MoneyGram International Inc. (MGI, Financial) filed Quarterly Report for the period ended 2010-03-31.
Moneygram International Inc. has a market cap of $224 million; its shares were traded at around $2.71 with and P/S ratio of 0.2. MGI is in the portfolios of Richard Blum of Blum Capital Partners, RS Investment Management, Louis Moore Bacon of Moore Capital Management, LP, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Fee and other commissions expense consists primarily of fees paid to our third-party agents for the money transfer and bill payment services. For the three months ended March 31, 2010, fee commissions expense increased $3.9 million, or 3 percent, compared to 2009, from money transfer transaction volume growth and the higher euro exchange rate, partially offset by lower signing bonus amortization and lower average commission rates. Incremental fee commissions of $6.3 million from money transfer transaction volume growth and $1.6 million from the higher euro exchange rate were reduced by $1.3 million from lower average money transfer commission rates. Signing bonus amortization decreased $1.2 million as certain historical signing bonuses were fully amortized or written off in the prior year. In addition, for the three months ended March 31, 2010, bill payment fee commissions expense declined $0.7 million, while other commissions for money order products and other products declined $0.3 million each.
Compensation and benefits Compensation and benefits includes salaries and benefits, management incentive programs and other employee related costs. Compensation and benefits increased $5.9 million, or 11 percent, for the three months ended March 31, 2010 from higher stock option and incentive compensation expense, partially offset by lower severance costs. Stock option expense increased $6.7 million from 2009 and 2010 grants, net of forfeitures. Incentive compensation increased $2.2 million due to accruing annual performance incentives at a higher rate than the prior year, partially offset by a decrease in annual sales incentive accruals. The first quarter of 2009 included $3.5 million of severance costs related to the departure of a former executive officer. As reflected in each of the amounts discussed above, the increase in the euro exchange rate, net of hedging activities, increased compensation and benefits expense $0.6 million for the three months ended March 31, 2010.
Transaction and operations support Transaction and operations support includes marketing, professional fees and other outside service costs, telecommunications and agent forms related to our products. Transaction and operations support increased $3.1 million, or 7 percent, for the three months ended March 31, 2010. Professional fees increased $2.3 million from litigation fees. Marketing costs increased $1.7 million in connection with agent location growth, while licensing fees increased $1.7 million primarily due to additional licensing fees in the United Kingdom. Partially offsetting these increases was a $1.4 million benefit from the impact of foreign exchange rate movements on our foreign denominated assets and liabilities, net of hedging activities, and a $1.2 million decrease in our provision for loss. As reflected in each of the amounts discussed above, the increase in the euro exchange rate, net of hedging activities, increased transactions and operations support $0.5 million for the three months ended March 31, 2010.
Income taxes For the three months ended March 31, 2010, the Company had $2.2 million of income tax expense on pre-tax income of $13.0 million, primarily reflecting the reversal of book to tax differences, including a litigation accrual. For the three months ended March 31, 2009, the Company had $0.6 million of income tax expense on pre-tax income of $12.4 million, reflecting benefits recognized on tax positions with respect to part of the net securities losses from 2008 and 2007.
Money transfer fee and other revenue for the three months ended March 31, 2010 increased $14.6 million, or 7 percent, driven by transaction volume growth and a higher euro exchange rate, partially offset by lower average fees per transaction. Transaction volume increased 6 percent for the three months ended March 31, 2010, generating incremental revenue of $12.6 million, while the higher euro exchange rate increased revenue by $2.4 million, net of hedging activities. Average fees per transaction declined from lower average principal per transaction and corridor mix, reducing revenue by $0.7 million during the three months ended March 31, 2010.
