DALLAS, July 30, 2020 /PRNewswire/ -- MoneyGram
International, Inc. (NASDAQ: MGI) today reported financial results
for its second quarter ending June 30,
2020.
Second Quarter 2020 Business Highlights
"We had a very strong quarter and materially outperformed on
both the top and bottom-line, despite the continued global
uncertainty from the COVID-19 pandemic," said Alex Holmes, MoneyGram Chairman and CEO. "In
June we returned to year-over-year revenue growth on strong money
transfer transaction growth of 10%. This return to growth was
driven by the rapid expansion of our digital business as well as
the continued improvement of our walk-in business. Additionally,
the resurgence of growth from the money transfer business, along
with agile management of the business throughout the crisis enabled
us to deliver year-over-year Operating Income and Adjusted EBITDA
growth for the quarter."
Holmes added: "We're excited about the underlying momentum in
our business driven by our digital transformation. The investments
that we have made over the past few years have allowed us to build
a fast growth digital business which not only has higher customer
retention and productivity rates, but also surpassed the walk-in
business during the quarter delivering higher margins on average.
With digital now representing 27% of money transfer transactions,
the business is providing a significant contribution to our
bottom-line results."
- MoneyGram achieved 106% year-over-year digital transaction
growth in the second quarter – a significant acceleration from the
first quarter of 2020 where the company reported 57% growth.
Overall digital growth was driven by the following components:
-
- MoneyGram Online, the Company's direct-to-consumer
channel, delivered 104% year-over-year transaction growth driven by
strong consumer demand for the MoneyGram app, high customer
retention rates, and increasing productivity rates
- Digital partnerships, driven by key partners in the
Middle East and Asia
Pacific, accelerated from 25% year-over-year transaction
growth in the first quarter to 97% growth in the second
quarter
- Account deposit and mobile wallet transactions
increased 148% which is an acceleration from the first quarter
where the Company reported 80% year-over-year transaction
growth
- Digital transactions accounted for 27% of all money transfer
transactions in the second quarter
- The Company remains focused on executing the long-term strategy
while managing through the crisis. During the quarter, the Company
achieved a number of important milestones:
-
- Expanded the loyalty program to new markets and launched
product enhancements to improve the customer experience
- Launched new wallet and account deposit partnerships in rapidly
growing regions of the world
- Strengthened the Company's leading position around the world by
signing and expanding partnerships, specifically overhauling key
receive markets
Second Quarter 2020 Financial Results, Year-Over-Year
- Total revenue was $279.8 million,
a decline of 14% or 13% on a constant currency basis primarily
driven by the impact of COVID-19 on the first part of the quarter
as the Company reported positive revenue growth in the month of
June
-
- Money transfer revenue was $253.1
million, down 10% or 9% on a constant currency basis related
to the impact of COVID-19 on the first part of the quarter
-
- The Company reported positive money transfer revenue growth in
the month of June on the strength of double-digit cross border
transaction growth
- Investment revenue was $4.3
million for the quarter due to lower prevailing
interest rates
- Total operating expenses of $257.8
million, improved $51.7 million or 17%
-
- Compensation and Benefits were flat including a $5.9 million special compensation plan accrual to
potentially restore compensation withheld during the quarter as
part of the Company's proactive response to the COVID-19
pandemic
- Transaction and Operations Support expenses were down over 60%
primarily driven by efficiencies and operating reductions
previously disclosed as part of the Company's proactive response to
the COVID-19 pandemic
- Included an $8.8 million net
benefit from Ripple market development fees of $15.1 million, partially offset by related
transaction and trading expenses of $6.3 million
- Operating Income was $22.0 million which was an
increase of 54%
- Net loss was $4.6 million for the
quarter
- Diluted loss per share was $0.06
and diluted adjusted income per share was $0.01
- Adjusted EBITDA increased 4%, or 5% on a constant currency
basis, to $56.4 million
-
- Adjusted EBITDA margin improved 340 basis points to 20%
- Adjusted Free Cash Flow was $24.7
million, an increase of 24%
"As the ongoing COVID-19 crisis continues to impact countless
lives around the world, the health, safety, and livelihoods of our
customers, employees, and partners remain our top priorities. I'm
extremely proud of how we've come together as a company over these
last few months to exceptionally serve our diverse customer base of
tens of millions of people who rely on our essential services,"
concluded Holmes.
