 | 337,591 | 640,741 | ||||||||||||||||||
Fee commissions expense | 240,308 | - | 240,308 | 246,330 | - | 246,330 | |||||||||||||||||||
Investment commissions expense | 753 | - | 753 | 91,504 | (27,735 | ) | (2) | 63,769 | |||||||||||||||||
Total commissions expense | 241,061 | - | 241,061 | 337,834 | (27,735 | ) | 310,099 | ||||||||||||||||||
Net revenue (losses) | 330,011 | (4,289 | ) | 325,721 | (34,684 | ) | 365,326 | 330,642 | |||||||||||||||||
EXPENSES | |||||||||||||||||||||||||
Compensation and benefits | 99,271 | (687 | ) | (3) | 98,584 | 120,435 | (16,524 | ) | (3) | 103,911 | |||||||||||||||
Transaction and operations support | 115,650 | (4,008 | ) | (4) | 111,642 | 103,364 | (8,862 | ) | (3) | 94,502 | |||||||||||||||
Depreciation and amortization | 29,324 | - | 29,324 | 28,506 | - | 28,506 | |||||||||||||||||||
Occupancy, equipment and supplies | 23,263 | - | 23,263 | 23,613 | - | 23,613 | |||||||||||||||||||
Interest expense | 53,689 | - | 53,689 | 38,797 | (1,982 | ) | (2) | 36,815 | |||||||||||||||||
Valuation gain on embedded derivative | - | - | - | (31,203 | ) | 31,203 | (5) | - | |||||||||||||||||
Debt extinguishment loss | - | - | - | 1,499 | (1,499 | ) | (6) | - | |||||||||||||||||
Total expenses | 321,197 | (4,695 | ) | 316,503 | 285,011 | 2,336 | 287,347 | ||||||||||||||||||
Income (Loss) before income taxes | $ | 8,814 | $ | 406 | $ | 9,218 | $ | (319,695 | ) | $ | 362,990 | $ | 43,295 |
(1) Realized and unrealized gains and losses and other-than-temporary impairments on investments.
(2) Mark-to-market valuation gain (loss) on interest rate swaps, which were terminated in June 2008.
(3) Executive severance and related costs & transaction costs related to the recapitalization.
(4) Impairment charges and loss on non-core businesses.
(5) Change in the fair value of embedded derivatives in preferred stock.
(6) Debt extinguishment loss related to the recapitalization.
TABLE FIVE | ||||||||||||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||||||||||||
GLOBAL FUNDS TRANSFER SEGMENT RESULTS (AS ADJUSTED) | ||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||
Reported | Q2 | Adjusted | Reported | Q2 | Adjusted | |||||||||||||||||||||
(Amounts in thousands) | Q2 2009 | Adjustments | Q2 2009 | Q2 2008 | Adjustments | Q2 2008 | ||||||||||||||||||||
Money transfer revenue | ||||||||||||||||||||||||||
Fee and other revenue | $ | 249,726 | $ | - | $ | 249,726 | $ | 254,715 | $ | - | $ | 254,715 | ||||||||||||||
Investment revenue | 107 | - | 107 | 375 | - | 375 | ||||||||||||||||||||
Net securities losses | - | - | - | (346 | ) | 346 | (1) | - | ||||||||||||||||||
Retail money order and other | ||||||||||||||||||||||||||
Fee and other revenue | 18,072 | - | 18,072 | 16,727 | - | 16,727 | ||||||||||||||||||||
Investment revenue | 1,254 | - | 1,254 | 5,021 | - | 5,021 | ||||||||||||||||||||
Net securities gains (losses) | 584 | (584 | ) | (1) | - | (4,240 | ) | 4,240 | (1) | - | ||||||||||||||||
