MoneyGram International Reports Third Quarter 2009 Financial Results
More News related to MGI
- MoneyGram International Grows Post Office Relationships as Cyprus Post and Post Cape Verde Join Agent Network
- "Rooftop of the World" Welcomes Two New MoneyGram Agent Locations
- MoneyGram International and the Italian Post Office Bring Mobile Money Transfer Service to Italy
- Holiday Money Transfer Pricing Upholds Continued Commitment to Walmart Customers
- MoneyGram International Temporarily Reduces Money Transfer Fees from the United States and Canada to El Salvador
More News related to Press Releases
- Hydrogenics Resumes Trading Under NASDAQ Symbol "HYGS"
- Varian Medical (VAR) to Highlight its New Range of Detectors at Annual RSNA Meeting in Chicago
- Manulife (MFC) Confirms No Exposure to Dubai World
- Activision's (ATVI) Call of Duty Amasses $3 Billion in Global Sales
- Seiko Epson to Transfer Sales Function of Small and Medium-Sized TFT LCD Business to Sony (SNE)
MINNEAPOLIS--(BUSINESS WIRE)-- MoneyGram International, Inc. (NYSE: MGI), a leading global payment services company, today reported financial results for the third quarter of 2009.
-- Money transfer transaction volume excluding bill payment increased 6
percent, and money transfer fee and other revenue increased 3 percent
versus prior year. On a constant currency basis, money transfer fee and
other revenue excluding bill payment increased 5 percent versus prior
year.
-- Global agent locations reached 186,000, an increase of 15 percent over
prior year.
-- Adjusted EBITDA in the quarter was $66.6 million versus $75.7 million in
the prior year, primarily driven by a $15.8 million decrease in net
investment income in the third quarter of 2009.
-- Net loss for the quarter was $18.3 million and EBITDA was $29.3 million.
Both EBITDA and net loss were impacted by $37.4 million of significant
items in the quarter. These items include a $16.5 million legal accrual
for a patent lawsuit; a $6.0 million legal accrual for settlement with
the FTC; $9.2 million of stock-based compensation and executive
severance; $8.4 million in impairment charges and $2.7 million of net
securities gains.
-- Total revenue in the third quarter was $304.5 million, roughly unchanged
from $305.0 million in the same period last year. Third quarter 2008
total revenue included net securities losses of $13.3 million and
investment revenue that was $25.4 million more favorable compared with
2009.
-- Year-to-date total revenue in 2009 was $875.5 million, up from $608.1
million in the first three quarters of 2008. Year-to-date total revenue
in 2008 included net securities losses of $350.8 million and investment
revenue that was $101.3 million more favorable compared with 2009.
"In the third quarter we made great progress on our expansion initiatives and on our efforts to actively manage our debt," said Pamela H. Patsley, MoneyGram International chairman and chief executive officer. "While our third quarter results were affected by several items, we do not believe that these are reflective of the underlying strength of the business. During the quarter, we saw improved growth in our money transfer business, signed and renewed several key agents around the globe and implemented initiatives focused on reducing costs, streamlining processes and improving efficiencies. I am confident that as a company we are re-energized and collectively taking the right steps to position MoneyGram for long-term profitable growth."
Liquidity
The Company ended the third quarter with assets in excess of payment service obligations of $410.5 million, and earlier in this month paid down the remaining $45.0 million balance on its revolving credit facility. Over the last six months, the Company has paid down $145.0 million of its outstanding debt.
Market Development
In the third quarter of 2009, the Company continued its focus on expanding its agent network. For example, MoneyGram recently:
-- Expanded its agreement with Carrefour, the world's second largest
retailer, to add money transfer services to 22 Carrefour hypermarkets
throughout Romania.
-- Renewed a multi-year agreement with Itau Unibanco, Brazil's largest
private-sector bank, and added 1,000 MoneyGram agent locations to the
bank's existing MoneyGram network of nearly 5,000 branches.
-- Signed CUNA Strategic Services in the U.S., to provide 7,900 credit
unions with turnkey access to MoneyGram's global money transfer and bill
payment services.
-- Added 2,600 Union Bank of India locations through the Company's largest
super agent, UAE Exchange Financial Services.
-- Added Citi Personal Loans and Citi Mortgage to the Company's growing
list of clients offering customers the convenience of walk-in bill
payment services.
-- Expanded MoneyGram's successful prepaid business with the addition of
First Data, Metavante and TxVia, providing consumers with more
convenient options to add funds to their re-loadable prepaid cards in
MoneyGram's agent locations in the U.S.
