UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
______________
FORM 8-K
______________
CURRENT
REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported):
February
11, 2014
MoneyGram International, Inc. |
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|
||||
(Exact name of registrant as specified in its charter) |
Delaware |
1-31950 |
16-1690064 |
||
(State or other jurisdiction of incorporation) |
(Commission File Number)
|
(I.R.S. Employer Identification Number) |
2828 N. Hardwood Street, 15th Floor Dallas, Texas |
75201 |
|
(Address of principal executive offices) |
(Zip code) |
Registrant’s
telephone number, including area code: (214)
999-7552
Not applicable |
||
(Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 |
Results of Operations and Financial Condition. |
On February 11, 2014, MoneyGram International, Inc. (the “Company”) issued a press release reporting financial results for its fourth quarter and year ended December 31, 2013. A copy of the press release is furnished herewith as Exhibit 99.1.
Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits
Exhibit No. |
Description of Exhibit |
99.1 | Press release dated February 11, 2014. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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MONEYGRAM INTERNATIONAL, INC. |
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|
|
|
By: |
/s/ Pamela H. Patsley |
Name: |
Pamela H. Patsley |
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Title: |
Chief Executive Officer |
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Date: |
February 11, 2014 |
EXHIBIT INDEX
Exhibit No. |
Description of Exhibit |
99.1 |
Press release dated February 11, 2014. |
Exhibit 99.1
MoneyGram International Reports Fourth Quarter and Fiscal 2013 Financial Results
Strong Money Transfer Growth Pushes Annual Revenue to $1.5 Billion
Fourth Quarter Self-Service Revenue Grew 38 Percent, Now 7 Percent of Money Transfer Revenue
Company Sets Goal for $2 Billion in Annual Revenue in 2017 with 15 to 20 Percent of Money Transfer Revenue from Self-Service Channels
DALLAS--(BUSINESS WIRE)--February 11, 2014--MoneyGram (NASDAQ:MGI), a leading global money transfer and payment services company, today reported financial results for its fourth quarter and fiscal year ended December 31, 2013.
Full year highlights:
Fourth quarter highlights:
"2013 was a great year for MoneyGram. We exceeded the outlook we set at the beginning of the year and achieved double-digit money transfer transaction and constant currency revenue growth. We celebrated a key network milestone as we added our 200th country, and we completed four acquisitions accelerating our self-service channel growth," said Pamela H. Patsley, MoneyGram chairman and chief executive officer. "Our top-line money transfer growth along with interest savings related to our debt refinancing led to outstanding cash generation. Agents and consumers rely on MoneyGram for innovative solutions, and we are investing to ensure we remain the brand of choice in the large and growing remittance industry."
Balance Sheet Items and Adjusted Free Cash Flow Items
MoneyGram ended the quarter with assets in excess of payment service obligations of $318.8 million and outstanding debt principal of $843.6 million. Interest expense was $10.0 million in the quarter, down $7.7 million from the prior year. For the full year, interest expense was $47.3 million, down $23.6 million from the prior year. Adjusted free cash flow for the quarter was down 10 percent to $21.7 million as a result of increased signing bonus payments made in the quarter. Fourth quarter capital expenditures were $11.6 million and signing bonus payments were $26.0 million. Cash taxes in the quarter were $7.8 million. Adjusted free cash flow for the year was up 29 percent to $149.8 million.
Market Developments
Global Funds Transfer Segment Results
For the quarter, total revenue for the Global Funds Transfer segment was $365.4 million, up 10 percent year-over-year. Money transfer transaction volume increased 11 percent, continuing the Company’s double-digit growth trend. Money transfer revenue was $340.0 million in the quarter, up 11 percent on a reported basis from over the prior year. Bill payment transaction volume was flat, while revenue decreased 2 percent to $25.4 million.
During the quarter, the segment reported operating income of $40.1 million and operating margin of 11.0 percent. Adjusted operating margin was 12.6 percent in the quarter, down from 13.6 percent in the prior year primarily as a result of an increase in commission and compliance expenses.
For the full year, total revenue for the Global Funds Transfer segment was $1,389.8 million, up 11 percent year-over-year. Money transfer transaction volume increased 13 percent for the year. Money transfer revenue was $1,287.8 million, up 12 percent on a reported basis from the prior year. Bill payment transaction volume decreased 2 percent, while revenue decreased 4 percent to $102.0 million.
