Item 2.05 Costs Associated with Exit or Disposal Activities.
On January 11, 2021, MoneyGram International, Inc. (the "Company") committed to
an operational plan to reduce overall operating expenses, including the
elimination of approximately 90 positions across the Company and certain actions
to reduce other ongoing operating expenses, including real estate-related
expenses (the "2021 Organizational Realignment"). The actions are designed to
streamline operations and structure the Company in a way that will be more agile
and aligned around its plan to execute market-specific strategies.
The total expected cost of the 2021 Organizational Realignment is approximately
$9.7 million, which includes approximately $6.2 million in one-time cash
severance expenditures and $3.5 million in real estate-related and other cash
expenditures. The Company expects the 2021 Organizational Realignment to reduce
operating expenses by approximately $18 million on an annualized basis.
The Company anticipates the workforce reduction portion of the 2021
Organizational Realignment to be substantially completed in the first quarter of
2021 and related cash expenditures to be substantially paid out in 2021. The
Company's estimates are based on a number of assumptions. Actual results may
differ materially, and additional charges not currently expected may be incurred
in connection with, or as a result of, the 2021 Organizational Realignment.
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 the Company's current
beliefs, expectations or intentions regarding future events and speak only as of
the date they are made. Words such as "may," "might," "will," "could," "should,"
"would," "expect," "plan," "project," "intend," "anticipate," "believe,"
"estimate," "predict," "potential," "pursuant," "target," "forecast," "outlook,"
"continue," "currently," 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 that are difficult to
predict and many of which are beyond the Company'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: the
impact of the COVID-19 pandemic or future pandemics on our business, including
the potential for work stoppages, lockdowns, shelter-in-place, or restricted
movement guidelines, service delays, lower consumer and commercial activity; 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 and other commercial relationships
to comply with U.S. and international laws and regulations; litigation or
investigations involving us or our agents and other commercial relationships,
which could result in material settlements, fines or penalties, termination of
contracts, other administrative actions or lawsuits and negative publicity;
uncertainties relating to compliance with the Deferred Prosecution Agreement, as
amended on July 24, 2020 ("Amended DPA"), entered into with the U.S. federal
government and the effect of the Amended DPA on our reputation and business and
our ability to make payments required under the Amended DPA; 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 and
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 consumers; our ability to adequately
protect our brand and intellectual property rights and to avoid infringing on
the rights of others; 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 capital structure; and uncertainties described in the "Risk
Factors" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" sections of the Company's public period reports filed
with the U.S. Securities and Exchange Commission (the "SEC"), including
MoneyGram's annual report on Form 10-K for the year ended December 31, 2019, and
subsequent quarterly reports on Form 10-Q.
2
--------------------------------------------------------------------------------
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 the Company's SEC filings. The Company's SEC filings may be
obtained by contacting the Company, through the Company's web site at
ir.moneygram.com or through the SEC's Electronic Data Gathering and Analysis
Retrieval System ("EDGAR") at www.sec.gov. The Company undertakes no obligation
to publicly update or revise any forward-looking statement.
3
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses