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Datum nieuwsfeit: 24-07-2007
( BW)(CO-WESTERN-UNION)(WU) Western Union Reports Second Quarter
Earnings Per Share of $0.26; Raises 2007 Operating Cash Flow
Expectation to $1 Billion; Accelerates Stock Repurchases
Business Editors
ENGLEWOOD, Colo.--(BUSINESS WIRE)--July 24, 2007--The Western
Union Company (NYSE: WU) today reported financial results for the
second quarter.
Highlights for the second quarter include:
-- Revenue of $1.2 billion, up 8%
-- Earnings per share of $0.26
-- Operating income margin of 27%
-- Consumer-to-consumer revenue exceeds $1 billion in the quarter
-- Year-to-date cash provided by operating activities of $487
million
For purposes of comparison, the earnings per share result of $0.26
for the second quarter includes, among other items, a total of $0.04
for incremental expenses associated with being a public company,
including incremental interest expense that the company did not have
in the second quarter of last year when it was still a segment of
First Data.
Commenting on the quarter, President and Chief Executive Officer
Christina Gold said, "We are pleased to deliver second quarter
financial results that are in-line with our expectations and are
consistent with our full-year guidance. I am particularly encouraged
that in our Mexico business we have achieved transaction acceleration
throughout the quarter.
"The international consumer-to-consumer business delivered another
strong quarter with revenue growth of 14% on transaction growth of
20%," Gold continued. "In fact, Western Union expects to generate
nearly $2.5 billion in revenue during 2007 from a subset of our
international business, those transactions that originate outside of
the United States. This group of transactions grew even faster,
posting 21% revenue growth and 29% transaction growth."
Total revenue for the second quarter was $1.2 billion, up 8% from
last year's second quarter. Operating income was $323 million and the
operating income margin was 27% compared to 29% in last year's second
quarter. Both operating income and operating income margin were
impacted by $10 million of incremental independent public company
expenses compared to $2 million in the second quarter of 2006. Net
income was $205 million and was impacted by $47 million in incremental
pre-tax interest expense compared to the second quarter of 2006. The
effective tax rate for the quarter was 31% down from 32% in the second
quarter of 2006.
During the second quarter, Western Union repurchased 7.8 million
shares for $168 million at an average cost of $21.61 per share.
Western Union has now repurchased a total of 13.8 million shares for
more than $300 million and has nearly $700 million remaining under its
board-authorized repurchase plan.
Total consumer-to-consumer revenue grew 7% to more than $1.0
billion in the second quarter on transaction growth of 14%. This was
the first time in Western Union history that this segment exceeded
$1.0 billion in quarterly revenue.
Western Union has been executing on a four-part strategy to
improve its Mexico business. As a result of the targeted efforts,
transaction growth was 5% and strengthened progressively through the
quarter with 9% transaction growth in June. The company expects the 7%
revenue decline in the second quarter from the Mexico business to
moderate as the year progresses. The company noted that the second
quarter 2007 spread between revenue and transaction growth primarily
reflects foreign exchange reductions it took for its Mexico business
in prior quarters. With the exception of certain Mother's Day
promotions, Western Union took no new significant pricing initiatives
in the Mexico market in the second quarter of 2007.
As a result of the immigration debate and broader market softness
in the U.S., the domestic consumer-to-consumer business saw a 10%
decrease in revenue and a 5% decrease in transactions for the quarter,
showing modest sequential improvement over the first quarter 2007. In
a trend paralleling the Mexico business, domestic transaction volume
improved in each successive month of the second quarter with June
showing the smallest decline of 3%.
Western Union continued to strengthen its agent network through
key renewals and new signings. Among these were: Checksmart and Ahold
in the U.S., Australia Post, Nepal Post, Israel Postal Company,
Ecobank covering a potential 17 countries in Africa, and Cash Express
Services in Bulgaria. The company also renewed its cooperation
agreement with Eurogiro, which has 24 Western Union agents among its
membership including Deutsche Postbank, La Banque Postale of France
and Correos y Telegrafos of Spain. Orlandi Valuta added 14 new agents
throughout Latin America and the Caribbean. This brings the total
number of agent locations to over 312,000 worldwide.