For the full year, the segment reported operating income of $162.6 million and operating margin of 11.7 percent. Adjusted operating margin was 12.9 percent, down from 14.0 percent in the prior year primarily as a result of an increase in commission and compliance expenses.
Financial Paper Products Segment Results
For the quarter, total revenue in the Financial Paper Products segment decreased 2 percent to $20.5 million, down from $21.0 million in the prior year quarter. Operating income was $5.9 million, down from $8.1 million in the fourth quarter of 2012. Operating margin was 28.8 percent. Adjusted operating margin was 30.2 percent in the quarter, down from 40.5 percent in the same period last year.
For the full year, total revenue in the Financial Paper Products segment was $84.0 million, down 1 percent from the prior year. Operating income was $30.9 million, down from $32.7 million in the prior year. Operating margin was 36.8 percent. Adjusted operating margin was 38.6 percent, down from 41.4 percent last year.
Global Transformation Program
MoneyGram today separately announced several changes to better support the Company’s corporate objectives, including its goal of reaching $2 billion in annual revenue in 2017. These actions include realigning the organizational structure and commencing a global transformation program designed to help MoneyGram lead the industry in compliance, fuel multi-channel growth and improve its cost structure. These initiatives are:
“The launch of our global transformation program will position MoneyGram to lead the industry in compliance and in combating fraud. The global transformation program will also enable us to invest for growth and improve our cost structure. We are energized and committed to achieving our goal of $2 billion in annual revenue in 2017, with 15 to 20 percent of money transfer revenue generated from self-service products. Our investments today will lead to an even more nimble, innovative and cost efficient MoneyGram in 2017,” said Patsley. “We have positioned our self-service business to capitalize on the strength of our brand and network, and the timing is right to increase our focus on these products. We remain committed to outpacing the industry for years to come.”
Outlook
For 2014 the Company estimates total constant currency revenue growth of 8 to 10 percent. Constant currency adjusted EBITDA growth is estimated to be 7 to 9 percent. Direct monitor costs will be adjusted in 2014 to provide investors with clear operating metrics. If direct monitor costs had been adjusted in 2013, the comparable estimated adjusted constant currency EBITDA growth for 2014 would be 5 to 7 percent.
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 expense, cash tax expense, cash payments for capital expenditures and agent signing bonuses), and constant currency measures. 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 actual 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, 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. Finally, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow, and constant currency figures are financial measures used by management in reviewing results of operations, forecasting, assessing cash flow and capital, 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 an exclusive alternative to 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
– Assets in Excess of Payment Service Obligations
Table Seven –
Constant Currency Measures
Conference Call
MoneyGram International will host a conference call today at 9 a.m. ET, 8 a.m. CT, to discuss its fourth quarter and fiscal year results. Pamela H. Patsley, chairman and chief executive officer, will host the call. The conference call can be accessed by calling 1-888-690-2880 (U.S.) and +1-913-312-1397 (International). The participant code is 7775120. Slides are available on MoneyGram’s website at www.moneygram.com. A replay of the conference call will be available at noon ET on February 11, 2014, through 11:59 p.m. ET on February 18, 2014. The replay of the call is available at 1-877-870-5176 (U.S.) or +1-858-384-5517 (International). The replay participant code is 7775120.
About MoneyGram International, Inc.
MoneyGram, a leading money transfer company, enables consumers who are not fully served by traditional financial institutions to meet their financial needs. MoneyGram offers money transfer services worldwide through a global network of 336,000 agent locations – including retailers, international post offices and financial institutions – in more than 200 countries and territories. MoneyGram also offers bill payment services in the U.S. and Canada. To learn more about money transfer or bill payment at an agent location or online, please visit moneygram.com or connect with us on Facebook.
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 permissible introduction by Walmart of "white label" branded 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, including the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; 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; 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; 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 our facilities, networks or databases; 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, 2012 and its quarterly reports on Form 10-Q for the quarterly periods ended March 31, 2013, June 30, 2013 and September 30, 2013.
