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MoneyGram International Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 3, 2011 03:43PM

MoneyGram International Inc. (MGI) filed Quarterly Report for the period ended 2011-09-30. Moneygram International Inc. has a market cap of $988.6 million; its shares were traded at around $2.48 with and P/S ratio of 0.8.



Highlight of Business Operations:

For the three months ended September 30, 2011, fee and other revenue increased $29.5 million, or 10 percent, due to a $35.4 million increase from money transfer, partially offset by a $2.9 million and $2.8 million decline in bill payment and the Financial Paper Products segment, respectively. Discontinued products and businesses drove a $0.3 million decrease in fee and other revenue. Money transfer transaction volume growth of 13 percent drove $31.6 million of incremental fee revenue, while a higher euro exchange rate generated $9.4 million of incremental fee revenue. Changes in corridor mix and average face value per money transfer transaction drove a net $5.7 million decrease in revenue. See Table 8 — Global Funds Transfer Segment and Table 9 — Financial Paper Products Segment for further information regarding fee and other revenue.

For the nine months ended September 30, 2011, fee and other revenue increased $65.1 million, or eight percent, due to a $85.9 million increase from money transfer, partially offset by a $10.1 million and $8.9 million decline in bill payment and the Financial Paper Products segment, respectively. Discontinued products and businesses drove a $1.9 million decrease in fee and other revenue. Money transfer transaction volume growth of 14 percent drove $95.3 million of incremental fee revenue, while a higher euro exchange rate generated $19.9 million of incremental fee revenue. Changes in corridor mix drove a $19.0 million decrease in revenue, while lower average money transfer fees from the $50 price band in the United States yielded a $9.2 million decrease in revenues. See Table 8 — Global Funds Transfer Segment and Table 9 — Financial Paper Products Segment for further information regarding fee and other revenue.

In the three and nine months ended September 30, 2011, salaries and related payroll taxes increased $2.2 million and $9.1 million, respectively, from ordinary salary increases and our changing employee base mix as we invest in our sales, market development and compliance functions, offset by lower headcount from our restructuring and outsourcing initiatives. Incentive compensation increased $3.7 million and $6.8 million, respectively, due primarily to our stronger performance against current year objectives. Employee stock-based compensation decreased $2.8 million and $8.2 million during the three and nine months ended September 30, 2011, respectively, from grants fully vesting in prior periods and forfeitures, partially offset by new grants. Other employee benefits decreased $0.8 million and $1.5 million for the three and nine months ended September 30, 2011, respectively, due to medical claim reimbursements in 2011 and non-restructuring severance costs in 2010, partially offset by higher expense associated with our legacy defined benefit plans from the impact of lower interest rates on our obligations under those plans net of a reduction in the number of eligible participants in the legacy post-retirement medical plan.

For the three months ended September 30, 2011, EBITDA increased $1.8 million, or three percent, to $59.1 million, while EBITDA increased $12.6 million, or seven percent, to $182.6 million, for the nine months ended September 30, 2011, primarily reflecting the significant items listed in Table 6. Adjusted EBITDA for the three and nine months ended September 30, 2011 increased $4.0 million, or six percent, to $72.0 million, and $1.7 million, or one percent, to $196.5 million, respectively, primarily reflecting higher money transfer fee revenue, partially offset by increases in marketing spend, compensation, fee commissions expenses and lower net investment revenue.

The higher euro exchange rate increased fee and other revenue $9.4 million and $19.9 million, respectively, for the three and nine months ended September 30, 2011, while changes in corridor mix and average face value per transaction resulted in net decreases of $5.2 million and $19.0 million, respectively. The introduction of the $50 price band in the United States during late March and April 2010 resulted in a decrease of $0.5 million and $9.2 million, respectively, from lower average money transfer fees. The $50 price band allows consumers to send $50 of principal for a $5 fee at most locations, or for $4.75 at a Walmart location.

Read the The complete Report



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