DALLAS, July 31, 2015
/PRNewswire/ -- MoneyGram (NASDAQ:MGI), a global provider of
innovative money transfer and payment services, today reported
financial results for its second quarter ended June 30,
2015.
"Our second quarter results reflect the significant progress
MoneyGram has made toward executing the strategic initiatives we
outlined at the beginning of the year," said Pamela H. Patsley, MoneyGram's chairman and
chief executive officer. "Our performance during the quarter
resulted in a return to constant currency revenue growth. We posted
the largest number of money transfer transactions in our history
and accelerated both our self-service revenue and transaction
growth. The launch of the new moneygram.com along with the growth
of our innovative kiosks and core money transfer business are
generating substantial momentum. We remain on track to reach our
double-digit growth target in the fourth quarter."
Money Transfer Highlights
- Money transfer transaction growth accelerated to 6 percent, and
represented the highest number of quarterly transactions in
MoneyGram's history.
- Money transfer revenue in the quarter was $316.6 million, representing 2 percent growth on
a constant currency basis and a decline of 4 percent on a reported
basis as compared to the prior year.
- Money transfer results reflect the continued strength in the
Company's U.S. Outbound and Non-U.S. send transaction growth,
offset by the impact of our U.S.-to-U.S. pricing initiative
implemented in the fourth quarter of 2014.
- U.S. Outbound transactions grew 13 percent year-over-year, led
by sends to Latin America and
Africa.
- Non-U.S. send transactions grew 16 percent led by sends from
the Middle East, Africa and UK, and accelerated from 14 percent
year-over-year growth in the first quarter.
- U.S.-to-U.S. transactions declined 22 percent, an improvement
from a decline of 37 percent in the first quarter. Total
transactions increased sequentially driven by MoneyGram's
innovative self-service product solutions.
- U.S. Outbound and Non-U.S. sends now represent 87 percent of
money transfer revenue and grew 14 percent on a constant currency
basis in the quarter, up from 10 percent growth in the first
quarter.
Self-Service Highlights
- Strong customer adoption of MoneyGram's innovative kiosks and
the launch of the new moneygram.com led to accelerated self-service
money transfer results in the second quarter.
- Self-service money transfer transactions increased 67 percent,
and now represent 14 percent of money transfer transactions.
- Self-service money transfer revenue grew 58 percent over the
prior year, and represents 12 percent of money transfer revenue.
Annualizing the second quarter, these channels generate almost
$150 million of revenue.
- New kiosks were activated in Europe and China expanding self-service into new
markets.
- moneygram.com transactions increased 19 percent and revenue was
up 10 percent over the prior year. Our sleek, reimagined
moneygram.com and mobile app for Apple and Android devices launched
in June. The platform is the first service which enables customers
to send money around the world without needing to create an
account. The ease of the new service produced nearly 190,000 new
active customers, a record quarterly high.
Financial Results
- Total revenue for the second quarter was $358.8 million, an increase of 1 percent on a
constant currency basis and a decrease of 4 percent on a reported
basis due to the stronger dollar. Investment revenue was
$2.8 million.
- In June, the Company completed a partial buyout of pension
obligations and recorded a non-cash charge of $13.8 million. The effect of the buyout was a
reduction in the Company's pension liability and a permanent
reduction in future expenses of the plan.
- The Company reported EBITDA of $16.0
million and a pre-tax loss of $27.1
million.
- Adjusted EBITDA was $57.7 million
(Table Four). Adjusted EBITDA margin was 16.1 percent, a 40 basis
point decline from the first quarter due to increased marketing
spend to launch new products and for seasonal campaigns.
- Adjusted diluted earnings per share was $0.23. Diluted loss per share was $0.20 due to the pension buyout and expenses
related to the Global Transformation Program.
- Adjusted free cash flow was negative $7.4 million primarily due to the repositioning
of the U.S.-to-U.S. business, investments in the Global
Transformation Program and agent signing bonus payments. The
Company also made a one-time $55.8
million payment related to the IRS tax litigation during the
quarter, which is not included in the adjusted free cash flow. The
Company has since filed an appeal of the U.S. tax court
decision.
"The critical need to send money and the push for global
financial inclusion continues to drive growth in the industry,"
Patsley said. "The investments we are making into the expansion of
our innovative self-service money transfer and payment service
products are providing consumers with more choices and greater
convenience, prompting a growing number of customers to choose
MoneyGram to fulfill some of their most important financial needs.
Given our strong execution and the progress we are making towards
achieving our goals, I am confident this is the right time to move
forward with the CEO succession plan that was separately announced
today."
