MoneyGram International Reports Second Quarter 2021 Results
DALLAS, July 29, 2021 /PRNewswire/ -- MoneyGram International, Inc. (NASDAQ:MGI) today reported financial results for its second quarter ended June 30, 2021.
Second Quarter 2021 Business Highlights
"We delivered strong top and bottom-line financial performance in the second quarter on revenue growth of 18% driven by a record number of online customers and transactions. During the quarter, we exited our DPA and significantly reduced our cost of capital through the combination of our efficient equity offering and successful execution of our debt refinancing," said Alex Holmes MoneyGram Chairman and CEO. "Our newly improved capital structure, coupled with our second quarter results, represent a significant milestone on our transformational journey. As we enter a new era of growth and improved cash flow, the underlying strength in our business and the execution of our customer-centric strategy highlight the substantial opportunity ahead. I couldn't be more pleased with our accomplishments in the quarter and I'm extremely excited about the future of the Company."
Money Transfer highlights for the quarter include the following:
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Second Quarter 2021 Financial Results, Year-Over-Year
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Balance Sheet and Liquidity
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Third Quarter 2021 Outlook
The Company is providing the following outlook for the quarter ending September 30, 2021:
The Company expects business conditions to remain consistent with the second quarter which takes into account normal seasonality, ongoing digital growth, the potential impact from a full quarter of Walmart marketplace expansion and the uncertainties concerning COVID. Considering these factors the Company anticipates total revenue to be in the range of $323 to $333 million.
Consistent with the revenue outlook, the Company anticipates Adjusted EBITDA to be in the range of $52 to $57 million. This range considers the revenue trends described above and also considers no benefit from Ripple incentive fees and no benefit from the one-time FX gain reported last year, which were $8.9 million and $6.3 million respectively in the third quarter of 2020.
Conference Call
MoneyGram International will host a conference call on July 30, 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.: | 1-800-458-4121 |
International: | 1-929-477-0324 |
Webcast: | public.viavid.com/index.php?id=145821 |
Replay: | U.S 1-844-512-2921 or International 1-412-317-6671 |
Replay ID: | 3760279 |
Replay is available through Friday, August 6, 2021, 11:59 p.m. ET | |
About MoneyGram International, Inc.
MoneyGram is leading the evolution of digital P2P payments. With a purpose-driven strategy to mobilize the movement of money, a strong culture of fintech innovation, and leading customer-centric capabilities, MoneyGram has grown to serve nearly 150 million people across the globe over the last five years.
The Company leverages its modern, mobile, and API-driven platform and collaborates with the world's leading brands to serve consumers through MoneyGram Online (MGO), its direct-to-consumer digital business, its global retail network and its emerging embedded finance business for enterprise customers, MoneyGram as a Service.
For more information, please visit ir.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 and speak only as of the date they are made. Words such as "may," "might," "will," "could," "should," "would," "expect," "plan," "project," "intend," "anticipate," "believe," "estimate," "predict," "potential," "pursuant," "target," "forecast," "outlook," "continue," "currently," 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 and specific factors expected to impact the Company's results of operations. Forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict and 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:
