DALLAS, Nov. 8, 2018 /PRNewswire/ -- MoneyGram
(NASDAQ:MGI) today reported financial results for its third quarter
ending September 30, 2018.
Third Quarter Financial Results
- Total revenue of $347.2 million
declined 13% on a reported basis and 12% on a constant currency
basis compared to third quarter 2017.
-
- Money transfer revenue was $304.2
million, representing a decrease of 15% on a reported basis
and a decrease of 14% on a constant currency basis as compared to
third quarter 2017. Revenue results include the impact of higher
compliance standards and newly implemented corridor specific
controls.
- MoneyGram.com revenue grew 3% as enhanced compliance controls
and introductory pricing reduced top-line growth in the quarter.
Total digital solutions, which includes MoneyGram.com, represented
16% of total money transfer revenue.
- Investment revenue was $13.5
million which was an increase of $5.8
million on a year over year basis due to higher yields and
investment balances in 2018.
- Net loss was $20.9 million
compared to net income of $7.7
million for third quarter 2017. EBITDA was $20.4 million, a decrease of $34.5 million as compared to the year-ago period.
The company accrued an additional $30.0
million related to the resolution of the deferred
prosecution agreement (the "DPA"). As of September 30, 2018, the company has accrued
$125.0 million related to this
matter. The quarter also includes:
-
- $1.2 million of restructuring and
reorganization costs.
- A $5.3 million income tax benefit
compared to a $4.0 million income tax
expense in the year-ago period.
- Adjusted EBITDA was $59.5 million
and decreased by $8.4 million
compared to third quarter 2017. Adjusted EBITDA margin was 17.1%
and remained flat when compared to third quarter 2017.
- Diluted loss per share was $0.32
compared to diluted earnings per share of $0.12 in the third quarter 2017. Adjusted diluted
earnings per share was $0.24.
- Adjusted Free Cash Flow was $28.9
million for the quarter, an increase of $3.7 million.
"Earlier today, we entered into an agreement with the Department
of Justice and the Federal Trade Commission to extend our DPA and
to modify our consent order. We remain steadfast in our commitment
to protecting our customers and having the highest compliance
standards in the industry. Our third quarter results reflect the
impact of enhanced compliance controls implemented earlier this
year and additional compliance controls implemented during the
quarter. Despite the short-term headwinds resulting from these
controls, we are focused on doing what is right for the safety of
our customers and long term success of our business," said
Alex Holmes, MoneyGram's chairman
and CEO.
Holmes added, "Importantly, in the third quarter, we marked a
milestone in our digital transformation. We expanded
our award-winning online service to several more countries and we
introduced the new MoneyGram app in Europe. In the coming weeks, we expect
MoneyGram.com to be live in 25 countries and the app available in
16, including the U.S."
Restructuring and Reorganization
In the first quarter of 2018, the company initiated a
restructuring and reorganization program as part of its Digital
Transformation initiative. The company incurred $1.2 million of expenses in the third quarter and
has incurred $14.0 million for the
year. The company expects to spend an additional $2.5 million to $5.5
million over the life of the program. This program
reflects the alignment of the organization with the delivery of new
digital touch-points for customers and agents, and the optimization
of the company's global network. The company expects
efficiencies that will result in $30
million of expense reductions in 2018 and, upon completion,
$45 million on an annualized
basis.
Full Year 2018 Outlook
The company is revising its full year estimates for 2018.
Revenue is expected to decline approximately 10 percent on a
constant currency basis. Adjusted EBITDA is expected to decline
approximately 15 percent on a constant currency basis.
Forward-Looking Statements
This communication contains forward-looking statements which are
protected as forward-looking statements under the Private
Securities Litigation Reform Act of 1995 that are not limited to
historical facts, but reflect MoneyGram's current beliefs,
expectations or intentions regarding future events. Words such as
"may," "will," "could," "should," "expect," "plan," "project,"
"intend," "anticipate," "believe," "estimate," "predict,"
"potential," "pursuant," "target," "continue," and similar
expressions are intended to identify such forward-looking
statements. The statements in this communication that are not
historical statements are forward-looking statements within the
meaning of the federal securities laws. Specific forward-looking
statements include, among others, statements regarding the
company's projected results of operations, specific factors
expected to impact the company's results of operations, and the
expected restructuring and reorganization program results.
