Exhibit 99.1
MoneyGram International Reports Third Quarter Financial Results
Increased non-U.S. transaction growth to 16 percent
MINNEAPOLIS--(BUSINESS WIRE)--October 28, 2010--MoneyGram International, Inc. (NYSE:MGI), a leading global payment services company, today reported financial results for the third quarter of 2010.
- Money transfer transaction volume increased 9 percent driven by 16 percent growth in non-U.S. sends in the current quarter versus prior year.
- Money transfer fee and other revenue was flat in the third quarter of 2010 versus prior year. On a constant currency basis, money transfer fee and other revenue increased 2 percent versus prior year. The difference between transaction growth and constant currency revenue growth is due to lower revenue per transaction primarily related to the continuation of the $50 price band in the United States.
- Global agent locations increased 11 percent over the prior year quarter to 207,000.
- Total revenue in the third quarter declined 4 percent to $292.9 million, compared with $304.5 million in the same period last year. Total fee and other revenue declined 2 percent to $288.5 million, from $294.9 million in the same period last year. Total revenue in 2010 reflects investment revenue and net securities gains that were $5.2 million less than third quarter 2009.
- Net income for the quarter was $10.0 million and EBITDA was $57.3 million. Both net income and EBITDA were impacted by $7.2 million of stock-based compensation, $1.8 million of legal accruals primarily related to various shareholder litigation matters, and $1.6 million of restructuring and reorganization costs. Net income was also impacted by a $1.6 million write off of deferred financing costs and debt discount related to a $30.0 million debt prepayment in the quarter.
- Adjusted EBITDA for the quarter was $68.0 million versus $66.6 million in the prior year. Third quarter 2010 Adjusted EBITDA reflects lower net investment revenue of $2.3 million compared with the same period in 2009. Adjusted EBITDA margin was 23.2 percent in the third quarter of 2010, compared with 22.1 percent in the same period last year.
“MoneyGram delivered solid financial performance in the third quarter,” said Pamela H. Patsley, MoneyGram chairman and chief executive officer. “We saw continued strength in our core money transfer business, made important investments in our global brand, and increased our capabilities through expanded relationships around the world. Additionally, we increased margin across the business through efficiency gains and expense management initiatives and improved our capital structure by paying down an additional $30 million in outstanding debt.”
Balance Sheet Items
During the quarter, MoneyGram prepaid $30 million on its Senior Tranche B Loan under its Senior Facility. Including this payment, the Company has paid down $277 million, or 28 percent, of its debt since Jan.1, 2009. The Company ended the quarter with $716.3 million in outstanding debt principal and assets in excess of payment service obligations of $290.4 million.
Market Development
The Company continued its focus on enhancing its product offerings and expanding its agent network. MoneyGram recently:
- Announced a long-term sponsorship agreement with the International Cricket Council (ICC), providing MoneyGram a presence at all the major ICC cricket tournaments around the world during 2011-2015. MoneyGram will be a local partner sponsor for the 2011 ICC World Cup, which takes place in Bangladesh, India and Sri Lanka from Feb. 19 to April 2, 2011.
- Teamed with Univision to become a reload partner, enabling Univision MasterCard® Prepaid cardholders the ability to load their cards at any MoneyGram agent location in the U.S.
- Renewed a multi-year contract extension with the United Kingdom Post Office (UKPO) to continue providing MoneyGram money transfer services in the UKPO’s 12,000 convenient branch locations throughout the U.K.
- Announced a global alliance with Ceridian Stored Value Solutions, a premier provider of global prepaid services, to develop MoneyGram’s in-lane prepaid money transfer product that will be available in up to 40 countries around the world.
- Expanded our presence in the Arabian Gulf region through an agreement with BFC Group Holdings, to provide money transfer services in Bahrain and Kuwait through its subsidiaries Bahrain Financing Company and Bahrain Exchange Company.
- Added Vijaya Bank in India, bringing MoneyGram’s money transfer services to nearly 1,200 branch locations in India. Further expanded our presence in this key remittance country with the rollout of an additional 1,800 locations through existing agents Punjab National Bank, State Bank of Hyderabad and United Bank of India. This brings our total locations in India to more than 26,000.
- Announced an agreement with BillingTree®, a leading on-demand payment processor, to provide same-day, cash payment services at MoneyGram’s agent locations nationwide under the brand name BillingTree PaynCash.
- Continued our expansion with Bank of China with the roll out of MoneyGram’s services at nearly 1,400 Bank of China branch locations in Jiangsu and Zhejiang provinces.