Balance Sheet Highlights
Cash and cash equivalents on hand at quarter end were
$130.6 million compared to
$146.8 million at the end of 2019. As
of June 30, 2020, the Company had
repaid all outstanding borrowings under its revolving credit
facility. Second quarter interest expense was $22.7 million and capital expenditures were
$9.8 million.
As announced earlier this week, MoneyGram has signed an
amendment with the DOJ to defer the final $55 million payment to the end of the DPA in
May 2021. The Government has agreed
to extend the $55 million payment to
provide additional time to consider the basis for potentially
reducing the final payment amount. The recent amendment also
reduced the frequency of MoneyGram's DOJ reporting from a monthly
to a quarterly reporting cycle.
Third Quarter 2020 Outlook Update
As a result of continuing economic uncertainty created by the
COVID-19 pandemic, the Company is not providing a specific third
quarter outlook. However, if revenue trends remain in their current
range, then the Company would anticipate sustained Adjusted EBITDA
growth in the third quarter.
Conference Call
MoneyGram International will host a conference call on
July 31, at 9:00 a.m. ET, to discuss its results.
Alex Holmes, Chairman and CEO, and
Larry Angelilli, CFO, will host the
call.
Participant Dial-In
Numbers:
|
U.S.:
|
1-800-479-1004
|
International:
|
1-929-477-0324
|
Webcast:
|
public.viavid.com/index.php?id=140819
|
|
|
Replay:
|
U.S 1-844-512-2921 or
International 1-412-317-6671
|
Replay ID:
|
6178495
|
Replay is available
through August 7, 2020, 11:59 p.m. ET
|
About MoneyGram International, Inc.
MoneyGram is a global leader in cross-border P2P payments and
money transfers. Its consumer-centric capabilities enable family
and friends to quickly and affordably send money in more than 200
countries and territories, with over 70 countries now digitally
enabled.
MoneyGram leverages its modern, mobile, and API-driven platform
and collaborates with the world's leading brands to serve millions
of people each year through both its walk-in business and its
direct-to-consumer digital business.
With a strong culture of innovation and a relentless focus on
utilizing technology to deliver the world's best customer
experience, MoneyGram is leading the evolution of digital P2P
payments.
For more information, please visit MoneyGram.com and follow
@MoneyGram.
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:
- the impact of the COVID-19 outbreak or future epidemics on our
business, including the potential for work stoppages, lockdowns,
shelter-in-place, or restricted movement guidelines, service
delays, lower consumer and commercial activity;
- 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 Amended DPA
entered into with the U.S. federal government and the effect of the
Amended DPA on our reputation and business and our ability to make
payments required under the Amended DPA;
- 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 we rely and 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 consumers;
- our ability to adequately protect our brand and intellectual
property rights and to avoid infringing on the rights of
others;
- 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 capital structure;
- 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 U.S. Securities and Exchange Commission (the "SEC"),
including MoneyGram's annual report on Form 10-K for the year ended
December 31, 2019.
