EX-99.1 2 mgi-2019930ex991.htm EXHIBIT 99.1 Exhibit

                                a2017mglogoa20.jpg
MoneyGram International Reports Third Quarter 2019 Financial Results
DALLAS (October 31, 2019) -- MoneyGram International, Inc. (NASDAQ: MGI) today reported financial results for its third quarter ending September 30, 2019.
Business Update
•
Business transformation continues to accelerate, demonstrated by both the expansion of digital capabilities to over 60 countries, including 25 countries with MoneyGram Online capabilities. Total digital transactions represented 20% of money transfer transactions.
•
Outside the US, money transfer transactions improved to a 7% year-over-year growth rate while returning to positive revenue growth. 60% of our total money transfer revenue now comes from business generated outside the United States.
•
First money transfer company to launch Visa Direct.
•
First money transfer company to utilize blockchain capabilities at scale through our Ripple strategic partnership.
“Our third quarter results reflect the continued transformation of our business as we increasingly focus on customer experience improvements, cross-border digital growth and industry-leading innovation through our strategic partnership with Ripple,” said Alex Holmes Chairman and CEO. He added: “While the US market, which continues to be our primary challenge, showed signs of improvement on a sequential basis, we are very pleased that our non-US business achieved year-over-year growth for the quarter.”
Third Quarter 2019 Financial Results
•
Total revenue was $324.6 million and $347.2 million for the three months ended September 30, 2019 and 2018, respectively.
◦
Money transfer revenue was $284.9 million for the quarter compared to $304.2 million for the three months ended September 30, 2018.
◦
Investment revenue was $13.4 million for the quarter.
•
Net loss was $7.7 million compared to $20.9 million for the third quarter of 2018. EBITDA was $44.6 million, an increase of $24.2 million as compared to the year-ago period. The prior year period included a $30.0 million accrual related to the resolution of the deferred prosecution agreement (the "DPA").
•
Adjusted EBITDA was $51.7 million and $59.5 million for the three months ended September 30, 2019 and 2018, respectively. Adjusted EBITDA margin was 15.9% for the three months ended September 30, 2019.
•
For the quarter, diluted loss per share was $0.10 and adjusted diluted loss per share was $0.03.
•
Adjusted Free Cash Flow was $9.3 million for the quarter.

1

Balance Sheet Highlights and Capital Structure Highlights
The Company ended the third quarter of 2019 with a cash and cash equivalents balance of $119.1 million compared to $145.5 million at the end of 2018. Third quarter interest expense was $24.8 million and capital expenditures were $13.3 million.
Fourth Quarter 2019 Outlook
The Company is revising its guidance to reflect the forecast for its fourth quarter results. For the fourth quarter of 2019, the Company anticipates total revenue of approximately $330 million, and adjusted EBITDA of approximately $50 million.


2


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. Words such as “may,” “will,” “could,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “pursuant,” “target,” “continue,” 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, specific factors expected to impact the company’s results of operations, and the expected restructuring and reorganization program results. Forward-looking statements are subject to numerous risks and uncertainties, 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: our ability to compete effectively; our ability to maintain key agent or biller relationships, or a reduction in business or transaction volume from these relationships, including our largest agent, Walmart, whether through the introduction by Walmart of additional competing "white label" branded money transfer products or otherwise; our ability to manage fraud risks from consumers or agents; the ability of us and our agents to comply with U.S. and international laws and regulations; litigation or investigations involving us or our agents; uncertainties relating to compliance with the DPA entered into with the U.S. federal government and the effect of the DPA on our reputation and business; regulations addressing consumer privacy, data use and security; our ability to successfully develop and timely introduce new and enhanced products and services and our investments in new products, services or infrastructure changes; our ability to manage risks associated with our international sales and operations; our offering of money transfer services through agents in regions that are politically volatile; changes in tax laws or an unfavorable outcome with respect to the audit of our tax returns or tax positions, or a failure by us to establish adequate reserves for tax events; our substantial debt service obligations, significant debt covenant requirements and credit ratings; major bank failure or sustained financial market illiquidity, or illiquidity at our clearing, cash management and custodial financial institutions; the ability of us and our agents to maintain adequate banking relationships; a security or privacy breach in systems, networks or databases on which we rely; disruptions to our computer network systems and data centers; weakness in economic conditions, in both the U.S. and global markets; a significant change, material slow down or complete disruption of international migration patterns; the financial health of certain European countries or the secession of a country from the European Union; our ability to manage credit risks from our agents and official check financial institution customers; our ability to adequately protect our brand and intellectual property rights and to avoid infringing on the rights of others; our ability to attract and retain key employees; our ability to manage risks related to the operation of retail locations and the acquisition or start-up of businesses; any restructuring actions and cost reduction initiatives that we undertake may not deliver the expected results and these actions may adversely affect our business; our ability to maintain effective internal controls; our capital structure and the special voting rights provided to designees of Thomas H. Lee Partners, L.P. on our Board of Directors; and uncertainties described in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of MoneyGram's public reports filed with the Securities and Exchange Commission (the “SEC”), including MoneyGram's annual report on Form 10-K for the year ended December 31, 2018 and MoneyGram's quarterly reports on Form 10-Q.

