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8-K - MONEYGRAM INTERNATIONAL, INC. 8-K - MONEYGRAM INTERNATIONAL INC | a6598454.htm |
Exhibit 99.1
MoneyGram International Reports Fourth Quarter, Full-Year 2010 Financial Results
Fourth quarter constant-currency money transfer fee and other revenue increases 9 percent over prior year
DALLAS--(BUSINESS WIRE)--February 4, 2011--MoneyGram International, Inc. (NYSE:MGI), a leading global payment services company, today reported financial results for the fourth quarter and full-year 2010.
- Money transfer transaction volume increased 12 percent driven by 18 percent growth in non-U.S. sends in the current quarter versus prior year.
- Money transfer fee and other revenue increased 7 percent in the fourth quarter of 2010 versus prior year. On a constant currency basis, money transfer fee and other revenue increased 9 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 $50 price band in the United States.
- Global agent locations increased 19 percent over the prior year end to 227,000.
- Total revenue in the fourth quarter increased 3 percent to $303.4 million, compared with $295.6 million in the fourth quarter of 2009. Total fee and other revenue increased 3.1 percent to $298.3 million, from $289.4 million in the fourth quarter of 2009. Total revenue in the fourth quarter reflects investment revenue that was $1.2 million less than fourth quarter 2009.
- Full-year total revenue in 2010 was $1,166.7 million, up from $1,161.7 million in 2009. Total revenue in 2010 reflects investment revenue that was $11.9 million less than in 2009.
- Net income for the quarter was $16.2 million and EBITDA was $67.8 million. Both net income and EBITDA were impacted by $5.9 million of stock-based compensation, $16.4 million of a reversal of a patent lawsuit accrual and $2.3 million of restructuring and reorganization costs. Net income was also impacted by a $3.6 million write-off of deferred financing costs and debt discount related to a $75.0 million debt prepayment in the quarter.
- Adjusted EBITDA for the quarter was $59.8 million versus $57.4 million in the prior year. Fourth quarter 2010 Adjusted EBITDA reflects lower net investment revenue of $1.2 million compared with the same period in 2009. Adjusted EBITDA margin was 19.7 percent in the fourth quarter of 2010, compared with 19.4 percent in the same period last year.
“We are pleased with MoneyGram’s fourth-quarter financial performance, and we are excited with our position exiting 2010,” said Pamela H. Patsley, chairman and chief executive officer. “We’re a stronger company than a year ago, more focused on our strategies and better positioned for growth. We are strengthening our core business, increasing money transfer transactions, taking out costs and continuing to see general economic improvements in many markets.”
Balance Sheet Items
During the quarter, MoneyGram prepaid $75 million on its Senior Tranche B Loan under its Senior Facility. Including this latest payment, MoneyGram has paid $165 million toward its outstanding debt obligation in 2010 and a total of $352 million since Jan. 1, 2009. This represents a 35 percent decrease in the Company's total outstanding debt since Jan. 1, 2009. The Company ended the quarter with $641.3 million in outstanding debt principal and assets in excess of payment service obligations of $230.2 million.
Market Development
The Company continued its focus on enhancing its product offerings and expanding its agent network. MoneyGram recently:
- Announced the expansion into Mexico of our successful cash-to-Visa account program. Beginning this month, consumers can visit any of the 35,000 MoneyGram locations in the U.S. to send funds directly to the Visa accounts of recipients in Mexico.
- Launched our service with Sberbank, Russia’s largest and oldest bank, where MoneyGram’s valued money transfer system is now available for consumers to send and receive money at 8,000 branch locations across the world’s third-largest remittance market.
- Created a partnership with Valora of Switzerland, the country’s largest retailer, significantly expanding MoneyGram’s presence in this important send market. The service will initially be offered in more than 500 kiosk locations this year and a total of 1,000 in 2012, making MoneyGram the leading provider of international money transfer services in Switzerland.
- Entered into an agreement with Movistar Remeses, a division of Spanish telecommunications giant Telefonica. Through the strategic agreement, Movistar Remeses now offers its 1,500 independently owned retail locations the opportunity to provide MoneyGram’s services to its consumers across Spain.
- Strengthened our partnership with Societe Generale through an expanded agreement that offers MoneyGram services through Societe Generale’s international retail banking network in 37 countries. The global agreement is an extension of the two companies’ successful partnership in Albania, Ghana, Russia, Mayotte and Reunion.
