DALLAS--(BUSINESS WIRE)--MoneyGram International, Inc. (NYSE:MGI), a leading global payment services company, today reported financial results for the fourth quarter and full-year 2011.
- On both a constant currency and reported basis, money transfer fee and other revenue increased 11 percent in the fourth quarter of 2011 over the fourth quarter of 2010.
- Money transfer transaction volume in the fourth quarter of 2011 increased 13 percent over the prior year, led by U.S.-to-U.S. transaction volume growth of 15 percent and sends originated outside of the U.S. growth of 14 percent. U.S. outbound transaction volume increased 10 percent on the strength of U.S.-to-Mexico growth of 15 percent.
- Global agent locations increased to 267,000, a strong 18 percent growth over 2010.
- Total revenue in the fourth quarter increased 6 percent to $321.8 million, compared with $303.4 million in the fourth quarter of 2010. Total fee and other revenue increased 7 percent to $318.8 million, from $298.3 million.
- Total revenue for the full-year 2011 increased 7 percent to $1,247.8 million, up from $1,166.7 million in 2010. Total fee and other revenue for the full-year 2011 was $1,230.9 million, up 8 percent from $1,145.3 million in 2010.
-
The company reported net income for the quarter of $3.1 million and
EBITDA of $22.0 million. Both net income and EBITDA for the fourth
quarter of 2011 were primarily impacted by:
- $32.3 million of debt extinguishment loss
- $6.2 million of restructuring and reorganization costs
- $4.1 million of stock-based compensation
- Adjusted EBITDA for the fourth quarter increased 12 percent to $67.2 million from $59.8 million in the prior year. Adjusted EBITDA margin in the fourth quarter of 2011 was 20.9 percent, up from 19.7 percent in the same period last year.
- Diluted income per common share was $0.04 in the fourth quarter of 2011, including a negative $0.28 per share impact from the loss on debt extinguishment.
“We are very pleased with our accomplishments in 2011. For the year we achieved double-digit growth in money transfer transaction volume, constant currency revenue, and agent locations. Our impressive performance was achieved while we recapitalized our preferred shares, nearly doubled our public float, and reduced our second lien debt by $175 million,” said Pamela H. Patsley, chairman and chief executive officer. “We are optimistic about 2012 and while we are mindful of the economic challenges in Europe, our business is geographically diverse. We have great momentum in our money transfer business and continue to leverage the core as we expand into online, account-based, mobile and self-service offerings. We will utilize our strong cash flow to invest in the business and maximize shareholder value.”
Capital Market Activities
During the quarter, MoneyGram completed its underwritten secondary public offering of MoneyGram's common stock, by affiliates and co-investors of Thomas H. Lee Partners, L.P. and affiliates of Goldman, Sachs & Co. for an aggregate of 10.2 million shares at a public offering price of $16.25 per share.
Also in the quarter, MoneyGram made a partial redemption of its 13.25% Senior Secured Second Lien Notes due in 2018, held by affiliates of Goldman, Sachs & Co, in a principal amount of $175 million at a redemption price of 113.25%. MoneyGram financed this redemption with a combination of cash and $150 million in borrowings under its new incremental credit facility, provided by a syndicate of lenders, which is additive to the First Lien Senior Credit Facility currently outstanding.
Balance Sheet Items
MoneyGram ended the fourth quarter of 2011 with assets in excess of payment service obligations of $211.7 million, and outstanding debt principal of $814.6 million. Interest expense for the year decreased $16.0 million from prior year as result of continued delevering and refinancing activities in 2011.
Market Developments
MoneyGram continues to grow globally through geographic diversification and enhanced service offerings.