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), diluted adjusted income (loss) 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, diluted adjusted income (loss) 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
|
-
|
Reconciliation of
Certain Non-GAAP Measures to Relevant GAAP Measures - EBITDA,
Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Free Cash
Flow
|
Table Five
|
-
|
Reconciliation of
Certain Non-GAAP Measures to Relevant GAAP Measures - Adjusted Net
Income and Adjusted Diluted EPS
|
Table Six
|
-
|
Condensed
Consolidated Balance Sheets
|
Table
Seven
|
-
|
Condensed
Consolidated Statements of Cash Flows
|
CONTACTS
|
|
|
Investor
Relations:
|
|
Media
Relations:
|
214-979-1400
|
|
Stephen
Reiff
|
InvestorRelations@moneygram.com
|
|
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
June 30,
|
|
2020
vs
|
|
Six Months
Ended
June 30,
|
|
2020
vs
|
|
2020
|
|
2019
|
|
2019
|
|
2020
|
|
2019
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee and other
revenue
|
|
$
|
275.5
|
|
|
$
|
309.3
|
|
|
$
|
(33.8)
|
|
|
$
|
556.3
|
|
|
$
|
610.3
|
|
|
$
|
(54.0)
|
|
Investment
revenue
|
|
4.3
|
|
|
14.5
|
|
|
(10.2)
|
|
|
14.4
|
|
|
28.9
|
|
|
(14.5)
|
|
Total
revenue
|
|
279.8
|
|
|
323.8
|
|
|
(44.0)
|
|
|
570.7
|
|
|
639.2
|
|
|
(68.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue change,
as reported
|
|
(14)
|
%
|
|
(14)
|
%
|
|
|
|
(11)
|
%
|
|
(15)
|
%
|
|
|
Total revenue change,
constant currency
|
|
(13)
|
%
|
|
(12)
|
%
|
|
|
|
(10)
|
%
|
|
(13)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commissions and
direct transaction expenses
|
|
152.9
|
|
|
167.8
|
|
|
(14.9)
|
|
|
307.3
|
|
|
328.7
|
|
|
(21.4)
|
|
Compensation and
benefits
|
|
53.2
|
|
|
53.5
|
|
|
(0.3)
|
|
|
106.6
|
|
|
112.9
|
|
|
(6.3)
|
|
Transaction and
operations support (1)
|
|
21.3
|
|
|
54.5
|
|
|
(33.2)
|
|
|
59.3
|
|
|
106.6
|
|
|
(47.3)
|
|
Occupancy, equipment
and supplies
|
|
14.2
|
|
|
15.5
|
|
|
(1.3)
|
|
|
29.1
|
|
|
30.9
|
|
|
(1.8)
|
|
Depreciation and
amortization
|
|
16.2
|
|
|
18.2
|
|
|
(2.0)
|
|
|
33.3
|
|
|
37.2
|
|
|
(3.9)
|
|
Total operating
expenses
|
|
257.8
|
|
|
309.5
|
|
|
(51.7)
|
|
|
535.6
|
|
|
616.3
|
|
|
(80.7)
|
|
OPERATING
INCOME
|
|
22.0
|
|
|
14.3
|
|
|
7.7
|
|
|
35.1
|
|
|
22.9
|
|
|
12.2
|
|
Other
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
22.7
|
|
|
14.0
|
|
|
8.7
|
|
|
46.5
|
|
|
27.9
|
|
|
18.6
|
|
Other non-operating
expense(2)
|
|
1.2
|
|
|
35.3
|
|
|
(34.1)
|
|
|
2.3
|
|
|
36.9
|
|
|
(34.6)
|
|
Total other
expenses
|
|
23.9
|
|
|
49.3
|
|
|
(25.4)
|
|
|
48.8
|
|
|
64.8
|
|
|
(16.0)
|
|
Loss before income
taxes
|
|
(1.9)
|
|
|
(35.0)
|
|
|
33.1
|
|
|
(13.7)
|
|
|
(41.9)
|
|
|
28.2
|
|
Income tax
expense
|
|
2.7
|
|
|
(7.8)
|
|
|
10.5
|
|
|
12.4
|
|
|
(1.2)
|
|
|
13.6
|
|
NET
LOSS
|
|
$
|
(4.6)
|
|
|
$
|
(27.2)
|
|
|
$
|
22.6
|
|
|
$
|
(26.1)
|
|
|
$
|
(40.7)
|
|
|
$
|
14.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per common
share
|
|
$
|
(0.06)
|
|
|
$
|
(0.41)
|
|
|
$
|
0.35
|
|
|
$
|
(0.34)
|
|
|
$
|
(0.62)
|
|
|
$
|
0.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
weighted-average outstanding common shares and equivalents used in
computing loss per share
|
|
77.8
|
|
|
66.1
|
|
|
11.7
|
|
|
77.6
|
|
|
65.5
|
|
|
12.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The three and six
months ended June 30, 2020 include Ripple market development fees
of $15.1 million and $31.7 million, respectively, partially offset
by related transaction and trading expenses of $6.3 million and
$10.8 million, respectively.