Forward-looking statements are subject to numerous risks and
uncertainties, many of which are beyond MoneyGram's control, which
could cause actual results to differ materially from the results
expressed or implied by the statements. These risks and
uncertainties 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 additional competing
"white label" branded money transfer products or otherwise; 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; uncertainties relating to compliance with the DPA entered
into with the U.S. federal government and the effect of the DPA on
our reputation and business; regulations addressing consumer
privacy, data use and security; our ability to successfully develop
and timely introduce new and enhanced products and services and our
investments in new products, services or infrastructure changes;
our ability to manage risks associated with our international sales
and operations; our offering of money transfer services through
agents in regions that are politically volatile; 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; major
bank failure or sustained financial market illiquidity, or
illiquidity at our clearing, cash management and custodial
financial institutions; the ability of us and our agents to
maintain adequate banking relationships; a security or privacy
breach in systems, networks or databases on which rely; disruptions
to our computer network systems and data centers; weakness in
economic conditions, in both the U.S. and global markets; a
significant change, material slow down or complete disruption of
international migration patterns; the financial health of certain
European countries or the secession of a country from the European
Union; our ability to manage credit risks from our agents and
official check financial institution customers; 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; any restructuring actions and cost reduction
initiatives that we undertake may not deliver the expected results
and these actions may adversely affect our business; 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; 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 Securities and
Exchange Commission (the "SEC"), including MoneyGram's annual
report on Form 10-K for the year ended December 31, 2017.
Additional information concerning factors that could cause
actual results to differ materially from those in the
forward-looking statements is contained from time to time in
MoneyGram's SEC filings. MoneyGram's SEC filings may be obtained by
contacting MoneyGram, through MoneyGram's web site at
ir.moneygram.com or through the SEC's Electronic Data Gathering and
Analysis Retrieval System (EDGAR) at http://www.sec.gov. MoneyGram
undertakes no obligation to publicly update or revise any
forward-looking statement.
Non-GAAP Measures
In addition to results presented in accordance with accounting
principles generally accepted in the
United States ("GAAP"), this news 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 certain
significant items), Adjusted EBITDA margin, Adjusted Free Cash Flow
(Adjusted EBITDA less cash interest, cash taxes and cash payments
for capital expenditures and agent signing bonuses), constant
currency measures (which assume that amounts denominated in foreign
currencies are translated to the U.S. dollar at rates consistent
with those in the prior year), adjusted diluted earnings per share
and adjusted net income. In addition, we 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, and projected results do not
reflect the potential impact of certain non-GAAP adjustments, which
include (but in future periods, may not be limited to) stock-based,
contingent and incentive compensation costs, compliance enhancement
program costs, direct monitor costs, legal and contingent matter
costs, restructuring and reorganization costs, currency changes and
the tax effect of such items. We cannot reliably predict or
estimate if and when these types of costs, adjustments or changes
may occur or their impact to our financial statements. Accordingly,
a reconciliation of the non-GAAP financial measures to the
equivalent GAAP financial measures for projected results is not
available.
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
|
-
|
Condensed
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
|
-
|
Adjusted Net Income
and Adjusted Diluted EPS
|
Table Six
|
-
|
Condensed
Consolidated Balance Sheets
|
Table
Seven
|
-
|
Condensed
Consolidated Statements of Cash Flows
|
Table
Eight
|
-
|
2018 Versus 2017
Excluding Asset-Backed Security Redemption
|
Conference Call
MoneyGram International will host a conference call on
November 9, at 8:00 a.m. CT,
9:00 a.m. ET, to discuss its results.
Alex Holmes, chairman and chief
executive officer, and Larry
Angelilli, chief financial officer, will host the call.
Participant Dial-In
Numbers:
|
U.S.:
|
1-888-394-8218
|
International:
|
+1-323-701-0225
|
Replay:
|
1-844-512-2921 or
1-412-317-6671
|
Replay ID:
|
3322067
|
Replay is
available through November 16, 2018
|
About MoneyGram International
MoneyGram is a global provider of innovative money transfer
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 select markets. More
information about MoneyGram International, Inc. is
available at moneygram.com.
