MoneyGram International Reports Solid First Quarter 2011 Financial Results.
First quarter money transfer transaction volume up 14 percent; agent
network expands 18 percent
city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S.
International, Inc. (
), a leading global
payment services company, today reported financial results for the first
quarter of 2011.
* Money transfer transaction volume increased 14 percent driven by
17 percent growth in non-U.S. sends in the first quarter of 2011 versus
* Money transfer fee and otherrevenue increased 8 percent in the
first quarter of 2011 versus prior year on both a reported and constant
currency basis. The difference between transaction growth and constant
currency revenue growth is due to lower revenue per transaction
primarily related to the
of the $50 price band in the
officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world’s third largest country in population and the fourth largest country in area.
* Global agent locations increased 18 percent over the prior first
quarter to 233,000.
* Total revenue in the first quarter increased 3 percent to $294.0
million, compared with $286.5 million in the first quarter of 2010.
Total fee and other revenue increased 3 percent to $290.0 million, from
$280.9 million in the first quarter of 2010.
* Net income for the quarter was $14.0 million, up from $10.8
million in the prior year quarter, and
was $51.3 million. Both
net income and EBITDA were impacted by $4.6 million of stock-based
compensation, $2.9 million of
$1.5 million in costs associated with the
. Net income
benefited from a lower income tax rate and a $3.5 million
benefit from the release of valuation allowances.
* Adjusted EBITDA for the quarter was $60.3 million versus $61.7
million in the prior year. First quarter 2011 Adjusted EBITDA reflects
lower net investment revenue of $1.6 million compared with the same
period in 2010. Adjusted EBITDA margin was 20.5 percent in the first
quarter of 2011, compared with 21.5 percent in the same period last
“It’s been an extremely busy and exciting 2011 for
MoneyGram, and clearly the highlight for the quarter was the
announcement of the recapitalization agreement and the subsequent
completion of the
process to secure a new senior credit
facility. The recapitalization is recognition of the tremendous progress
we’ve made and a testament to all the hard work toward rebuilding
H. Patsley, chairman and chief executive
officer at MoneyGram. “At the same time, we are aware that there is
still much work to be done. The company and our core money transfer
business continue to strengthen and we remain
Marked by persevering, painstaking effort. See Synonyms at busy.
[Middle English, from Old French, from Latin d
investing in our brand and driving productivity across the organization.
We continue to refine what is working well and are taking the necessary
steps to improve those areas that are under-performing. We look forward
to the rest of 2011 with great enthusiasm.”
During the quarter, the Company entered into a recapitalization
agreement with affiliates of Thomas H. Lee Partners (
THL Transamerican Hockey League
THL Thermal-Hydraulic Limits
THL Treasure House Library
THL Time Has Lived
co-investors, and affiliates of
, Emma 1869-1940.
Russian-born American anarchist. Jailed repeatedly for her advocacy of birth control and opposition to military conscription, she was deported to the Soviet Union in 1919.
, Hans 1494-1576.
German writer and Meistersinger noted for his many dramas, poems, and songs. His life inspired Wagner’s opera Die Meistersinger von Nürnberg (1868).
& Co. Under the terms
of the Recapitalization Agreement, THL and its co-investors will convert
all of their Series B Preferred into common stock, and
will convert all of its Series B-1 Preferred into shares of Series D
, a non-voting equivalent to
common stock. Through the agreement, THL and its co-investors will
1. Almost exact or correct:
28.2 million additional shares of common stock and
$140.8 million in cash, and Goldman Sachs will receive approximately
15,504 additional shares of Series D Preferred (equivalent to 15.5
million shares of common stock) and $77.5 million in cash as
consideration for completing the transaction. THL and its co-investors
are expected to own approximately 55.1 percent and Goldman Sachs is
expected to own approximately 30.3 percent of the shares of common stock
outstanding after the transaction on a fully
tr.v. di·lut·ed, di·lut·ing, di·lutes
1. To make thinner or less concentrated by adding a liquid such as water.
2. To lessen the force, strength, purity, or brilliance of, especially by admixture.
Earlier this month, MoneyGram announced that a syndication process
had been completed for a new $540 million senior secured credit facility
consisting of a $150 million, five-year
facility and a
$390 million, six-year term loan. The
from the term loan
under the new credit facility will be used to
company’s previously announced recapitalization and to
the Company’s existing credit facility. Closing on the new credit
facility is subject to
and execution of the new credit
agreement with the lenders and customary terms and conditions. Closing
on the new credit facility will take place in
in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun.
closing of the recapitalization.
The Company continued its focus on enhancing its product offerings
and expanding its agent network. MoneyGram recently:
* Announced the launch of MoneyGram’s cash-to-account program
Banco de Oro
, enabling consumers to transfer
money from select MoneyGram locations in the United States,
, independent federation (2005 est. pop. 23,953,000), 128,430 sq mi (332,633 sq km), Southeast Asia. The official capital and by far the largest city is Kuala Lumpur; Putrajaya is the adminstrative capital.