|
(2) The three and six
months ended June 30, 2019 include non-cash pension settlement
charge of $31.3 million and debt extinguishment cost of $2.4
million.
|
TABLE
TWO
|
MONEYGRAM
INTERNATIONAL, INC.
|
SEGMENT
RESULTS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Funds
Transfer
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
millions, except
percentages)
|
|
Three Months
Ended
June 30,
|
|
2020
vs
|
|
Six Months
Ended
June 30,
|
|
2020
vs
|
|
2020
|
|
2019
|
|
2019
|
|
2020
|
|
2019
|
|
2019
|
Money transfer
revenue
|
|
$
|
253.1
|
|
|
$
|
282.2
|
|
|
$
|
(29.1)
|
|
|
$
|
509.0
|
|
|
$
|
555.5
|
|
|
$
|
(46.5)
|
|
Bill payment
revenue
|
|
10.8
|
|
|
15.0
|
|
|
(4.2)
|
|
|
24.2
|
|
|
30.9
|
|
|
(6.7)
|
|
Total
revenue
|
|
$
|
263.9
|
|
|
$
|
297.2
|
|
|
$
|
(33.3)
|
|
|
$
|
533.2
|
|
|
$
|
586.4
|
|
|
$
|
(53.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions and
direct transaction expenses
|
|
$
|
152.7
|
|
|
$
|
161.4
|
|
|
$
|
(8.7)
|
|
|
$
|
304.0
|
|
|
$
|
315.7
|
|
|
$
|
(11.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
$
|
16.5
|
|
|
$
|
5.6
|
|
|
$
|
10.9
|
|
|
$
|
23.2
|
|
|
$
|
6.7
|
|
|
$
|
16.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
6.3
|
%
|
|
1.9
|
%
|
|
|
|
4.4
|
%
|
|
1.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money transfer
revenue change, as
reported
|
|
(10)
|
%
|
|
(14)
|
%
|
|
|
|
(8)
|
%
|
|
(17)
|
%
|
|
|
Money transfer
revenue change, constant currency
|
|
(9)
|
%
|
|
(12)
|
%
|
|
|
|
(7)
|
%
|
|
(14)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Paper
Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
millions, except
percentages)
|
|
Three Months
Ended
June 30,
|
|
2020
vs
|
|
Six Months
Ended
June 30,
|
|
2020
vs
|
|
2020
|
|
2019
|
|
2019
|
|
2020
|
|
2019
|
|
2019
|
Money order
revenue
|
|
$
|
10.8
|
|
|
$
|
13.6
|
|
|
$
|
(2.8)
|
|
|
$
|
22.9
|
|
|
$
|
27.5
|
|
|
$
|
(4.6)
|
|
Official check
revenue
|
|
5.1
|
|
|
13.0
|
|
|
(7.9)
|
|
|
14.6
|
|
|
25.3
|
|
|
(10.7)
|
|
Total
revenue
|
|
$
|
15.9
|
|
|
$
|
26.6
|
|
|
$
|
(10.7)
|
|
|
$
|
37.5
|
|
|
$
|
52.8
|
|
|
$
|
(15.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commissions
expense
|
|
$
|
0.2
|
|
|
$
|
6.4
|
|
|
$
|
(6.2)
|
|
|
$
|
3.3
|
|
|
$
|
13.0
|
|
|
$
|
(9.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
$
|
6.2
|
|
|
$
|
10.0
|
|
|
$
|
(3.8)
|
|
|
$
|
13.2
|
|
|
$
|
18.2
|
|
|
$
|
(5.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
39.0
|
%
|
|
37.6
|
%
|
|
|
|
35.2
|
%
|
|
34.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE
THREE
|
MONEYGRAM
INTERNATIONAL, INC.