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 http://www.sec.gov. MoneyGram undertakes no obligation to publicly update or revise any forward-looking statement.

###



3


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), adjusted diluted earnings per share and adjusted net income. In addition, we present adjusted operating income and adjusted operating margin 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, adjusted diluted earnings per share and adjusted net income 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
-
Segment Reconciliations
Table Four
-
Reconciliation of Certain Non-GAAP Measures to Relevant GAAP Measures - EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Free Cash Flow
Table Five
-
Reconciliation of Certain Non-GAAP Measures to Relevant GAAP Measures - Adjusted Net Income and Adjusted Diluted EPS
Table Six
-
Condensed Consolidated Balance Sheets
Table Seven
-
Condensed Consolidated Statements of Cash Flows

4


Conference Call
MoneyGram International will host a conference call on November 1, 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.:     1-888-220-8474
International: 1-646-828-8193
Webcast:    http://public.viavid.com/index.php?id=136679
Replay:    1-844-512-2921 or 1-412-317-6671
Replay ID:     5151159
Replay is available through November 8, 2019, 11:59pm ET
About MoneyGram International
MoneyGram is a global leader in omnichannel money transfer and payment services that enables friends and family to safely, conveniently, and affordably send money for life’s daily needs in over 200 countries and territories. The innovative MoneyGram platform leverages its leading digital and physical network, global financial settlement engine, cloud-based infrastructure with integrated APIs, and its unparalleled compliance program that leads the industry in protecting consumers. More information about MoneyGram International, Inc. is available at moneygram.com.

CONTACT
Investor Relations:
214-979-1400
InvestorRelations@moneygram.com


Media Relations:
Noelle Whittington
214-979-1402
media@moneygram.com


5


TABLE ONE
MONEYGRAM INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
(Amounts in millions, except percentages and per share data)
 
Three Months Ended September 30,
 
2019 vs
 
Nine Months Ended September 30,
 
2019 vs
 
2019
 
2018
 
2018
 
2019
 
2018
 
2018
 
 
 
 
 
 
 
 
 
 
 
 
 
REVENUE
 
 
 
 
 
 
 
 
 
 
 
 
Fee and other revenue
 
$
311.2

 
$
333.7

 
$
(22.5
)
 
$
921.5

 
$
1,066.3

 
$
(144.8
)
Investment revenue
 
13.4

 
13.5

 
(0.1
)
 
42.3

 
35.5

 
6.8

Total revenue
 
324.6

 
347.2

 
(22.6
)
 
963.8

 
1,101.8

 
(138.0
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue change, as reported
 
(7
)%
 
(13
)%
 
 
 
(13
)%
 
(8
)%
 
 
Total revenue change, constant currency
 
(5
)%
 
(12
)%
 
 
 
(11
)%
 
(9
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
 
 
 
 
Total commissions and direct transaction expenses
 
165.8

 
179.7

 
(13.9
)
 
494.5

 
555.6

 
(61.1
)
Compensation and benefits
 
50.5

 
56.7

 
(6.2
)
 
163.4

 
201.1

 
(37.7
)
Transaction and operations support (1)
 
58.2

 
88.4

 
(30.2
)
 
164.8

 
235.2

 
(70.4
)
Occupancy, equipment and supplies
 
15.5

 
13.8

 
1.7

 
46.4

 
47.4

 
(1.0
)
Depreciation and amortization
 
18.2

 
19.5

 
(1.3
)
 
55.4

 
57.7

 
(2.3
)
Total operating expenses
 
308.2

 
358.1

 
(49.9
)
 
924.5

 
1,097.0

 
(172.5
)
OPERATING INCOME (LOSS)
 
