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MoneyGram International Reports Fourth Quarter And Fiscal 2013 Financial Results

MoneyGram (NASDAQ:MGI), a leading global money transfer and payment services company, today reported financial results for its fourth quarter and fiscal year ended December 31, 2013.

Full year highlights:

  • Total revenue was $1,474.4 million, an increase of 10 percent on a reported and constant currency basis.
  • Money transfer revenue increased 12 percent over the prior year to $1,287.8 million, both on a reported and constant currency basis.
  • Money transfer transaction volume increased 13 percent over the prior year, led by:
    • 18 percent growth in U.S. outbound sends
    • 13 percent growth in sends originated outside of the U.S.
    • 7 percent growth in U.S.-to-U.S. sends.
  • Self-service money transfer revenue grew 30 percent, and represented 6 percent of money transfer revenue.
  • MoneyGram Online money transfer and bill payment transaction volume increased 44 percent and revenue was up 24 percent over the prior year.
  • The Company reported EBITDA of $226.1 million and net income of $52.4 million. Both EBITDA and net income were primarily impacted by:
    • $45.3 million of debt extinguishment costs related to the 2013 refinancing
    • $14.1 million of stock-based and contingent performance compensation expense
    • $4.7 million of reorganization and restructuring and severance related costs
    • $2.8 million of expenses related to the compliance enhancement program
    • $2.5 million of legal expenses related to certain ongoing matters.
  • Adjusted EBITDA for the year was $295.5 million, an increase of 6 percent on a reported basis and 5 percent in constant currency. Adjusted EBITDA margin was 20 percent, down from 20.8 percent in the prior year. Adjusted EBITDA was negatively impacted 40 basis points by the direct monitor costs. Increased commission expense and higher compliance related investments also negatively impacted margins.
  • Diluted earnings per common share was $0.73, including a negative $0.40 per share impact due to the aforementioned debt extinguishment costs, a negative $0.12 per share impact from stock-based and contingent performance compensation, a negative $0.04 per share impact from reorganization and restructuring and severance related costs, a negative $0.02 per share impact from the compliance enhancement program and $0.02 per share impact for legal expenses related to certain ongoing matters.
  • Adjusted free cash flow was $149.8 million, up 29 percent from the prior year period driven by strong growth in revenue and EBITDA and lower debt interest payments.

Fourth quarter highlights:

  • Total revenue was $385.8 million, an increase over the prior year of 9 percent on a reported basis and 8 percent in constant currency.
  • Money transfer revenue increased to $340.0 million, representing growth of 11 percent over the prior year on a reported basis and 10 percent in constant currency.
  • Money transfer transaction volume increased 11 percent over the prior year, led by:
    • 18 percent growth in U.S. outbound sends
    • 8 percent growth in sends originated outside of the U.S.
    • 7 percent growth in U.S.-to-U.S. sends.
  • Global agent locations increased 8 percent over the prior year to 336,000.
  • Self-service money transfer revenue grew 38 percent in the quarter and represented 7 percent of money transfer revenue.
  • MoneyGram Online money transfer and bill payment transaction volume increased 32 percent and revenue was up 27 percent over the prior year.
  • The Company reported EBITDA of $69.2 million and net income of $23.4 million, which was impacted by:
    • $4.0 million of stock-based and contingent performance compensation
    • $2.8 million of expenses related to the compliance enhancement program
    • $0.4 million of legal expenses related to certain ongoing matters.
  • Adjusted EBITDA for the fourth quarter was $76.4 million, up 7 percent on a reported basis and 5 percent on a constant currency basis. In the quarter, adjusted EBITDA margin was 19.8 percent, down from 20.2 percent in the fourth quarter of the prior year. Direct monitor costs negatively impacted the margin by 65 basis points.
  • Diluted earnings per common share was $0.33, including a negative $0.04 per share impact from stock-based and contingent performance compensation and $0.02 related to the compliance enhancement program.
  • Adjusted free cash flow for the quarter was $21.7 million, down 10 percent from $24.2 million in the prior year quarter.

"2013 was a great year for MoneyGram. We exceeded the outlook we set at the beginning of the year and achieved double-digit money transfer transaction and constant currency revenue growth. We celebrated a key network milestone as we added our 200th country, and we completed four acquisitions accelerating our self-service channel growth," said Pamela H. Patsley, MoneyGram chairman and chief executive officer. "Our top-line money transfer growth along with interest savings related to our debt refinancing led to outstanding cash generation. Agents and consumers rely on MoneyGram for innovative solutions, and we are investing to ensure we remain the brand of choice in the large and growing remittance industry."

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