MoneyGram International Inc. (MGI) reported a fourth-quarter loss per share of 4 cents, worse than the Zacks Consensus Estimate of a loss of 2 cents.
Results included a curtailment gain on the company’s benefit plans ($15.5 million) that was partially offset by other one-time costs such as stock-based compensation and severance costs ($7.1 million) and asset write-downs ($6.1 million). Net income included a $20.3 million tax benefit related to net securities losses in 2007 and 2008.
Including the above-mentioned one-time costs and benefits, net loss for the quarter was $3.6 million or 4 cents per share, compared to net income of $18.6 or 22 cents per share in the fourth quarter of 2008.
Total expenses decreased 7.4% to $159.9 million against $172.6 million in the year-ago quarter. Higher money transfer transaction volumes and decreased operating expenses were offset by declining bill payment transaction volumes and continued weakness in Mexico and Spain.
MoneyGram’s total revenue for the quarter was $296.4 million, down 7.1% from $319.0 million in the year-ago period. Fourth quarter 2008 total revenue included net securities losses of $10.2 million compared to $0.7 million in the reported quarter, and investment revenue that was $27.6 million more that in 2009.
Segment Results
In the Global Funds Transfer segment, MoneyGram’s revenue rose by 4.6% to $263.8 million versus $252.2 million in the year-ago period. Money transfer transaction volume excluding bill payment increased 7%, while money transfer fee and other revenue increased 6% to $230.6 million versus $217.0 million in the prior-year period.
On a constant currency basis, money transfer fee and other revenue excluding bill payment increased 3% on a year-over-year basis. Bill payment transaction volume decreased 3% and revenue declined 5% to $33.1 million from $34.7 million in the prior-year quarter.
Results were negatively affected by currency valuation changes and a decline in average money transfer fees during the quarter. Global agent locations reached 190,000, an increase of 8% over the prior-year quarter.
The economic downturn in Spain continues to impact MoneyGram’s non-U.S. transaction growth. Excluding Spain, transactions originating outside the U.S. saw healthy growth of 20% from the prior year. Transaction volume to Mexico decreased 13% year-over-year in the reported quarter.
In the Financial Paper Products segment, MoneyGram’s total revenue declined 43.1% to $30.1 million from $52.9 million in the prior-year quarter. Net revenue in the fourth quarter of 2009 and 2008 reflects investment revenue of $5.7 million and $33.4 million, respectively.
For full-year 2009, MoneyGram’s total revenue increased 26.4% to $1.17 billion from $927.1 million in 2008. Total revenue in 2008 included net securities losses of $340.7 million and investment revenue that was $128.9 million more favorable compared with 2009. Net loss, including one-time costs, was $102.1 million or $1.24 per share, down from a net loss of $345.7 million or $4.19 per share in 2008.
As of October 31, 2009, MoneyGram had cash and cash equivalents of $3.8 billion, net receivables of $1.05 billion and investments of $298.6 million.
Liquidity
The company ended the quarter with assets in excess of payment service obligations of $313.3 million and also paid down the remaining $45.0 million balance on its revolving credit facility. On Dec 22, 2009, MoneyGram made an optional repayment of $40 million on its tranche B term loan under the senior secured credit facility, thereby lowering its total outstanding debt by 19.0% to $187 million since Jan, 2009.
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