Full Year 2015 Outlook
The Company's outlook for 2015 is unchanged. For the full-year
2015, the Company estimates approximately flat constant currency
revenue growth.
For Adjusted EBITDA, the Company estimates a decline of
approximately 8 to 12 percent on a constant currency basis for the
full-year 2015. The Company anticipates improving to year-over-year
double-digit constant currency revenue and Adjusted EBITDA growth
in the fourth 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), Adjusted EBITDA margin and Adjusted Free Cash
Flow (Adjusted EBITDA less cash interest, cash taxes, cash payments
for capital expenditures and agent signing bonuses), constant
currency measures, adjusted diluted earnings per share and adjusted
net income. In addition, we also present adjusted operating income
and adjusted operating margin for our two reporting segments. The
following tables include a full reconciliation of non-GAAP
financial measures to the related GAAP financial measures. The
equivalent GAAP financial measures for projected results are not
provided as we are not able to predict results inclusive of
currency changes.
We believe that these non-GAAP financial measures provide useful
information to investors because they are an indicator of the
strength and performance of ongoing business operations. These
calculations are commonly used as a basis for investors, analysts
and other interested parties to evaluate and compare the operating
performance and value of companies within our industry. Finally,
EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, adjusted free cash
flow, constant currency, adjusted diluted earnings per share and
adjusted net income figures are financial and performance measures
used by management in reviewing results of operations, forecasting,
allocating resources or 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 in
isolation or as substitutes for the accompanying GAAP financial
measures.
Description of
Tables
|
|
Table One
|
–
|
Consolidated
Statements of Operations
|
Table Two
|
–
|
Segment
Results
|
Table
Three
|
–
|
Segment
Reconciliations
|
Table Four
|
–
|
EBITDA, Adjusted
EBITDA, Adjusted EBITDA Margin and Adjusted Free Cash
Flow
|
Table Five
|
–
|
Consolidated Balance
Sheets
|
Table Six
|
–
|
Adjusted Net Income
and Adjusted Diluted EPS
|
Conference Call
MoneyGram International will host a conference call today at
8:00 a.m. CDT, 9:00 a.m. EDT, to discuss its results.
Pamela H. Patsley, chairman and
chief executive officer, will host the call.
Participant Dial-In
Numbers:
|
U.S.:
|
1-888-811-5441
|
International:
|
+1-913-312-0404
|
Replay:
|
1-877-870-5176 or +
1-858-384-5517
|
Replay ID:
|
1751956
|
Replay is available
through August 7, 2015
|
About MoneyGram International, Inc.
MoneyGram is a global provider of innovative money transfer and
payment services and is recognized worldwide as a financial
connection to friends and family. Whether online, or through a
mobile device, at a kiosk or in a local store, we connect consumers
any way that is convenient for them. We also provide bill payment
services, issue money orders and process official checks in the
U.S. More information about MoneyGram International, Inc. is
available at moneygram.com.
Forward Looking Statements
This release may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements with respect to, among other things, the
financial condition, results of operations, plans, objectives,
future performance and business of MoneyGram and its subsidiaries.
Forward-looking statements can be identified by words such as
"believes," "estimates," "expects," "projects," "plans," "will,"
"should," "could," "would," "goals," "anticipates" and other
similar expressions. These forward-looking statements speak only as
of the date they are made, and MoneyGram undertakes no obligation
to publicly update or revise any forward-looking statement, except
as required by federal securities law. These forward-looking
statements are based on management's current expectations and are
subject to certain risks, uncertainties and changes in
circumstances due to a number of factors. These factors include,
but are not limited to: our ability to compete effectively; our
ability to maintain key agent or biller relationships, or a
reduction in business or transaction volume from these
relationships, including our largest agent, Walmart, whether
through the introduction by Walmart of a competing "white label"
branded money transfer product or otherwise; the impact of our new
U.S.-to-U.S. pricing strategy; our ability to manage fraud risks
from consumers or agents; the ability of us and our agents to
comply with U.S. and international laws and regulations; litigation
or investigations involving us or our agents, including the outcome
of ongoing investigations by several state governments, which could
result in material settlements, fines or penalties, revocation of
required licenses or registrations, terminations of contracts,
other administrative actions, lawsuits or associated negative
publicity; uncertainties relating to compliance with and the impact
of the deferred prosecution agreement entered into with the U.S.