|
SEGMENT
RECONCILIATIONS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Funds
Transfer
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
millions, except
percentages)
|
|
Three Months
Ended
June 30,
|
|
2020
vs
|
|
Six Months
Ended
June 30,
|
|
2020
vs
|
|
2020
|
|
2019
|
|
2019
|
|
2020
|
|
2019
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (as
reported)
|
|
$
|
263.9
|
|
|
$
|
297.2
|
|
|
$
|
(33.3)
|
|
|
$
|
533.2
|
|
|
$
|
586.4
|
|
|
$
|
(53.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income
|
|
$
|
22.6
|
|
|
$
|
15.9
|
|
|
$
|
6.7
|
|
|
$
|
38.3
|
|
|
$
|
28.2
|
|
|
$
|
10.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal and contingent
matters
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3)
|
|
|
—
|
|
|
(0.3)
|
|
Restructuring and
reorganization costs
|
|
(0.7)
|
|
|
(0.5)
|
|
|
(0.2)
|
|
|
(1.2)
|
|
|
(4.1)
|
|
|
2.9
|
|
Compliance
enhancement program
|
|
(0.9)
|
|
|
(1.9)
|
|
|
1.0
|
|
|
(2.5)
|
|
|
(3.0)
|
|
|
0.5
|
|
Direct monitor
costs
|
|
(3.1)
|
|
|
(6.2)
|
|
|
3.1
|
|
|
(7.9)
|
|
|
(10.3)
|
|
|
2.4
|
|
Stock-based
compensation expense
|
|
(1.4)
|
|
|
(1.7)
|
|
|
0.3
|
|
|
(3.2)
|
|
|
(4.1)
|
|
|
0.9
|
|
Total
adjustments
|
|
(6.1)
|
|
|
(10.3)
|
|
|
4.2
|
|
|
(15.1)
|
|
|
(21.5)
|
|
|
6.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (as
reported)
|
|
$
|
16.5
|
|
|
$
|
5.6
|
|
|
$
|
10.9
|
|
|
$
|
23.2
|
|
|
$
|
6.7
|
|
|
$
|
16.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
margin
|
|
8.6
|
%
|
|
5.3
|
%
|
|
|
|
7.2
|
%
|
|
4.8
|
%
|
|
|
Total
adjustments
|
|
(2.3)
|
%
|
|
(3.5)
|
%
|
|
|
|
(2.8)
|
%
|
|
(3.7)
|
%
|
|
|
Operating margin (as
reported)
|
|
6.3
|
%
|
|
1.9
|
%
|
|
|
|
4.4
|
%
|
|
1.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Paper
Products
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
millions, except
percentages)
|
|
Three Months
Ended
June 30,
|
|
2020
vs
|
|
Six Months
Ended
June 30,
|
|
2020
vs
|
|
2020
|
|
2019
|
|
2019
|
|
2020
|
|
2019
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (as
reported)
|
|
$
|
15.9
|
|
|
$
|
26.6
|
|
|
$
|
(10.7)
|
|
|
$
|
37.5
|
|
|
$
|
52.8
|
|
|
$
|
(15.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income
|
|
$
|
6.7
|
|
|
$
|
10.6
|
|
|
$
|
(3.9)
|
|
|
$
|
14.3
|
|
|
$
|
19.4
|
|
|
$
|
(5.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compliance
enhancement program
|
|
(0.3)
|
|
|
(0.4)
|
|
|
0.1
|
|
|
(0.7)
|
|
|
(0.8)
|
|
|
0.1
|
|
Stock-based
compensation expense
|
|
(0.2)
|
|
|
(0.2)
|
|
|
—
|
|
|
(0.4)
|
|
|
(0.4)
|
|
|
—
|
|
Total
adjustments
|
|
(0.5)
|
|
|
(0.6)
|
|
|
0.1
|
|
|
(1.1)
|
|
|
(1.2)
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (as
reported)
|
|
$
|
6.2
|
|
|
$
|
10.0
|
|
|
$
|
(3.8)
|
|
|
$
|
13.2
|
|
|
$
|
18.2
|
|
|
$
|
(5.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
margin
|
|
42.1
|
%
|
|
39.8
|
%
|
|
|
|
38.1
|
%
|
|
36.7
|
%
|
|
|
Total
adjustments
|
|
(3.1)
|
%
|
|
(2.3)
|
%
|
|
|
|
(2.9)
|
%
|
|
(2.3)
|
%
|
|
|
Operating margin (as
reported)
|
|
39.0
|
%
|
|
37.6
|
%
|
|
|
|
35.2
|
%
|
|
34.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE
FOUR
|
MONEYGRAM
INTERNATIONAL, INC.