- Expanded MoneyGram's presence in Japan, another very important send market, through a new agreement with SBI Remit Co. Ltd. This service, launched in December, enables SBI customers to send and receive funds online, by depositing money into customer’s account with SBI Remit via ATMs, and through kiosks in convenience stores.
- Initiated the roll out of a unique self-service money transfer solution through kiosks in Australia. This service will be available in 400 7-Eleven convenience stores in Victoria, New South Wales and Queensland, tripling MoneyGram’s network in Australia when fully rolled out.
- Signed an agreement with Online Resources Corporation, a leading provider of online banking technology, to offer same-day cash payment services from any MoneyGram location in the U.S. to Online Resources biller clients in the financial services, utility, health care, insurance and other industries.
“In the fourth quarter of 2010, we renewed our focus on improving the customer experience and saw a return to accelerated revenue growth in our core money transfer business. We built consumer excitement around our ICC cricket sponsorship, the global expansion of our Rewards program and expanded our service with new partners in new markets,” said Patsley. “As we enter 2011, we remain keenly focused on continuing to grow our market share, delivering improved financial results and building on the success we achieved in 2010. At the same time, we remain disciplined in our deployment of capital, prudent in our investment decisions, and committed to improving our capital structure to create long-term shareholder value.”
Global Funds Transfer Segment Results
Total revenue for the Global Funds Transfer segment increased 5 percent to $276.7 million in the fourth quarter of 2010 compared with $263.8 million in the fourth quarter of 2009. The segment reported operating income of $44.2 million and an operating margin of 16.0 percent in the fourth quarter of 2010. Adjusted operating margin improved to 11.9 percent in the quarter from 11.4 percent in the prior year.
Money transfer transaction volume increased 12 percent, with fee and other revenue increasing 7 percent to $246.2 million in the fourth quarter of 2010 compared with $230.6 million in the fourth quarter of 2009. On a constant currency basis, money transfer fee and other revenue improved 9 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 U.S. In the fourth quarter, money transfer transactions originating outside of the U.S. increased 18 percent over the prior year. Excluding Spain, transactions originating outside of the U.S. increased a very strong 21 percent over the prior year. Transactions sent from Spain increased 2 percent compared with the same period last year. Money transfer transactions originating in the U.S., excluding transactions sent to Mexico, increased 11 percent. Transaction volume to Mexico increased a healthy 6 percent in the quarter, while intra-U.S. transaction growth was a solid 13 percent in the fourth quarter.
Bill payment transaction volume decreased 3 percent, while fee and other revenue decreased 8 percent to $30.4 million in the fourth quarter of 2010 from $33.1 million in the fourth quarter of 2009. The difference between transaction growth 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 our traditional auto and mortgage verticals which continue to struggle in the U.S. economy.
Financial Paper Products Segment Results
Total revenue in the Financial Paper Products segment declined 14 percent to $26.0 million in the fourth quarter of 2010 from $30.1 million in the fourth quarter of 2009. Operating income increased to $8.6 million in the fourth quarter of 2010 from $1.4 million in the fourth quarter of 2009. Operating margin in the fourth quarter of 2010 was 32.9 percent. Adjusted operating margin was 36.1 percent in the quarter.
Revision to Financial Presentation
During the fourth quarter of 2010, the Company revised the presentation of its Consolidated Statements of Income (Loss) as a result of an internal review to enhance management and external reporting. As a result of this review, the Company will no longer present net revenue, previously measured as total revenue less total commissions expense, as this measure was not found to be a meaningful metric internally or to our external users. The Company will continue to separately disclose “Commissions expense.” In addition, the Company has also created an operating income measure consistent with management reporting. Finally, $2.4 million of gains related to historical cash flow hedges for the year ended Dec. 31, 2009 were reclassified from “Fee and other revenue” to “Other” expense in the non-operating section based on the Company’s purpose for entering into the derivatives. All prior periods have been reclassified to conform to this new presentation.
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. 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 fourth quarter and full-year 2010 results. Pamela H. Patsley, chairman and chief executive officer, will host the call. The conference call can be accessed by calling 1-800-211-3767 in the U.S. and 1-719-325-4846 internationally. The participant confirmation number is 8409060. Slides are available on MoneyGram’s website at www.moneygram.com. A replay of the conference call will be available at noon ET on Feb. 4 through 11:59 p.m. ET on Feb. 11, 2011. 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 8409690.