TABLE ONE | ||||||||||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Three Months Ended |
2013 vs |
Twelve Months Ended |
2013 vs | |||||||||||||||||||||
(Amounts in millions, except per share data) | 2013 | 2012 | 2012 | 2013 | 2012 | 2012 | ||||||||||||||||||
REVENUE | ||||||||||||||||||||||||
Fee and other revenue | $ | 381.7 | $ | 351.3 | $ | 30.4 | $ | 1,456.8 | $ | 1,328.6 | $ | 128.2 | ||||||||||||
Investment revenue | 4.1 | 3.1 | 1.0 | 17.6 | 12.6 | 5.0 | ||||||||||||||||||
Total revenue |
385.8 | 354.4 | 31.4 | 1,474.4 | 1,341.2 | 133.2 | ||||||||||||||||||
OPERATING EXPENSES | ||||||||||||||||||||||||
Fee and other commissions expense | 175.3 | 158.2 | 17.1 | 677.8 | 599.2 | 78.6 | ||||||||||||||||||
Investment commissions expense | 0.1 | 0.1 | — | 0.4 | 0.3 | 0.1 | ||||||||||||||||||
Total commissions expense | 175.4 | 158.3 | 17.1 | 678.2 | 599.5 | 78.7 | ||||||||||||||||||
Compensation and benefits | 66.8 | 68.7 | (1.9 | ) | 264.9 | 241.6 | 23.3 | |||||||||||||||||
Transaction and operations support | 74.4 | 63.9 | 10.5 | 253.7 | 355.7 | (102.0 | ) | |||||||||||||||||
Occupancy, equipment and supplies | 12.0 | 11.1 | 0.9 | 49.0 | 47.7 | 1.3 | ||||||||||||||||||
Depreciation and amortization | 14.2 | 11.7 | 2.5 | 50.7 | 44.3 | 6.4 | ||||||||||||||||||
Total operating expenses | 342.8 | 313.7 | 29.1 | 1,296.5 | 1,288.8 | 7.7 | ||||||||||||||||||
OPERATING INCOME | 43.0 | 40.7 | 2.3 | 177.9 | 52.4 | 125.5 | ||||||||||||||||||
Other (income) expense | ||||||||||||||||||||||||
Net securities gains | — | (10.0 |
) |
10.0 | — | (10.0 | ) | 10.0 | ||||||||||||||||
Interest expense | 10.0 | 17.7 | (7.7 | ) | 47.3 | 70.9 | (23.6 | ) | ||||||||||||||||
Debt extinguishment costs | — | — | — | 45.3 | — | 45.3 | ||||||||||||||||||
Other costs | — | — | — | — | 0.4 | (0.4 | ) | |||||||||||||||||
Total other expenses, net | 10.0 | 7.7 | 2.3 | 92.6 | 61.3 | 31.3 | ||||||||||||||||||
Income (loss) before income taxes | 33.0 | 33.0 | — | 85.3 | (8.9 | ) | 94.2 | |||||||||||||||||
Income tax expense | 9.6 | 12.8 | (3.2 | ) | 32.9 | 40.4 | (7.5 | ) | ||||||||||||||||
NET INCOME (LOSS) | $ | 23.4 | $ | 20.2 | $ | 3.2 | $ | 52.4 | $ | (49.3 | ) | $ | 101.7 | |||||||||||
Earnings (loss) per common share: | ||||||||||||||||||||||||
Basic | $ | 0.33 | $ | 0.28 | $ | 0.05 | $ | 0.73 | $ | (0.69 | ) | $ | 1.42 | |||||||||||
Diluted | $ | 0.33 | $ | 0.28 | $ | 0.05 | $ | 0.73 | $ | (0.69 | ) | $ | 1.42 | |||||||||||
Weighted-average outstanding common shares and equivalents used in computing earnings (loss) per share: | ||||||||||||||||||||||||
Basic (1) | 71.6 | 71.5 | 0.1 | 71.6 | 71.5 | 0.1 | ||||||||||||||||||
Diluted (1) | 71.9 | 71.6 | 0.3 | 71.9 | 71.5 | 0.4 | ||||||||||||||||||
(1) Includes common stock equivalents of 13.7 million for the three and twelve months ended December 31, 2013. The following weighted-average potential common shares are excluded from diluted earnings (loss) per common share as their effect is anti-dilutive. All potential common shares are anti-dilutive in periods of net loss available to common stockholders. | ||||||||||||||||||||||||