|
RECONCILIATION OF
CERTAIN NON-GAAP MEASURES TO RELEVANT GAAP MEASURES
|
EBITDA, ADJUSTED
EBITDA, ADJUSTED EBITDA MARGIN AND ADJUSTED FREE CASH
FLOW
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
millions, except
percentages)
|
|
Three Months
Ended
June 30,
|
|
2020
vs
|
|
Six Months
Ended
June 30,
|
|
2020
vs
|
|
2020
|
|
2019
|
|
2019
|
|
2020
|
|
2019
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
$
|
(1.9)
|
|
|
$
|
(35.0)
|
|
|
$
|
33.1
|
|
|
$
|
(13.7)
|
|
|
$
|
(41.9)
|
|
|
$
|
28.2
|
|
Interest
expense
|
|
22.7
|
|
|
14.0
|
|
|
8.7
|
|
|
46.5
|
|
|
27.9
|
|
|
18.6
|
|
Depreciation and
amortization
|
|
16.2
|
|
|
18.2
|
|
|
(2.0)
|
|
|
33.3
|
|
|
37.2
|
|
|
(3.9)
|
|
Signing bonus
amortization
|
|
12.6
|
|
|
11.7
|
|
|
0.9
|
|
|
25.1
|
|
|
23.4
|
|
|
1.7
|
|
EBITDA
|
|
49.6
|
|
|
8.9
|
|
|
40.7
|
|
|
91.2
|
|
|
46.6
|
|
|
44.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant items
impacting EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct monitor
costs
|
|
3.1
|
|
|
6.2
|
|
|
(3.1)
|
|
|
7.9
|
|
|
10.3
|
|
|
(2.4)
|
|
Stock-based,
contingent and incentive
compensation
|
|
1.6
|
|
|
1.9
|
|
|
(0.3)
|
|
|
3.6
|
|
|
4.5
|
|
|
(0.9)
|
|
Compliance enhancement
program
|
|
1.2
|
|
|
2.3
|
|
|
(1.1)
|
|
|
3.2
|
|
|
3.8
|
|
|
(0.6)
|
|
Restructuring and
reorganization costs
|
|
0.7
|
|
|
0.5
|
|
|
0.2
|
|
|
1.2
|
|
|
4.0
|
|
|
(2.8)
|
|
Legal and contingent
matters
|
|
0.2
|
|
|
0.7
|
|
|
(0.5)
|
|
|
0.6
|
|
|
1.3
|
|
|
(0.7)
|
|
Non-cash pension
settlement charge (1)
|
|
—
|
|
|
31.3
|
|
|
(31.3)
|
|
|
—
|
|
|
31.3
|
|
|
(31.3)
|
|
Debt extinguishment
costs (2)
|
|
—
|
|
|
2.4
|
|
|
(2.4)
|
|
|
—
|
|
|
2.4
|
|
|
(2.4)
|
|
Severance and related
costs
|
|
—
|
|
|
0.1
|
|
|
(0.1)
|
|
|
0.2
|
|
|
0.2
|
|
|
—
|
|
Adjusted
EBITDA
|
|
$
|
56.4
|
|
|
$
|
54.3
|
|
|
$
|
2.1
|
|
|
$
|
107.9
|
|
|
$
|
104.4
|
|
|
$
|
3.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin (3)
|
|
20.2
|
%
|
|
16.8
|
%
|
|
3.4
|
%
|
|
18.9
|
%
|
|
16.3
|
%
|
|
2.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
change, as reported
|
|
4
|
%
|
|
|
|
|
|
3
|
%
|
|
|
|
|
Adjusted EBITDA
change, constant currency adjusted
|
|
5
|
%
|
|
|
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
56.4
|
|
|
$
|
54.3
|
|
|
$
|
2.1
|
|
|
$
|
107.9
|
|
|
$
|
104.4
|
|
|
$
|
3.5
|