Global Funds Transfer Segment Results
Total revenue for the Global Funds Transfer segment decreased 1 percent to $266.2 million in the third quarter of 2010 compared with $268.1 million in the third quarter of 2009. The segment reported operating income of $36.5 million and an operating margin of 13.7 percent in the third quarter of 2010. Adjusted operating margin was 16.0 percent in the quarter.
Money transfer transaction volume increased 9 percent, with fee and other revenue flat at $235.0 million in the third quarter of 2010 and 2009. On a constant currency basis, money transfer fee and other revenue improved 2 percent. The difference between transaction growth and constant currency revenue growth is due to lower revenue per transaction primarily related to the continuation of the $50 price band in the United States.
In the third quarter, money transfer transactions originating outside of the United States increased 16 percent over the prior year. Excluding Spain, transactions originating outside of the United States increased a very strong 19 percent over the prior year. Transactions sent from Spain were flat compared with the same period last year. Money transfer transactions originating in the United States, excluding transactions sent to Mexico, increased 7 percent. Third quarter transaction volume to Mexico returned to positive growth, increasing 1 percent in the quarter. Intra-U.S. transaction growth increased 9 percent.
Bill payment transaction volume increased 1 percent, while fee and other revenue decreased 6 percent to $31.2 million in the third quarter of 2010 from $33.1 million in the third quarter of 2009. The difference between transaction and revenue growth is primarily related to transaction mix as we continue to grow in new emerging verticals that generate lower revenue per transaction compared with the traditional business.
Financial Paper Products Segment Results
Total revenue in the Financial Paper Products segment declined 15 percent to $26.0 million in the third quarter of 2010 from $30.6 million in the third quarter of 2009. Operating income decreased 13 percent to $7.5 million in the third quarter of 2010 from $8.6 million in the third quarter of 2009. Operating margin in the third quarter of 2010 was 28.8 percent. Adjusted operating margin was 32.8 percent in the quarter.
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) and Adjusted EBITDA margin (Adjusted EBITDA divided by Adjusted Total Revenue). The following tables include a full reconciliation of these non-GAAP financial measures to the related GAAP financial measures.
We believe that EBITDA, Adjusted EBITDA and Adjusted EBITDA margin 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. In addition, the Company’s debt agreements require compliance with financial measures based on EBITDA and Adjusted EBITDA. Finally, EBITDA, Adjusted EBITDA and Adjusted EBITDA margin 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 exclusive alternative to accompanying GAAP financial measures.
Description of Tables
Table One – Consolidated Statements of Income (Loss)
Table Two – Segment Results
Table Three – Segment Reconciliations
Table Four – EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin
Table Five – Consolidated Balance Sheets
Table Six – Assets in Excess of Payment Service Obligations
Conference Call
MoneyGram International will host a conference call today at 9:00 a.m. ET, 8:00 a.m. CT, to discuss its third quarter 2010 results. Pamela H. Patsley, chairman and chief executive officer, will host the call. The conference call can be accessed by calling 1-888-503-8168 in the U.S. The participant confirmation number is 4055652. Slides are available on MoneyGram’s website at www.moneygram.com. A replay of the conference call will be available at noon ET on Oct. 28 through 11:59 p.m. ET on Nov. 5, 2010. The replay of the call is available at 1-877-870-5176 (U.S.) or 1-858-384-5517 (outside the U.S.). The replay confirmation code is 4055652.