federal government and the effect of the deferred prosecution
agreement on our reputation and business; regulations addressing
consumer privacy, data use and security; 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
restrictions by the Office of Foreign Assets Control; changes in
tax laws or an unfavorable outcome with respect to the audit of our
tax returns or tax positions, or a failure by us to establish
adequate reserves for tax events; our substantial debt service
obligations, significant debt covenant requirements and credit
ratings; sustained financial market illiquidity, or illiquidity at
our clearing, cash management and custodial financial institutions;
our significant exposure to loss in the event of a major bank
failure or a loss of liquidity in the bank deposit market; the
ability of us and our agents to maintain adequate banking
relationships; concerns regarding the financial health of certain
European countries; a security or privacy breach in systems,
networks or databases on which rely; disruptions to our computer
network systems and data centers; continued weakness in economic
conditions, in both the U.S. and global markets; weakened consumer
confidence in our business or money transfers generally; a
significant change, material slow down or complete disruption of
international migration patterns; our ability to manage credit
risks from our retail agents and official check financial
institution customers; our ability to retain partners to operate
our official check and money order businesses; our ability to
successfully develop and timely introduce new and enhanced products
and services or investments in unsuccessful new products, services
or infrastructure changes; our ability to manage risks associated
with our international sales and operations; our ability to
adequately protect our brand and intellectual property rights and
to avoid infringing on the rights of others; our ability to attract
and retain key employees; our ability to manage risks related to
the operation of retail locations and the acquisition or start-up
of businesses; our ability to maintain effective internal controls;
our capital structure and the special voting rights provided to
designees of Thomas H. Lee Partners, L.P. on our Board of
Directors; whether we will be able to implement the global
reorganization and restructuring initiative as planned; whether the
expected amount of costs associated with such initiative will
exceed our forecasts; whether we will be able to realize the full
amount of estimated savings from such initiative; and the risks and
uncertainties described in the "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" sections of MoneyGram's public reports filed with the
SEC, including MoneyGram's annual report on Form 10-K for the year
ended December 31, 2014 and
subsequent Form 10-Q.
TABLE
ONE
|
MONEYGRAM
INTERNATIONAL, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(Unaudited)
|
(Amounts in
millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
2015
vs
|
|
Six Months Ended
June 30,
|
|
2015
vs
|
|
2015
|
|
2014
|
|
2014
|
|
2015
|
|
2014