|
Cash payments for
interest
|
|
(16.8)
|
|
|
(13.2)
|
|
|
(3.6)
|
|
|
(34.4)
|
|
|
(26.0)
|
|
|
(8.4)
|
|
Cash payments for
taxes, net of refunds
|
|
(0.4)
|
|
|
0.7
|
|
|
(1.1)
|
|
|
(2.5)
|
|
|
(0.5)
|
|
|
(2.0)
|
|
Cash payments for
capital expenditures
|
|
(9.8)
|
|
|
(16.5)
|
|
|
6.7
|
|
|
(19.9)
|
|
|
(29.2)
|
|
|
9.3
|
|
Cash payments for
agent signing bonuses
|
|
(4.7)
|
|
|
(5.3)
|
|
|
0.6
|
|
|
(29.7)
|
|
|
(15.4)
|
|
|
(14.3)
|
|
Adjusted Free Cash
Flow
|
|
$
|
24.7
|
|
|
$
|
20.0
|
|
|
$
|
4.7
|
|
|
$
|
21.4
|
|
|
$
|
33.3
|
|
|
$
|
(11.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Non-cash charge
of $31.3 million from the sale of pension liability in June
2019.
|
(2) Debt
extinguishment costs related to the amended and new debt agreements
entered on June 26, 2019.
|
(3) Adjusted EBITDA
margin is calculated as Adjusted EBITDA divided by total
revenue.
|
TABLE
FIVE
|
MONEYGRAM
INTERNATIONAL, INC.
|
RECONCILIATION OF
CERTAIN NON-GAAP MEASURES TO RELEVANT GAAP MEASURES
|
ADJUSTED NET
INCOME AND ADJUSTED DILUTED EPS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
(Amounts in
millions, except per share data)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(4.6)
|
|
|
$
|
(27.2)
|
|
|
$
|
(26.1)
|
|
|
$
|
(40.7)
|
|
Total adjustments
(1)
|
|
6.8
|
|
|
45.4
|
|
|
16.7
|
|
|
57.8
|
|
Tax impacts of
adjustments (2)
|
|
(1.3)
|
|
|
(10.5)
|
|
|
(3.6)
|
|
|
(13.3)
|
|
Valuation allowance
(3)
|
|
—
|
|
|
—
|
|
|
10.1
|
|
|
—
|
|
Adjusted net income
(loss)
|
|
$
|
0.9
|
|
|
$
|
7.7
|
|
|
$
|
(2.9)
|
|
|
$
|
3.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
common share
|
|
$
|
(0.06)
|
|
|
$
|
(0.41)
|
|
|
$
|
(0.34)
|
|
|
$
|
(0.62)
|
|
|
|
|
|
|
|
|
|
|
Diluted adjustments
per common share
|
|
0.07
|
|
|
0.53
|
|
|
0.30
|
|
|
0.68
|
|
|
|
|
|
|
|
|
|
|
Diluted adjusted
income (loss) per common share
|
|
$
|
0.01
|
|
|
$
|
0.12
|
|
|
$
|
(0.04)
|
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted-average outstanding common shares and
equivalents
|
|
77.8
|
|
|
66.1
|
|
|
77.6
|
|
|
65.5
|
|
|
|
|
|
|
|
|
|
|
|
(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 and
jurisdiction of each adjustment.
|
(3) In the first
quarter of 2020, the Company recorded beginning-of-the-year
valuation allowance of $10.1 million on its U.S. deferred tax
assets.