Gr. Hellas or Ellas, republic (2005 est. pop. 10,668,000), 50,944 sq mi (131,945 sq km), SE Europe. It occupies the southernmost part of the Balkan Peninsula and borders on the Ionian Sea in the west, on the Mediterranean Sea in the south, on
, Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov.
directly into the bank accounts of recipients in
* Increased its presence in
, Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America.
with the addition of super agent
OM D.T.V.M., which launched MoneyGram’s services at
locations throughout the country. Its network is expected to grow to 200
locations by the end of the year.
* Announced our agreement with InComm
relate prep →
relate prep → ,
service, the company’s new in-lane money transfer product.
InComm will assist MoneyGram in the distribution and
1. the act or process of rendering active.
2. the transformation of a proenzyme into an active enzyme by the action of a kinase or another enzyme.
MoneyGram Xpress packages, which will be available to U.S. consumers in
select outlets in InComm’s network of more than 225,000 retail
* Expanded its agreement with Uniteller, an important agent in
, Uniteller’s parent company, in a deal
that will bring MoneyGram’s services to nearly 1,200 locations
which added more than 400 locations across the country.
* Signed an agreement with
in Romania, adding key
locations in this important send and receive country.
* Launched MoneyGram’s first money transfer
, officially Socialist Republic of Vietnam, republic (v), 128,400 sq mi (332,642 sq km), Southeast Asia. Occupying the eastern coastline of the Southeast Asian peninsula, Vietnam is bounded by China on the north, by Laos
with agent partner DongA Bank, expanding its service delivery from bank
branch locations and home delivery to also include the convenience of
* Celebrated the 10 millionth-transaction milestone with the UK Post
Office. As part of its
partnership that began in 1997 and
today includes nearly 12,000 locations.
Global Funds Transfer Segment Results
Total revenue for the Global Funds Transfer segment increased 5
percent to $269.8 million in the first quarter of 2011 compared with
$256.7 million in the first quarter of 2010. The segment reported
of $26.4 million and an
of 9.8 percent
in the first quarter of 2011. Adjusted operating margin was 11.3 percent
in the quarter, down compared to 13.1 percent in the prior year quarter.
Segment margin was impacted by increased marketing spend and increased
commission expense, which resulted from revenue growth and changes in
Money transfer transaction volume increased 14 percent, with fee and
other revenue increasing 8 percent to $239.6 million in the first
quarter of 2011 compared with $222.7 million in the first quarter of
2010. On a constant currency basis, money transferfee and other revenue
improved 8 percent. The difference between transaction growth and
constant currency revenue growth is due to lower revenue per transaction
primarily related to the continuation of the $50 price band in the U.S.
In the first quarter, money transfer transactions originating outside of
the U.S. increased 17 percent over the prior year.
, the money transfer business continued to deliver
solid results led by 17 percent growth in U.S.-to-U.S. transaction
volume. Money transfer transactions originating in the U.S. excluding
transactions sent to Mexico increased 9 percent versus the first quarter
of 2010. During the quarter, transaction volume to Mexico increased a
strong 10 percent, which is a significant improvement from last
year’s first quarter transaction growth rate of negative 11
Bill payment transaction volume decreased 8 percent, while fee and
other revenue decreased 11 percent to $30.1 million in the first quarter
of 2011 from $33.8 million in the first quarter of 2010. The decline in
both transaction volume and revenue continues to be related to
transaction mix. While the business continues to perform well in new
emerging verticals, these verticals generate lower revenue per
transaction compared with our traditional consumer credit verticals,
which continue to experience
and economic declines.
Financial Paper Products Segment Results
Total revenue in the Financial Paper Products segment was $23.9
million in the first quarter, down from $28.4 million in the first
quarter of 2010. Operating income was $8.4 million in the first quarter
of 2011 down from $8.9 million in the first quarter of 2010. Operating
margin in the first quarter of 2011 was 35.1 percent. Adjusted operating
margin was 37.7 percent in the quarter up from 34.9 percent in the same
period last year.
In addition to results presented in
See generally accepted accounting principles (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
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
of the strength
and performance of ongoing
, including our ability to
service debt and fund capital expenditures, acquisitions and operations.
These calculations are commonly used as a basis for investors, analysts
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
v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies
1. To be or go with as a companion.
Description of Tables
Table One –
v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates
1. To unite into one system or whole; combine:
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
MoneyGram International will host a conference call today at 9:00
a.m. ET, 8:00 a.m. CT, to discuss its first quarter 2011 results. Pamela
H. Patsley, chairman and chief executive officer, will host the call.
The conference call can be accessed by calling 1-877-591-4959 in the
U.S. and 1-719-325-4821 internationally. The
number is 5322393. Slides are available on MoneyGram’s website at
www.moneygram.com. A replay of the conference call will be available at
noon ET on April 28 through 11:59 p.m. ET on May 5, 2011. 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 5322393.