"As we move into 2010, we will continue to expand our network and further enhance our product and service offerings thus increasing value and brand loyalty for our customers," added Patsley. "The adoption of new services, such as mobile text message 'receive' notifications and multi-currency payout, coupled with our MoneyGram Rewards global loyalty program, create a formidable platform for growth."
Global Funds Transfer Results
Total revenue for the Global Funds Transfer segment rose to $285.0 million in the third quarter of 2009 from $279.5 million in the same period last year. Segment results were impacted by a 6 percent increase in money transfer transaction volume excluding bill payment, partially offset by currency valuation changes and a decline in average money transfer fees. The segment reported operating income of $13.7 million, and an operating margin of 4.8 percent in the third quarter. Both operating income and margin were impacted by $27.1 million of the significant items discussed above. Adjusted margin was 14.3 percent.
Money transfer transaction volume excluding bill payment increased 6 percent and revenue increased 3 percent to $235.2 million in the third quarter of 2009 from $228.0 million in the third quarter of 2008. On a constant currency basis, money transfer revenue excluding bill payment improved 5 percent.
Money transfer transaction volume including bill payment was up 4 percent and revenue improved by 2 percent to $266.5 million in the third quarter of 2009 from $260.0 million in the third quarter of 2008. On a constant currency basis, money transfer revenue including bill payment improved 4 percent.
In the third quarter, money transfer transactions excluding bill payment originating in the United States and Canada increased 9 percent. Including bill payment, transactions increased 4 percent in the quarter from the prior year. Transactions originating outside of North America increased 8 percent from the prior year. Spain's economic downturn continues to impact the Company's international transaction growth. Excluding Spain, transactions originating outside of North America increased 17 percent from the prior year.
MoneyGram's transaction volume to Mexico decreased 10 percent in the quarter. However, the Company continued to see positive growth in its domestic U.S. business, and throughout much of Latin America and Canada.
Payment Systems Results
Payment Systems total revenue declined to $18.5 million in the third quarter of 2009 from $25.5 million in the third quarter of 2008. Net revenue in 2009 reflects investment revenue of $5.1 million and a net securities gain of $2.1 million, while 2008 net revenue reflects $26.8 million of investment revenue and $11.2 million in net securities losses and $10.6 million in commission expense. The segment reported operating income of $7.0 million in the third quarter of 2009, up from $1.9 million in the third quarter of 2008. Operating margin improved to 38.0 percent in the third quarter of 2009 from 7.6 percent in the comparable period last year.
Legal Accruals
In the third quarter, the Company recorded an accrual of $6.0 million related to a settlement with the Federal Trade Commission (FTC) regarding customer complaints that third parties have inappropriately used MoneyGram's money transfer services in conjunction with consumer fraud activities. This $6.0 million accrual is in addition to a $12.0 million accrual taken by the Company during the second quarter of 2009 toward the potential settlement. In combination, these accruals fully satisfy the monetary terms of the Company's settlement with the FTC.
Also during the quarter, the Company recorded an accrual for $16.5 million related to a verdict returned in a suit brought by Western Union involving certain Western Union patents. Post-trial motions are pending, including the Company's motions for judgment in its favor and for a new trial. The Company continues to evaluate next steps, including a possible appeal if its post-trial motions are not successful.
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) and Adjusted EBITDA (EBITDA adjusted for significant items). The following tables include a full reconciliation of these non-GAAP financial measures to the related GAAP financial measures.
We believe that EBITDA and Adjusted EBITDA 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 and Adjusted EBITDA 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 Loss Table Two - Consolidated Statements of (Loss) Income (as Adjusted) Table Three - Global Funds Transfer Segment Results (as Adjusted) Table Four - Payment Systems Segment Results (as Adjusted) Table Five - EBITDA and Adjusted EBITDA Table Six - Consolidated Balance Sheets Table Seven - Assets in Excess of Payment Service Obligations
Conference Call
MoneyGram International will have a conference call today at 9:00 a.m. ET, 8:00 a.m. CT to discuss its third quarter 2009 results. Pamela H. Patsley, chairman and chief executive officer, and Jeff Woods, executive vice president and chief financial officer, will host the call. The conference call can be accessed by calling 1-877-548-7911 in the U.S. The participant confirmation number is 8914415. A replay of the conference call will be available one hour after the call concludes through 5:00 p.m. ET on Nov. 6, 2009. The replay of the call is available at 1-888-203-1112 for U.S. callers or 1-719-457-0820 for international callers. The confirmation code is 8914415.