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 207,000 global money transfer agent locations in 191 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 and factual information contained herein, particularly those statements pertaining to MoneyGram’s expectations, guidance or future operating results, are forward-looking statements and are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are only as of the date they are made, and unless legally required, MoneyGram undertakes no obligation to update or revise publicly any forward-looking statement. Words such as “estimates,” “expects,” “projects,” “plans” and other similar expressions or future or conditional verbs such as “will,” “should,” “could,” and “would” are intended to identify such forward-looking statements. These forward-looking 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 the following: (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) sustained illiquidity of global financial 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) weak 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 and regulatory requirements including the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations required to be developed thereunder, 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, reduce the market for or value of our services or change our relationships with our customers, investors and other stakeholders; (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 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; (s) our ability to mitigate fraud risks from consumers, agents and other third parties; (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 INCOME (LOSS) | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, |
| September 30, |
| |||||||||||||||||||||
(Amounts in thousands, except per share data) | 2010 | 2009 | 2010 vs 2009 | 2010 | 2009 | 2010 vs 2009 | ||||||||||||||||||
REVENUE | ||||||||||||||||||||||||
Fee and other revenue | $ | 288,494 | $ | 294,863 | $ | (6,369 | ) | $ | 847,004 | $ | 841,500 | $ | 5,504 | |||||||||||
Investment revenue | 4,393 | 6,849 | (2,456 | ) | 16,284 | 26,995 | (10,711 | ) | ||||||||||||||||
Net securities gains | - | 2,738 | (2,738 | ) | 2,115 | 7,027 | (4,912 | ) | ||||||||||||||||
Total revenue | 292,887 | 304,450 | (11,563 | ) | 865,403 | 875,522 | (10,119 | ) | ||||||||||||||||
Fee and other commissions expense | 127,003 | 128,352 | (1,349 | ) | 369,661 | 368,660 | 1,001 | |||||||||||||||||
Investment commissions expense | 181 | 375 | (194 | ) | 601 | 1,128 | (527 | ) | ||||||||||||||||
Total commissions expense | 127,184 | 128,727 | (1,543 | ) | 370,262 | 369,788 | 474 | |||||||||||||||||
Net revenue | 165,703 | 175,723 | (10,020 | ) | 495,141 | 505,734 | (10,593 | ) | ||||||||||||||||
EXPENSES | ||||||||||||||||||||||||
Compensation and benefits | 56,220 | 58,963 | (2,743 | ) | 169,007 | 158,234 | 10,773 | |||||||||||||||||
Transaction and operations support | 46,984 | 82,573 | (35,589 | ) | 143,149 | 198,223 | (55,074 | ) | ||||||||||||||||
Occupancy, equipment and supplies | 12,528 | 12,254 | 274 | 34,672 | 35,517 | (845 | ) | |||||||||||||||||
Interest expense | 24,689 | 26,127 | (1,438 | ) | 76,536 | 79,816 | (3,280 | ) | ||||||||||||||||
Depreciation and amortization | 11,497 | 14,510 | (3,013 | ) | 35,884 | 43,834 | (7,950 | ) | ||||||||||||||||
Total expenses | 151,918 | 194,427 | (42,509 | ) | 459,248 | 515,624 | (56,376 | ) | ||||||||||||||||
Income (loss) before income taxes | 13,785 | (18,704 | ) | 32,489 | 35,893 | (9,890 | ) | 45,783 | ||||||||||||||||
Income tax expense (benefit) | 3,800 | (400 | ) | 4,200 | 8,248 | (110 | ) | 8,358 | ||||||||||||||||
NET INCOME (LOSS) | $ | 9,985 | $ | (18,304 | ) | $ | 28,289 | $ | 27,645 | $ | (9,780 | ) | $ | 37,425 | ||||||||||
Basic and diluted loss per common share | $ | (0.30 | ) | $ | (0.60 | ) | $ | 0.30 | $ | (0.86 | ) | $ | (1.19 | ) | $ | 0.33 | ||||||||
Net loss available to common stockholders: | ||||||||||||||||||||||||