Shares related to stock options | 3.4 | 3.9 | 3.6 | 4.9 | ||||||||||||||||||||
Shares related to restricted stock and restricted stock units | 0.9 | 0.5 | 0.8 | 0.5 | ||||||||||||||||||||
TABLE TWO | ||||||||||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||||||||||
SEGMENT RESULTS | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Global Funds Transfer | ||||||||||||||||||||||||
Three Months Ended |
2013 vs |
Twelve Months Ended |
2013 vs | |||||||||||||||||||||
(Amounts in millions) | 2013 | 2012 | 2012 | 2013 | 2012 | 2012 | ||||||||||||||||||
Money transfer revenue: | ||||||||||||||||||||||||
Fee and other revenue | $ | 339.9 | $ | 306.9 | $ | 33.0 | $ | 1,287.5 | $ | 1,148.5 | $ | 139.0 | ||||||||||||
Investment revenue | 0.1 | — | 0.1 | 0.3 | 0.6 | (0.3 | ) | |||||||||||||||||
Bill payment revenue: | ||||||||||||||||||||||||
Fee and other revenue | 25.4 | 26.0 | (0.6 | ) | 102.0 | 106.1 | (4.1 | ) | ||||||||||||||||
Investment revenue | — | — | — | — | — | — | ||||||||||||||||||
Total revenue | $ | 365.4 | $ | 332.9 | $ | 32.5 | $ | 1,389.8 | $ | 1,255.2 | $ | 134.6 | ||||||||||||
Total commissions expense | $ | 175.1 | $ | 157.8 | $ | 17.3 | $ | 676.9 | $ | 597.6 | $ | 79.3 | ||||||||||||
Operating income | $ | 40.1 | $ | 38.4 | $ | 1.7 | $ | 162.6 | $ | 149.6 | $ | 13.0 | ||||||||||||
Operating margin | 11.0 | % | 11.5 | % | 11.7 | % | 11.9 | % | ||||||||||||||||
Financial Paper Products | ||||||||||||||||||||||||
Three Months Ended |
2013 vs |
Twelve Months Ended |
2013 vs | |||||||||||||||||||||
(Amounts in millions) | 2013 | 2012 | 2012 | 2013 | 2012 | 2012 | ||||||||||||||||||
Money order revenue: | ||||||||||||||||||||||||
Fee and other revenue | $ | 12.5 | $ | 13.6 | $ | (1.1 | ) | $ | 51.1 | $ | 55.4 | $ | (4.3 | ) | ||||||||||
Investment revenue | 1.2 | 0.5 | 0.7 | 4.0 | 2.1 | 1.9 | ||||||||||||||||||
Official check revenue: | ||||||||||||||||||||||||
Fee and other revenue | 3.9 | 4.6 | (0.7 | ) | 16.2 | 18.3 | (2.1 | ) | ||||||||||||||||
Investment revenue | 2.9 | 2.3 | 0.6 | 12.7 | 8.7 | 4.0 | ||||||||||||||||||
Total revenue | $ | 20.5 | $ | 21.0 | $ | (0.5 | ) | $ | 84.0 | $ | 84.5 | $ | (0.5 | ) | ||||||||||
Total commissions expense | $ | 0.2 | $ | 0.5 | $ | (0.3 | ) | $ | 1.2 | $ | 1.9 | $ | (0.7 | ) | ||||||||||
Operating income | $ | 5.9 | $ | 8.1 | $ | (2.2 | ) | $ | 30.9 | $ | 32.7 | $ | (1.8 | ) | ||||||||||
Operating margin | 28.8 | % | 38.6 | % | 36.8 | % | 38.7 | % | ||||||||||||||||
TABLE THREE | ||||||||||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||||||||||
SEGMENT RECONCILIATIONS | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Global Funds Transfer | ||||||||||||||||||||||||
Three Months Ended |
2013 vs |
Twelve Months Ended |
2013 vs | |||||||||||||||||||||
(Amounts in millions) | 2013 | 2012 | 2012 | 2013 | 2012 | 2012 | ||||||||||||||||||
Revenue (as reported) | $ | 365.4 | $ | 332.9 | $ | 32.5 | $ | 1,389.8 | $ | 1,255.2 | $ | 134.6 | ||||||||||||
Adjusted operating income | $ | 46.0 | $ | 45.3 | $ | 0.7 | $ | 178.6 | $ | 176.2 | $ | 2.4 | ||||||||||||
Reorganization and restructuring costs | — | (5.4 | ) | 5.4 | (3.0 | ) | (18.3 | ) | 15.3 | |||||||||||||||