CONTACT:
Media Relations:
Michelle Buckalew
214-979-1418
media@moneygram.com
TABLE
ONE
|
MONEYGRAM
INTERNATIONAL, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
millions, except percentages and per share data)
|
|
Three Months
Ended September 30,
|
|
2018
vs
|
|
Nine Months
Ended September 30,
|
|
2018
vs
|
|
2018
|
|
2017
|
|
2017
|
|
2018
|
|
2017
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee and other
revenue
|
|
$
|
333.7
|
|
|
$
|
390.1
|
|
|
$
|
(56.4)
|
|
|
$
|
1,066.3
|
|
|
$
|
1,161.5
|
|
|
$
|
(95.2)
|
|
Investment
revenue
|
|
13.5
|
|
|
7.7
|
|
|
5.8
|
|
|
35.5
|
|
|
32.4
|
|
|
3.1
|
|
Total
revenue
|
|
347.2
|
|
|
397.8
|
|
|
(50.6)
|
|
|
1,101.8
|
|
|
1,193.9
|
|
|
(92.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue change,
as reported
|
|
(13)
|
%
|
|
(4)
|
%
|
|
|
|
(8)
|
%
|
|
(2)
|
%
|
|
|
Total revenue change,
constant currency
|
|
(12)
|
%
|
|
(5)
|
%
|
|
|
|
(9)
|
%
|
|
(1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commissions and
direct transaction expenses (1)
|
|
179.7
|
|
|
198.5
|
|
|
(18.8)
|
|
|
555.6
|
|
|
591.9
|
|
|
(36.3)
|
|
Compensation and
benefits (2)
|
|
56.7
|
|
|
67.4
|
|
|
(10.7)
|
|
|
201.1
|
|
|
203.1
|
|
|
(2.0)
|
|
Transaction and
operations support (1) (3)
|
|
88.4
|
|
|
72.5
|
|
|
15.9
|
|
|
235.2
|
|
|
224.5
|
|
|
10.7
|
|
Occupancy, equipment
and supplies
|
|
13.8
|
|
|
15.5
|
|
|
(1.7)
|
|
|
47.4
|
|
|
49.0
|
|
|
(1.6)
|
|
Depreciation and
amortization
|
|
19.5
|
|
|
18.9
|
|
|
0.6
|
|
|
57.7
|
|
|
55.8
|
|
|
1.9
|
|
Total operating
expenses (2)
|
|
358.1
|
|
|
372.8
|
|
|
(14.7)
|
|
|
1,097.0
|
|
|
1,124.3
|
|
|
(27.3)
|
|
OPERATING (LOSS)
INCOME (2)
|
|
(10.9)
|
|
|
25.0
|
|
|
(35.9)
|
|
|
4.8
|
|
|
69.6
|
|
|
(64.8)
|
|
Other
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
13.8
|
|
|
11.6
|
|
|
2.2
|
|
|
39.8
|
|
|
33.6
|
|
|
6.2
|
|
Other non-operating
expense (income) (2)
|
|
1.5
|
|
|
1.7
|
|
|
(0.2)
|
|
|
(25.6)
|
|
|
4.4
|
|
|
(30.0)
|
|
Total other expenses
(2)
|
|
15.3
|
|
|
13.3
|
|
|
2.0
|
|
|
14.2
|
|
|
38.0
|
|
|
(23.8)
|
|
(Loss) income before
income taxes
|
|
(26.2)
|
|
|
11.7
|
|
|
(37.9)
|
|
|
(9.4)
|
|
|
31.6
|
|
|
(41.0)
|
|
Income tax (benefit)
expense
|
|
(5.3)
|
|
|
4.0
|
|
|
(9.3)
|
|
|
2.1
|
|
|
8.9
|
|
|
(6.8)
|
|
NET (LOSS)
INCOME
|
|
$
|
(20.9)
|
|
|
$
|
7.7
|
|
|
$
|
(28.6)
|
|
|
$
|
(11.5)
|
|
|
$
|
22.7
|
|
|
$
|
(34.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(LOSS) EARNINGS
PER COMMON SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.32)
|
|
|
$
|
0.12
|
|
|
$
|
(0.44)
|
|
|
$
|
(0.18)
|
|
|
$
|
0.36
|
|
|
$
|
(0.54)
|
|
Diluted
|
|
$
|
(0.32)
|
|
|
$
|
0.12
|
|
|
$
|
(0.44)
|
|
|
$
|
(0.18)
|
|
|
$
|
0.34
|
|
|
$
|
(0.52)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
outstanding common shares and equivalents used in computing (loss)
earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
64.5
|
|
|
63.1
|
|
|
1.4
|
|
|
64.2
|
|
|
62.8
|
|
|
1.4
|
|
Diluted
|
|
64.5
|
|
|
66.2
|
|
|
(1.7)
|
|
|
64.2
|
|
|
66.2
|
|
|
(2.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) 2017 financial
information reflects the income statement presentation change
outlined in Table 8 of Exhibit 99.1 that was furnished as part of
the Company's Form 8-K dated May 7, 2018.