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Moneygram International Inc. has a market cap of $224 million; its shares were traded at around $2.71 with and P/S ratio of 0.2. MGI is in the portfolios of Richard Blum of Blum Capital Partners, RS Investment Management, Louis Moore Bacon of Moore Capital Management, LP, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Fee and other revenue consists of fees on money transfer, bill payment, money order and official check transactions. For the three months ended March 31, 2010, fee and other revenue increased $12.7 million, or 5 percent, from 2009, driven by money transfer transaction volume growth and a higher euro exchange rate, partially offset by lower average money transfer fees. Money transfer transaction volume increased 6 percent, generating incremental revenue of $12.6 million. The higher euro exchange rate increased revenue $2.4 million, net of hedging activities. Average money transfer fees declined from lower average principal per transaction and corridor mix, reducing revenue by $0.7 million. Bill payment revenue decreased $2.4 million in the three months ended March 31, 2010, as compared to 2009, from industry mix and lower volumes. See Table 6 Global Funds Transfer Segment for further information regarding money transfer and bill payment revenue and transaction volume. Fee and other revenue in the Financial Paper Products segment increased by $3.2 million for the three months ended March 31, 2010, from 2009, primarily due to our repricing initiatives. See Table 7 Financial Paper Products Segment for further information. In addition, fee and other revenue declined $2.6 million from the prior year due to discontinued businesses and products.Fee and other commissions expense consists primarily of fees paid to our third-party agents for the money transfer and bill payment services. For the three months ended March 31, 2010, fee commissions expense increased $3.9 million, or 3 percent, compared to 2009, from money transfer transaction volume growth and the higher euro exchange rate, partially offset by lower signing bonus amortization and lower average commission rates. Incremental fee commissions of $6.3 million from money transfer transaction volume growth and $1.6 million from the higher euro exchange rate were reduced by $1.3 million from lower average money transfer commission rates. Signing bonus amortization decreased $1.2 million as certain historical signing bonuses were fully amortized or written off in the prior year. In addition, for the three months ended March 31, 2010, bill payment fee commissions expense declined $0.7 million, while other commissions for money order products and other products declined $0.3 million each.
Compensation and benefits Compensation and benefits includes salaries and benefits, management incentive programs and other employee related costs. Compensation and benefits increased $5.9 million, or 11 percent, for the three months ended March 31, 2010 from higher stock option and incentive compensation expense, partially offset by lower severance costs. Stock option expense increased $6.7 million from 2009 and 2010 grants, net of forfeitures. Incentive compensation increased $2.2 million due to accruing annual performance incentives at a higher rate than the prior year, partially offset by a decrease in annual sales incentive accruals. The first quarter of 2009 included $3.5 million of severance costs related to the departure of a former executive officer. As reflected in each of the amounts discussed above, the increase in the euro exchange rate, net of hedging activities, increased compensation and benefits expense $0.6 million for the three months ended March 31, 2010.
Transaction and operations support Transaction and operations support includes marketing, professional fees and other outside service costs, telecommunications and agent forms related to our products. Transaction and operations support increased $3.1 million, or 7 percent, for the three months ended March 31, 2010. Professional fees increased $2.3 million from litigation fees. Marketing costs increased $1.7 million in connection with agent location growth, while licensing fees increased $1.7 million primarily due to additional licensing fees in the United Kingdom. Partially offsetting these increases was a $1.4 million benefit from the impact of foreign exchange rate movements on our foreign denominated assets and liabilities, net of hedging activities, and a $1.2 million decrease in our provision for loss. As reflected in each of the amounts discussed above, the increase in the euro exchange rate, net of hedging activities, increased transactions and operations support $0.5 million for the three months ended March 31, 2010.
Income taxes For the three months ended March 31, 2010, the Company had $2.2 million of income tax expense on pre-tax income of $13.0 million, primarily reflecting the reversal of book to tax differences, including a litigation accrual. For the three months ended March 31, 2009, the Company had $0.6 million of income tax expense on pre-tax income of $12.4 million, reflecting benefits recognized on tax positions with respect to part of the net securities losses from 2008 and 2007.
Money transfer fee and other revenue for the three months ended March 31, 2010 increased $14.6 million, or 7 percent, driven by transaction volume growth and a higher euro exchange rate, partially offset by lower average fees per transaction. Transaction volume increased 6 percent for the three months ended March 31, 2010, generating incremental revenue of $12.6 million, while the higher euro exchange rate increased revenue by $2.4 million, net of hedging activities. Average fees per transaction declined from lower average principal per transaction and corridor mix, reducing revenue by $0.7 million during the three months ended March 31, 2010.
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