Total Global Funds Transfer revenue | 269,743 | (584 | ) | 269,159 | 272,252 | 4,586 | 276,838 | |||||||||||||||||||
Commissions expense | 121,318 | - | 121,318 | 128,551 | - | 128,551 | ||||||||||||||||||||
Net revenue | $ | 148,425 | $ | (584 | ) | $ | 147,841 | $ | 143,701 | $ | 4,586 | $ | 148,287 | |||||||||||||
Operating income | $ | 10,905 | $ | 2,592 | (2) | $ | 13,497 | $ | 30,620 | $ | 4,586 | $ | 35,206 | |||||||||||||
Operating margin | 4.0 | % | 5.0 | % | 11.2 | % | 12.7 | % | ||||||||||||||||||
Reported | Q2 YTD | Adjusted | Reported | Q2 YTD | Adjusted | |||||||||||||||||||||
(Amounts in thousands) | Q2 2009 YTD | Adjustments | Q2 2009 YTD | Q2 2008 YTD | Adjustments | Q2 2008 YTD | ||||||||||||||||||||
Money transfer revenue | ||||||||||||||||||||||||||
Fee and other revenue | $ | 491,846 | $ | - | $ | 491,846 | $ | 491,600 | $ | - | $ | 491,600 | ||||||||||||||
Investment revenue | 107 | - | 107 | 1,081 | - | 1,081 | ||||||||||||||||||||
Net securities losses | - | - | - | (4,081 | ) | 4,081 | (1) | - | ||||||||||||||||||
Retail money order and other | ||||||||||||||||||||||||||
Fee and other revenue | 33,914 | - | 33,914 | 33,659 | - | 33,659 | ||||||||||||||||||||
Investment revenue | 2,976 | - | 2,976 | 13,870 | - | 13,870 | ||||||||||||||||||||
Net securities gains (losses) | 592 | (592 | ) | (1) | - | (44,878 | ) | 44,878 | (1) | - | ||||||||||||||||
Total Global Funds Transfer revenue | 529,435 | (592 | ) | 528,843 | 491,251 | 48,959 | 540,210 | |||||||||||||||||||
Commissions expense | 239,221 | - | 239,221 | 245,114 | - | 245,114 | ||||||||||||||||||||
Net revenue | $ | 290,214 | $ | (592 | ) | $ | 289,622 | $ | 246,137 | $ | 48,959 | $ | 295,096 | |||||||||||||
Operating income | $ | 47,631 | $ | 2,584 | (2) | $ | 50,215 | $ | 26,948 | $ | 48,959 | $ | 75,907 | |||||||||||||
Operating margin | 9.0 | % | 9.5 | % | 5.5 | % | 14.1 | % | ||||||||||||||||||
(1) Realized and unrealized gains and losses and other-than-temporary impairments on investments.
(2) Includes adjustment for goodwill impairment charge of $3.2 million on exit of non-core business.
TABLE SIX | ||||||||||||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||||||||||||
PAYMENT SYSTEMS SEGMENT RESULTS (AS ADJUSTED) | ||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||
Reported | Q2 | Adjusted | Reported | Q2 | Adjusted | |||||||||||||||||||||
(Amounts in thousands) | Q2 2009 | Adjustments | Q2 2009 | Q2 2008 | Adjustments | Q2 2008 | ||||||||||||||||||||
Fee and other revenue | $ | 10,696 | $ | - | $ | 10,696 | $ | 10,300 | $ | - | $ | 10,300 | ||||||||||||||
Investment revenue | 6,313 | - | 6,313 | 29,102 | - | 29,102 | ||||||||||||||||||||
Net securities gains (losses) | 3,242 | (3,242 | ) | (1) | - | (25,705 | ) | 25,705 | (1) | - | ||||||||||||||||
Total Payment Systems revenue | 20,251 | (3,242 | ) | 17,009 | 13,697 | 25,705 | 39,402 | |||||||||||||||||||