16.4

 
(10.9
)
 
27.3

 
39.3

 
4.8

 
34.5

Other expenses
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
24.8

 
13.8

 
11.0

 
52.7

 
39.8

 
12.9

Other non-operating expense (income) (2)
 
1.2

 
1.5

 
(0.3
)
 
38.1

 
(25.6
)
 
63.7

Total other expenses
 
26.0

 
15.3

 
10.7

 
90.8

 
14.2

 
76.6

Loss before income taxes
 
(9.6
)
 
(26.2
)
 
16.6

 
(51.5
)
 
(9.4
)
 
(42.1
)
Income tax (benefit) expense
 
(1.9
)
 
(5.3
)
 
3.4

 
(3.1
)
 
2.1

 
(5.2
)
NET LOSS
 
$
(7.7
)
 
$
(20.9
)
 
$
13.2

 
$
(48.4
)
 
$
(11.5
)
 
$
(36.9
)
 
 
 
 
 
 
 
 
 
 
 
 
 
LOSS PER COMMON SHARE
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
(0.10
)
 
$
(0.32
)
 
$
0.22

 
$
(0.70
)
 
$
(0.18
)
 
$
(0.52
)
Diluted
 
$
(0.10
)
 
$
(0.32
)
 
$
0.22

 
$
(0.70
)
 
$
(0.18
)
 
$
(0.52
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average outstanding common shares and equivalents used in computing loss per share
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
76.4

 
64.5

 
11.9

 
69.2

 
64.2

 
5.0

Diluted
 
76.4

 
64.5

 
11.9

 
69.2

 
64.2

 
5.0

 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Three and nine months ended September 30, 2018 include an accrual of $30.0 million and $40.0 million, respectively, related to the resolution of the DPA matter.
(2) Nine months ended September 30, 2019 includes non-cash pension settlement charge of $31.3 million and debt extinguishment cost of $2.4 million.

6


TABLE TWO
MONEYGRAM INTERNATIONAL, INC.
SEGMENT RESULTS
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Global Funds Transfer
 
 
 
 
 
 
 
 
 
 
 
 
(Amounts in millions, except percentages)
 
Three Months Ended September 30,
 
2019 vs
 
Nine Months Ended September 30,
 
2019 vs
 
2019
 
2018
 
2018
 
2019
 
2018
 
2018
Money transfer revenue
 
$
284.9

 
$
304.2

 
$
(19.3
)
 
$
840.4

 
$
970.5

 
$
(130.1
)
Bill payment revenue
 
14.7

 
17.4

 
(2.7
)
 
45.6

 
57.7

 
(12.1
)
Total revenue
 
$
299.6

 
$
321.6

 
$
(22.0
)
 
$
886.0

 
$
1,028.2

 
$
(142.2
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Commissions and direct transaction expenses
 
$
159.3

 
$
174.3

 
$
(15.0
)
 
$
475.0

 
$
541.5

 
$
(66.5
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income (loss)
 
$
9.8

 
$
(19.7
)
 
$
29.5

 
$
16.5

 
$
(12.6
)
 
$
29.1

 
 
 
 
 
 
 
 
 
 
 
 
 
Operating margin
 
3.3
 %
 
(6.1
)%
 
 
 
1.9
 %
 
(1.2
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money transfer revenue change, as reported
 
(6
)%
 
(15
)%
 
 
 
(13
)%
 
(8
)%
 
 
Money transfer revenue change, constant currency
 
(5
)%
 
(14
)%
 
 
 
(11
)%
 
(10
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Paper Products
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Amounts in millions, except percentages)
 
Three Months Ended September 30,
 
2019 vs
 
Nine Months Ended September 30,
 
2019 vs
 
2019
 
2018
 
2018
 
2019
 
2018
 
2018
Money order revenue
 
$
13.1

 
$
14.0

 
$
(0.9
)
 
$
40.6

 
$
41.6

 
$
(1.0
)
Official check revenue
 
11.9

 
11.6

 
0.3

 
37.2

 
32.0

 
5.2

Total revenue
 
$
25.0

 
$
25.6

 
$
(0.6
)
 
$
77.8

 
$
73.6

 
$
4.2

 
 
 
 
 
 
 
 
 
 
 
 
 
Total commissions expense
 
$
6.5

 
$
5.4

 
$
1.1

 
$
19.5

 
$
14.1

 
$
5.4

 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income
 
$
7.6

 
$
9.6

 
$
(2.0
)
 