|
(2) 2017 financial
information reflects the adoption of ASU 2017-07.
|
(3) Quarter-to-date
and year-to-date 2018 include an additional accrual of $30.0
million and $40.0 million, respectively, related to the resolution
of the DPA.
|
TABLE
TWO
|
MONEYGRAM
INTERNATIONAL, INC.
|
SEGMENT
RESULTS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Funds
Transfer
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
millions, except percentages)
|
|
Three Months
Ended September 30,
|
|
2018
vs
|
|
Nine Months
Ended September 30,
|
|
2018
vs
|
|
2018
|
|
2017
|
|
2017
|
|
2018
|
|
2017
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money transfer
revenue
|
|
$
|
304.2
|
|
|
$
|
356.8
|
|
|
$
|
(52.6)
|
|
|
$
|
970.5
|
|
|
$
|
1,055.4
|
|
|
$
|
(84.9)
|
|
Bill payment
revenue
|
|
17.4
|
|
|
20.3
|
|
|
(2.9)
|
|
|
57.7
|
|
|
66.1
|
|
|
(8.4)
|
|
Total
revenue
|
|
$
|
321.6
|
|
|
$
|
377.1
|
|
|
$
|
(55.5)
|
|
|
$
|
1,028.2
|
|
|
$
|
1,121.5
|
|
|
$
|
(93.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions and
direct transaction expenses (1)
|
|
$
|
174.3
|
|
|
$
|
195.6
|
|
|
$
|
(21.3)
|
|
|
$
|
541.5
|
|
|
$
|
585.0
|
|
|
$
|
(43.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss)
income (2)
|
|
$
|
(19.7)
|
|
|
$
|
23.5
|
|
|
$
|
(43.2)
|
|
|
$
|
(12.6)
|
|
|
$
|
61.0
|
|
|
$
|
(73.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
(2)
|
|
(6.1)
|
%
|
|
6.2
|
%
|
|
|
|
(1.2)
|
%
|
|
5.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money transfer
revenue change, as reported
|
|
(15)
|
%
|
|
(3)
|
%
|
|
|
|
(8)
|
%
|
|
(3)
|
%
|
|
|
Money transfer
revenue change, constant currency
|
|
(14)
|
%
|
|
(5)
|
%
|
|
|
|
(10)
|
%
|
|
(2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Paper
Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
millions, except percentages)
|
|
Three Months
Ended September 30,
|
|
2018
vs
|
|
Nine Months
Ended September 30,
|
|
2018
vs
|
|
2018
|
|
2017
|
|
2017
|
|
2018
|
|
2017
|
|
2017
|
Money order
revenue
|
|
$
|
14.0
|
|
|
$
|
12.8
|
|
|
$
|
1.2
|
|
|
$
|
41.6
|
|
|
$
|
42.0
|
|
|
$
|
(0.4)
|
|
Official check
revenue
|
|
11.6
|
|
|
7.9
|
|
|
3.7
|
|
|
32.0
|
|
|
30.4
|
|
|
1.6
|
|
Total
revenue
|
|
$
|
25.6
|
|
|
$
|
20.7
|
|
|
$
|
4.9
|
|
|
$
|
73.6
|
|
|
$
|
72.4
|
|
|
$
|
1.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commissions
expense
|
|
$
|
5.4
|
|
|
$
|
2.9
|
|
|
$
|
2.5
|
|
|
$
|
14.1
|
|
|
$
|
6.9
|
|
|
$
|
7.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(2)
|
|
$
|
9.6
|
|
|
$
|
4.7
|
|
|
$
|
4.9
|
|
|
$
|
22.3
|
|
|
$
|
26.8
|
|
|
$
|
(4.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
(2)
|
|
37.5
|
%
|
|
22.7
|
%
|
|
|
|
30.3
|
%
|
|
37.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) 2017 financial
information reflects the income statement presentation change
outlined in Table 8 of Exhibit 99.1 that was furnished as part of
the Company's Form 8-K dated May 7, 2018.
|
(2) 2017 financial
information reflects the immaterial correction outlined in Table 8
of Exhibit 99.1 that was furnished as part of the Company's Form
8-K dated May 7, 2018.
|
TABLE
THREE
|
MONEYGRAM
INTERNATIONAL, INC.