-
Expansion during the quarter targeted key developing markets including
the addition of:
- 4,000 locations added in the Russian Federation, Eastern Europe and the CIS including Ochadbank, EcoslamikBank, Fonobank and Bank Rushdi, and Unibank
- 2,000 additional locations in Latin America including BTS, Scotiabank and Farmacias Esquivar
- 1,000 locations added in Africa including Wema Bank, BIMAO, and United Bank of Africa
- 1,000 additional locations in the Indian subcontinent bringing MoneyGram to 45,000 locations in the region
- The launch of the PO Bulgaria network
-
Enhanced service and new channel offering revenue grew 61 percent and
represented 4.2 percent of money transfer revenue. Highlights include:
- Introduction of cash-to-account service offerings with ICBC in China and VTB bank in Ukraine, and signed an agreement with Banco Rendimento in Brazil to enable cash-to-account for all banks in Brazil
- Annual revenue and transaction growth in excess of 30 percent for MoneyGram Online
- Launch of a co-branded website for money transfers with Walmart.com
- New currency expansion including sends and receives in Malaysian Ringgitt and multi-currency receives in China
- Expansion of remittance services for Mozido mobile wallets
Global Funds Transfer Segment Results
Total revenue for the Global Funds Transfer segment was $300.2 million in the fourth quarter of 2011, up 8 percent from $276.7 million in the fourth quarter of 2010. The segment reported operating income of $33.4 million and an operating margin of 11.1 percent in the fourth quarter of 2011. Adjusted operating margin was 14.0 percent in the quarter, up from 11.9 percent in the prior year’s quarter.
During the fourth quarter of 2011, money transfer transaction volume increased a healthy 13 percent. Money transfer fee and other revenue increased 11 percent to $273.3 million compared with $246.2 million in the fourth quarter of 2010. On a constant currency basis, money transfer fee and other revenue increased 11 percent.
Money transfer transactions originating outside of the U.S. increased a robust 14 percent in the fourth quarter of 2011 over the prior year. U.S.-to-U.S. money transfer transaction volume continued its strong growth, increasing 15 percent. U.S. outbound transaction volume growth was 10 percent for the quarter. The U.S.-to-Mexico transaction volume growth rate accelerated for the ninth consecutive quarter reporting 15 percent growth over the prior year fourth quarter.
Bill payment transaction volume decreased 9 percent, while fee and other revenue decreased 12 percent to $26.7 million in the fourth quarter of 2011 from $30.4 million in the fourth quarter of 2010. Excluding divestitures, fee and other revenue declined 7 percent while transactions declined 2 percent.
Financial Paper Products Segment Results
Total revenue in the Financial Paper Products segment declined 18 percent to $21.3 million in the fourth quarter of 2011, from $26.0 million in the fourth quarter of 2010. Operating income was $5.9 million in the fourth quarter of 2011 down from $8.6 million in the fourth quarter of 2010. Operating margin in the fourth quarter of 2011 was 27.7 percent. Adjusted operating margin was 33.3 percent in the quarter down from 36.1 percent in the same period last year. Segment margin continues to be negatively impacted by declining investment revenue.
Outlook
For the fiscal year 2012, management is estimating total revenue growth of 7 percent to 9 percent and adjusted EBITDA growth of 9 percent to 11 percent consistent with its long-term management targets.
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) and Adjusted EBITDA margin. 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 these non-GAAP financial measures to the related GAAP financial measures.
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. In addition, the Company’s debt agreements require compliance with financial measures based on EBITDA and Adjusted EBITDA. Finally, EBITDA, Adjusted EBITDA and Adjusted EBITDA margin 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 Income (Loss)
Table Two –
Segment Results
Table Three – Segment Reconciliations
Table
Four – EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin
Table
Five – Consolidated Balance Sheets
Table Six – Assets in Excess of
Payment Service Obligations
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 full-year 2011 results. Pamela H. Patsley, chairman and chief executive officer, will host the call. The conference call can be accessed by calling 1-800-967-7188 in the U.S. and 1-719-457-2705 internationally. The participant confirmation number is 4352975. Slides are available on MoneyGram’s website at www.moneygram.com. A replay of the conference call will be available at noon ET on Feb. 3 through 11:59 p.m. ET on Feb. 11, 2012. The replay of the call is available at 1-877-870-5176 (U.S.) or 1-858-384-5517 (outside the U.S.). The replay confirmation code is 4352975.
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 267,000 global money transfer agent locations in 192 countries and territories. For more information, visit the Company's website at www.moneygram.com.