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee and other
revenue
|
|
$
|
356.0
|
|
|
$
|
368.8
|
|
|
$
|
(12.8)
|
|
|
$
|
683.7
|
|
|
$
|
736.5
|
|
|
$
|
(52.8)
|
|
Investment
revenue
|
|
2.8
|
|
|
3.6
|
|
|
(0.8)
|
|
|
5.7
|
|
|
10.8
|
|
|
(5.1)
|
|
Total
revenue
|
|
358.8
|
|
|
372.4
|
|
|
(13.6)
|
|
|
689.4
|
|
|
747.3
|
|
|
(57.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue growth,
as reported
|
|
(4)
|
%
|
|
2
|
%
|
|
|
|
(8)
|
%
|
|
6
|
%
|
|
|
Total revenue growth,
constant currency
|
|
1
|
%
|
|
1
|
%
|
|
|
|
(3)
|
%
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee and other
commissions expense
|
|
163.2
|
|
|
171.6
|
|
|
(8.4)
|
|
|
316.6
|
|
|
342.5
|
|
|
(25.9)
|
|
Investment
commissions expense
|
|
0.2
|
|
|
0.1
|
|
|
0.1
|
|
|
0.3
|
|
|
0.2
|
|
|
0.1
|
|
Total commissions
expense
|
|
163.4
|
|
|
171.7
|
|
|
(8.3)
|
|
|
316.9
|
|
|
342.7
|
|
|
(25.8)
|
|
Compensation and
benefits
|
|
87.8
|
|
|
75.0
|
|
|
12.8
|
|
|
162.5
|
|
|
144.7
|
|
|
17.8
|
|
Transaction and
operations support
|
|
90.3
|
|
|
77.3
|
|
|
13.0
|
|
|
160.7
|
|
|
148.6
|
|
|
12.1
|
|
Occupancy, equipment
and supplies
|
|
15.8
|
|
|
13.7
|
|
|
2.1
|
|
|
31.3
|
|
|
26.5
|
|
|
4.8
|
|
Depreciation and
amortization
|
|
17.2
|
|
|
13.6
|
|
|
3.6
|
|
|
32.0
|
|
|
26.7
|
|
|
5.3
|
|
Total operating
expenses
|
|
374.5
|
|
|
351.3
|
|
|
23.2
|
|
|
703.4
|
|
|
689.2
|
|
|
14.2
|
|
OPERATING (LOSS)
INCOME
|
|
(15.7)
|
|
|
21.1
|
|
|
(36.8)
|
|
|
(14.0)
|
|
|
58.1
|
|
|
(72.1)
|
|
OTHER
EXPENSE
|
|
|
|
|
|
|
|
|
|
|
|
|
Net securities
gains
|
|
—
|
|
|
(22.4)
|
|
|
22.4
|
|
|
—
|
|
|
(22.4)
|
|
|
22.4
|
|
Interest
expense
|
|
11.4
|
|
|
11.4
|
|
|
—
|
|
|
22.5
|
|
|
21.1
|
|
|
1.4
|
|
Total other expense
(income)
|
|
11.4
|
|
|
(11.0)
|
|
|
22.4
|
|
|
22.5
|
|
|
(1.3)
|
|
|
23.8
|
|
(Loss) income before
income taxes
|
|
(27.1)
|
|
|
32.1
|
|
|
(59.2)
|
|
|
(36.5)
|
|
|
59.4
|
|
|
(95.9)
|
|
Income tax (benefit)
expense
|
|
(14.7)
|
|
|
6.5
|
|
|
(21.2)
|
|
|
47.9
|
|
|
(5.2)
|
|
|
53.1
|
|
NET (LOSS)
INCOME
|
|
$
|
(12.4)
|
|
|
$
|
25.6
|
|
|
$
|
(38.0)
|
|
|
$
|
(84.4)
|
|
|
$
|
64.6
|
|
|
$
|
(149.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(LOSS) EARNINGS
PER COMMON SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.20)
|
|
|
$
|
0.40
|
|
|
$
|
(0.60)
|
|
|
$
|
(1.36)
|
|
|
$
|
0.96
|
|
|
$
|
(2.32)
|
|
Diluted
|
|
$
|
(0.20)
|
|
|
$
|
0.40
|
|
|
$
|
(0.60)
|
|
|
$
|
(1.36)
|
|
|
$
|
0.95
|
|
|
$
|
(2.31)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
outstanding common shares and equivalents used in computing (loss)
earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
(1)
|
|
62.1
|
|
|
63.6
|
|
|
(1.5)
|
|
|
62.1
|
|
|
67.6
|
|
|
(5.5)
|
|
Diluted
(1)
|
|
62.1
|
|
|
63.8
|
|
|
(1.7)
|
|
|
62.1
|
|
|
67.8
|
|
|
(5.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Includes common stock equivalents of 8.9 million for the three and
six months ended June 30, 2015, respectively. The following
weighted-average potential common shares are excluded from diluted
(loss) earnings 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
|
|
3.5
|
|
|
4.3
|
|
|
|
|
3.6
|
|
|
4.3
|
|
|
|
Shares related to