Net income (loss) as reported | $ | 9,985 | $ | (18,304 | ) | $ | 28,289 | $ | 27,645 | $ | (9,780 | ) | $ | 37,425 | ||||||||||
Accrued preferred stock dividends | (31,981 | ) | (28,277 | ) | (3,704 | ) | (92,017 | ) | (81,111 | ) | (10,906 | ) | ||||||||||||
Accretion recognized on preferred stock | (2,592 | ) | (2,580 | ) | (12 | ) | (7,416 | ) | (7,621 | ) | 205 | |||||||||||||
Net loss available to common stockholders | $ | (24,588 | ) | $ | (49,161 | ) | $ | 24,573 | $ | (71,788 | ) | $ | (98,512 | ) | $ | 26,724 | ||||||||
Weighted-average outstanding common shares (1) | 83,336 | 82,505 | 831 | 83,081 | 82,497 | 584 | ||||||||||||||||||
(1) The following weighted-average potential common shares are excluded from diluted loss per common share as their effect is anti-dilutive. | ||||||||||||||||||||||||
All potential common shares are anti-dilutive in periods of net loss available to common stockholders. | ||||||||||||||||||||||||
Shares related to stock options and restricted stock | 38,605 | 22,560 | 36,546 | 15,781 | ||||||||||||||||||||
Shares related to preferred stock | 418,555 | 370,082 | 418,555 | 370,082 |
TABLE TWO | ||||||||||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||||||||||
SEGMENT RESULTS | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Global Funds Transfer | ||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, |
| September 30, |
| |||||||||||||||||||||
(Amounts in thousands) | 2010 | 2009 | 2010 vs 2009 | 2010 | 2009 | 2010 vs 2009 | ||||||||||||||||||
Money transfer revenue: | ||||||||||||||||||||||||
Fee and other revenue | $ | 234,980 | $ | 235,008 | $ | (28 | ) | $ | 680,310 | $ | 662,427 | $ | 17,883 | |||||||||||
Investment revenue | 33 | 24 | 9 | 151 | 133 | 18 | ||||||||||||||||||
Bill payment revenue: | ||||||||||||||||||||||||
Fee and other revenue | 31,194 | 33,072 | (1,878 | ) | 96,051 | 101,436 | (5,385 | ) | ||||||||||||||||
Investment revenue | 22 | 44 | (22 | ) | 67 | 51 | 16 | |||||||||||||||||
Total revenue | 266,229 | 268,148 | (1,919 | ) | 776,579 | 764,047 | 12,532 | |||||||||||||||||
Commissions expense | 125,935 | 126,504 | (569 | ) | 366,230 | 362,579 | 3,651 | |||||||||||||||||
Net revenue | $ | 140,294 | $ | 141,644 | $ | (1,350 | ) | $ | 410,349 | $ | 401,468 | $ | 8,881 | |||||||||||
Operating income | $ | 36,465 | $ | 11,643 | $ | 24,822 | $ | 95,128 | $ | 56,080 | $ | 39,048 | ||||||||||||
Operating margin | 13.7 | % | 4.3 | % | 12.2 | % | 7.3 | % | ||||||||||||||||
Financial Paper Products | ||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, |
| September 30, |
| |||||||||||||||||||||
(Amounts in thousands) | 2010 | 2009 | 2010 vs 2009 | 2010 | 2009 | 2010 vs 2009 | ||||||||||||||||||
Money order revenue: | ||||||||||||||||||||||||
Fee and other revenue | $ | 15,795 | $ | 17,696 | $ | (1,901 | ) | $ | 49,143 | $ | 52,308 | $ | (3,165 | ) | ||||||||||
Investment revenue | 808 | 1,178 | (370 | ) | 3,030 | 4,471 | (1,441 | ) | ||||||||||||||||
Official check revenue: | ||||||||||||||||||||||||
Fee and other revenue | 6,162 | 6,809 | (647 | ) | 19,524 | 16,203 | 3,321 | |||||||||||||||||
Investment revenue | 3,188 | 4,946 | (1,758 | ) | �� | 11,812 | 19,662 | (7,850 | ) | |||||||||||||||
Total revenue | 25,953 | 30,629 | (4,676 | ) | 83,509 | 92,644 | (9,135 | ) | ||||||||||||||||
Commissions expense | 960 | 1,729 | (769 | ) | 3,098 | 5,659 | (2,561 | ) | ||||||||||||||||
Net revenue | $ | 24,993 | $ | 28,900 | $ | (3,907 | ) | $ | 80,411 | $ | 86,985 | $ | (6,574 | ) | ||||||||||
Operating income | $ | 7,478 | $ | 8,606 | $ | (1,128 | ) | $ | 27,955 | $ | 26,012 | $ | 1,943 | |||||||||||
Operating margin | 28.8 | % | 28.1 | % | 33.5 | % | 28.1 | % |
TABLE THREE | ||||||||||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||||||||||
SEGMENT RECONCILIATIONS | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Global Funds Transfer | ||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, |
| September 30, |
| |||||||||||||||||||||