Forward-Looking Statements
This press 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" 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: (a) our substantial debt service obligations, significant debt covenant requirements and credit rating; (b) our capital structure and the special voting rights provided to designees of Thomas H. Lee Partners, L.P. ("THL") on our Board of Directors; (c) sustained financial market illiquidity, or illiquidity at our clearing, cash management and custodial financial institutions; (d) continued weakness in economic conditions, in both the United States and global markets; (e) a material slow down or complete disruption of international migration patterns; (f) our ability to maintain agent or biller relationships, or a reduction in transaction volume from these relationships; (g) litigation involving MoneyGram or its agents; which could result in material settlements, fines or penalties; (h) ongoing investigations involving MoneyGram by the United States federal government and several state governments which could result in criminal or civil penalties, revocation of required licenses or registrations, termination of contracts, other administrative actions or lawsuits and negative publicity; (i) fluctuations in interest rates; (j) our ability to manage credit risks from our retail agents and official check financial institution customers; (k) our ability to manage fraud risks from consumers or agents; (l) the ability of MoneyGram and its agents to maintain adequate banking relationships; (m) our ability to retain partners to operate our official check and money order businesses; (n) our ability to maintain sufficient capital; (o) our ability to attract and retain key employees; (p) our ability to successfully develop and timely introduce new and enhanced products and services; (q) investments in new products, services or infrastructure changes; (r) our ability to adequately protect our brand and intellectual property rights and to avoid infringing on the rights of others; (s) our ability to compete effectively; (t) 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; (u) 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; (v) 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 restrictions; (w) a security or privacy breach in our facilities, networks or databases; (x) disruptions to our computer network systems and data centers; (y) our ability to effectively operate and adapt our technology to match our business growth; (z) our ability to manage risks related to the operation of retail locations and the acquisition or start-up of businesses; (aa) our ability to manage risks associated with our international sales and operations; (bb) our ability to maintain effective internal controls; and (cc) 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 Form 10-K for the year ended December 31, 2010 and its Forms 10-Q for the quarters ended March 31, 2011, June 30, 2011 and September 30, 2011.
TABLE ONE | ||||||||||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF (LOSS) INCOME | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
|
||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
December 31, | 2011 vs | December 31, | 2011 vs | |||||||||||||||||||||
(Amounts in thousands, except per share data) | 2011 | 2010 | 2010 | 2011 | 2010 | 2010 | ||||||||||||||||||
REVENUE | ||||||||||||||||||||||||
Fee and other revenue | $ | 318,753 | $ | 298,308 | $ | 20,445 | $ | 1,230,858 | $ | 1,145,312 | $ | 85,546 | ||||||||||||
Investment revenue | 3,092 | 5,057 | (1,965 | ) | 16,911 | 21,341 | (4,430 | ) | ||||||||||||||||
Total revenue | 321,845 | 303,365 | 18,480 | 1,247,769 | 1,166,653 | 81,116 | ||||||||||||||||||