Compliance enhancement program | (2.8 | ) | — | (2.8 | ) | (2.8 | ) | — | (2.8 | ) | ||||||||||||||
Stock-based compensation expense | (3.1 | ) | (1.5 | ) | (1.6 | ) | (10.2 | ) | (8.3 | ) | (1.9 | ) | ||||||||||||
Total adjustments |
(5.9 | ) | (6.9 | ) | 1.0 | (16.0 | ) | (26.6 | ) | 10.6 | ||||||||||||||
Operating income (as reported) | $ | 40.1 | $ | 38.4 | $ | 1.7 | $ | 162.6 | $ | 149.6 | $ | 13.0 | ||||||||||||
Adjusted operating margin | 12.6 | % | 13.6 | % | 12.9 | % | 14.0 | % | ||||||||||||||||
Total adjustments | (1.6 | )% | (2.1 | )% | (1.2 | )% | (2.1 | )% | ||||||||||||||||
Operating margin (as reported) | 11.0 | % | 11.5 | % | 11.7 | % | 11.9 | % | ||||||||||||||||
Financial Paper Products | ||||||||||||||||||||||||
Three Months Ended |
2013 vs |
Twelve Months Ended |
2013 vs | |||||||||||||||||||||
(Amounts in millions) | 2013 | 2012 | 2012 | 2013 | 2012 | 2012 | ||||||||||||||||||
Revenue (as reported) | $ | 20.5 | $ | 21.0 | $ | (0.5 | ) | $ | 84.0 | $ | 84.5 | $ | (0.5 | ) | ||||||||||
Adjusted operating income | $ | 6.2 | $ | 8.5 | $ | (2.3 | ) | $ | 32.4 | $ | 35.0 | $ | (2.6 | ) | ||||||||||
Reorganization and restructuring costs | — | (0.2 | ) | 0.2 | (0.3 | ) | (1.3 | ) | 1.0 | |||||||||||||||
Stock-based compensation expense | (0.3 | ) | (0.2 | ) | (0.1 | ) | (1.2 | ) | (1.0 | ) | (0.2 | ) | ||||||||||||
Total adjustments | (0.3 | ) | (0.4 | ) | 0.1 | (1.5 | ) | (2.3 | ) | 0.8 | ||||||||||||||
Operating income (as reported) | $ | 5.9 | $ | 8.1 | $ | (2.2 | ) | $ | 30.9 | $ | 32.7 | $ | (1.8 | ) | ||||||||||
Adjusted operating margin | 30.2 | % | 40.5 | % | 38.6 | % | 41.4 | % | ||||||||||||||||
Total adjustments | (1.5 | )% | (1.9 | )% | (1.8 | )% | (2.7 | )% | ||||||||||||||||
Operating margin (as reported) | 28.8 | % | 38.6 | % | 36.8 | % | 38.7 | % | ||||||||||||||||
TABLE FOUR | ||||||||||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||||||||||
EBITDA, ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN AND ADJUSTED FREE CASH FLOW | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Three Months Ended |
2013 vs |
Twelve Months Ended |
2013 vs | |||||||||||||||||||||
(Amounts in millions) | 2013 | 2012 | 2012 | 2013 | 2012 | 2012 | ||||||||||||||||||
Income (loss) before income taxes | $ | 33.0 | $ | 33.0 | $ | — | $ | 85.3 | $ | (8.9 | ) | $ | 94.2 | |||||||||||
Interest expense | 10.0 | 17.7 | (7.7 | ) | 47.3 | 70.9 | (23.6 | ) | ||||||||||||||||
Depreciation and amortization | 14.2 | 11.7 | 2.5 | 50.7 | 44.3 | 6.4 | ||||||||||||||||||
Amortization of agent signing bonuses | 12.0 | 8.9 | 3.1 | 42.8 | 33.6 | 9.2 | ||||||||||||||||||
EBITDA | 69.2 | 71.3 | (2.1 | ) | 226.1 | 139.9 | 86.2 | |||||||||||||||||
Significant items impacting EBITDA: | ||||||||||||||||||||||||
Net securities gains | — | (10.0 | ) | 10.0 | — | (10.0 | ) | 10.0 | ||||||||||||||||
Severance and related costs (1) | — | — | — | 1.5 | 1.0 | 0.5 | ||||||||||||||||||
Reorganization and restructuring costs | — | 5.1 | (5.1 | ) | 3.2 | 19.3 | (16.1 | ) | ||||||||||||||||
Compliance enhancement program | 2.8 | — |
|
2.8 | 2.8 | — | 2.8 | |||||||||||||||||
Contribution from investors (2) | — | — | — | — | 0.3 | (0.3 | ) | |||||||||||||||||