(Amounts in thousands) | 2010 | 2009 | 2010 vs 2009 | 2010 | 2009 | 2010 vs 2009 | ||||||||||||||||||
Revenue (as reported) | $ | 266,229 | $ | 268,148 | $ | (1,919 | ) | $ | 776,579 | $ | 764,047 | $ | 12,532 | |||||||||||
Adjusted operating income | $ | 42,613 | $ | 38,645 | $ | 3,968 | $ | 112,244 | $ | 100,006 | $ | 12,238 | ||||||||||||
Asset impairment charges | - | - | - | - | (3,176 | ) | 3,176 | |||||||||||||||||
Stock-based compensation expense | (6,148 | ) | (4,502 | ) | (1,646 | ) | (17,116 | ) | (6,250 | ) | (10,866 | ) | ||||||||||||
Legal accrual | - | (22,500 | ) | 22,500 | - | (34,500 | ) | 34,500 | ||||||||||||||||
Total adjustments | (6,148 | ) | (27,002 | ) | 20,854 | (17,116 | ) | (43,926 | ) | 26,810 | ||||||||||||||
Operating income (as reported) | $ | 36,465 | $ | 11,643 | $ | 24,822 | $ | 95,128 | $ | 56,080 | $ | 39,048 | ||||||||||||
Adjusted operating margin | 16.0 | % | 14.4 | % | 14.5 | % | 13.1 | % | ||||||||||||||||
Total adjustments | (2.3 | %) | (10.1 | %) | (2.2 | %) | (5.7 | %) | ||||||||||||||||
Operating margin (as reported) | 13.7 | % | 4.3 | % | 12.2 | % | 7.3 | % | ||||||||||||||||
Financial Paper Products | ||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, |
| September 30, |
| |||||||||||||||||||||
(Amounts in thousands) | 2010 | 2009 | 2010 vs 2009 | 2010 | 2009 | 2010 vs 2009 | ||||||||||||||||||
Revenue (as reported) | $ | 25,953 | $ | 30,629 | $ | (4,676 | ) | $ | 83,509 | $ | 92,644 | $ | (9,135 | ) | ||||||||||
Adjusted operating income | $ | 8,523 | $ | 9,511 | $ | (988 | ) | $ | 30,868 | $ | 27,158 | $ | 3,710 | |||||||||||
Stock-based compensation expense | (1,045 | ) | (905 | ) | (140 | ) | (2,913 | ) | (1,146 | ) | (1,767 | ) | ||||||||||||
Total adjustments | (1,045 | ) | (905 | ) | (140 | ) | (2,913 | ) | (1,146 | ) | (1,767 | ) | ||||||||||||
Operating income (as reported) | $ | 7,478 | $ | 8,606 | $ | (1,128 | ) | $ | 27,955 | $ | 26,012 | $ | 1,943 | |||||||||||
Adjusted operating margin | 32.8 | % | 31.1 | % | 37.0 | % | 29.3 | % | ||||||||||||||||
Total adjustments | (4.0 | %) | (3.0 | %) | (3.5 | %) | (1.2 | %) | ||||||||||||||||
Operating margin (as reported) | 28.8 | % | 28.1 | % | 33.5 | % | 28.1 | % |
TABLE FOUR | |||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | |||||||||||||||||
EBITDA, ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(Amounts in thousands) | 2010 | 2009 | 2010 | 2009 | |||||||||||||
Income (loss) before income taxes | $ | 13,785 | $ | (18,704 | ) | $ | 35,893 | $ | (9,890 | ) | |||||||
Interest expense | 24,689 | 26,127 | 76,536 | 79,816 | |||||||||||||
Depreciation and amortization | 11,497 | 14,510 | 35,884 | 43,834 | |||||||||||||
Amortization of agent signing bonuses | 7,361 | 7,331 | 21,733 | 24,413 | |||||||||||||
EBITDA | 57,332 | 29,264 | 170,046 | 138,173 | |||||||||||||
Significant items impacting EBITDA: | |||||||||||||||||
Net securities gains | - | (2,738 | ) | (2,115 | ) | (7,027 | ) | ||||||||||
Severance and related costs (1) | 7 | 3,752 | (185 | ) | 5,010 | ||||||||||||
Restructuring and reorganization costs (2) | 1,628 | - | 3,563 | - | |||||||||||||
Asset impairment charges (3) | 20 | 8,409 | 1,520 | 12,267 | |||||||||||||
Stock-based compensation expense | 7,213 | 5,447 | 20,086 | 7,047 | |||||||||||||
Legal accruals (4) | 1,810 | 22,500 | 1,810 | 34,500 | |||||||||||||
Adjusted EBITDA | $ | 68,010 | $ | 66,634 | $ | 194,725 | $ | 189,970 | |||||||||
Adjusted EBITDA margin (5) | 23.2 | % | 22.1 | % | 22.6 | % | 21.9 | % | |||||||||
(1) Severance and related costs from executive terminations occurring prior to the second quarter of 2010, including adjustments to amounts previously accrued. | |||||||||||||||||
(2) Costs associated with restructuring and reorganization initiatives in the second and third quarter of 2010. | |||||||||||||||||
(3) Impairment charges related to the corporate airplane (2010 and 2009) and goodwill and capitalized software in connection with exit plans (2009). | |||||||||||||||||