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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 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 gross profit 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 (loss) 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 | - | Reconciliation of Certain Non-GAAP Measures to Relevant GAAP Measures - EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Free Cash Flow |
Table Four | - | Reconciliation of Certain Non-GAAP Measures to Relevant GAAP Measures - Adjusted Net Income and Adjusted Diluted EPS |
Table Five | - | Condensed Consolidated Balance Sheets |
Table Six | - | Condensed Consolidated Statements of Cash Flows |
CONTACTS | ||
Investor Relations: | Media Relations: | |
214-979-1400 | Stephen Reiff | |
TABLE ONE | ||||||||||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
(Amounts in millions, except percentages and | Three Months Ended | 2021 vs | Six Months Ended | 2021 vs | ||||||||||||||||||||
2021 | 2020 | 2020 | 2021 | 2020 | 2020 | |||||||||||||||||||
REVENUE | ||||||||||||||||||||||||
Fee and other revenue | $ | 327.3 | $ | 275.5 | $ | 51.8 | $ | 635.4 | $ | 556.3 | $ | 79.1 | ||||||||||||
Investment revenue | 2.0 | 4.3 | (2.3) | 4.0 | 14.4 | (10.4) | ||||||||||||||||||
Total revenue | 329.3 | 279.8 | 49.5 | 639.4 | 570.7 | 68.7 | ||||||||||||||||||
Total revenue change, as reported | 18 | % | (14) | % | 12 | % | (11) | % | ||||||||||||||||
Total revenue change, constant currency | 13 | % | (13) | % | 8 | % | (10) | % | ||||||||||||||||
COST OF REVENUE | ||||||||||||||||||||||||
Commissions and other fee expense | 161.3 | 141.4 | 19.9 | 311.2 | 284.6 | 26.6 | ||||||||||||||||||
Investment commissions expense | 0.2 | 0.2 | — | 0.4 | 3.2 | (2.8) | ||||||||||||||||||
Direct transaction expense | 16.2 | 11.3 | 4.9 | 31.4 | 19.5 | 11.9 | ||||||||||||||||||
Total cost of revenue | 177.7 | 152.9 | 24.8 | 343.0 | 307.3 | 35.7 | ||||||||||||||||||
GROSS PROFIT | 151.6 | 126.9 | 24.7 | 296.4 | 263.4 | 33.0 | ||||||||||||||||||
OPERATING EXPENSES | ||||||||||||||||||||||||
Compensation and benefits | 59.0 | 53.2 | 5.8 | 121.2 | 106.6 | 14.6 | ||||||||||||||||||
Transaction and operations support (1) | 40.3 | 21.3 | 19.0 | 83.7 | 59.3 | 24.4 | ||||||||||||||||||
Occupancy, equipment and supplies | 16.3 | 14.2 | 2.1 | 31.8 | 29.1 | 2.7 | ||||||||||||||||||
Depreciation and amortization | 14.1 | 16.2 | (2.1) | 29.4 | 33.3 | (3.9) | ||||||||||||||||||
Total operating expenses | 129.7 | 104.9 | 24.8 | 266.1 | 228.3 | 37.8 | ||||||||||||||||||
OPERATING INCOME | 21.9 | 22.0 | (0.1) | 30.3 | 35.1 | (4.8) | ||||||||||||||||||
Other expenses | ||||||||||||||||||||||||
Interest expense | 22.5 | 22.7 | (0.2) | 44.8 | 46.5 | (1.7) | ||||||||||||||||||
Loss on early extinguishment of debt | 10.3 | — | 10.3 | 10.3 | — | 10.3 | ||||||||||||||||||
Other non-operating expense | 0.8 | 1.2 | (0.4) | 1.8 | 2.3 | (0.5) | ||||||||||||||||||
Total other expenses | 33.6 | 23.9 | 9.7 | 56.9 | 48.8 | 8.1 | ||||||||||||||||||
Loss before income taxes | (11.7) | (1.9) | (9.8) | (26.6) | (13.7) | (12.9) | ||||||||||||||||||
Income tax (benefit) expense | (0.6) | 2.7 | (3.3) | (0.1) | 12.4 | (12.5) | ||||||||||||||||||
NET LOSS | $ | (11.1) | $ | (4.6) | $ | (6.5) | $ | (26.5) | $ | (26.1) | $ | (0.4) | ||||||||||||
Basic and diluted loss per common share | $ | (0.13) | $ | (0.06) | $ | (0.07) | $ | (0.32) | $ | (0.34) | $ | 0.02 | ||||||||||||
Basic and diluted weighted-average | 87.2 | 77.8 | 9.4 | 83.4 | 77.6 | 5.8 | ||||||||||||||||||
(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. | ||||||||||||||||||||||||
TABLE TWO | ||||||||||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||||||||||
SEGMENT RESULTS | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Global Funds Transfer | ||||||||||||||||||||||||
(Amounts in millions, except | Three Months Ended | 2021 vs | Six Months Ended | 2021 vs | ||||||||||||||||||||
2021 | 2020 | 2020 | 2021 | 2020 | 2020 | |||||||||||||||||||