restricted stock units
|
|
4.3
|
|
|
1.8
|
|
|
|
|
3.5
|
|
|
1.5
|
|
|
|
TABLE
TWO
|
MONEYGRAM
INTERNATIONAL, INC.
|
SEGMENT
RESULTS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Funds
Transfer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
2015
vs
|
|
Six Months Ended
June 30,
|
|
2015
vs
|
(Amounts in
millions)
|
|
2015
|
|
2014
|
|
2014
|
|
2015
|
|
2014
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money transfer
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee and other
revenue
|
|
$
|
316.5
|
|
|
$
|
328.2
|
|
|
$
|
(11.7)
|
|
|
$
|
603.3
|
|
|
$
|
654.3
|
|
|
$
|
(51.0)
|
|
Investment
revenue
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
Bill payment
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee and other
revenue
|
|
24.1
|
|
|
24.5
|
|
|
(0.4)
|
|
|
49.6
|
|
|
50.1
|
|
|
(0.5)
|
|
Total
revenue
|
|
$
|
340.7
|
|
|
$
|
352.8
|
|
|
$
|
(12.1)
|
|
|
$
|
653.0
|
|
|
$
|
704.5
|
|
|
$
|
(51.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commissions
expense
|
|
$
|
163.2
|
|
|
$
|
171.5
|
|
|
$
|
(8.3)
|
|
|
$
|
316.5
|
|
|
$
|
342.2
|
|
|
$
|
(25.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
$
|
0.4
|
|
|
$
|
19.5
|
|
|
$
|
(19.1)
|
|
|
$
|
0.6
|
|
|
$
|
51.0
|
|
|
$
|
(50.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
0.1
|
%
|
|
5.5
|
%
|
|
|
|
0.1
|
%
|
|
7.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money transfer
revenue growth, as reported
|
|
(4)
|
%
|
|
3
|
%
|
|
|
|
(8)
|
%
|
|
7
|
%
|
|
|
Money transfer
revenue growth, constant currency
|
|
2
|
%
|
|
1
|
%
|
|
|
|
(3)
|
%
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Paper
Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
2015
vs
|
|
Six Months Ended
June 30,
|
|
2015
vs
|
(Amounts in
millions)
|
|
2015
|
|
2014
|
|
2014
|
|
2015
|
|
2014
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money order
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee and other
revenue
|
|
$
|
12.1
|
|
|
$
|
12.3
|
|
|
$
|
(0.2)
|
|
|
$
|
24.3
|
|
|
$
|
24.6
|
|
|
$
|
(0.3)
|
|
Investment
revenue
|
|
0.7
|
|
|
1.0
|
|
|
(0.3)
|
|
|
1.6
|
|
|
3.1
|
|
|
(1.5)
|
|
Official check
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee and other
revenue
|
|
3.3
|
|
|
3.8
|
|
|
(0.5)
|
|
|
6.5
|
|
|
7.5
|
|
|
(1.0)
|
|
Investment
revenue
|
|
2.0
|
|
|
2.5
|
|
|
(0.5)
|
|
|
4.0
|
|
|
7.6
|
|
|
(3.6)
|
|
Total
revenue
|
|
$
|
18.1
|
|
|
$
|
19.6
|
|
|
$
|
(1.5)
|
|
|
$
|
36.4
|
|
|
$
|
42.8
|
|
|
$
|
(6.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commissions
expense
|
|
$
|
0.3
|
|
|
$
|
0.2
|
|
|
$
|
0.1
|
|
|
$
|
0.5
|
|
|
$
|
0.5
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
$
|
4.0
|
|
|
$
|
6.1
|
|
|
$
|
(2.1)
|
|
|
$
|
9.4
|
|
|
$
|
15.9
|
|
|
$
|
(6.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
22.1
|
%
|
|
31.1
|
%
|
|
|
|
25.8
|
%
|
|
37.1
|
%
|
|
|
TABLE
THREE
|
MONEYGRAM
INTERNATIONAL, INC.
|
SEGMENT
RECONCILIATIONS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Funds
Transfer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
2015
vs
|
|
Six Months Ended
June 30,
|
|
2015
vs
|
(Amounts in
millions)
|
|
2015
|