EXPENSES | ||||||||||||||||||||||||
Fee and other commissions expense | 141,942 | 131,098 | 10,844 | 547,573 | 500,759 | 46,814 | ||||||||||||||||||
Investment commissions expense | 81 | 136 | (55 | ) | 431 | 737 | (306 | ) | ||||||||||||||||
Total commissions expense | 142,023 | 131,234 | 10,789 | 548,004 | 501,496 | 46,508 | ||||||||||||||||||
Compensation and benefits | 57,853 | 57,415 | 438 | 235,696 | 226,422 | 9,274 | ||||||||||||||||||
Transaction and operations support | 61,384 | 42,633 | 18,751 | 227,762 | 185,782 | 41,980 | ||||||||||||||||||
Occupancy, equipment and supplies | 13,259 | 11,809 | 1,450 | 47,739 | 46,481 | 1,258 | ||||||||||||||||||
Depreciation and amortization | 11,093 | 12,190 | (1,097 | ) | 46,051 | 48,074 | (2,023 | ) | ||||||||||||||||
Total operating expenses | 285,612 | 255,281 | 30,331 | 1,105,252 | 1,008,255 | 96,997 | ||||||||||||||||||
OPERATING INCOME | 36,233 | 48,084 | (11,851 | ) | 142,517 | 158,398 | (15,881 | ) | ||||||||||||||||
Other expense (income) | ||||||||||||||||||||||||
Net securities gains | - | - | - | (32,816 | ) | (2,115 | ) | (30,701 | ) | |||||||||||||||
Interest expense | 20,445 | 25,597 | (5,152 | ) | 86,165 | 102,133 | (15,968 | ) | ||||||||||||||||
Debt extinguishment costs | 32,302 | - | 32,302 | 37,522 | - | 37,522 | ||||||||||||||||||
Other | 1,470 | - | 1,470 | 11,876 | - | 11,876 | ||||||||||||||||||
Total other expense, net | 54,217 | 25,597 | 28,620 | 102,747 | 100,018 | 2,729 | ||||||||||||||||||
(Loss) income before income taxes | (17,984 | ) | 22,487 | (40,471 | ) | 39,770 | 58,380 | (18,610 | ) | |||||||||||||||
Income tax (benefit) expense | (21,107 | ) | 6,331 | (27,438 | ) | (19,636 | ) | 14,579 | (34,215 | ) | ||||||||||||||
NET INCOME | $ | 3,123 | $ | 16,156 | $ | (13,033 | ) | $ | 59,406 | $ | 43,801 | $ | 15,605 | |||||||||||
Income (loss) per common share: | ||||||||||||||||||||||||
Basic | $ | 0.04 | $ | (1.86 | ) | $ | 1.90 | $ | (9.03 | ) | $ | (8.77 | ) | $ | (0.26 | ) | ||||||||
Diluted | $ | 0.04 | $ | (1.86 | ) | $ | 1.90 | $ | (9.03 | ) | $ | (8.77 | ) | $ | (0.26 | ) | ||||||||
Net income (loss) available to common stockholders: | ||||||||||||||||||||||||
Net income (loss) as reported | $ | 3,123 | $ | 16,156 | $ | (13,033 | ) | $ | 59,406 | $ | 43,801 | $ | 15,605 | |||||||||||
Accrued dividends on mezzanine equity | - | (32,988 | ) | 32,988 | (30,934 | ) | (125,005 | ) | 94,071 | |||||||||||||||
Accretion on mezzanine equity | - | (2,604 | ) | 2,604 | (80,023 | ) | (10,020 | ) | (70,003 | ) | ||||||||||||||
Additional consideration issued in connection with conversion of mezzanine equity |
- | - | - | (366,797 | ) | - | (366,797 | ) | ||||||||||||||||
Cash dividends paid on mezzanine equity | - | - | - | (20,477 | ) | - | (20,477 | ) | ||||||||||||||||
Net income (loss) available to common stockholders | $ | 3,123 | $ | (19,436 | ) | $ | 22,559 | $ | (438,825 | ) | $ | (91,224 | ) | $ | (347,601 | ) | ||||||||
Weighted-average outstanding common shares and equivalents used in computing earnings per share(1) |
||||||||||||||||||||||||
Basic | 71,490 | 10,437 | 61,053 | 48,576 | 10,398 | 38,178 | ||||||||||||||||||
Diluted | 71,670 | 10,437 | 61,233 | 48,576 | 10,398 | 38,178 | ||||||||||||||||||
(1) Includes common stock equivalents of 18.4 and 12.7 million for the three and twelve months ended December 31, 2011, respectively. The following weighted-average potential common shares are excluded from diluted 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, restricted stock and restricted stock units |
4,759 | 4,940 | 5,205 | 4,665 | ||||||||||||||||||||
Shares related to preferred stock | - | 53,969 | 20,989 | 53,969 | ||||||||||||||||||||