Commissions expense | 800 | - | 800 | (4,839 | ) | 29,273 | (2) | 24,434 | ||||||||||||||||||
Net revenue | $ | 19,451 | $ | (3,242 | ) | $ | 16,209 | $ | 18,536 | $ | (3,568 | ) | $ | 14,968 | ||||||||||||
Operating income | $ | 9,442 | $ | (2,560 | ) | (3) | $ | 6,882 | $ | 3,904 | $ | (3,568 | ) | $ | 336 | |||||||||||
Operating margin | 46.6 | % | 40.5 | % | 28.5 | % | 0.9 | % | ||||||||||||||||||
Reported | Q2 YTD | Adjusted | Reported | Q2 YTD | Adjusted | |||||||||||||||||||||
(Amounts in thousands) | Q2 2009 YTD | Adjustments | Q2 2009 YTD | Q2 2008 YTD | Adjustments | Q2 2008 YTD | ||||||||||||||||||||
Fee and other revenue | $ | 20,852 | $ | - | $ | 20,852 | $ | 19,120 | $ | - | $ | 19,120 | ||||||||||||||
Investment revenue | 15,076 | - | 15,076 | 81,180 | - | 81,180 | ||||||||||||||||||||
Net securities gains (losses) | 3,291 | (3,291 | ) | (1) | - | (288,632 | ) | 288,632 | (1) | - | ||||||||||||||||
Total Payment Systems revenue (losses) | 39,219 | (3,291 | ) | 35,928 | (188,332 | ) | 288,632 | 100,300 | ||||||||||||||||||
Commissions expense | 1,840 | - | 1,840 | 92,719 | (27,735 | ) | (2) | 64,984 | ||||||||||||||||||
Net revenue (losses) | $ | 37,379 | $ | (3,291 | ) | $ | 34,088 | $ | (281,051 | ) | $ | 316,367 | $ | 35,316 | ||||||||||||
Operating income (loss) | $ | 16,694 | $ | (2,609 | ) | (3) | $ | 14,085 | $ | (310,949 | ) | $ | 316,367 | $ | 5,418 | |||||||||||
Operating margin | 42.6 | % | 39.2 | % | (165.1 | %) | 5.4 | % |
(1) Realized and unrealized gains and losses and other-than-temporary impairments on investments.
(2) Mark-to-market valuation gain (loss) on interest rate swaps, which were terminated in June 2008.
(3) Includes adjustment of $0.7 million for goodwill impairment and loss on pending sale of non-core business.
TABLE SEVEN | |||||||||||
MONEYGRAM INTERNATIONAL, INC. | |||||||||||
EBITDA AND ADJUSTED EBITDA | |||||||||||
(Unaudited) | |||||||||||
(Amounts in thousands) |
| Q2 2009 | Q2 2008 | ||||||||
(Loss) income before income taxes | $ | (3,590 | ) | $ | 23,420 | ||||||
Interest expense | 26,649 | 24,008 | |||||||||
Depreciation and amortization | 14,962 | 14,288 | |||||||||
Amortization of agent signing bonuses | 8,554 | 9,007 | |||||||||
EBITDA | 46,575 | 70,723 | |||||||||
Net securities (gains) losses (1) | (4,233 | ) | 30,291 | ||||||||
Valuation gains on interest rate swaps | - | (29,273 | ) | ||||||||
Severance and related net costs | (2,772 | ) | 17,653 | ||||||||
Impairment charges and loss on non-core businesses | 3,858 | - | |||||||||
Valuation gain on embedded derivative (2) | - | (31,203 | ) | ||||||||
Adjusted EBITDA | $ | 43,428 | $ | 58,191 |
(1) Realized and unrealized gains and losses and other-than-temporary impairments on investments.
(2) Change in the fair value of embedded derivatives in preferred stock.
CONTACT:
MoneyGram International, Inc.
Media:
Lynda Michielutti, 952-591-3846
lmichielutti@moneygram.com
or
Investors:
Alex Holmes, 720-568-8703
aholmes@moneygram.com