The consumer-to-business segment grew revenue 13% to $175 million
in the quarter, including $15 million of revenue from the December
2006 Servicio Electronico De Pago S.A., or Pago Facil, acquisition.
Operating income margin was 32%.
Management raised its expectation for cash from operating
activities to $1 billion from $900 million. In addition, capital
expenditures are now expected to be less than $200 million this year.
Western Union plans to accelerate its stock repurchase activity with a
goal to repurchase an additional $300 million to $400 million of
company stock in the second half of 2007.
Investor and Analyst Conference
Western Union President and Chief Executive Officer Christina Gold
will host a conference call and webcast at 8:30 a.m. Eastern Time
today. Joining Christina on the conference call will be Scott
Scheirman, Executive Vice President and Chief Financial Officer.
To listen to the conference call live via telephone, dial
888-680-0892 (U.S.) or +1-617-213-4858 (outside the U.S.) ten minutes
prior to the start of the call. The pass code is 31559165.
The conference call will also be available via webcast at
www.westernunion.com. Registration for the event is required, so
please allow at least five minutes to register prior to the scheduled
start time.
A replay of the call will be available one hour after the call
ends through July 31, 2007 at 5:00 p.m. Eastern Time at 888-286-8010
(U.S.) or +1-617-801-6888 (outside the U.S.). The pass code is
55762912. A webcast replay will be available at www.westernunion.com
for the same time period.
Please note: All statements made by Western Union officers on this
call are the property of Western Union and subject to copyright
protection. Other than the replay, Western Union has not authorized,
and disclaims responsibility for, any recording, replay or
distribution of any transcription of this call.
Definition of Incremental Independent Public Company Expenses
Incremental independent public company expenses include the costs
of staffing additions and related costs to replace support previously
provided by First Data Corporation, Western Union's corporate parent
until September 29, 2006, as well as additional costs for corporate
governance, information technology, corporate branding and global
public affairs, benefits and payroll administration, procurement,
workforce reorganization, stock compensation, and other expenses
related to being a stand-alone public company. These costs also
include recruiting and relocation expenses associated with hiring
management positions new to Western Union, other employee compensation
expenses, and temporary labor used to develop ongoing processes. These
expenses are those in excess of amounts allocated to the company by
First Data prior to September 29, 2006 or beyond amounts that the
company presumes First Data would have allocated subsequently thereto.
The company expects most of these expenses will continue to be
incurred in future periods.
Safe Harbor Compliance Statement for Forward-Looking Statements
This press release contains forward-looking statements regarding
projected future results. Forward-looking statements include all
statements that do not relate solely to historical or current facts,
and generally can be identified by the use of words such as "may,"
"believe," "will," "expect," "project," "estimate," "anticipate,"
"plan," "could," "would," "likely," "intend" or "continue." All
forward-looking statements are inherently uncertain as they are based
on various expectations and assumptions concerning future events and
they are subject to numerous known and unknown risks and uncertainties
which could cause actual events or results to differ materially from
those projected. These factors include, but are not limited to: the
impact of our spin-off from First Data Corporation; changes in
immigration laws, patterns and other factors related to immigrants;
the integration of significant businesses and technologies we acquire
and the realization of anticipated synergies from these acquisitions;
technological changes, particularly with respect to e-commerce; our
ability to attract and retain qualified key employees; changes in
laws, regulations or industry standards affecting our businesses;
changes in foreign exchange rates or spreads, including those
applicable to money transfer transactions; changes in the political or
economic climate in countries in which we operate; continued growth in
the consumer money transfer market and other markets in which we
operate at rates approximating recent levels; our ability to compete
effectively in the money transfer industry with respect to global and
niche or corridor money transfer providers, United States and
international banks, card associations, telecommunications providers,
card-based payments providers and a number of other types of
competitive service providers; our ability to maintain our agent
network; implementation of Western Union agent agreements according to
schedule; no interruption of United States government relations with
countries in which Western Union has or is implementing material agent
agreements; successfully managing the potential both for patent
protection and patent liability in the context of rapidly developing
legal framework for expansive software and other intellectual property
patent protection; successfully managing credit and fraud risks from
our agents and from consumers; unanticipated developments relating to
lawsuits, investigations or similar matters; catastrophic events; and
any material breach of security of any of our systems.