TABLE TWO | ||||||||||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||||||||||
SEGMENT RESULTS | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Global Funds Transfer | ||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
December 31, | 2011 vs | December 31, | 2011 vs | |||||||||||||||||||||
(Amounts in thousands) | 2011 | 2010 | 2010 | 2011 | 2010 | 2010 | ||||||||||||||||||
Money transfer revenue: | ||||||||||||||||||||||||
Fee and other revenue | $ | 273,328 | $ | 246,179 | $ | 27,149 | $ | 1,039,526 | $ | 926,489 | $ | 113,037 | ||||||||||||
Investment revenue | 157 | 93 | 64 | 562 | 244 | 318 | ||||||||||||||||||
Bill payment revenue: | ||||||||||||||||||||||||
Fee and other revenue | 26,719 | 30,416 | (3,697 | ) | 112,624 | 126,467 | (13,843 | ) | ||||||||||||||||
Investment revenue | - | 14 | (14 | ) | 4 | 81 | (77 | ) | ||||||||||||||||
Total revenue | 300,204 | 276,702 | 23,502 | 1,152,716 | 1,053,281 | 99,435 | ||||||||||||||||||
Commissions expense | 141,539 | 130,415 | 11,124 | 545,688 | 496,645 | 49,043 | ||||||||||||||||||
Operating income | $ | 33,352 | $ | 44,186 | $ | (10,834 | ) | $ | 124,793 | $ | 139,314 | $ | (14,521 | ) | ||||||||||
Operating margin | 11.1 | % | 16.0 | % | 10.8 | % | 13.2 | % | ||||||||||||||||
Financial Paper Products | ||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
December 31, | 2011 vs | December 31, | 2011 vs | |||||||||||||||||||||
(Amounts in thousands) | 2011 | 2010 | 2010 | 2011 | 2010 | 2010 | ||||||||||||||||||
Money order revenue: | ||||||||||||||||||||||||
Fee and other revenue | $ | 13,782 | $ | 15,199 | $ | (1,417 | ) | $ | 57,350 | $ | 64,342 | $ | (6,992 | ) | ||||||||||
Investment revenue | 495 | 921 | (426 | ) | 3,100 | 3,951 | (851 | ) | ||||||||||||||||
Official check revenue: | ||||||||||||||||||||||||
Fee and other revenue | 4,907 | 6,172 | (1,265 | ) | 21,069 | 25,696 | (4,627 | ) | ||||||||||||||||
Investment revenue | 2,130 | 3,714 | (1,584 | ) | 11,813 | 15,526 | (3,713 | ) | ||||||||||||||||
Total revenue | 21,314 | 26,006 | (4,692 | ) | 93,332 | 109,515 | (16,183 | ) | ||||||||||||||||
Commissions expense | 484 | 833 | (349 | ) | 2,396 | 3,931 | (1,535 | ) | ||||||||||||||||
Operating income | $ | 5,911 | $ | 8,553 | $ | (2,642 | ) | $ | 29,168 | $ | 36,508 | $ | (7,340 | ) | ||||||||||
Operating margin | 27.7 | % | 32.9 | % | 31.3 | % | 33.3 | % | ||||||||||||||||
TABLE THREE | ||||||||||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||||||||||
SEGMENT RECONCILIATIONS | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Global Funds Transfer | ||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
December 31, | 2011 vs | December 31, | 2011 vs | |||||||||||||||||||||
(Amounts in thousands) | 2011 | 2010 | 2010 | 2011 | 2010 | 2010 | ||||||||||||||||||
Revenue (as reported) | $ | 300,204 | $ | 276,702 | $ | 23,502 | $ | 1,152,716 | $ | 1,053,281 | $ | 99,435 | ||||||||||||
Adjusted operating income | $ | 42,000 | $ | 32,864 | $ | 9,136 | $ | 157,890 | $ | 145,108 | $ | 12,782 | ||||||||||||
Restructuring and reorganization costs | (5,135 | ) | - | (5,135 | ) | (19,185 | ) | - | (19,185 | ) | ||||||||||||||
Stock-based compensation expense | (3,513 | ) | (5,060 | ) | 1,547 | (13,912 | ) | (22,176 | ) | 8,264 | ||||||||||||||
Legal accrual | - | 16,382 | (16,382 | ) | - | 16,382 | (16,382 | ) | ||||||||||||||||
Total adjustments | (8,648 | ) | 11,322 | (19,970 | ) | (33,097 | ) | (5,794 | ) | (27,303 | ) | |||||||||||||
Operating income (as reported) | $ | 33,352 | $ | 44,186 | $ | (10,834 | ) | $ | 124,793 | $ | 139,314 | $ | (14,521 | ) | ||||||||||
Adjusted operating margin | 14.0 | % | 11.9 | % | 13.7 | % | 13.8 | % | ||||||||||||||||