|
SEGMENT
RECONCILIATIONS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Funds
Transfer
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
millions, except percentages)
|
|
Three Months
Ended September 30,
|
|
2018
vs
|
|
Nine Months
Ended September 30,
|
|
2018
vs
|
|
2018
|
|
2017
|
|
2017
|
|
2018
|
|
2017
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (as
reported)
|
|
$
|
321.6
|
|
|
$
|
377.1
|
|
|
$
|
(55.5)
|
|
|
$
|
1,028.2
|
|
|
$
|
1,121.5
|
|
|
$
|
(93.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (1)
|
|
$
|
18.3
|
|
|
$
|
32.7
|
|
|
$
|
(14.4)
|
|
|
$
|
68.3
|
|
|
$
|
90.3
|
|
|
$
|
(22.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal and contingent
matters
|
|
(29.7)
|
|
|
—
|
|
|
(29.7)
|
|
|
(42.1)
|
|
|
—
|
|
|
(42.1)
|
|
Restructuring and
reorganization costs
|
|
(1.2)
|
|
|
—
|
|
|
(1.2)
|
|
|
(13.7)
|
|
|
—
|
|
|
(13.7)
|
|
Compliance
enhancement program
|
|
(3.2)
|
|
|
(1.6)
|
|
|
(1.6)
|
|
|
(8.7)
|
|
|
(6.7)
|
|
|
(2.0)
|
|
Direct monitor
costs
|
|
(1.7)
|
|
|
(4.4)
|
|
|
2.7
|
|
|
(7.4)
|
|
|
(12.6)
|
|
|
5.2
|
|
Stock-based
compensation expense
|
|
(2.2)
|
|
|
(3.2)
|
|
|
1.0
|
|
|
(9.0)
|
|
|
(10.0)
|
|
|
1.0
|
|
Total
adjustments
|
|
(38.0)
|
|
|
(9.2)
|
|
|
(28.8)
|
|
|
(80.9)
|
|
|
(29.3)
|
|
|
(51.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss)
income (as reported) (1)
|
|
$
|
(19.7)
|
|
|
$
|
23.5
|
|
|
$
|
(43.2)
|
|
|
$
|
(12.6)
|
|
|
$
|
61.0
|
|
|
$
|
(73.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
margin (1)
|
|
5.7
|
%
|
|
8.7
|
%
|
|
|
|
6.6
|
%
|
|
8.1
|
%
|
|
|
Total
adjustments
|
|
(11.8)
|
%
|
|
(2.4)
|
%
|
|
|
|
(7.9)
|
%
|
|
(2.6)
|
%
|
|
|
Operating margin (as
reported) (1)
|
|
(6.1)
|
%
|
|
6.2
|
%
|
|
|
|
(1.2)
|
%
|
|
5.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Paper
Products
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
millions, except percentages)
|
|
Three Months
Ended September 30,
|
|
2018
vs
|
|
Nine Months
Ended September 30,
|
|
2018
vs
|
|
2018
|
|
2017
|
|
2017
|
|
2018
|
|
2017
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (as
reported)
|
|
$
|
25.6
|
|
|
$
|
20.7
|
|
|
$
|
4.9
|
|
|
$
|
73.6
|
|
|
$
|
72.4
|
|
|
$
|
1.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (1)
|
|
$
|
10.5
|
|
|
$
|
5.4
|
|
|
$
|
5.1
|
|
|
$
|
25.5
|
|
|
$
|
28.9
|
|
|
$
|
(3.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compliance
enhancement program
|
|
(0.6)
|
|
|
(0.4)
|
|
|
(0.2)
|
|
|
(2.2)
|
|
|
(1.1)
|
|
|
(1.1)
|
|
Stock-based
compensation expense
|
|
(0.3)
|
|
|
(0.3)
|
|
|
—
|
|
|
(1.0)
|
|
|
(1.0)
|
|
|
—
|
|
Total
adjustments
|
|
(0.9)
|
|
|
(0.7)
|
|
|
(0.2)
|
|
|
(3.2)
|
|
|
(2.1)
|
|
|
(1.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (as
reported) (1)
|
|
$
|
9.6
|
|
|
$
|
4.7
|
|
|
$
|
4.9
|
|
|
$
|
22.3
|
|
|
$
|
26.8
|
|
|
$
|
(4.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
margin (1)
|
|
41.0
|
%
|
|
26.1
|
%
|
|
|
|
34.6
|
%
|
|
39.9
|
%
|
|
|
Total
adjustments
|
|
(3.5)
|
%
|
|
(3.4)
|
%
|
|
|
|
(4.3)
|
%
|
|
(2.9)
|
%
|
|
|
Operating margin (as
reported) (1)
|
|
37.5
|
%
|
|
22.7
|
%
|
|
|
|
30.3
|
%
|
|
37.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) 2017 financial
information reflects the immaterial correction outlined in Table 8
of Exhibit 99.1 that was furnished as part of the Company's Form
8-K dated May 7, 2018.