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 227,000 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 | Year Ended | |||||||||||||||||||||||
December 31, |
2010 vs |
December 31, |
2010 vs |
|||||||||||||||||||||
(Amounts in thousands, except per share data) |
2010 | 2009 | 2010 | 2009 | ||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||
Fee and other revenue | $ | 298,308 | $ | 289,393 | $ | 8,915 | $ | 1,145,312 | $ | 1,128,492 | $ | 16,820 | ||||||||||||
Investment revenue | 5,057 | 6,224 | (1,167 | ) | 21,341 | 33,219 | (11,878 | ) | ||||||||||||||||
Total revenue | 303,365 | 295,617 | 7,748 | 1,166,653 | 1,161,711 | 4,942 | ||||||||||||||||||
EXPENSES | ||||||||||||||||||||||||
Fee and other commissions expense | 131,098 | 128,445 | 2,653 | 500,759 | 497,105 | 3,654 | ||||||||||||||||||
Investment commissions expense | 136 | 234 | (98 | ) | 737 | 1,362 | (625 | ) | ||||||||||||||||
Total commissions expense | 131,234 | 128,679 | 2,555 | 501,496 | 498,467 | 3,029 | ||||||||||||||||||
Compensation and benefits | 57,415 | 40,819 | 16,596 | 226,422 | 199,053 | 27,369 | ||||||||||||||||||
Transaction and operations support | 42,633 | 86,054 | (43,421 | ) | 185,782 | 284,277 | (98,495 | ) | ||||||||||||||||
Occupancy, equipment and supplies | 11,809 | 11,908 | (99 | ) | 46,481 | 47,425 | (944 | ) | ||||||||||||||||
Depreciation and amortization | 12,190 | 13,257 | (1,067 | ) | 48,074 | 57,091 | (9,017 | ) | ||||||||||||||||
Total operating expenses | 255,281 | 280,717 | (25,436 | ) | 1,008,255 | 1,086,313 | (78,058 | ) | ||||||||||||||||
OPERATING INCOME | 48,084 | 14,900 | 33,184 | 158,398 | 75,398 | 83,000 | ||||||||||||||||||
Other expense (income) | ||||||||||||||||||||||||
Net securities gains | - | (763 | ) | 763 | (2,115 | ) | (7,790 | ) | 5,675 | |||||||||||||||
Interest expense | 25,597 | 28,095 | (2,498 | ) | 102,133 | 107,911 | (5,778 | ) | ||||||||||||||||
Other | - | - | - | - | (2,401 | ) | 2,401 | |||||||||||||||||
Total other expense, net | 25,597 | 27,332 | (1,735 | ) | 100,018 | 97,720 | 2,298 | |||||||||||||||||
Income (loss) before income taxes | 22,487 | (12,432 | ) | 34,919 | 58,380 | (22,322 | ) | 80,702 | ||||||||||||||||
Income tax expense (benefit) | 6,331 | (20,306 | ) | 26,637 | 14,579 | (20,416 | ) | 34,995 | ||||||||||||||||
NET INCOME (LOSS) | $ | 16,156 | $ | 7,874 | $ | 8,282 | $ | 43,801 | $ | (1,906 | ) | $ | 45,707 | |||||||||||
Basic and diluted loss per common share | $ | (0.23 | ) | $ | (0.29 | ) | $ | 0.06 | $ | (1.10 | ) | $ | (1.48 | ) | $ | 0.38 | ||||||||
Net loss available to common stockholders: | ||||||||||||||||||||||||
Net income (loss) as reported | $ | 16,156 | $ | 7,874 | $ | 8,282 | $ | 43,801 | $ | (1,906 | ) | $ | 45,707 | |||||||||||
Accrued preferred stock dividends | (32,988 | ) | (29,168 | ) | (3,820 | ) | (125,005 | ) | (110,279 | ) | (14,726 | ) | ||||||||||||
Accretion recognized on preferred stock | (2,604 | ) | (2,592 | ) | (12 | ) | (10,020 | ) | (10,213 | ) | 193 | |||||||||||||
Net loss available to common stockholders | $ | (19,436 | ) | $ | (23,886 | ) | $ | 4,450 | $ | (91,224 | ) | $ | (122,398 | ) | $ | 31,174 | ||||||||
Weighted-average outstanding common shares (1) | 83,499 | 82,505 | 994 | 83,186 | 82,499 | 687 | ||||||||||||||||||
(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 | 39,520 | 38,156 | 37,322 | 21,664 | ||||||||||||||||||||