|
2014
|
|
2014
|
|
2015
|
|
2014
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (as
reported)
|
|
$
|
340.7
|
|
|
$
|
352.8
|
|
|
$
|
(12.1)
|
|
|
$
|
653.0
|
|
|
$
|
704.5
|
|
|
$
|
(51.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income
|
|
$
|
21.2
|
|
|
$
|
36.6
|
|
|
$
|
(15.4)
|
|
|
$
|
40.5
|
|
|
$
|
81.0
|
|
|
$
|
(40.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reorganization and
restructuring costs
|
|
(4.1)
|
|
|
(5.7)
|
|
|
1.6
|
|
|
(12.5)
|
|
|
(8.4)
|
|
|
(4.1)
|
|
Compliance
enhancement program
|
|
(9.4)
|
|
|
(7.1)
|
|
|
(2.3)
|
|
|
(14.5)
|
|
|
(13.7)
|
|
|
(0.8)
|
|
Direct monitor
costs
|
|
(2.8)
|
|
|
(0.1)
|
|
|
(2.7)
|
|
|
(4.7)
|
|
|
(0.9)
|
|
|
(3.8)
|
|
Stock-based
compensation expense
|
|
(4.5)
|
|
|
(4.2)
|
|
|
(0.3)
|
|
|
(8.2)
|
|
|
(7.0)
|
|
|
(1.2)
|
|
Total
adjustments
|
|
(20.8)
|
|
|
(17.1)
|
|
|
(3.7)
|
|
|
(39.9)
|
|
|
(30.0)
|
|
|
(9.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (as
reported)
|
|
$
|
0.4
|
|
|
$
|
19.5
|
|
|
$
|
(19.1)
|
|
|
$
|
0.6
|
|
|
$
|
51.0
|
|
|
$
|
(50.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
margin
|
|
6.2
|
%
|
|
10.4
|
%
|
|
|
|
6.2
|
%
|
|
11.5
|
%
|
|
|
Total
adjustments
|
|
(6.1)
|
%
|
|
(4.8)
|
%
|
|
|
|
(6.1)
|
%
|
|
(4.3)
|
%
|
|
|
Operating margin (as
reported)
|
|
0.1
|
%
|
|
5.5
|
%
|
|
|
|
0.1
|
%
|
|
7.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Paper
Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
2015
vs
|
|
Six Months Ended
June 30,
|
|
2015
vs
|
(Amounts in
millions)
|
|
2015
|
|
2014
|
|
2014
|
|
2015
|
|
2014
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (as
reported)
|
|
$
|
18.1
|
|
|
$
|
19.6
|
|
|
$
|
(1.5)
|
|
|
$
|
36.4
|
|
|
$
|
42.8
|
|
|
$
|
(6.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income
|
|
$
|
5.6
|
|
|
$
|
7.6
|
|
|
$
|
(2.0)
|
|
|
$
|
12.8
|
|
|
$
|
18.4
|
|
|
$
|
(5.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reorganization and
restructuring costs
|
|
(0.5)
|
|
|
(0.7)
|
|
|
0.2
|
|
|
(1.5)
|
|
|
(1.0)
|
|
|
(0.5)
|
|
Compliance
enhancement program
|
|
(0.6)
|
|
|
(0.3)
|
|
|
(0.3)
|
|
|
(1.0)
|
|
|
(0.7)
|
|
|
(0.3)
|
|
Stock-based
compensation expense
|
|
(0.5)
|
|
|
(0.5)
|
|
|
—
|
|
|
(0.9)
|
|
|
(0.8)
|
|
|
(0.1)
|
|
Total
adjustments
|
|
(1.6)
|
|
|
(1.5)
|
|
|
(0.1)
|
|
|
(3.4)
|
|
|
(2.5)
|
|
|
(0.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (as
reported)
|
|
$
|
4.0
|
|
|
$
|
6.1
|
|
|
$
|
(2.1)
|
|
|
$
|
9.4
|
|
|
$
|
15.9
|
|
|
$
|
(6.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
margin
|
|
30.9
|
%
|
|
38.8
|
%
|
|
|
|
35.2
|
%
|
|
43.0
|
%
|
|
|
Total
adjustments
|
|
(8.8)
|
%
|
|
(7.7)
|
%
|
|
|
|
(9.3)
|
%
|
|
(5.8)
|
%
|
|
|
Operating margin (as
reported)
|
|
22.1
|
%
|
|
31.1
|
%
|
|
|
|
25.8
|
%
|
|
37.1
|
%
|
|
|
TABLE
FOUR
|
MONEYGRAM
INTERNATIONAL, INC.
|
EBITDA, ADJUSTED
EBITDA, ADJUSTED EBITDA MARGIN AND ADJUSTED FREE CASH
FLOW
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
(Amounts in
millions)
|
|
Three Months Ended
June 30,
|
|
2015
vs
|
|
Six Months Ended
June 30,
|
|
2015
vs
|
|
2015
|
|
2014
|
|
2014
|
|
2015
|
|
2014
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before