$
25.8

 
$
22.3

 
$
3.5

 
 
 
 
 
 
 
 
 
 
 
 
 
Operating margin
 
30.4
 %
 
37.5
 %
 
 
 
33.2
 %
 
30.3
 %
 


 
 
 
 
 
 
 
 
 
 
 
 
 

7


TABLE THREE
MONEYGRAM INTERNATIONAL, INC.
SEGMENT RECONCILIATIONS
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Global Funds Transfer
 
 
 
 
 
 
 
 
 
 
 
 
(Amounts in millions, except percentages)
 
Three Months Ended September 30,
 
2019 vs
 
Nine Months Ended September 30,
 
2019 vs
 
2019
 
2018
 
2018
 
2019
 
2018
 
2018
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue (as reported)
 
$
299.6

 
$
321.6

 
$
(22.0
)
 
$
886.0

 
$
1,028.2

 
$
(142.2
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted operating income
 
$
15.8

 
$
18.3

 
$
(2.5
)
 
$
44.0

 
$
68.3

 
$
(24.3
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Legal and contingent matters
 
—

 
(29.7
)
 
29.7

 
—

 
(42.1
)
 
42.1

Restructuring and reorganization costs
 
(0.1
)
 
(1.2
)
 
1.1

 
(4.2
)
 
(13.7
)
 
9.5

Compliance enhancement program
 
(2.4
)
 
(3.2
)
 
0.8

 
(5.4
)
 
(8.7
)
 
3.3

Direct monitor costs
 
(2.1
)
 
(1.7
)
 
(0.4
)
 
(12.4
)
 
(7.4
)
 
(5.0
)
Stock-based compensation expense
 
(1.4
)
 
(2.2
)
 
0.8

 
(5.5
)
 
(9.0
)
 
3.5

Total adjustments
 
(6.0
)
 
(38.0
)
 
32.0

 
(27.5
)
 
(80.9
)
 
53.4

 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income (loss) (as reported)
 
$
9.8

 
$
(19.7
)
 
$
29.5

 
$
16.5

 
$
(12.6
)
 
$
29.1

 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted operating margin
 
5.3
 %
 
5.7
 %
 
 
 
5.0
 %
 
6.6
 %
 
 
Total adjustments
 
(2.0
)%
 
(11.8
)%
 
 
 
(3.1
)%
 
(7.9
)%
 
 
Operating margin (as reported)
 
3.3
 %
 
(6.1
)%
 
 
 
1.9
 %
 
(1.2
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Paper Products
 
 
 
 
 
 
 
 
 
 
 
 
(Amounts in millions, except percentages)
 
Three Months Ended September 30,
 
2019 vs
 
Nine Months Ended September 30,
 
2019 vs
 
2019
 
2018
 
2018
 
2019
 
2018
 
2018
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue (as reported)
 
$
25.0

 
$
25.6

 
$
(0.6
)
 
$
77.8

 
$
73.6

 
$
4.2

 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted operating income
 
$
8.0

 
$
10.5

 
$
(2.5
)
 
$
27.4

 
$
25.5

 
$
1.9

 
 
 
 
 
 
 
 
 
 
 
 
 
Compliance enhancement program
 
(0.2
)
 
(0.6
)
 
0.4

 
(1.0
)
 
(2.2
)
 
1.2

Stock-based compensation expense
 
(0.2
)
 
(0.3
)
 
0.1

 
(0.6
)
 
(1.0
)
 
0.4

Total adjustments
 
(0.4
)
 
(0.9
)
 
0.5

 
(1.6
)
 
(3.2
)
 
1.6

 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income (as reported)
 
$
7.6

 
$
9.6

 
$
(2.0
)
 
$
25.8

 
$
22.3

 
$
3.5

 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted operating margin
 
32.0
 %
 
41.0
 %
 
 
 
35.2
 %
 
34.6
 %
 
 
Total adjustments
 
(1.6
)%
 
(3.5
)%
 
 
 
(2.1
)%
 
(4.3
)%
 
 
Operating margin (as reported)
 
30.4
 %
 
37.5
 %
 
 
 
33.2
 %
 
30.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


8


TABLE FOUR
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 September 30,
 
2019 vs
 
Nine Months Ended September 30,
 
2019 vs
 
2019
 
2018
 
2018
 
2019
 
2018
 
2018
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss before income taxes
 
$
(9.6
)
 