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
listed company with 233,000 global money transfer agent
locations in 191 countries and territories. For more information, visit
the Company’s website at www.moneygram.com.
Forward Looking Statements
The statements contained in this press release regarding MoneyGram
International, Inc. that are not historical and factual information
contained herein, particularly those statements
intr.v. per·tained, per·tain·ing, per·tains
1. To have reference; relate:
MoneyGram’s expectations, guidance or future operating results, are
forward-looking statements and are made under the
Private Securities Litigation Reform Act
of 1995. These
statements are only as of the date they are made, and unless legally
required, MoneyGram undertakes no obligation to update or revise
publicly any forward-looking statement. Words such as
“estimates,” “expects,” “projects,”
“plans” and other similar expressions or future or
verbs such as “will,” “should,” “could,”
and “would” are intended to identify such forward-looking
statements. These forward-looking statements are based on
management’s current expectations and are subject to uncertainty
and changes in
due to a number of factors, including, but
not limited to the following: (a) our substantial dividend and debt
service obligations and our
, agreement entered into voluntarily by two or more parties to do or refrain from doing certain acts. In the Bible and in theology the covenant is the agreement or engagement of God with man as revealed in the
requirements which could impact our
ability to obtain additional financing and to operate and grow our
business; (b) sustained illiquidity of global financial markets which
may adversely affect our liquidity and our agents’ liquidity, our
access to credit and capital and our agents’ access to credit and
capital and our earnings on our investment portfolio; (c) weak economic
conditions generally and in
/geo·graph·ic/ () in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map.
pertaining to geography.
areas or industries that are
important to our business which may cause a decline in our money
transfer growth rate and transaction volume and/or revenue; (d) a
material slow down or complete
/dis·rup·tion/ () a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process.
of international migration
patterns which could adversely affect our money transfer volume and
growth rate; (e) a loss of material retail agent relationships or a
reduction in transaction volume from them; (f) our ability to develop
and implement successful
for our services; (g)
stockholder lawsuits and other
or government investigations
of the Company or its agents which could result in material costs,
settlements, fines or penalties; (h) our ability to maintain sufficient
banking relationships; (i) our ability to attract and retain key
employees; (j) our ability to maintain capital sufficient to pursue our
growth strategy, fund key strategic initiatives and meet evolving
tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates
1. To control or direct according to rule, principle, or law.
requirements; (k) our ability to successfully and timely
implement new or enhanced technology and infrastructure, delivery
methods and product and service offerings and to invest in products,
services and infrastructure; (l) our ability to adequately protect our
brand and our other intellectual property rights and to avoid infringing
on third-party intellectual property rights; (m) competition from large
Smallest unit of a habitat that is occupied by an organism. A habitat niche is the physical space occupied by the organism; an ecological niche is the role the organism plays in the community of organisms found in the
competitors or new competitors that may enter the
markets in which we operate; (n) the impact of laws and regulatory
requirements including the recently enacted Dodd-Frank Wall Street
Reform and Consumer Protection Act and the regulations required to be
developed thereunder, and other industry practices in the U.S. and
abroad, including changes in laws, regulations or other industry
practices and standards that may increase our costs of doing business,
reduce the market for or value of our services or change our
relationships with our customers, investors and other
our offering of money transfer services through agents in regions that
or, in a limited number of cases, are subject
Office of Foreign Assets Control
restrictions which could
of U.S. law or regulations by us or our agents
which could subject us to fines and penalties and cause us reputational
harm; (p) a breakdown, catastrophic event, security breach, privacy
operation or other event impacting our systems or
processes or our vendors’, agents’ or financial institution
customers’ systems or processes, which could result in financial
loss, loss of customers, regulatory
and damage to our brand
and reputation; (q) our ability to scale our technology to match our
business and transactional growth; (r) our ability to manage our credit
exposure to retail agents and financial institution customers; (s) our
To moderate in force or intensity.
fraud risks from consumers, agents and other third
parties; (t) our ability to successfully manage risks associated with
running Company-owned retail locations and acquiring new businesses; (u)
our ability to successfully manage risks associated with our
international sales and operations including the potential for
political, economic or other
/in·sta·bil·i·ty/ () lack of steadiness or stability.
in countries that are important
to our business; (v) our compliance with the internal control provisions
of Section 404 of the
of 2002; (w) the outcome of
positions we take with respect to federal, state, local and
international taxation; (x) additional risk factors described in our
other filings with the Securities and Exchange Commission from time to