About Western Union
The Western Union Company (NYSE: WU) is a leader in global money
transfer services. Together with its affiliates, Orlandi Valuta, Vigo
and Pago Facil, Western Union provides consumers with fast, reliable
and convenient ways to send and receive money around the world, as
well as send payments and purchase money orders. It operates through a
network of more than 312,000 Agent locations in over 200 countries and
territories. Famous for its pioneering telegraph services, the
original Western Union dates back to 1851. For more information, visit
www.westernunion.com.
THE WESTERN UNION COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
(unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
------------------------- --------------------------
2007 2006 Change 2007 2006 Change
-------- -------- ------- --------- --------- ------
Revenues:
Transaction fees $981.4 $921.7 6% $1,911.5 $1,791.6 7%
Foreign exchange
revenue 185.8 165.1 13% 352.4 309.6 14%
Commission and
other revenues 35.7 26.8 33% 70.0 55.4 26%
-------- -------- --------- ---------
Total revenues 1,202.9 1,113.6 8% 2,333.9 2,156.6 8%
Expenses:
Cost of services 687.9 595.6 15% 1,333.5 1,153.4 16%
Selling, general
and
administrative 192.3 191.6 0% 373.1 364.1 2%
-------- -------- --------- ---------
Total expenses
(b) 880.2 787.2 12% 1,706.6 1,517.5 12%
Operating income 322.7 326.4 -1% 627.3 639.1 -2%
Interest expense
(b) (46.8) (0.3) (a) (94.8) (0.7) (a)
Interest income 19.1 7.2 (a) 38.6 12.7 (a)
Interest income
from First Data,
net - 12.0 (a) - 23.5 (a)
Derivative
gains/(losses),
net 1.4 (21.6) (a) 3.1 (27.2) (a)
Foreign exchange
effect on notes
receivable from
First Data, net - (3.3) (a) - (4.1) (a)
Other income, net 1.8 3.4 (a) 6.1 5.4 (a)
-------- -------- --------- ---------
Total other
(expense) /
income, net (24.5) (2.6) (a) (47.0) 9.6 (a)
-------- -------- --------- ---------
Income before
income taxes 298.2 323.8 -8% 580.3 648.7 -11%
Provision for
income taxes 93.7 104.9 -11% 182.6 210.0 -13%
-------- -------- --------- ---------
Net income $204.5 $218.9 -7% $397.7 $438.7 -9%
======== ======== ========= =========
Earnings per
share:
Basic $0.27 $0.29 -7% $0.52 $0.57 -9%
Diluted $0.26 $0.29 -10% $0.51 $0.57 -11%
Weighted-average
shares
outstanding: (c)
Basic 764.8 763.9 766.5 763.9
Diluted 779.0 763.9 781.1 763.9
(a) Calculation not meaningful
(b) During the first and second quarters of 2007, Western Union
incurred higher corporate overhead and interest costs, many of which
are recurring, as a result of its separation from First Data. Prior
to September 29, 2006, the businesses that comprise Western Union
were wholly-owned subsidiaries of First Data.
(c) For all periods prior to September 29, 2006 (date of spin-off from
First Data), basic and diluted earnings per share are computed
utilizing the shares outstanding at September 29, 2006.