$
(26.2
)
 
$
16.6

 
$
(51.5
)
 
$
(9.4
)
 
$
(42.1
)
Interest expense
 
24.8

 
13.8

 
11.0

 
52.7

 
39.8

 
12.9

Depreciation and amortization
 
18.2

 
19.5

 
(1.3
)
 
55.4

 
57.7

 
(2.3
)
Signing bonus amortization
 
11.2

 
13.3

 
(2.1
)
 
34.6

 
42.0

 
(7.4
)
EBITDA
 
44.6

 
20.4

 
24.2

 
91.2

 
130.1

 
(38.9
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Significant items impacting EBITDA:
 
 
 
 
 
 
 
 
 
 
 
 
Compliance enhancement program
 
2.6

 
3.7

 
(1.1
)
 
6.4

 
10.9

 
(4.5
)
Direct monitor costs
 
2.1

 
1.7

 
0.4

 
12.4

 
7.4

 
5.0

Stock-based, contingent and incentive compensation
 
1.6

 
2.5

 
(0.9
)
 
6.1

 
10.0

 
(3.9
)
Legal and contingent matters (1)
 
0.6

 
30.0

 
(29.4
)
 
1.9

 
42.7

 
(40.8
)
Restructuring and reorganization costs
 
0.1

 
1.2

 
(1.1
)
 
4.1

 
13.7

 
(9.6
)
Non-cash pension settlement charge (2)
 
—

 
—

 
—

 
31.3

 
—

 
31.3

Debt extinguishment costs (3)
 
—

 
—

 
—

 
2.4

 
—

 
2.4

Severance and related costs
 
0.1

 
—

 
0.1

 
0.3

 
0.4

 
(0.1
)
Income related to the terminated merger with Ant Financial (4)
 
—

 
—

 
—

 
—

 
(29.3
)
 
29.3

Adjusted EBITDA
 
$
51.7

 
$
59.5

 
$
(7.8
)
 
$
156.1

 
$
185.9

 
$
(29.8
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA margin (5)
 
15.9
 %
 
17.1
%
 
(1.2
)%
 
16.2
 %
 
16.9
%
 
(0.7
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA change, as reported
 
(13
)%
 
 
 
 
 
(16
)%
 
 
 
 
Adjusted EBITDA change, constant currency adjusted
 
(10
)%
 
 
 
 
 
(13
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA
 
$
51.7

 
$
59.5

 
$
(7.8
)
 
$
156.1

 
$
185.9

 
$
(29.8
)
Cash payments for interest
 
(19.2
)
 
(13.0
)
 
(6.2
)
 
(45.2
)
 
(37.4
)
 
(7.8
)
Cash payments for taxes, net of refunds
 
(1.1
)
 
(1.0
)
 
(0.1
)
 
(1.6
)
 
(3.9
)
 
2.3

Cash payments for capital expenditures
 
(13.3
)
 
(16.0
)
 
2.7

 
(42.5
)
 
(44.5
)
 
2.0

Cash payments for agent signing bonuses
 
(8.8
)
 
(0.6
)
 
(8.2
)
 
(24.2
)
 
(20.2
)
 
(4.0
)
Adjusted Free Cash Flow
 
$
9.3

 
$
28.9

 
$
(19.6
)
 
$
42.6

 
$
79.9

 
$
(37.3
)
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Three and nine months ended September 30, 2018 include an accrual of $30.0 million and $40.0 million, respectively, related to the resolution of the DPA matter.
(2) Nine months ended September 30, 2019 includes a non-cash charge of $31.3 million from the sale of pension liability.
(3) Nine months ended September 30, 2019 includes debt extinguishment costs related to the amended and new debt agreements.
(4) Costs include, but are not limited to, legal, bank and consultant fees and income includes the $30.0 million merger termination fee.
(5) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenue.