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 approximately 186,000 global money transfer agent locations in 190 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, regulatory requirements, 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 or reduce the market for or value of our services; (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 ("OFAC") 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 LOSS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, 2009 vs September 30, 2009 vs
(Amounts in
thousands, 2009 2008 2008 2009 2008 2008
except per share
data)
REVENUE
Fee and other $ 294,863 $ 286,021 $ 8,842 $ 841,500 $ 830,699 $ 10,801
revenue
Investment 6,849 32,231 (25,382 ) 26,995 128,294 (101,299 )
revenue
Net securities 2,738 (13,253 ) 15,991 7,027 (350,844 ) 357,871
gains (losses)
Total revenue 304,450 304,999 (549 ) 875,522 608,149 267,373
Fee commissions 128,352 131,397 (3,045 ) 368,660 377,727 (9,067 )
expense
Investment
commissions 375 9,968 (9,593 ) 1,128 101,472 (100,344 )
expense
Total
commissions 128,727 141,365 (12,638 ) 369,788 479,199 (109,411 )
expense
Net revenue 175,723 163,634 12,089 505,734 128,950 376,784
EXPENSES
Compensation and 58,963 53,541 5,422 158,234 173,976 (15,742 )
benefits
Transaction and
operations 82,573 48,530 34,043 198,223 151,894 46,329
support
Occupancy,
equipment and 12,254 11,069 1,185 35,517 34,682 835
supplies
Interest expense 26,127 27,834 (1,707 ) 79,816 66,631 13,185
Depreciation and 14,510 13,891 619 43,834 42,397 1,437
amortization
Valuation loss
on embedded - 47,233 (47,233 ) - 16,030 (16,030 )
derivative
Debt
extinguishment - - - - 1,499 (1,499 )
loss
Total expenses 194,427 202,098 (7,671 ) 515,624 487,109 28,515
Loss before (18,704 ) (38,464 ) 19,760 (9,890 ) (358,159 ) 348,269
income taxes
Income tax
(benefit) (400 ) 88 (488 ) (110 ) 26,087 (26,197 )
expense
NET LOSS $ (18,304 ) $ (38,552 ) $ 20,248 $ (9,780 ) $ (384,246 ) $ 374,466
Basic and
diluted loss per $ (0.60 ) $ (0.80 ) $ 0.20 $ (1.19 ) $ (5.34 ) $ 4.15
common share
Net loss as $ (18,304 ) $ (38,552 ) $ 20,248 $ (9,780 ) $ (384,246 ) $ 374,466
reported
Preferred stock (28,277 ) (24,995 ) (3,282 ) (81,111 ) (50,810 ) (30,301 )
dividends
Accretion
recognized on (2,580 ) (2,533 ) (47 ) (7,621 ) (5,192 ) (2,429 )
preferred stock
Net loss
available to $ (49,161 ) $ (66,080 ) $ 16,919 $ (98,512 ) $ (440,248 ) $ 341,736
common
stockholders
Weighted-average
outstanding 82,505 82,464 41 82,497 82,452 45
common shares(1)
(1) The following potential common shares are excluded as their effect is anti-dilutive in
periods of net loss available to common stockholders:
Shares related
to stock options 22,560 3,485 15,781 3,918
and restricted
stock
Shares related
to preferred 370,082 327,324 370,082 327,324
stock
TABLE TWO
MONEYGRAM INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF (LOSS) INCOME (AS ADJUSTED)
(Unaudited)
Three Months Ended September 30, Three Months Ended September 30, 2008
2009
(Amounts in As Reported Adjustments Adjusted As Reported Adjustments Adjusted
thousands) (1) (1)
REVENUE
Fee and other $ 294,863 $ - $ 294,863 $ 286,021 $ - $ 286,021
revenue
Investment 6,849 - 6,849 32,231 - 32,231
revenue
Net securities 2,738 (2,738 ) - (13,253 ) 13,253 -
gains (losses)
Total revenue 304,450 (2,738 ) 301,712 304,999 13,253 318,252
Fee
commissions 128,352 - 128,352 131,397 - 131,397
expense
Investment
commissions 375 - 375 9,968 - 9,968
expense
Total
commissions 128,727 - 128,727 141,365 - 141,365
expense
Net revenue 175,723 (2,738 ) 172,985 163,634 13,253 176,887
EXPENSES
Compensation 58,963 (8,933 ) 50,030 53,541 (1,199 ) 52,342
and benefits
Transaction
and operations 82,573 (31,175 ) 51,398 48,530 (24 ) 48,506
support
Occupancy,
equipment and 12,254 - 12,254 11,069 - 11,069