Debt extinguishment (3) | — | — | — | 45.3 | — | 45.3 | ||||||||||||||||||
Stock-based and contingent performance compensation (4) | 4.0 | 1.6 | 2.4 | 14.1 | 9.2 | 4.9 | ||||||||||||||||||
Legal expenses (5) | 0.4 | 3.7 | (3.3 | ) | 2.5 | 119.2 | (116.7 | ) | ||||||||||||||||
Adjusted EBITDA | $ | 76.4 | $ | 71.7 | $ | 4.7 | $ | 295.5 | $ | 278.9 | $ | 16.6 | ||||||||||||
Adjusted EBITDA margin (6) | 19.8 | % | 20.2 | % | (0.4 | )% | 20.0 | % | 20.8 | % | (0.8 | )% | ||||||||||||
Foreign currency impact | (0.9 | ) | (2.0 | ) | ||||||||||||||||||||
Adjusted EBITDA, constant currency adjusted | $ | 75.5 | $ | 293.5 | ||||||||||||||||||||
Adjusted EBITDA growth, as reported | 7 | % | 6 | % | ||||||||||||||||||||
Adjusted EBITDA growth, constant currency adjusted | 5 | % | 5 | % | ||||||||||||||||||||
Adjusted EBITDA | $ | 76.4 | $ | 71.7 | $ | 4.7 | $ | 295.5 | $ | 278.9 | $ | 16.6 | ||||||||||||
Cash interest expense | (9.3 | ) | (15.5 | ) | 6.2 | (43.9 | ) | (64.4 | ) | 20.5 | ||||||||||||||
Cash tax expense | (7.8 | ) | (2.0 | ) | (5.8 | ) | (8.0 | ) | (2.9 | ) | (5.1 | ) | ||||||||||||
Cash payments for capital expenditures | (11.6 | ) | (16.4 | ) | 4.8 | (48.8 | ) | (59.6 | ) | 10.8 | ||||||||||||||
Cash payments for agent signing bonuses | (26.0 | ) | (13.6 | ) | (12.4 | ) | (45.0 | ) | (36.2 | ) | (8.8 | ) | ||||||||||||
Adjusted Free Cash Flow | $ | 21.7 | $ | 24.2 | $ | (2.5 | ) | $ | 149.8 | $ | 115.8 | $ | 34.0 | |||||||||||
(1) Severance and related costs primarily from executive terminations. |
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(2) Expense resulting from payment by an investor to Walmart upon liquidation of such investor's investment as required by the Participation Agreement. | ||||||||||||||||||||||||
(3) Debt extinguishment costs relate to the termination of our 2011 Credit Agreement and second lien notes in connection with the 2013 Credit Agreement. | ||||||||||||||||||||||||
(4) Stock based compensation and one-time contingent performance award payable after three years based on achievement of revenue growth targets. | ||||||||||||||||||||||||
(5) Legal expenses are primarily in connection with the settlement related to the MDPA/U.S. DOJ investigation and certain ongoing legal matters. | ||||||||||||||||||||||||
(6) 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) |
December 31, |
December 31, |
||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | — | $ | — | ||||
Cash and cash equivalents (substantially restricted) | 2,228.5 | 2,683.2 | ||||||
Receivables, net (substantially restricted) | 767.7 | 1,206.5 | ||||||
Interest-bearing investments (substantially restricted) | 1,011.6 | 450.1 | ||||||
Available-for-sale investments (substantially restricted) | 48.1 | 63.5 | ||||||
Property and equipment, net | 134.8 | 127.9 | ||||||
Goodwill | 435.2 | 428.7 | ||||||
Other assets | 161.0 | 190.7 | ||||||
Total assets | $ | 4,786.9 | $ | 5,150.6 | ||||
LIABILITIES | ||||||||
Payment service obligations | $ | 3,737.1 | $ | 4,175.4 | ||||
Debt | 842.9 | 809.9 | ||||||
Pension and other postretirement benefits | 98.4 | 126.8 | ||||||