|
TABLE
FOUR
|
MONEYGRAM
INTERNATIONAL, INC.
|
EBITDA, ADJUSTED
EBITDA, ADJUSTED EBITDA MARGIN AND ADJUSTED FREE CASH
FLOW
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
(Amounts in
millions, except percentages)
|
|
Three Months
Ended September 30,
|
|
2018
vs
|
|
Nine Months
Ended September 30,
|
|
2018
vs
|
|
2018
|
|
2017
|
|
2017
|
|
2018
|
|
2017
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before
income taxes
|
|
$
|
(26.2)
|
|
|
$
|
11.7
|
|
|
$
|
(37.9)
|
|
|
$
|
(9.4)
|
|
|
$
|
31.6
|
|
|
$
|
(41.0)
|
|
Interest
expense
|
|
13.8
|
|
|
11.6
|
|
|
2.2
|
|
|
39.8
|
|
|
33.6
|
|
|
6.2
|
|
Depreciation and
amortization
|
|
19.5
|
|
|
18.9
|
|
|
0.6
|
|
|
57.7
|
|
|
55.8
|
|
|
1.9
|
|
Signing bonus
amortization
|
|
13.3
|
|
|
12.7
|
|
|
0.6
|
|
|
42.0
|
|
|
39.0
|
|
|
3.0
|
|
EBITDA
|
|
20.4
|
|
|
54.9
|
|
|
(34.5)
|
|
|
130.1
|
|
|
160.0
|
|
|
(29.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant items
impacting EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal and contingent
matters (1)
|
|
30.0
|
|
|
0.5
|
|
|
29.5
|
|
|
42.7
|
|
|
1.9
|
|
|
40.8
|
|
Compliance
enhancement program
|
|
3.7
|
|
|
2.4
|
|
|
1.3
|
|
|
10.9
|
|
|
8.4
|
|
|
2.5
|
|
Stock-based,
contingent and incentive compensation
|
|
2.5
|
|
|
3.5
|
|
|
(1.0)
|
|
|
10.0
|
|
|
11.0
|
|
|
(1.0)
|
|
Direct monitor
costs
|
|
1.7
|
|
|
4.4
|
|
|
(2.7)
|
|
|
7.4
|
|
|
12.6
|
|
|
(5.2)
|
|
Restructuring and
reorganization costs
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
|
13.7
|
|
|
—
|
|
|
13.7
|
|
Costs (income)
related to the terminated merger with Ant Financial
(2)
|
|
—
|
|
|
2.2
|
|
|
(2.2)
|
|
|
(29.3)
|
|
|
10.7
|
|
|
(40.0)
|
|
Severance and related
costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
Adjusted
EBITDA
|
|
$
|
59.5
|
|
|
$
|
67.9
|
|
|
$
|
(8.4)
|
|
|
$
|
185.9
|
|
|
$
|
204.6
|
|
|
$
|
(18.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin (3)
|
|
17.1
|
%
|
|
17.1
|
%
|
|
—
|
%
|
|
16.9
|
%
|
|
17.1
|
%
|
|
(0.2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
change, as reported
|
|
(12)
|
%
|
|
|
|
|
|
(9)
|
%
|
|
|
|
|
Adjusted EBITDA
change, constant currency adjusted
|
|
(13)
|
%
|
|
|
|
|
|
(12)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
59.5
|
|
|
$
|
67.9
|
|
|
$
|
(8.4)
|
|
|
$
|
185.9
|
|
|
$
|
204.6
|
|
|
$
|
(18.7)
|
|
Cash payments for
interest
|
|
(13.0)
|
|
|
(10.7)
|
|
|
(2.3)
|
|
|
(37.4)
|
|
|
(31.1)
|
|
|
(6.3)
|
|
Cash payments for
taxes, net of refunds
|
|
(1.0)
|
|
|
(2.8)
|
|
|
1.8
|
|
|
(3.9)
|
|
|
(6.4)
|
|
|
2.5
|
|
Cash payments for
capital expenditures
|
|
(16.0)
|
|
|
(23.0)
|
|
|
7.0
|
|
|
(44.5)
|
|
|
(63.1)
|
|
|
18.6
|
|
Cash payments for
agent signing bonuses
|
|
(0.6)
|
|
|
(6.2)
|
|
|
5.6
|
|
|
(20.2)
|
|
|
(24.6)
|
|
|
4.4
|
|
Adjusted Free Cash
Flow
|
|
$
|
28.9
|
|
|
$
|
25.2
|
|
|
$
|
3.7
|
|
|
$
|
79.9
|
|
|
$
|
79.4
|
|
|
$
|
0.5
|
|
|
(1) Quarter-to-date
and year-to-date 2018 include an additional accrual of $30.0
million and $40.0 million, respectively, related to the resolution
of the DPA.