supplies
Interest 26,127 - 26,127 27,834 - 27,834
expense
Depreciation
and 14,510 - 14,510 13,891 - 13,891
amortization
Valuation loss
on embedded - - - 47,233 (47,233 ) -
derivative
Total expenses 194,427 (40,108 ) 154,319 202,098 (48,456 ) 153,642
(Loss) income
before income $ (18,704 ) $ 37,370 $ 18,666 $ (38,464 ) $ 61,709 $ 23,245
taxes
Nine Months Ended September 30, Nine Months Ended September 30, 2008
2009
(Amounts in As Reported Adjustments Adjusted As Reported Adjustments Adjusted
thousands) (1) (1)
REVENUE
Fee and other $ 841,500 $ - $ 841,500 $ 830,699 $ - $ 830,699
revenue
Investment 26,995 - 26,995 128,294 - 128,294
revenue
Net securities 7,027 (7,027 ) - (350,844 ) 350,844 -
gains (losses)
Total revenue 875,522 (7,027 ) 868,495 608,149 350,844 958,993
Fee
commissions 368,660 - 368,660 377,727 - 377,727
expense
Investment
commissions 1,128 - 1,128 101,472 (27,735 ) 73,737
expense
Total
commissions 369,788 - 369,788 479,199 (27,735 ) 451,464
expense
Net revenue 505,734 (7,027 ) 498,707 128,950 378,579 507,529
EXPENSES
Compensation 158,234 (11,674 ) 146,560 173,976 (19,017 ) 154,959
and benefits
Transaction
and operations 198,223 (47,150 ) 151,073 151,894 (8,963 ) 142,931
support
Occupancy,
equipment and 35,517 - 35,517 34,682 - 34,682
supplies
Interest 79,816 - 79,816 66,631 (1,982 ) (2) 64,649
expense
Depreciation
and 43,834 - 43,834 42,397 - 42,397
amortization
Valuation loss
on embedded - - - 16,030 (16,030 ) -
derivative
Debt
extinguishment - - - 1,499 (1,499 ) -
loss
Total expenses 515,624 (58,824 ) 456,800 487,109 (47,491 ) 439,618
(Loss) income
before income $ (9,890 ) $ 51,797 $ 41,907 $ (358,159 ) $ 426,070 $ 67,911
taxes
(1) See Table 5 - EBITDA and Adjusted EBITDAfor a detailed listing of the adjustments.
(2) Loss upon termination of interest rate swaps related to our debt.
TABLE THREE
MONEYGRAM INTERNATIONAL, INC.
GLOBAL FUNDS TRANSFER SEGMENT RESULTS (AS ADJUSTED)
(Unaudited)
Three Months Ended September 30, 2009 Three Months Ended September 30, 2008
(Amounts in As Reported Adjustments Adjusted As Reported Adjustments Adjusted
thousands) (1) (1)
Money
transfer
revenue
Fee and
other $ 266,466 $ - $ 266,466 $ 259,952 $ - $ 259,952
revenue
Investment 66 - 66 373 - 373
revenue
Net
securities - - - (159 ) 159 -
losses
Retail
money order
and other
Fee and
other 17,043 - 17,043 16,203 - 16,203
revenue
Investment 1,081 - 1,081 5,049 - 5,049
revenue
Net
securities 367 (367 ) - (1,891 ) 1,891 -
gains
(losses)
Total
Global
Funds 285,023 (367 ) 284,656 279,527 2,050 281,577
Transfer
revenue
Commissions 127,832 - 127,832 130,731 - 130,731
expense
Net revenue $ 157,191 $ (367 ) $ 156,824 $ 148,796 $ 2,050 $ 150,846
Operating $ 13,721 $ 27,099 $ 40,820 $ 39,514 $ 3,005 $ 42,519
income
Operating 4.8 % 14.3 % 14.1 % 15.1 %
margin
Nine Months Ended September 30, 2009 Nine Months Ended September 30, 2008
(Amounts in As Reported Adjustments Adjusted As Reported Adjustments Adjusted
thousands) (1) (1)
Money
transfer
revenue
Fee and
other $ 758,313 $ - $ 758,313 $ 751,552 $ - $ 751,552
revenue
Investment 172 - 172 1,454 - 1,454
revenue
Net
securities - - - (4,240 ) 4,240 -
losses
Retail
money order
and other
Fee and
other 50,957 - 50,957 49,862 - 49,862
revenue
Investment 4,058 - 4,058 18,919 - 18,919
revenue
Net
securities 958 (958 ) - (46,769 ) 46,769 -
gains
(losses)
Total
Global
Funds 814,458 (958 ) 813,500 770,778 51,009 821,787
Transfer
revenue
Commissions 367,053 - 367,053 375,845 - 375,845
expense
Net revenue $ 447,405 $ (958 ) $ 446,447 $ 394,933 $ 51,009 $ 445,942
Operating $ 61,352 $ 43,583 $ 104,935 $ 66,462 $ 53,059 $ 119,521
income
Operating 7.5 % 12.9 % 8.6 % 14.5 %
margin
(1) Represents the allocation to Global Funds Transfer of the adjustments detailed in
Table 5- EBITDA and Adjusted EBITDA.