income taxes
|
|
$
|
(27.1)
|
|
|
$
|
32.1
|
|
|
$
|
(59.2)
|
|
|
$
|
(36.5)
|
|
|
$
|
59.4
|
|
|
$
|
(95.9)
|
|
Interest
expense
|
|
11.4
|
|
|
11.4
|
|
|
—
|
|
|
22.5
|
|
|
21.1
|
|
|
1.4
|
|
Depreciation and
amortization
|
|
17.2
|
|
|
13.6
|
|
|
3.6
|
|
|
32.0
|
|
|
26.7
|
|
|
5.3
|
|
Amortization of agent
signing bonuses
|
|
14.5
|
|
|
12.7
|
|
|
1.8
|
|
|
29.1
|
|
|
24.5
|
|
|
4.6
|
|
EBITDA
|
|
16.0
|
|
|
69.8
|
|
|
(53.8)
|
|
|
47.1
|
|
|
131.7
|
|
|
(84.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant items
impacting EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension settlement
charge (1)
|
|
13.8
|
|
|
—
|
|
|
13.8
|
|
|
13.8
|
|
|
—
|
|
|
13.8
|
|
Compliance
enhancement program
|
|
10.2
|
|
|
7.4
|
|
|
2.8
|
|
|
15.7
|
|
|
14.5
|
|
|
1.2
|
|
Stock-based,
contingent and incentive compensation (2)
|
|
6.7
|
|
|
5.3
|
|
|
1.4
|
|
|
12.8
|
|
|
8.8
|
|
|
4.0
|
|
Reorganization and
restructuring costs
|
|
4.6
|
|
|
6.7
|
|
|
(2.1)
|
|
|
14.5
|
|
|
9.8
|
|
|
4.7
|
|
Legal and contingent
matters (3)
|
|
3.6
|
|
|
0.2
|
|
|
3.4
|
|
|
3.7
|
|
|
0.6
|
|
|
3.1
|
|
Direct monitor
costs
|
|
2.8
|
|
|
0.1
|
|
|
2.7
|
|
|
4.7
|
|
|
0.9
|
|
|
3.8
|
|
Net securities
gains
|
|
—
|
|
|
(22.4)
|
|
|
22.4
|
|
|
—
|
|
|
(22.4)
|
|
|
22.4
|
|
Capital transaction
costs (4)
|
|
—
|
|
|
1.0
|
|
|
(1.0)
|
|
|
—
|
|
|
2.1
|
|
|
(2.1)
|
|
Adjusted
EBITDA
|
|
$
|
57.7
|
|
|
$
|
68.1
|
|
|
$
|
(10.4)
|
|
|
$
|
112.3
|
|
|
$
|
146.0
|
|
|
$
|
(33.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin (5)
|
|
16.1
|
%
|
|
18.3
|
%
|
|
(2.2)
|
%
|
|
16.3
|
%
|
|
19.5
|
%
|
|
(3.2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
growth, as reported
|
|
(15)
|
%
|
|
|
|
|
|
(23)
|
%
|
|
|
|
|
Adjusted EBITDA
growth, constant currency adjusted
|
|
(13)
|
%
|
|
|
|
|
|
(22)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
57.7
|
|
|
$
|
68.1
|
|
|
$
|
(10.4)
|
|
|
$
|
112.3
|
|
|
$
|
146.0
|
|
|
$
|
(33.7)
|
|
Cash payments for
interest
|
|
(10.6)
|
|
|
(10.6)
|
|
|
—
|
|
|
(21.0)
|
|
|
(19.7)
|
|
|
(1.3)
|
|
Cash payments for
taxes
|
|
(57.7)
|
|
|
(0.3)
|
|
|
(57.4)
|
|
|
(65.3)
|
|
|
(0.4)
|
|
|
(64.9)
|
|
Payments related to
IRS tax matter
|
|
55.8
|
|
|
—
|
|
|
55.8
|
|
|
61.0
|
|
|
—
|
|
|
61.0
|
|
Cash payments for
capital expenditures
|
|
(32.8)
|
|
|
(22.4)
|
|
|
(10.4)
|
|
|
(59.7)
|
|
|
(39.5)
|
|
|
(20.2)
|
|
Cash payments for
agent signing bonuses
|
|
(19.8)
|
|
|
(4.6)
|
|
|
(15.2)
|
|
|
(63.8)
|
|
|
(9.5)
|
|
|
(54.3)
|
|
Adjusted Free Cash
Flow
|
|
$
|
(7.4)
|
|
|
$
|
30.2
|
|
|
$
|
(37.6)
|
|
|
$
|
(36.5)
|
|
|
$
|
76.9
|
|
|
$
|
(113.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Non-cash charge
resulting from the partial buyout of the defined benefit pension
plan.
|
(2)
|
Stock-based
compensation, contingent performance awards payable after three
years and certain incentive compensation.
|
(3)
|
Fees and expenses
related to certain legal and contingent matters.
|
(4)
|
Professional and
legal fees incurred for the April 2, 2014 equity
transactions.
|
(5)
|
Adjusted EBITDA
margin is calculated as Adjusted EBITDA divided by total
revenue.
