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MoneyGram International Reports Third Quarter 2012 Financial Results

Stocks in this article: MGI

MoneyGram International, Inc. (NYSE:MGI), a leading global payment services company, reported financial results for the third quarter, which ended September 30, 2012. Total revenue of $338.6 million increased 5 percent compared to $321.9 million in the third quarter of 2011.

  • Money transfer fee and other revenue increased 8 percent over the prior year, and increased 11 percent on a constant currency basis.
  • Money transfer transaction volume increased 13 percent over the prior year, led by:
    • 18 percent growth in sends originated outside of the U.S.
    • 13 percent growth in U.S. outbound on the strength of U.S.-to-Mexico sends, which grew 19 percent,
    • 9 percent growth in U.S.-to-U.S. sends.
  • Global agent locations increased 15 percent to 293,000.
  • The bill payment business showed 5 percent transaction growth driven by new channel expansion, excluding the prior year divestiture.
  • The Company reported net loss of ($54.8) million and negative EBITDA of ($8.2) million. Both net income and EBITDA were impacted by:
    • $70.0 million incremental accrual in connection with the settlement with the U.S. Attorney’s Office for the Middle District of Pennsylvania (“MDPA”) investigation
    • $3.9 million of restructuring and reorganization costs
    • $2.4 million of stock-based compensation
    • $2.2 million of legal expenses related to the MDPA investigation and the settled shareholder lawsuit.
  • Adjusted EBITDA for the third quarter decreased 2 percent to $70.4 million from $72.0 million in the prior year. In the quarter, adjusted EBITDA margin was 20.8 percent, down from 22.4 percent compared to the same period last year. Adjusted EBITDA was negatively impacted by $4.9 million of increased marketing spend, $2.4 million related to a lower euro valuation against the U.S. dollar compared to the prior year, and $1.0 million of lower investment revenue.
  • Diluted loss per common share was ($0.77), including a negative $1.00 per share impact due to the legal accrual and expenses, a negative $0.03 per share impact from restructuring and reorganization costs, and a negative $0.02 per share impact from stock-based compensation.
  • For the nine months ended September 30, 2012, total revenue was $986.8 million, an increase of 7 percent year-over-year. Adjusted EBITDA increased 5 percent to $207.2 million, which includes a negative impact of $5.2 million related to a lower euro valuation against the U.S. dollar compared to the prior year.

“Consumers continue to recognize MoneyGram’s compelling products and valuable services as evidenced by our third-quarter results, which included our sixth consecutive quarter of double-digit constant currency money transfer growth. We are focused on delivering strong operating results and building on the positive momentum in our core money transfer and bill payment businesses,” said Pamela H. Patsley, chairman and chief executive officer. “At the same time, we have worked diligently to address the Middle District of Pennsylvania investigation in a way that is best for all stakeholders. This settlement is a significant step forward for MoneyGram in resolving our legacy issues. We remain fully committed to employing the highest standards of compliance at MoneyGram and continue to focus our efforts on building a stronger company.”

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