THE WESTERN UNION COMPANY
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
(unaudited)
June 30, December 31,
2007 2006
--------- ------------
Assets
Cash and cash equivalents $1,487.8 $1,421.7
Settlement assets 1,250.3 1,284.2
Property and equipment, net of accumulated
depreciation
of $231.3 and $213.1, respectively 192.9 176.1
Goodwill 1,647.2 1,648.0
Other intangible assets, net of accumulated
amortization
of $236.6 and $211.4, respectively 283.2 287.7
Other assets 466.3 503.4
---------- --------------
Total assets $5,327.7 $5,321.1
========== ==============
Liabilities and Stockholders' (Deficiency)
Liabilities:
Accounts payable and accrued liabilities $543.8 $554.8
Settlement obligations 1,249.0 1,282.5
Pension obligations 52.8 52.9
Deferred tax liability, net 263.8 274.8
Borrowings 3,155.8 3,323.5
Other liabilities 148.5 147.4
---------- --------------
Total liabilities 5,413.7 5,635.9
Stockholders' (Deficiency):
Preferred stock, $1.00 par value; 10 shares
authorized; no shares issued - -
Common stock, $0.01 par value; 2,000 shares
authorized; 772.7 shares and 772.0 shares
issued, respectively 7.7 7.7
Capital deficiency (410.2) (437.1)
Retained earnings 570.7 208.0
Accumulated other comprehensive loss (67.6) (73.5)
Less: Treasury Stock at cost, 8.6 shares and
0.9 shares, respectively (186.6) (19.9)
---------- --------------
Total Stockholders' (Deficiency) (86.0) (314.8)
---------- --------------
Total Liabilities and Stockholders'
(Deficiency) $5,327.7 $5,321.1
========== ==============
THE WESTERN UNION COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
Six Months Ended
June 30,
-----------------
2007 2006
--------- -------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $397.7 $438.7
Adjustments to reconcile net income to net cash
provided by operating
activities:
Depreciation 22.7 16.2
Amortization 38.6 32.9
Deferred income tax provision 5.1 21.5
Realized gain on derivative instruments - (7.9)
Other non-cash items, net 28.2 18.9
Increase (decrease) in cash, excluding the effects of
acquisitions and
dispositions, resulting from changes in:
Other assets 24.6 (39.4)
Accounts payable and accrued liabilities (17.8) (10.4)
Other liabilities (12.0) 11.4
--------- -------
Net cash provided by operating activities 487.1 481.9
CASH FLOWS FROM INVESTING ACTIVITIES
Capitalization of contract costs (9.7) (79.9)
Capitalization of purchased and developed software (15.2) (2.0)
Purchases of property and equipment (43.8) (32.5)
Notes receivable issued to agents (5.6) (140.0)
Repayments of notes receivable issued to agents 10.9 -
Cash received on maturity of foreign currency
forwards - 7.9
--------- -------
Net cash used in investing activities (63.4) (246.5)
CASH FLOWS FROM FINANCING ACTIVITIES
Net repayments of commercial paper (164.6) -
Repayments of net borrowings under credit facilities (3.0) -
Proceeds from exercise of options 90.5 -
Purchase of treasury shares (280.5) -
Advances from affiliates of First Data - 17.7
Repayments of notes payable to First Data - (100.0)
Additions to notes receivable from First Data - (7.5)
--------- -------
Net cash used in financing activities (357.6) (89.8)
Net change in cash and cash equivalents 66.1 145.6
Cash and cash equivalents at beginning of period 1,421.7 510.2
--------- -------
Cash and cash equivalents at end of period $1,487.8 $655.8
========= =======
THE WESTERN UNION COMPANY
SUMMARY SEGMENT DATA
(in millions)
(unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
-------------------------- --------------------------
2007 2006 Change 2007 2006 Change
--------- --------- ------ --------- --------- ------
Revenues:
Consumer-to-
Consumer:
External revenue
Transaction fees $811.8 $763.9 6% $1,563.0 $1,469.4 6%
Foreign exchange
revenue 185.4 164.6 13% 351.7 308.9 14%
Other revenues 9.6 8.5 13% 18.4 15.5 19%
--------- --------- --------- ---------
Total Consumer-
to-Consumer: 1,006.8 937.0 7% 1,933.1 1,793.8 8%
Consumer-to-
Business:
External revenue
Transaction fees 160.4 146.4 10% 329.2 297.7 11%
Other revenues 14.5 8.1 79% 27.9 18.6 50%
--------- --------- --------- ---------
Total Consumer-
to-Business: 174.9 154.5 13% 357.1 316.3 13%
Other:
External revenue 21.2 22.1 -4% 43.7 46.5 -6%
Internal revenue - - (a) - 0.9 (a)
--------- --------- --------- ---------
Total Other: 21.2 22.1 -4% 43.7 47.4 -8%
Eliminations - - (a) - (0.9) (a)
--------- --------- --------- ---------
Total revenues $1,202.9 $1,113.6 8% $2,333.9 $2,156.6 8%
========= ========= ========= =========
Operating
income:
Consumer-to-
Consumer $262.0 $269.5 -3% $500.7 $516.6 -3%
Consumer-to-
Business 55.1 53.5 3% 116.0 112.2 3%
Other 5.6 3.4 (a) 10.6 10.3 (a)
--------- --------- --------- ---------
Total operating
income $322.7 $326.4 -1% $627.3 $639.1 -2%
========= ========= ========= =========
Operating profit
margin:
Consumer-to-
Consumer 26.0% 28.8% -3 pts 25.9% 28.8% -3 pts
Consumer-to-
Business 31.5% 34.6% -3 pts 32.5% 35.5% -3 pts
Other 26.4% 15.4% (a) 24.3% 21.7% (a)
Total operating
profit margin 26.8% 29.3% -3 pts 26.9% 29.6% -3 pts
Depreciation and
Amortization:
Consumer-to-
Consumer $24.4 $18.9 29% $47.8 $37.7 27%
Consumer-to-
Business 5.5 4.6 20% 11.7 9.2 27%
Other 1.0 1.0 0% 1.8 2.2 -18%
--------- --------- --------- ---------
Total
depreciation
and
amortization $30.9 $24.5 26% $61.3 $49.1 25%
========= ========= ========= =========
(a) Calculation not meaningful
THE WESTERN UNION COMPANY
KEY INDICATORS
(in millions)
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
---------------------- -------------------------
2007 2006 Change 2007 2006 Change
-------- ------ ------ -------- -------- ------
Transactions
Consumer-to-
Consumer 41.7 36.6 14% 79.5 69.9 14%
Consumer-to-
Business 99.3 59.5 67% 199.7 120.7 65%
Revenue
Consumer-to-
Consumer $1,006.8 $937.0 7% $1,933.1 $1,793.8 8%
Consumer-to-
Business $174.9 $154.5 13% $357.1 $316.3 13%
Three Months Six Months
Ended June 30, 2007 Ended June 30, 2007
---------------------- -------------------------
Consumer-to-Consumer
Transaction Growth
International (a) 20% 20%
Domestic (b) -5% -5%
Mexico (c) 5% 4%
Consumer-to-
Consumer 14% 14%
Consumer-to-Consumer
Revenue Growth
International (a) 14% 14%
Domestic (b) -10% -11%
Mexico (c) -7% -7%
Consumer-to-
Consumer 7% 8%
Three Months Six Months
Ended June 30, 2007 Ended June 30, 2007
---------------------- -------------------------
Including Excluding Including Excluding SEPSA
SEPSA SEPSA SEPSA
---------------------- --------- ---------------
Consumer-to-Business
Transaction Growth 67% 1% 65% 1%
Consumer-to-Business
Revenue Growth 13% 3% 13% 4%
(a) Represents transactions between and within foreign countries
(excluding Canada and Mexico), transactions originated in the United
States or Canada destined for foreign countries and foreign country
transactions destined for the United States or Canada. Excludes all
transactions between or within the United States and Canada and all
transactions to and from Mexico as reflected in (b) and (c) below.
(b) Represents all transactions between and within the United States
and Canada.
(c) Represents all transactions to and from Mexico.
WU-F
WU-G
--30--SL/dx*
CONTACT: The Western Union Company
Media
Sherry Johnson, +1-720-332-4750
sherry.l.johnson@westernunion.com
or
Investors
Gary Kohn, +1-720-332-8276
gary.kohn@westernunion.com
Disclaimer: Deze bekendmaking is officieel geldend in de originele
brontaal. Vertalingen zijn slechts als leeshulp bedoeld en moeten
worden vergeleken met de tekst in de brontaal welke als enige,
juridische geldigheid beoogt.