9


TABLE FIVE
MONEYGRAM INTERNATIONAL, INC.
RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO RELEVANT GAAP MEASURES
ADJUSTED NET INCOME AND ADJUSTED DILUTED EPS
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(Amounts in millions, except per share data)
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
Net loss
 
$
(7.7
)
 
$
(20.9
)
 
$
(48.4
)
 
$
(11.5
)
Total adjustments (1)
 
7.1

 
39.1

 
64.9

 
55.8

Tax impacts of adjustments (2)
 
(1.6
)
 
(2.5
)
 
(14.9
)
 
(4.4
)
Adjusted net (loss) income
 
$
(2.2
)
 
$
15.7

 
$
1.6

 
$
39.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted loss per common share
 
$
(0.10
)
 
$
(0.32
)
 
$
(0.70
)
 
$
(0.18
)
 
 
 
 
 
 
 
 
 
Diluted adjustments per common share
 
0.07

 
0.56

 
0.72

 
0.80

 
 
 
 
 
 
 
 
 
Diluted adjusted (loss) income per common share
 
$
(0.03
)
 
$
0.24

 
$
0.02

 
$
0.62

 
 
 
 
 
 
 
 
 
Diluted weighted-average outstanding common shares and equivalents
 
76.4

 
64.5

 
69.2

 
64.2

 
 
 
 
 
 
 
 
 
 
(1) See summary of adjustments in Table Four - 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.

10


TABLE SIX
MONEYGRAM INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
 
 
 
 
(Amounts in millions, except share data)
 
September 30, 2019
 
December 31, 2018
ASSETS
 
 
 
 
Cash and cash equivalents
 
$
119.1

 
$
145.5

Settlement assets
 
3,325.7

 
3,373.8

Property and equipment, net
 
178.6

 
193.9

Goodwill
 
442.2

 
442.2

Other assets (1)
 
172.4

 
140.7

Total assets
 
$
4,238.0

 
$
4,296.1

LIABILITIES
 
 
 
 
Payment service obligations
 
$
3,325.7

 
$
3,373.8

Debt, net (2)
 
846.4

 
901.0

Pension and other postretirement benefits
 
71.7

 
76.6

Accounts payable and other liabilities (1)
 
243.2

 
213.5

Total liabilities
 
4,487.0

 
4,564.9

STOCKHOLDERS’ DEFICIT
 
 
 
 
Participating convertible preferred stock - series D, $0.01 par value, 200,000 shares authorized, 71,282 issued at September 30, 2019 and December 31, 2018
 
183.9

 
183.9

Common stock, $0.01 par value, 162,500,000 shares authorized, 64,434,490 and 58,823,567 shares issued at September 30, 2019 and December 31, 2018, respectively
 
0.6

 
0.6

Additional paid-in capital
 
1,095.2

 
1,046.8

Retained loss
 
(1,447.7
)
 
(1,403.6
)
Accumulated other comprehensive loss
 
(62.2
)
 
(67.5
)
Treasury stock: 2,384,065 and 3,207,118 shares at September 30, 2019 and December 31, 2018, respectively
 
(18.8
)
 
(29.0
)
Total stockholders’ deficit
 
(249.0
)
 
(268.8
)
Total liabilities and stockholders’ deficit
 
$
4,238.0

 
$
4,296.1

 
 
 
 
 
(1) 2019 financial information reflects the adoption of ASC 842 - Leases. Other Assets includes $42.7 million of right-of-use assets related to the Company's operating leases and Accounts payable and other liabilities includes $45.6 million of lease liabilities.
(2) On June 26, 2019, MoneyGram entered into an amended first lien credit agreement and a new second lien credit agreement, each with Bank of America, N.A. acting as administrative agent. These agreements extended and/or repaid in full all outstanding indebtedness under the Company's existing credit facility.

11


TABLE SEVEN
MONEYGRAM INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
 
 
 
 
Nine Months Ended September 30,
(Amounts in millions)
 
2019
 
2018
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
Net loss
 
$
(48.4
)
 
$
(11.5
)
Adjustments to reconcile net loss to net cash provided by operating activities
 
87.4

 
88.4

Net cash provided by operating activities
 
39.0

 
76.9

CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
Purchases of property and equipment
 
(42.5
)
 
(44.5
)
Net cash used in investing activities
 
(42.5
)
 
(44.5
)
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
Transaction costs for issuance and amendment of debt
 
(21.7
)
 
—

Principal payments on debt
 
(30.0
)
 
(7.4
)
Net proceeds from issuing equity instruments
 
29.5

 
—

Payments to tax authorities for stock-based compensation
 
(0.7
)
 
(6.2
)
Net cash used in financing activities
 
(22.9
)
 
(13.6
)
NET CHANGE IN CASH AND CASH EQUIVALENTS
 
(26.4
)
 
18.8

CASH AND CASH EQUIVALENTS—Beginning of period
 
145.5

 
190.0

CASH AND CASH EQUIVALENTS—End of period
 
$
119.1

 
$
208.8

 
 
 
 
 


12