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EX. 16
[MONEYGRAM LETTERHEAD]
Contact: Warren Bechtel
(201) 291-3672
MONEYGRAM PAYMENT SYSTEMS REPORTS 1998 FIRST-QUARTER RESULTS
AND ESTABLISHMENT OF SHAREHOLDERS' RIGHTS AGREEMENT
Saddle Brook, New Jersey, May 11 -- MoneyGram Payment Systems, Inc.
(NYSE:MNE) reported today that its net income for the three months ended March
31, 1998 was $1.8 million, or 11 cents per common share, compared with $2.2
million, or 13 cents per share, in the first quarter of 1997.
Total revenue for the quarter was $34.8 million, compared with $32.4
million in the year-earlier period. The 1998 revenue total includes $1.35
million from Mid-America Money Order Company and Consorcio Oriental LLC, which
were acquired by MoneyGram during the first quarter of this year.
Transactions handled by MoneyGram in the first quarter totaled 1.44
million. That compares with 1.28 million transactions handled in last year's
first quarter, an increase of 12 percent.
The Company also announced that, in order to protect shareholder value, the
Board of Directors of MoneyGram Payment Systems yesterday approved, and the
Company entered into, a shareholders' rights agreement. Pursuant to the rights
agreement, the Company will dividend to shareholders as of record on May 20,
1998 the right to purchase one share of Common Stock of the Company for each
share held at an exercise price of $50.00. In the event a person who does not
already own more than 15% of the Common Stock of the Company crosses such
threshold or a person who already owns 15% increases its ownership percentage,
each rights holder other than such person upon payment of the exercise price
will be entitled to purchase Common Stock with a market value of $100.00.
Alternatively, the board may elect to effect a "cashless exercise" of the
rights. The rights will not trade separately from the Common Stock, and no
certificates will be mailed to shareholders until the above ownership threshold
is crossed. The board may elect to redeem the rights at a nominal value at a
future date. The rights plan provides that successful completion of the Viad
tender offer would not trigger the rights.
MoneyGram Payment Systems, Inc. is a leading non-bank provider of consumer
money transfer and other financial services. Through the MoneyGram network of
more than 22,000 convenient agent locations, customers can wire cash in minutes
to more than 100 countries throughout the world. MoneyGram ExpressPayment(SM)
service enables credit card issuers, mortgage servicers, finance companies,
collections companies and others to collect good-funds payments from delinquent
debtors within hours. The company was organized in January, 1996 and completed
the initial public offering of its common shares on December 11, 1996.
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MONEYGRAM PAYMENT SYSTEMS, INC.
STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31
(IN MILLIONS, EXCEPT PER-SHARE AMOUNTS)
1998 1997
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Revenue
Fee and other............................................. $ 28.9 $ 26.3
Foreign exchange.......................................... 5.9 6.1
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Total Revenue..................................... 34.8 32.4
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Expenses
Agent commissions......................................... 11.5 11.0
Processing................................................ 8.0 6.0
Advertising & promotion................................... 7.0 6.0
Selling & service......................................... 2.5 3.0
General & administrative.................................. 3.0 2.8
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Total Expenses.................................... 32.0 28.8
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Income before income taxes.................................. 2.8 3.6
Income tax expense.......................................... 1.0 1.4
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Net Income.................................................. $ 1.8 $ 2.2
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Basic net income per common share........................... $ .11 $ .13
Diluted net income per common share......................... $ .11 $ .13
Weighted average shares and equivalents outstanding......... 16,000 16,625