Shares related to preferred stock | 431,751 | 381,749 | 431,751 | 381,749 | ||||||||||||||||||||
TABLE TWO | ||||||||||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||||||||||
SEGMENT RESULTS | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Global Funds Transfer | ||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
December 31, |
2010 vs |
December 31, |
2010 vs |
|||||||||||||||||||||
(Amounts in thousands) | 2010 | 2009 | 2010 | 2009 | ||||||||||||||||||||
Money transfer revenue: | ||||||||||||||||||||||||
Fee and other revenue | $ | 246,179 | $ | 230,649 | $ | 15,530 | $ | 926,489 | $ | 890,675 | $ | 35,814 | ||||||||||||
Investment revenue | 93 | 30 | 63 | 244 | 163 | 81 | ||||||||||||||||||
Bill payment revenue: | ||||||||||||||||||||||||
Fee and other revenue | 30,416 | 33,099 | (2,683 | ) | 126,467 | 134,535 | (8,068 | ) | ||||||||||||||||
Investment revenue | 14 | 25 | (11 | ) | 81 | 76 | 5 | |||||||||||||||||
Total revenue | 276,702 | 263,803 | 12,899 | 1,053,281 | 1,025,449 | 27,832 | ||||||||||||||||||
Commissions expense | 130,415 | 125,536 | 4,879 | 496,645 | 488,116 | 8,529 | ||||||||||||||||||
Operating income | $ | 44,186 | $ | 28,967 | $ | 15,219 | $ | 139,314 | $ | 82,647 | $ | 56,667 | ||||||||||||
Operating margin | 16.0 | % | 11.0 | % | 13.2 | % | 8.1 | % | ||||||||||||||||
Financial Paper Products | ||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
December 31, |
2010 vs |
December 31, |
2010 vs |
|||||||||||||||||||||
(Amounts in thousands) | 2010 | 2009 | 2010 | 2009 | ||||||||||||||||||||
Money order revenue: | ||||||||||||||||||||||||
Fee and other revenue | $ | 15,199 | $ | 16,988 | $ | (1,789 | ) | $ | 64,342 | $ | 69,296 | $ | (4,954 | ) | ||||||||||
Investment revenue | 921 | 1,114 | (193 | ) | 3,951 | 5,584 | (1,633 | ) | ||||||||||||||||
Official check revenue: | ||||||||||||||||||||||||
Fee and other revenue | 6,172 | 7,486 | (1,314 | ) | 25,696 | 23,690 | 2,006 | |||||||||||||||||
Investment revenue | 3,714 | 4,550 | (836 | ) | 15,526 | 24,213 | (8,687 | ) | ||||||||||||||||
Total revenue | 26,006 | 30,138 | (4,132 | ) | 109,515 | 122,783 | (13,268 | ) | ||||||||||||||||
Commissions expense | 833 | 2,636 | (1,803 | ) | 3,931 | 8,295 | (4,364 | ) | ||||||||||||||||
Operating income | $ | 8,553 | $ | 1,360 | $ | 7,193 | $ | 36,508 | $ | 27,372 | $ | 9,136 | ||||||||||||
Operating margin | 32.9 | % | 4.5 | % | 33.3 | % | 22.3 | % | ||||||||||||||||
TABLE THREE | ||||||||||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||||||||||
SEGMENT RECONCILIATIONS | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Global Funds Transfer | ||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
December 31, |
2010 vs |
December 31, |
2010 vs |
|||||||||||||||||||||
(Amounts in thousands) | 2010 | 2009 | 2010 | 2009 | ||||||||||||||||||||
Revenue (as reported) | $ | 276,702 | $ | 263,803 | $ | 12,899 | $ | 1,053,281 | $ | 1,025,449 | $ | 27,832 | ||||||||||||
Adjusted operating income | $ | 32,864 | $ | 30,114 | $ | 2,750 | $ | 145,108 | $ | 127,720 | $ | 17,388 | ||||||||||||
Asset impairment charges | - | - | - | - | (3,176 | ) | 3,176 | |||||||||||||||||
Stock-based compensation expense | (5,060 | ) | (1,147 | ) | (3,913 | ) | (22,176 | ) | (7,397 | ) | (14,779 | ) | ||||||||||||
Legal accrual | 16,382 | - | 16,382 | 16,382 | (34,500 | ) | 50,882 | |||||||||||||||||
Total adjustments | 11,322 | (1,147 | ) | 12,469 | (5,794 | ) | (45,073 | ) | 39,279 | |||||||||||||||