TABLE FOUR
MONEYGRAM INTERNATIONAL, INC.
PAYMENT SYSTEMS SEGMENT RESULTS (AS ADJUSTED)
(Unaudited)
Three Months Ended September 30, Three Months Ended September 30, 2008
2009
(Amounts in As Adjustments Adjusted As Reported Adjustments Adjusted
thousands) Reported (1) (1)
Fee and
other $ 11,354 $ - $ 11,354 $ 9,869 $ - $ 9,869
revenue
Investment 5,055 - 5,055 26,809 - 26,809
revenue
Net
securities 2,095 (2,095 ) - (11,203 ) 11,203 -
gains
(losses)
Total
Payment 18,504 (2,095 ) 16,409 25,475 11,203 36,678
Systems
revenue
Commissions 896 - 896 10,635 - 10,635
expense
Net revenue $ 17,608 $ (2,095 ) $ 15,513 $ 14,840 $ 11,203 $ 26,043
Operating $ 7,023 $ (214 ) $ 6,809 $ 1,927 $ 11,471 $ 13,398
income
Operating 38.0 % 41.5 % 7.6 % 36.5 %
margin
Nine Months Ended September 30, Nine Months Ended September 30, 2008
2009
(Amounts in As Adjustments Adjusted As Reported Adjustments Adjusted
thousands) Reported (1) (1)
Fee and
other $ 32,205 $ - $ 32,205 $ 28,989 $ - $ 28,989
revenue
Investment 20,131 - 20,131 107,989 - 107,989
revenue
Net
securities 5,386 (5,386 ) - (299,835 ) 299,835 -
gains
(losses)
Total
Payment
Systems 57,722 (5,386 ) 52,336 (162,857 ) 299,835 136,978
revenue
(losses)
Commissions 2,735 - 2,735 103,354 (27,735 ) 75,619
expense
Net revenue $ 54,987 $ (5,386 ) $ 49,601 $ (266,211 ) $ 327,570 $ 61,359
(losses)
Operating
income $ 23,718 $ (2,701 ) $ 21,017 $ (309,022 ) $ 328,113 $ 19,091
(loss)
Operating 41.1 % 40.2 % NM 13.9 %
margin
(1)Represents the allocation to Payment Systems of the adjustments detailed in Table 5-
EBITDA and Adjusted EBITDA.
TABLE FIVE
MONEYGRAM INTERNATIONAL, INC.
EBITDA AND ADJUSTED EBITDA
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(Amounts in thousands) 2009 2008 2009 2008
Loss before income taxes $ (18,704 ) $ (38,464 ) $ (9,890 ) $ (358,159 )
Interest expense 26,127 27,834 79,816 66,631
Depreciation and 14,510 13,891 43,834 42,397
amortization
Amortization of agent 7,331 10,711 24,413 27,809
signing bonuses
EBITDA 29,264 13,972 138,173 (221,322 )
Significant items impacting
EBITDA:
Net securities (gains) (2,738 ) 13,253 (7,027 ) 350,844
losses
Severance and related costs 3,752 - 5,010 17,653
(1)
Impairment charges (2) 8,409 - 12,267 -
Legal accruals (3) 22,500 - 34,500 -
Stock-based compensation 5,447 1,223 7,047 2,594
expense (4)
Valuation loss on embedded - 47,233 - 16,030
derivatives(5)
Transaction costs related - - - 7,733
to the recapitalization
Debt extinguishment loss - - - 1,499
(6)
Valuation loss on interest - - - 27,735
rate swaps (7)
Adjusted EBITDA $ 66,634 $ 75,681 $ 189,970 $ 202,766
(1) Severance and related costs from executive terminations, none of which is
allocated to the segments. Related costs are included in the "Transaction and
operations support" line in our Consolidated Statements of Loss.