Money transfer revenue | $ | 304.9 | $ | 253.1 | $ | 51.8 | $ | 590.3 | $ | 509.0 | $ | 81.3 | ||||||||||||
Bill payment revenue | 10.4 | 10.8 | (0.4) | 21.2 | 24.2 | (3.0) | ||||||||||||||||||
Total revenue | $ | 315.3 | $ | 263.9 | $ | 51.4 | $ | 611.5 | $ | 533.2 | $ | 78.3 | ||||||||||||
Cost of revenue | $ | 177.5 | $ | 152.7 | $ | 24.8 | $ | 342.6 | $ | 304.0 | $ | 38.6 | ||||||||||||
Gross profit | $ | 137.8 | $ | 111.2 | $ | 26.6 | $ | 268.9 | $ | 229.2 | $ | 39.7 | ||||||||||||
Money transfer revenue change, as | 20 | % | (10) | % | 16 | % | 8 | % | ||||||||||||||||
Money transfer revenue change, | 16 | % | (9) | % | 12 | % | (7) | % | ||||||||||||||||
Financial Paper Products | ||||||||||||||||||||||||
(Amounts in millions, except | Three Months Ended | 2021 vs | Six Months Ended | 2021 vs | ||||||||||||||||||||
2021 | 2020 | 2020 | 2021 | 2020 | 2020 | |||||||||||||||||||
Money order revenue | $ | 10.6 | $ | 10.8 | $ | (0.2) | $ | 21.0 | $ | 22.9 | $ | (1.9) | ||||||||||||
Official check revenue | 3.4 | 5.1 | (1.7) | 6.9 | 14.6 | (7.7) | ||||||||||||||||||
Total revenue | $ | 14.0 | $ | 15.9 | $ | (1.9) | $ | 27.9 | $ | 37.5 | $ | (9.6) | ||||||||||||
Investment commissions expense | $ | 0.2 | $ | 0.2 | $ | — | $ | 0.4 | $ | 3.3 | $ | (2.9) | ||||||||||||
Gross profit (1) | $ | 13.8 | $ | 15.7 | $ | (1.9) | $ | 27.5 | $ | 34.2 | $ | (6.7) | ||||||||||||
(1) In periods of extremely low interest rates, it is possible for commissions to be close to zero, resulting in abnormally high gross margin. | ||||||||||||||||||||||||
TABLE THREE | ||||||||||||||||||||||||
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 | 2021 vs | Six Months Ended | 2021 vs | ||||||||||||||||||||
2021 | 2020 | 2020 | 2021 | 2020 | 2020 | |||||||||||||||||||
Loss before income taxes | $ | (11.7) | $ | (1.9) | $ | (9.8) | $ | (26.6) | $ | (13.7) | $ | (12.9) | ||||||||||||
Interest expense | 22.5 | 22.7 | (0.2) | 44.8 | 46.5 | (1.7) | ||||||||||||||||||
Depreciation and amortization | 14.1 | 16.2 | (2.1) | 29.4 | 33.3 | (3.9) | ||||||||||||||||||
Signing bonus amortization | 14.7 | 12.6 | 2.1 | 29.0 | 25.1 | 3.9 | ||||||||||||||||||
EBITDA | 39.6 | 49.6 | (10.0) | 76.6 | 91.2 | (14.6) | ||||||||||||||||||
Significant items impacting EBITDA: | ||||||||||||||||||||||||
Loss on early extinguishment of debt | 10.3 | — | 10.3 | 10.3 | — | 10.3 | ||||||||||||||||||
Restructuring and reorganization costs | 2.2 | 0.7 | 1.5 | 8.1 | 1.2 | 6.9 | ||||||||||||||||||
Stock-based, contingent and incentive | 1.5 | 1.6 | (0.1) | 3.3 | 3.6 | (0.3) | ||||||||||||||||||
Direct monitor costs | 1.1 | 3.1 | (2.0) | 4.9 | 7.9 | (3.0) | ||||||||||||||||||
Compliance enhancement program | 0.2 | 1.2 | (1.0) | 1.3 | 3.2 | (1.9) | ||||||||||||||||||
Legal and contingent matters | (0.1) | 0.2 | (0.3) | — | 0.6 | (0.6) | ||||||||||||||||||
Severance and related costs | — | — | — | 0.2 | 0.2 | — | ||||||||||||||||||
Adjusted EBITDA | $ | 54.8 | $ | 56.4 | $ | (1.6) | $ | 104.7 | $ | 107.9 | $ | (3.2) | ||||||||||||
Adjusted EBITDA margin (1) | 16.6 | % | 20.2 | % | (3.6) | % | 16.4 | % | 18.9 | % | (2.5) | % | ||||||||||||
Adjusted EBITDA change, as reported | (3) | % | (3) | % | ||||||||||||||||||||
Adjusted EBITDA change, constant | (12) | % | (11) | % | ||||||||||||||||||||
Adjusted EBITDA | $ | 54.8 | $ | 56.4 | $ | (1.6) | $ | 104.7 | $ | 107.9 | $ | (3.2) | ||||||||||||
Cash payments for interest | (27.1) | (16.8) | (10.3) | (39.0) | (34.4) | (4.6) | ||||||||||||||||||
Cash payments for taxes, net of | (1.5) | (0.4) | (1.1) | 1.2 | (2.5) | 3.7 | ||||||||||||||||||
Cash payments for capital expenditures | (10.0) | (9.8) | (0.2) | (21.2) | (19.9) | (1.3) | ||||||||||||||||||
Cash payments for agent signing | (9.7) | (4.7) | (5.0) | (22.7) | (29.7) | 7.0 | ||||||||||||||||||
Adjusted Free Cash Flow | $ | 6.5 | $ | 24.7 | $ | (18.2) | $ | 23.0 | $ | 21.4 | $ | 1.6 | ||||||||||||
(1) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenue. | ||||||||||||||||||||||||