|
|
|
|
|
TABLE
FIVE
|
MONEYGRAM
INTERNATIONAL, INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(Unaudited)
|
|
|
|
|
|
(Amounts in
millions, except share data)
|
|
June 30,
2015
|
|
December 31,
2014
|
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
128.6
|
|
|
$
|
250.6
|
|
Settlement assets
(1)
|
|
3,474.4
|
|
|
3,533.6
|
|
Property and
equipment, net
|
|
192.0
|
|
|
165.6
|
|
Goodwill
|
|
442.5
|
|
|
442.5
|
|
Other
assets
|
|
227.1
|
|
|
249.9
|
|
Total
assets
|
|
$
|
4,464.6
|
|
|
$
|
4,642.2
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Payment service
obligations
|
|
$
|
3,474.4
|
|
|
$
|
3,533.6
|
|
Debt
|
|
958.5
|
|
|
963.5
|
|
Pension and other
postretirement benefits
|
|
111.4
|
|
|
125.7
|
|
Accounts payable and
other liabilities
|
|
169.0
|
|
|
202.1
|
|
Total
liabilities
|
|
4,713.3
|
|
|
4,824.9
|
|
|
|
|
|
|
STOCKHOLDERS'
DEFICIT
|
|
|
|
|
Participating
convertible preferred stock - series D, $0.01 par value, 200,000
shares authorized, 71,282 issued at June 30, 2015 and December 31,
2014
|
|
183.9
|
|
|
183.9
|
|
Common stock, $0.01
par value, 162,500,000 shares authorized, 58,823,567 shares issued
at June 30, 2015 and December 31, 2014
|
|
0.6
|
|
|
0.6
|
|
Additional paid-in
capital
|
|
991.8
|
|
|
982.8
|
|
Retained
loss
|
|
(1,233.8)
|
|
|
(1,144.6)
|
|
Accumulated other
comprehensive loss
|
|
(57.0)
|
|
|
(67.1)
|
|
Treasury stock:
5,580,147 and 5,734,338 shares at June 30, 2015 and
December 31, 2014, respectively
|
|
(134.2)
|
|
|
(138.3)
|
|
Total stockholders'
deficit
|
|
(248.7)
|
|
|
(182.7)
|
|
Total liabilities and
stockholders' deficit
|
|
$
|
4,464.6
|
|
|
$
|
4,642.2
|
|
|
|
|
|
|
|
|
(1)
|
As of December 31,
2014, we recast our Consolidated Balance Sheets to include the
Settlement cash and cash equivalents, Receivables, net,
Interest-bearing investments and Available-for-sale investment in a
new balance sheet caption, entitled Settlement assets, in an amount
equal to Payment service obligations. The historically reported
Assets in excess of payment service obligations are now presented
as unrestricted Cash and cash equivalents on the Consolidated
Balance Sheets.
|
TABLE
SIX
|
MONEYGRAM
INTERNATIONAL, INC.
|
ADJUSTED NET
INCOME and ADJUSTED DILUTED EPS
|
(Unaudited)
|
|
|
|
|
|
|
|
(Amounts in
millions, except per share data)
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(12.4)
|
|
|
$
|
25.6
|
|
|
$
|
(84.4)
|
|
|
$
|
64.6
|
|
|
|
|
|
|
|
|
|
|
Net securities
gains
|
|
—
|
|
|
(22.4)
|
|
|
—
|
|
|
(22.4)
|
|
Other expenses
(1)
|
|
41.7
|
|
|
20.7
|
|
|
65.2
|
|
|
36.7
|
|
Total adjustments
(1)
|
|
41.7
|
|
|
(1.7)
|
|
|
65.2
|
|
|
14.3
|
|
Tax impacts of
adjustments (2)
|
|
(15.2)
|
|
|
(6.0)
|
|
|
(23.8)
|
|
|
(11.8)
|
|
Tax adjustments
(3)
|
|
—
|
|
|
—
|
|
|
63.7
|
|
|
(22.9)
|
|
Adjusted net
income
|
|
$
|
14.1
|
|
|
$
|
17.9
|
|
|
$
|
20.7
|
|
|
$
|
44.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss)
earnings per common share
|
|
$
|
(0.20)
|
|
|
$
|
0.40
|
|
|
$
|
(1.36)
|
|
|
$
|
0.95
|
|
|
|
|
|
|
|
|
|
|
Diluted adjustments
per common share
|
|
$
|
0.43
|
|
|
$
|
(0.12)
|
|
|
$
|
1.69
|
|
|
$
|
(0.30)
|
|
|
|
|
|
|
|
|
|
|
Diluted adjusted
earnings per common share
|
|
$
|
0.23
|
|
|
$
|
0.28
|
|
|
$
|
0.33
|
|
|
$
|
0.65
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted-average outstanding common shares and
equivalents
|
|
62.1
|
|
|
63.8
|
|
|
62.1
|
|
|
67.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
See summary of
adjustments in Table Four - EBITDA, Adjusted EBITDA, Adjusted
EBITDA Margin and Adjusted Free Cash Flow.
|
(2)
|
Tax rates used to
calculate the tax expense impact are based on the nature of each
adjustment.
|
(3)
|
Represents
adjustments to income tax expense for the IRS tax litigation matter
and a change to an uncertain tax position.
|
|
|
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SOURCE MoneyGram