(2) Impairment of the corporate airplane, goodwill and capitalized software in
connection with exit plans, of which $3.2 million is allocated to Global Funds
Transfer for the nine months ended September 30, 2009 and $1.4 million and $2.1
million is allocated to Payment Systems for the three and nine months ended
September 30, 2009, respectively.
(3) Legal accruals for Global Funds Transfer related to a patent lawsuit and a
settlement agreement with the Federal Trade Commission.
(4) Substantially all stock-based compensation is included in the "Compensation
and benefits" line in our Consolidated Statements of Loss.
(5) Change in the fair value of embedded derivatives in our preferred stock,
none of which is allocated to the segments.
(6) Relates to the amendment of the Senior Credit Facility during the
recapitalization, none of which is allocated to the segments.
(7) Loss upon the termination of interest rate swaps related to the official
check business in Payment Systems.
TABLE SIX
MONEYGRAM INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
(Amounts in thousands, except share data) 2009 2008
ASSETS
Cash and cash equivalents $ - $ -
Cash and cash equivalents (substantially 3,876,105 4,077,381
restricted)
Receivables, net (substantially restricted) 958,937 1,264,885
Trading investments and related put options 25,804 47,990
(substantially restricted)
Available-for-sale investments (substantially 324,942 438,774
restricted)
Property and equipment 128,110 156,263
Intangible assets 11,949 14,548
Goodwill 428,117 434,337
Other assets 153,175 208,118
Total assets $ 5,907,139 $ 6,642,296
LIABILITIES
Payment service obligations $ 4,775,290 $ 5,437,999
Debt 879,171 978,881
Pension and other postretirement benefits 131,964 130,900
Accounts payable and other liabilities 140,183 121,586
Deferred tax liabilities 13,476 12,454
Total liabilities 5,940,084 6,681,820
MEZZANINE EQUITY
Participating Convertible Preferred Stock-Series
B, $0.01 par value, 800,000 shares authorized, 517,090 458,408
495,000 shares issued and outstanding
Participating Convertible Preferred Stock-Series
B-1, $0.01 par value, 500,000 shares authorized, 313,854 283,804
272,500 shares issued and outstanding
Total mezzanine equity 830,944 742,212
STOCKHOLDERS' DEFICIT
Preferred shares - undesignated, $0.01 par value, - -
5,000,000 authorized, none issued
Preferred shares - junior participating, $0.01 par - -
value, 2,000,000 authorized, none issued
Common shares, $0.01 par value, 1,300,000,000 886 886
shares authorized, 88,556,077 shares issued
Additional paid-in capital - 62,324
Retained loss (678,241 ) (649,254 )
Unearned employee benefits (46 ) (424 )
Accumulated other comprehensive loss (33,325 ) (42,707 )
Treasury stock: 6,035,848 and 5,999,175 shares at
September 30, 2009 and December 31, 2008, (153,163 ) (152,561 )
respectively
Total stockholders' deficit (863,889 ) (781,736 )
Total liabilities, mezzanine equity and $ 5,907,139 $ 6,642,296
stockholders' deficit
TABLE SEVEN
MONEYGRAM INTERNATIONAL, INC.
ASSETS IN EXCESS OF PAYMENT SERVICE OBLIGATIONS
(Unaudited)
September 30, June 30, March 31, December 31,
(Amounts in 2009 2009 2009 2008
thousands)
Cash and cash $ 3,876,105 $ 3,973,685 $ 3,904,783 $ 4,077,381
equivalents
Receivables, net 958,937 1,098,388 1,117,184 1,264,885
Trading
investments and 25,804 37,309 50,127 47,990
related put
options
Available-for-sale 324,942 357,432 415,827 438,774
investments
5,185,788 5,466,814 5,487,921 5,829,030
Payment service (4,775,290 ) (5,079,941 ) (5,067,167 ) (5,437,999 )
obligations
Assets in excess
of payment service $ 410,498 $ 386,873 $ 420,754 $ 391,031
obligations
Source: MoneyGram International, Inc.
Related Categories
Press ReleasesStocks Mentioned
-0.10Related Entities
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