Total adjustments | (2.9 | %) | 4.1 | % | (2.9 | %) | (0.6 | %) | ||||||||||||||||
Operating margin (as reported) | 11.1 | % | 16.0 | % | 10.8 | % | 13.2 | % | ||||||||||||||||
Financial Paper Products | ||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
December 31, | 2011 vs | December 31, | 2011 vs | |||||||||||||||||||||
(Amounts in thousands) | 2011 | 2010 | 2010 | 2011 | 2010 | 2010 | ||||||||||||||||||
Revenue (as reported) | $ | 21,314 | $ | 26,006 | $ | (4,692 | ) | $ | 93,332 | $ | 109,515 | $ | (16,183 | ) | ||||||||||
Adjusted operating income | $ | 7,094 | $ | 9,400 | $ | (2,306 | ) | $ | 33,757 | $ | 40,268 | $ | (6,511 | ) | ||||||||||
Restructuring and reorganization costs | (592 | ) | - | (592 | ) | (2,265 | ) | - | (2,265 | ) | ||||||||||||||
Stock-based compensation expense | (591 | ) | (847 | ) | 256 | (2,324 | ) | (3,760 | ) | 1,436 | ||||||||||||||
Total adjustments | (1,183 | ) | (847 | ) | (336 | ) | (4,589 | ) | (3,760 | ) | (829 | ) | ||||||||||||
Operating income (as reported) | $ | 5,911 | $ | 8,553 | $ | (2,642 | ) | $ | 29,168 | $ | 36,508 | $ | (7,340 | ) | ||||||||||
Adjusted operating margin | 33.3 | % | 36.1 | % | 36.2 | % | 36.8 | % | ||||||||||||||||
Total adjustments | (5.6 | %) | (3.3 | %) | (4.9 | %) | (3.4 | %) | ||||||||||||||||
Operating margin (as reported) | 27.7 | % | 32.9 | % | 31.3 | % | 33.3 | % | ||||||||||||||||
TABLE FOUR | ||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||
EBITDA, ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(Amounts in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
(Loss) income before income taxes | $ | (17,984 | ) | $ | 22,487 | $ | 39,770 | $ | 58,380 | |||||||
Interest expense | 20,445 | 25,597 | 86,165 | 102,133 | ||||||||||||
Depreciation and amortization | 11,093 | 12,190 | 46,051 | 48,074 | ||||||||||||
Amortization of agent signing bonuses | 8,436 | 7,514 | 32,618 | 29,247 | ||||||||||||
EBITDA | 21,990 | 67,788 | 204,604 | 237,834 | ||||||||||||
Significant items impacting EBITDA: | ||||||||||||||||
Net securities gains | - | - | (32,816 | ) | (2,115 | ) | ||||||||||
Severance and related costs (1) | - | (161 | ) | (31 | ) | (346 | ) | |||||||||
Restructuring and reorganization costs | 6,211 | 2,290 | 23,470 | 5,853 | ||||||||||||
Capital transaction costs (2) | 1,039 | - | 6,446 | - | ||||||||||||
Asset impairment charges (3) | 686 | 309 | 3,372 | 1,829 | ||||||||||||
Debt extinguishment loss (4) | 32,302 | - | 37,522 | - | ||||||||||||
Stock-based compensation expense | 4,115 | 5,925 | 16,281 | 26,011 | ||||||||||||
Legal accruals (5) | 863 | (16,382 | ) | 4,817 | (14,572 | ) | ||||||||||
Adjusted EBITDA | $ | 67,206 | $ | 59,769 | $ | 263,665 | $ | 254,494 | ||||||||
Adjusted EBITDA margin (6) | 20.9 | % | 19.7 | % | 21.1 | % | 21.8 | % | ||||||||
|
(1) |
Severance and related costs from executive terminations occurring prior to the second quarter of 2010, including adjustments to amounts previously accrued. |
|
(2) |
Represents professional and legal fees related to the May 2011 Recapitalization and November 2011 Secondary Offering. |
|
(3) |
Impairments of assets in 2011 relate to the disposition of a business and software and intangible asset impairments. In 2010, impairments relate to the sale of corporate aircraft, goodwill and intangible assets. |
|
(4) |
Debt extinguishment loss relates to the termination of our former senior facility in connection with the May 2011 Recapitalization and the partial redemption of our Second Lien Notes in November 2011. |
|
(5) |
In 2011, legal accruals relate primarily to settlements and related costs for securities litigation associated with our May 2011 Recapitalization. In 2010, legal accruals relate to the reversal of a patent lawsuit accrual and settlements for securities litigation related to the March 2008 Recapitalization. |