TABLE FOUR | ||||||||||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||||||||||
RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO RELEVANT GAAP MEASURES | ||||||||||||||||
ADJUSTED NET INCOME AND ADJUSTED DILUTED EPS | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
(Amounts in millions, except per share data) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Net loss | $ | (11.1) | $ | (4.6) | $ | (26.5) | $ | (26.1) | ||||||||
Total adjustments (1) | 15.2 | 6.8 | 28.1 | 16.7 | ||||||||||||
Tax impacts of adjustments (2) | (3.5) | (1.3) | (6.5) | (3.6) | ||||||||||||
Valuation allowance (3) | — | — | 1.0 | 10.1 | ||||||||||||
Adjusted net income (loss) | $ | 0.6 | $ | 0.9 | $ | (3.9) | $ | (2.9) | ||||||||
Diluted loss per common share | $ | (0.13) | $ | (0.06) | $ | (0.32) | $ | (0.34) | ||||||||
Diluted adjustments per common share | 0.14 | 0.07 | 0.27 | 0.30 | ||||||||||||
Diluted adjusted earnings (loss) per common share | $ | 0.01 | $ | 0.01 | $ | (0.05) | $ | (0.04) | ||||||||
Diluted weighted-average outstanding common shares and equivalents | 87.2 | 77.8 | 83.4 | 77.6 | ||||||||||||
(1) See summary of adjustments in Table Three - 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) Valuation allowance recorded for deferred tax assets existing at the beginning of the year. | ||||||||||||||||
TABLE FIVE | ||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited) | ||||||||
(Amounts in millions, except share data) | June 30, 2021 | December 31, 2020 | ||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 117.0 | $ | 196.1 | ||||
Settlement assets | 3,607.2 | 3,702.9 | ||||||
Property and equipment, net | 138.9 | 148.1 | ||||||
Goodwill | 442.2 | 442.2 | ||||||
Right-of-use assets | 54.3 | 55.1 | ||||||
Other assets | 113.4 | 129.7 | ||||||
Total assets | $ | 4,473.0 | $ | 4,674.1 | ||||
LIABILITIES | ||||||||
Payment service obligations | $ | 3,607.2 | $ | 3,702.9 | ||||
Debt, net | 766.1 | 857.8 | ||||||
Pension and other postretirement benefits | 74.2 | 74.5 | ||||||
Lease liabilities | 58.3 | 59.1 | ||||||
Accounts payable and other liabilities | 135.4 | 216.8 | ||||||
Total liabilities | 4,641.2 | 4,911.1 | ||||||
STOCKHOLDERS' DEFICIT | ||||||||
Common stock, $0.01 par value, 162,500,000 shares authorized, | 0.9 | 0.7 | ||||||
Additional paid-in capital | 1,396.7 | 1,296.0 | ||||||
Retained loss | (1,501.9) | (1,475.3) | ||||||
Accumulated other comprehensive loss | (60.2) | (58.4) | ||||||
Treasury stock: 540,225 and 13,231 shares at June 30, 2021 and | (3.7) | — | ||||||
Total stockholders' deficit | (168.2) | (237.0) | ||||||
Total liabilities and stockholders' deficit | $ | 4,473.0 | $ | 4,674.1 | ||||
TABLE SIX | ||||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
Six Months Ended June 30, | ||||||||
(Amounts in millions) | 2021 | 2020 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (26.5) | $ | (26.1) | ||||
Adjustments to reconcile net loss to net cash (used in) provided by operating | (18.2) | 33.7 | ||||||
Net cash (used in) provided by operating activities | (44.7) | 7.6 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Payments for capital expenditures | (21.2) | (19.9) | ||||||
Net cash used in investing activities | (21.2) | (19.9) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Principal payments on debt | (103.2) | (3.2) | ||||||
Prepayment call premium | (4.0) | — | ||||||
Proceeds from revolving credit facility | — | 23.0 | ||||||
Payments on revolving credit facility | — | (23.0) | ||||||
Net proceeds from stock issuance | 97.6 | — | ||||||
Payments to tax authorities for stock-based compensation | (3.6) | (0.7) | ||||||
Net cash used in financing activities | (13.2) | (3.9) | ||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | (79.1) | (16.2) | ||||||
CASH AND CASH EQUIVALENTS—Beginning of year | 196.1 | 146.8 | ||||||
CASH AND CASH EQUIVALENTS—End of period | $ | 117.0 | $ | 130.6 | ||||
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SOURCE MoneyGram