Operating income (as reported) | $ | 44,186 | $ | 28,967 | $ | 15,219 | $ | 139,314 | $ | 82,647 | $ | 56,667 | ||||||||||||
Adjusted operating margin | 11.9 | % | 11.4 | % | 13.8 | % | 12.5 | % | ||||||||||||||||
Total adjustments | 4.1 | % | (0.4 | %) | (0.6 | %) | (4.4 | %) | ||||||||||||||||
Operating margin (as reported) | 16.0 | % | 11.0 | % | 13.2 | % | 8.1 | % | ||||||||||||||||
Financial Paper Products | ||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
December 31, |
2010 vs |
December 31, |
2010 vs |
|||||||||||||||||||||
(Amounts in thousands) | 2010 | 2009 | 2010 | 2009 | ||||||||||||||||||||
Revenue (as reported) | $ | 26,006 | $ | 30,138 | $ | (4,132 | ) | $ | 109,515 | $ | 122,783 | $ | (13,268 | ) | ||||||||||
Adjusted operating income | $ | 9,400 | $ | 7,420 | $ | 1,980 | $ | 40,268 | $ | 34,578 | $ | 5,690 | ||||||||||||
Asset impairment charges | - | (6,060 | ) | 6,060 | - | (6,060 | ) | 6,060 | ||||||||||||||||
Stock-based compensation expense | (847 | ) | - | (847 | ) | (3,760 | ) | (1,146 | ) | (2,614 | ) | |||||||||||||
Total adjustments | (847 | ) | (6,060 | ) | 5,213 | (3,760 | ) | (7,206 | ) | 3,446 | ||||||||||||||
Operating income (as reported) | $ | 8,553 | $ | 1,360 | $ | 7,193 | $ | 36,508 | $ | 27,372 | $ | 9,136 | ||||||||||||
Adjusted operating margin | 36.1 | % | 24.6 | % | 36.8 | % | 28.2 | % | ||||||||||||||||
Total adjustments | (3.3 | %) | (20.1 | %) | (3.4 | %) | (5.9 | %) | ||||||||||||||||
Operating margin (as reported) | 32.9 | % | 4.5 | % | 33.3 | % | 22.3 | % | ||||||||||||||||
TABLE FOUR | ||||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||||
EBITDA, ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||
December 31, | December 31, | |||||||||||||||||
(Amounts in thousands) | 2010 | 2009 | 2010 | 2009 | ||||||||||||||
Income (loss) before income taxes | $ | 22,487 | $ | (12,432 | ) | $ | 58,380 | $ | (22,322 | ) | ||||||||
Interest expense | 25,597 | 28,095 | 102,133 | 107,911 | ||||||||||||||
Depreciation and amortization | 12,190 | 13,257 | 48,074 | 57,091 | ||||||||||||||
Amortization of agent signing bonuses | 7,514 | 10,867 | 29,247 | 35,280 | ||||||||||||||
EBITDA | 67,788 | 39,787 | 237,834 | 177,960 | ||||||||||||||
Significant items impacting EBITDA: | ||||||||||||||||||
Net securities gains | - | (763 | ) | (2,115 | ) | (7,790 | ) | |||||||||||
Severance and related costs (1) | (161 | ) | 543 | (346 | ) | 4,353 | ||||||||||||
Restructuring and reorganization costs | 2,290 | - | 5,853 | - | ||||||||||||||
Asset impairment charges (2) | 309 | 6,062 | 1,829 | 18,329 | ||||||||||||||
Stock-based compensation expense | 5,925 | 7,105 | 26,011 | 14,152 | ||||||||||||||
Net curtailment gain on benefit plans | - | (15,537 | ) | - | (14,339 | ) | ||||||||||||
Legal accruals (3) | (16,382 | ) | 20,250 | (14,572 | ) | 54,750 | ||||||||||||
Adjusted EBITDA | $ | 59,769 | $ | 57,447 | $ | 254,494 | $ | 247,415 | ||||||||||
Adjusted EBITDA margin (4) | 19.7 | % | 19.4 | % | 21.8 | % | 21.3 | % | ||||||||||
(1) Severance and related costs from executive terminations occuring prior to the second quarter of 2010, including adjustments to amounts previously accrued. |
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(2) Impairment charges related to goodwill, intangible assets and fixed assets. | ||||||||||||||||||