|
(6) |
Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Total Revenue. |
|
TABLE FIVE | ||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited) | ||||||||
December 31, | December 31, | |||||||
(Amounts in thousands, except share and per share data) | 2011 | 2010 | ||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | - | $ | - | ||||
Cash and cash equivalents (substantially restricted) | 2,572,174 | 2,865,941 | ||||||
Receivables, net (substantially restricted) | 1,220,065 | 982,319 | ||||||
Short-term investments (substantially restricted) | 522,024 | 405,769 | ||||||
Available-for-sale investments (substantially restricted) | 102,771 | 160,936 | ||||||
Property and equipment | 116,341 | 115,111 | ||||||
Goodwill | 428,691 | 428,691 | ||||||
Other assets | 213,512 | 156,969 | ||||||
Total assets | $ | 5,175,578 | $ | 5,115,736 | ||||
LIABILITIES | ||||||||
Payment service obligations | $ | 4,205,375 | $ | 4,184,736 | ||||
Debt | 810,888 | 639,946 | ||||||
Pension and other postretirement benefits | 120,252 | 120,536 | ||||||
Accounts payable and other liabilities | 149,261 | 113,647 | ||||||
Total liabilities | 5,285,776 | 5,058,865 | ||||||
MEZZANINE EQUITY | ||||||||
Participating Convertible Preferred Stock-Series B, $0.01 par value, none at December 31, 2011 and 800,000 shares authorized, 495,000 shares issued at December 31, 2010 |
- | 628,199 | ||||||
Participating Convertible Preferred Stock-Series B-1, $0.01 par value, none at December 31, 2011 and 500,000 shares authorized, 272,500 shares issued at December 31, 2010 |
- | 371,154 | ||||||
Total mezzanine equity | - | 999,353 | ||||||
STOCKHOLDERS' DEFICIT | ||||||||
Junior Participating Preferred Stock - Series A, $0.01 par value, none at December 31, 2011, 2,000,000 shares authorized, none issued at December 31, 2010 |
- | - | ||||||
Participating Convertible Preferred Stock - Series D, $0.01 par value, 200,000 shares authorized, 109,239 issued at December 31, 2011 and none at December 31, 2010 |
281,898 | - | ||||||
Common Stock, $0.01 par value, 162,500,000 shares authorized, 62,263,963 and 15,388,119 shares issued at December 31, 2011 and December 31, 2010, respectively |
623 | 886 | ||||||
Additional paid-in capital | 989,188 | - | ||||||
Retained loss | (1,216,543 | ) | (771,544 | ) | ||||
Accumulated other comprehensive loss | (38,028 | ) | (31,879 | ) | ||||
Treasury stock: 4,429,184 and 4,935,555 shares at December 31, 2011 and December 31, 2010, respectively |
(127,336 | ) | (139,945 | ) | ||||
Total stockholders' deficit | (110,198 | ) | (942,482 | ) | ||||
Total liabilities, mezzanine equity and stockholders' deficit | $ | 5,175,578 | $ | 5,115,736 | ||||
TABLE SIX | ||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||
ASSETS IN EXCESS OF PAYMENT SERVICE OBLIGATIONS | ||||||||||||||||
(Unaudited) | ||||||||||||||||
December 31, | September 30, | June 30, | March 31, | |||||||||||||
(Amounts in thousands) | 2011 | 2011 | 2011 | 2011 | ||||||||||||
Cash and cash equivalents | $ | 2,572,174 | $ | 2,583,475 | $ | 2,685,666 | $ | 2,776,009 | ||||||||
Receivables, net | 1,220,065 | 1,084,927 | 1,038,766 | 956,945 | ||||||||||||
Short-term investments | 522,024 | 520,372 | 517,318 | 411,299 | ||||||||||||
Available-for-sale investments | 102,771 | 118,820 | 134,346 | 145,168 | ||||||||||||
4,417,034 | 4,307,594 | 4,376,096 | 4,289,421 | |||||||||||||
Payment service obligations | (4,205,375 | ) | (4,058,191 | ) | (4,142,961 | ) | (4,045,265 | ) | ||||||||
Assets in excess of payment service obligations | $ | 211,659 | $ | 249,403 | $ | 233,135 | $ | 244,156 |