|
(2) Costs include,
but are not limited to, legal, bank and consultant fees and income
includes the $30.0 million merger termination fee.
|
(3) Adjusted EBITDA
margin is calculated as Adjusted EBITDA divided by total
revenue.
|
TABLE
FIVE
|
MONEYGRAM
INTERNATIONAL, INC.
|
ADJUSTED NET
INCOME AND ADJUSTED DILUTED EPS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
(Amounts in
millions, except per share data)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(20.9)
|
|
|
$
|
7.7
|
|
|
$
|
(11.5)
|
|
|
$
|
22.7
|
|
Total adjustments
(1)
|
|
39.1
|
|
|
13.0
|
|
|
55.8
|
|
|
44.6
|
|
Tax impacts of
adjustments (2)
|
|
(2.5)
|
|
|
(4.8)
|
|
|
(4.4)
|
|
|
(16.3)
|
|
Adjusted net
income
|
|
$
|
15.7
|
|
|
$
|
15.9
|
|
|
$
|
39.9
|
|
|
$
|
51.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss)
earnings per common share
|
|
$
|
(0.32)
|
|
|
$
|
0.12
|
|
|
$
|
(0.18)
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
|
|
Diluted adjustments
per common share
|
|
0.56
|
|
|
0.12
|
|
|
0.80
|
|
|
0.43
|
|
|
|
|
|
|
|
|
|
|
Diluted adjusted
earnings per common share
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
$
|
0.62
|
|
|
$
|
0.77
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted-average outstanding common shares and
equivalents
|
|
64.5
|
|
|
66.2
|
|
|
64.2
|
|
|
66.2
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
TABLE
SIX
|
MONEYGRAM
INTERNATIONAL, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
|
|
|
|
(Amounts in
millions, except share data)
|
|
September 30,
2018
|
|
December 31,
2017
|
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
208.8
|
|
|
$
|
190.0
|
|
Settlement
assets
|
|
3,522.2
|
|
|
3,756.9
|
|
Property and
equipment, net
|
|
201.1
|
|
|
214.9
|
|
Goodwill
|
|
442.2
|
|
|
442.2
|
|
Other
assets
|
|
149.4
|
|
|
168.5
|
|
Total
assets
|
|
$
|
4,523.7
|
|
|
$
|
4,772.5
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Payment service
obligations
|
|
$
|
3,522.2
|
|
|
$
|
3,756.9
|
|
Debt, net
|
|
902.8
|
|
|
908.1
|
|
Pension and other
postretirement benefits
|
|
86.5
|
|
|
97.3
|
|
Accounts payable and
other liabilities
|
|
268.4
|
|
|
255.5
|
|
Total
liabilities
|
|
4,779.9
|
|
|
5,017.8
|
|
|
|
|
|
|
STOCKHOLDERS'
DEFICIT
|
|
|
|
|
Participating
convertible preferred stock - series D, $0.01 par value, 200,000
shares authorized, 71,282 issued at September 30, 2018 and December
31, 2017
|
|
183.9
|
|
|
183.9
|
|
Common stock, $0.01
par value, 162,500,000 shares authorized, 58,823,567 shares issued
at September 30, 2018 and December 31, 2017
|
|
0.6
|
|
|
0.6
|
|
Additional paid-in
capital
|
|
1,044.4
|
|
|
1,034.8
|
|
Retained
loss
|
|
(1,386.9)
|
|
|
(1,336.1)
|
|
Accumulated other
comprehensive loss
|
|
(69.3)
|
|
|
(63.0)
|
|
Treasury stock:
3,215,358 and 4,585,223 shares at September 30, 2018 and
December 31, 2017, respectively
|
|
(28.9)
|
|
|
(65.5)
|
|
Total stockholders'
deficit
|
|
(256.2)