(3) 2010 primarily represents the reversal of a patent lawsuit accrual and an accrual for shareholder litigation. 2009 primarily represents accruals for shareholder litigation, a patent lawsuit and a settlement agreement with the Federal Trade Commission. |
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(4) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Total Revenue. | ||||||||||||||||||
TABLE FIVE | |||||||||
MONEYGRAM INTERNATIONAL, INC. | |||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||
(Unaudited) | |||||||||
December 31, | December 31, | ||||||||
(Amounts in thousands, except share and per share data) | 2010 | 2009 | |||||||
ASSETS | |||||||||
Cash and cash equivalents | $ | - | $ | - | |||||
Cash and cash equivalents (substantially restricted) | 3,271,710 | 3,776,824 | |||||||
Receivables, net (substantially restricted) | 982,319 | 1,054,381 | |||||||
Trading investments and related put options (substantially restricted) | - | 26,951 | |||||||
Available-for-sale investments (substantially restricted) | 160,936 | 298,633 | |||||||
Property and equipment | 115,111 | 127,972 | |||||||
Goodwill | 428,691 | 425,630 | |||||||
Other assets | 156,969 | 219,272 | |||||||
Total assets | $ | 5,115,736 | $ | 5,929,663 | |||||
LIABILITIES | |||||||||
Payment service obligations | $ | 4,184,736 | $ | 4,843,454 | |||||
Debt | 639,946 | 796,791 | |||||||
Pension and other postretirement benefits | 120,536 | 119,170 | |||||||
Accounts payable and other liabilities | 113,647 | 188,933 | |||||||
Total liabilities | 5,058,865 | 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 |
628,199 | 539,084 | |||||||
Participating Convertible Preferred Stock-Series B-1, $0.01 par value, 500,000 shares authorized, 272,500 shares issued and outstanding |
371,154 | 325,244 | |||||||
Total mezzanine equity | 999,353 | 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 | (771,544 | ) | (694,914 | ) | |||||
Unearned employee benefits | - | (8 | ) | ||||||
Accumulated other comprehensive loss | (31,879 | ) | (35,671 | ) | |||||
Treasury stock: 4,935,555 and 6,040,958 shares at December 31, 2010 and December 31, 2009, respectively |
(139,945 | ) | (153,306 | ) | |||||
Total stockholders' deficit | (942,482 | ) | (883,013 | ) | |||||
Total liabilities, mezzanine equity and stockholders' deficit | $ | 5,115,736 | $ | 5,929,663 | |||||
TABLE SIX | ||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||
ASSETS IN EXCESS OF PAYMENT SERVICE OBLIGATIONS | ||||||||||||||||
(Unaudited) | ||||||||||||||||
December 31, | September 30, | June 30, | March 31, | |||||||||||||
(Amounts in thousands) | 2010 | 2010 | 2010 | 2010 | ||||||||||||
Cash and cash equivalents | $ | 3,271,710 | $ | 3,292,518 | $ | 3,492,147 | $ | 3,678,499 | ||||||||
Receivables, net | 982,319 | 1,081,521 | 1,047,768 | 960,341 | ||||||||||||
Trading investments and related put options | - | - | - | - | ||||||||||||
Available-for-sale investments | 160,936 | 189,133 | 216,894 | 258,245 | ||||||||||||
4,414,965 | 4,563,172 | 4,756,809 | 4,897,085 | |||||||||||||
Payment service obligations | (4,184,736 | ) | (4,272,734 | ) | (4,472,692 | ) | (4,572,846 | ) | ||||||||
Assets in excess of payment service obligations | $ | 230,229 | $ | 290,438 | $ | 284,117 | $ | 324,239 | ||||||||
CONTACT:
MoneyGram International, Inc.
Media:
Lynda
Michielutti, 952-591-3846
lmichielutti@moneygram.com
Investors:
Alex
Holmes, 214-999-7505
aholmes@moneygram.com