|
TABLE
SIX
|
MONEYGRAM
INTERNATIONAL, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
|
|
|
|
(Amounts in
millions, except share data)
|
|
June 30,
2020
|
|
December 31,
2019
|
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
130.6
|
|
|
$
|
146.8
|
|
Settlement
assets
|
|
3,501.5
|
|
|
3,237.0
|
|
Property and
equipment, net
|
|
158.2
|
|
|
176.1
|
|
Goodwill
|
|
442.2
|
|
|
442.2
|
|
Other
assets
|
|
185.3
|
|
|
182.9
|
|
Total
assets
|
|
$
|
4,417.8
|
|
|
$
|
4,185.0
|
|
LIABILITIES
|
|
|
|
|
Payment service
obligations
|
|
$
|
3,501.5
|
|
|
$
|
3,237.0
|
|
Debt, net
|
|
855.6
|
|
|
850.3
|
|
Pension and other
postretirement benefits
|
|
76.3
|
|
|
77.5
|
|
Accounts payable and
other liabilities
|
|
252.9
|
|
|
260.6
|
|
Total
liabilities
|
|
4,686.3
|
|
|
4,425.4
|
|
STOCKHOLDERS'
DEFICIT
|
|
|
|
|
Participating
convertible preferred stock - series D, $0.01 par value, 200,000
shares authorized, 71,282 shares issued at June 30, 2020 and
December 31, 2019
|
|
183.9
|
|
|
183.9
|
|
Common stock, $0.01
par value, 162,500,000 shares authorized, 65,061,090 shares issued
at June 30, 2020 and December 31, 2019
|
|
0.7
|
|
|
0.7
|
|
Additional paid-in
capital
|
|
1,120.3
|
|
|
1,116.9
|
|
Retained
loss
|
|
(1,494.1)
|
|
|
(1,460.1)
|
|
Accumulated other
comprehensive loss
|
|
(68.0)
|
|
|
(63.5)
|
|
Treasury stock:
1,504,305 and 2,329,906 shares at June 30, 2020 and December 31,
2019, respectively
|
|
(11.3)
|
|
|
(18.3)
|
|
Total stockholders'
deficit
|
|
(268.5)
|
|
|
(240.4)
|
|
Total liabilities and
stockholders' deficit
|
|
$
|
4,417.8
|
|
|
$
|
4,185.0
|
|
|
|
|
|
|
TABLE
SEVEN
|
MONEYGRAM
INTERNATIONAL, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
|
|
|
Six Months Ended
June 30,
|
(Amounts in
millions)
|
|
2020
|
|
2019
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
Net loss
|
|
$
|
(26.1)
|
|
|
$
|
(40.7)
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
33.7
|
|
|
78.8
|
|
Net cash provided by
operating activities
|
|
7.6
|
|
|
38.1
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
Purchases of property
and equipment
|
|
(19.9)
|
|
|
(29.2)
|
|
Net cash used in
investing activities
|
|
(19.9)
|
|
|
(29.2)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
Transaction costs for
issuance and amendment of debt
|
|
—
|
|
|
(21.3)
|
|
Principal payments on
debt
|
|
(3.2)
|
|
|
(28.4)
|
|
Proceeds from
revolving credit facility
|
|
23.0
|
|
|
—
|
|
Payments on revolving
credit facility
|
|
(23.0)
|
|
|
—
|
|
Net proceeds from
issuing equity instruments
|
|
—
|
|
|
29.5
|
|
Payments to tax
authorities for stock-based compensation
|
|
(0.7)
|
|
|
(0.7)
|
|
Net cash used in
financing activities
|
|
(3.9)
|
|
|
(20.9)
|
|
NET CHANGE IN CASH
AND CASH EQUIVALENTS
|
|
(16.2)
|
|
|
(12.0)
|
|
CASH AND CASH
EQUIVALENTS—Beginning of period
|
|
146.8
|
|
|
145.5
|
|
CASH AND CASH
EQUIVALENTS—End of period
|
|
$
|
130.6
|
|
|
$
|
133.5
|
|
|
|
|
|
|
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SOURCE MoneyGram