|
|
|
(245.3)
|
|
Total liabilities and
stockholders' deficit
|
|
$
|
4,523.7
|
|
|
$
|
4,772.5
|
|
|
|
|
|
|
TABLE
SEVEN
|
MONEYGRAM
INTERNATIONAL, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
|
|
|
Nine Months
Ended September 30,
|
(Amounts in
millions)
|
|
2018
|
|
2017
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
Net (loss)
income
|
|
$
|
(11.5)
|
|
|
$
|
22.7
|
|
Adjustments to
reconcile net (loss) income to net cash provided by operating
activities
|
|
88.4
|
|
|
67.1
|
|
Net cash provided by
operating activities
|
|
76.9
|
|
|
89.8
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
Purchases of property
and equipment
|
|
(44.5)
|
|
|
(63.1)
|
|
Net cash used in
investing activities
|
|
(44.5)
|
|
|
(63.1)
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
Principal payments on
debt
|
|
(7.4)
|
|
|
(7.3)
|
|
Proceeds from
exercise of stock options and other
|
|
—
|
|
|
1.8
|
|
Payments to tax
authorities for stock-based compensation
|
|
(6.2)
|
|
|
(8.0)
|
|
Net cash used in
financing activities
|
|
(13.6)
|
|
|
(13.5)
|
|
NET CHANGE IN CASH
AND CASH EQUIVALENTS
|
|
18.8
|
|
|
13.2
|
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS—Beginning of period
|
|
190.0
|
|
|
157.2
|
|
CASH AND CASH
EQUIVALENTS—End of period
|
|
$
|
208.8
|
|
|
$
|
170.4
|
|
|
|
|
|
|
TABLE
EIGHT
|
MONEYGRAM
INTERNATIONAL, INC.
|
2018 VERSUS 2017
EXCLUDING ASSET-BACKED SECURITY REDEMPTION
|
(Unaudited)
|
|
|
|
|
|
|
|
(Amounts in
millions)
|
|
Nine Months
Ended September 30, 2017
|
|
Reported
|
|
Security
Redemption (1)
|
|
As
Excluded
|
|
|
|
|
|
|
|
Investment
revenue
|
|
$
|
32.4
|
|
|
$
|
(12.2)
|
|
|
$
|
20.2
|
|
Total
revenue
|
|
1,193.9
|
|
|
(12.2)
|
|
|
1,181.7
|
|
Net income
|
|
22.7
|
|
|
(12.2)
|
|
|
10.5
|
|
EBITDA
|
|
160.0
|
|
|
(12.2)
|
|
|
147.8
|
|
Adjusted
EBITDA
|
|
204.6
|
|
|
(12.2)
|
|
|
192.4
|
|
Adjusted Free Cash
Flow
|
|
$
|
79.4
|
|
|
$
|
(12.2)
|
|
|
$
|
67.2
|
|
|
|
|
|
|
|
|
(1) Represents the
$12.2 million gain from the one-time redemption of an asset-backed
security in the second quarter of 2017. There was no net tax
expense impact from the gain.
|
|
(Amounts in
millions, except percentages)
|
|
Nine Months
Ended September 30,
|
|
2018 vs
2017
|
|
2018
|
|
2017
|
|
$
|
|
%
|
|
|
|
|
As
Excluded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
revenue
|
|
$
|
35.5
|
|
|
$
|
20.2
|
|
|
$
|
15.3
|
|
|
76
|
%
|
Total
revenue
|
|
1,101.8
|
|
|
1,181.7
|
|
|
(79.9)
|
|
|
(7)
|
|
Net (loss)
income
|
|
(11.5)
|
|
|
10.5
|
|
|
(22.0)
|
|
|
NM
|
|
EBITDA
|
|
130.1
|
|
|
147.8
|
|
|
(17.7)
|
|
|
(12)
|
|
Adjusted
EBITDA
|
|
185.9
|
|
|
192.4
|
|
|
(6.5)
|
|
|
(3)
|
|
Adjusted Free Cash
Flow
|
|
$
|
79.9
|
|
|
$
|
67.2
|
|
|
$
|
12.7
|
|
|
19
|
%
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
|
16.9
|
%
|
|
16.3
|
%
|
|
|
|
|
NM = Not meaningful
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SOURCE MoneyGram