Accounts payable and other liabilities | 185.5 | 199.9 | ||||||
Total liabilities | 4,863.9 | 5,312.0 | ||||||
STOCKHOLDERS’ DEFICIT | ||||||||
Participating Convertible Preferred Stock - Series D, $0.01 par value, 200,000 shares authorized, 109,239 issued at December 31, 2013 and December 31, 2012, respectively |
281.9 | 281.9 | ||||||
Common Stock, $0.01 par value, 162,500,000 shares authorized, 62,263,963 shares issued at December 31, 2013 and December 31, 2012, respectively |
0.6 | 0.6 | ||||||
Additional paid-in capital | 1,011.8 | 1,001.0 | ||||||
Retained loss | (1,214.4 | ) | (1,265.9 | ) | ||||
Accumulated other comprehensive loss | (33.0 | ) | (52.3 | ) | ||||
Treasury stock: 4,300,782 and 4,407,038 shares at December 31, 2013 and December 31, 2012, respectively | (123.9 | ) | (126.7 | ) | ||||
Total stockholders’ deficit | (77.0 | ) | (161.4 | ) | ||||
Total liabilities and stockholders’ deficit | $ | 4,786.9 | $ | 5,150.6 | ||||
TABLE SIX | ||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||
ASSETS IN EXCESS OF PAYMENT SERVICE OBLIGATIONS | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(Amounts in millions) |
December 31, |
September 30, |
June 30, |
March 31, |
||||||||||||
Cash and cash equivalents (1) | $ | 2,228.5 | $ | 2,222.4 | $ | 2,202.4 | $ | 2,430.2 | ||||||||
Receivables, net (1) | 767.7 | 959.7 | 1,178.5 | 1,170.4 | ||||||||||||
Interest-bearing investments (1) | 1,011.6 | 941.8 | 902.3 | 501.9 | ||||||||||||
Available-for-sale investments (1) | 48.1 | 50.7 | 50.5 | 56.2 | ||||||||||||
4,055.9 | 4,174.6 | 4,333.7 | 4,158.7 | |||||||||||||
Payment service obligations | (3,737.1 | ) | (3,864.9 | ) | (4,076.4 | ) | (3,939.0 | ) | ||||||||
Assets in excess of payment service obligations | $ | 318.8 | $ | 309.7 | $ | 257.3 | $ | 219.7 | ||||||||
(1) Substantially restricted | ||||||||||||||||
TABLE SEVEN | ||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||
CONSTANT CURRENCY MEASURES | ||||||||
(Unaudited) | ||||||||
(Amounts in millions) |
Three months ended |
Twelve months ended |
||||||
Total revenue, as reported (GAAP) | $ | 385.8 | $ | 1,474.4 | ||||
Foreign currency impact | (2.2 | ) | (5.4 | ) | ||||
Total revenue, constant currency adjusted | $ | 383.6 | $ | 1,469.0 | ||||
Prior year total revenue, as reported (GAAP) | $ | 354.4 | $ | 1,341.2 | ||||
Revenue change, as reported (GAAP) | 9 | % | 10 | % | ||||
Total revenue growth, constant currency adjusted | 8 | % | 10 | % | ||||
(Amounts in millions) |
Three months ended |
Twelve months ended |
||||||
Money transfer revenue, as reported (GAAP) | $ | 340.0 | $ | 1,287.8 | ||||
Foreign currency impact | (2.2 | ) | (5.4 | ) | ||||
Money transfer revenue, constant currency adjusted | $ | 337.8 | $ | 1,282.4 | ||||
Prior year money transfer revenues, as reported (GAAP) | $ | 306.9 | $ | 1,149.1 | ||||
Revenue change, as reported (GAAP) | 11 | % | 12 | % | ||||
Money transfer revenue growth, constant currency adjusted | 10 | % | 12 | % | ||||
CONTACT:
MoneyGram International, Inc.
Investor Relations:
Eric
Dutcher, 214-999-7508
edutcher@moneygram.com
or
Media
Relations:
214-303-9923
media@moneygram.com