Transactions declined 3% year-over-year as a result of fewer low-margin transactions from the Middle East, partially offset by growth in the U.S., India and Germany. Retailer locations declined due the rationalization of sites in the U.S. with marginal volume.
The Money Transfer Segment
reports the following results for the third quarter 2013 compared with the same period of 2012:
- Revenues of $95.3 million, a 19% increase from $80.0 million (17% increase on a constant currency basis).
- Operating income of $7.5 million, a 21% increase from $6.2 million (21% increase on a constant currency basis).
- Adjusted EBITDA of $12.0 million, a 10% increase from $10.9 million (10% increase on a constant currency basis).
- Total transactions of 8.9 million, an 11% increase from 8.0 million.
- Network locations of approximately 207,000 as of September 30, 2013, a 22% increase from approximately 170,000.
Revenue, operating income and adjusted EBITDA growth was driven by an 11% increase in total transactions. Transactions increased as a result of sales efforts and continued expansion of the network, which grew 22% compared with the same quarter last year. Operating income and adjusted EBITDA growth was partially offset by costs incurred to launch digital products.
Money transfers grew 17% in the quarter, with increases across all send markets. U.S.-initiated transfers increased 17% year-over-year, including a 14% increase in transfers to Mexico and a 19% increase to non-Mexico locations. Non-U.S. transfers grew 18%.
Corporate and Other
reports $8.9 million of expense for the third quarter 2013 compared with $6.6 million for the third quarter 2012. The increase in corporate expense is primarily attributable to short- and long-term incentive compensation expense related to improved Company performance and one-time prior year related contingencies.
Balance Sheet and Financial Position
Unrestricted cash on hand was $244.5 million as of September 30, 2013, compared to $189.9 million as of June 30, 2013. Cash increased primarily as a result of cash flows generated from operations and working capital changes related to the timing of settlements within our epay and money transfer businesses, partially offset by debt payments. Total indebtedness was $250.1 million as of September 30, 2013, compared to $295.5 million as of June 30, 2013.