(4) Legal accruals related primarily to shareholder litigation (2010) and a patent lawsuit and a settlement agreement with the Federal Trade Commission (2009). | |||||||||||||||||
(5) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Adjusted Total Revenue. | |||||||||||||||||
Adjusted Total Revenue reconciliation: | |||||||||||||||||
Adjusted total revenue | $ | 292,887 | $ | 301,712 | $ | 863,288 | $ | 868,495 | |||||||||
Net securities gains | - | 2,738 | 2,115 | 7,027 | |||||||||||||
Total revenue (as reported) | $ | 292,887 | $ | 304,450 | $ | 865,403 | $ | 875,522 |
TABLE FIVE | ||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited) | ||||||||
September 30, | December 31, | |||||||
(Amounts in thousands, except share and per share data) | 2010 | 2009 | ||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | - | $ | - | ||||
Cash and cash equivalents (substantially restricted) | 3,292,518 | 3,776,824 | ||||||
Receivables, net (substantially restricted) | 1,081,521 | 1,054,381 | ||||||
Trading investments and related put options (substantially restricted) | - | 26,951 | ||||||
Available-for-sale investments (substantially restricted) | 189,133 | 298,633 | ||||||
Property and equipment | 113,844 | 127,972 | ||||||
Intangible assets | 6,708 | 7,680 | ||||||
Goodwill | 428,691 | 425,630 | ||||||
Other assets | 151,554 | 211,592 | ||||||
Total assets | $ | 5,263,969 | $ | 5,929,663 | ||||
LIABILITIES | ||||||||
Payment service obligations | $ | 4,272,734 | $ | 4,843,454 | ||||
Debt | 712,161 | 796,791 | ||||||
Pension and other postretirement benefits | 114,816 | 118,444 | ||||||
Accounts payable and other liabilities | 128,083 | 189,659 | ||||||
Total liabilities | 5,227,794 | 5,948,348 | ||||||
MEZZANINE EQUITY | ||||||||
Participating Convertible Preferred Stock-Series B, $0.01 par value, 760,000 shares authorized, 495,000 shares issued and outstanding | 604,731 | 539,084 | ||||||
Participating Convertible Preferred Stock-Series B-1, $0.01 par value, 500,000 shares authorized, 272,500 shares issued and outstanding | 359,030 | 325,244 | ||||||
Total mezzanine equity | 963,761 | 864,328 | ||||||
STOCKHOLDERS' DEFICIT | ||||||||
Preferred shares, $0.01 par value, none issued | - | - | ||||||
Common shares, $0.01 par value, 1,300,000,000 shares authorized, 88,556,077 shares issued | 886 | 886 | ||||||
Additional paid-in capital | - | - | ||||||
Retained loss | (753,253 | ) | (694,914 | ) | ||||
Unearned employee benefits | - | (8 | ) | |||||
Accumulated other comprehensive loss | (30,117 | ) | (35,671 | ) | ||||
Treasury stock: 5,185,555 and 6,040,958 shares at September 30, 2010 and December 31, 2009, respectively | (145,102 | ) | (153,306 | ) | ||||
Total stockholders' deficit | (927,586 | ) | (883,013 | ) | ||||
Total liabilities, mezzanine equity and stockholders' deficit | $ | 5,263,969 | $ | 5,929,663 |
TABLE SIX | |||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | |||||||||||||||
ASSETS IN EXCESS OF PAYMENT SERVICE OBLIGATIONS | |||||||||||||||
(Unaudited) | |||||||||||||||
September 30, | June 30, | March 31, | December 31, | ||||||||||||
(Amounts in thousands) | 2010 | 2010 | 2010 | 2009 | |||||||||||
Cash and cash equivalents | $ | 3,292,518 | $ | 3,492,147 | $ | 3,678,499 | $ | 3,776,824 | |||||||
Receivables, net | 1,081,521 | 1,047,768 | 960,341 | 1,054,381 | |||||||||||
Trading investments and related put options | - | - | - | 26,951 | |||||||||||
Available-for-sale investments | 189,133 | 216,894 | 258,245 | 298,633 | |||||||||||
4,563,172 | 4,756,809 | 4,897,085 | 5,156,789 | ||||||||||||
Payment service obligations | (4,272,734 | ) | (4,472,692 | ) | (4,572,846 | ) | (4,843,454 | ) | |||||||
Assets in excess of payment service obligations | $ | 290,438 | $ | 284,117 | $ | 324,239 | $ | 313,335 |
CONTACT:
MoneyGram International, Inc.
Media:
Lynda Michielutti, 952-591-3846
lmichielutti@moneygram.com
or
Investors:
Alex Holmes, 720-568-8703
aholmes@moneygram.com