TIDMPPT TIDMPPTR
RNS Number : 6110E
Planet Payment Inc.
14 May 2013
Date: 14 May 2013
On behalf of: Planet Payment, Inc. ("the Company" or "Planet Payment")
Embargoed until: 0700 hrs
Planet Payment Announces First Quarter 2013 Results
Net Income $0.4 million and Adjusted EBITDA $1.4 million
Planet Payment, Inc. (NASDAQ:PLPM) (LSE:AIM:PPT), a leading
provider of international payment processing and multi-currency
processing services, announced today its results for the first
quarter ended March 31, 2013.
Financial Highlights for the Quarter Ended March 31, 2013
-- Net revenue for the period increased approximately 3% to
$12.1 million compared to $11.7 million in the first quarter of
2012.
-- Consolidated gross billings increased 8% to $32.5 million
compared to $30.2 million in the first quarter of 2012. (See Table
3 for explanation of this metric).
-- Gross foreign currency mark-up increased 8% to $28.2 million
compared to $26.1 million in the first quarter of 2012. (See Table
3 for explanation of this metric).
-- Net income for the period was $0.4 million or $0.01 earnings
per diluted share compared to net income of $0.8 million or $0.01
per diluted share in the first quarter of 2012.
-- Adjusted EBITDA for the period was $1.4 million compared to
$1.7 million in the first quarter of 2012. (See Table 1 for
reconciliation of net income to Adjusted EBITDA).
Operational Highlights for the Quarter Ended March 31, 2013
-- Total active merchant locations increased by 35% to
approximately 42,000 (See Table 3 for explanation of this
metric).
-- Settled multi-currency dollar volume processed increased 2%
to $700 million. (See Table 3 for explanation of this metric).
-- Total settled dollar volume processed increased 19% to $1.7
billion and total settled transactions processed increased 28% to
13.2 million. (See Table 3 for explanation of these metrics).
-- Launched POS card acceptance in Myanmar and ATM services with
additional banks under the strategic processing relationship with
Visa.
-- Launched a solution to enable eCommerce merchants in the
United States and Canada to accept UnionPay cards.
-- Launched HomeCurrencyPay, Global Payments' Dynamic Currency
Conversion (DCC) solution for merchants throughout the United
States.
-- Launch of TSYS Pay in Your Currency(R) and Shop in Your
Currency(TM) multi-currency solutions.
-- Industrial and Commercial Bank of China, ICBC launched Pay in
Your Currency services in Macau.
-- Implemented additional support for ATMs and our processing
platform certified by Visa and MasterCard for EMV acceptance in the
United States.
Outlook for Fiscal Year 2013
-- Net revenue estimated to be in the range of $52.2 million to $55.0 million.
-- Net income estimated to be in the range of $2.6 million to $4.8 million.
-- Adjusted EBITDA estimated to be in the range of $8.3 million
to $10.6 million. (See Table 2 for reconciliation of prospective
net income to Adjusted EBITDA).
-- Fully diluted earnings per share estimated to be in the range
of $0.04 to $0.08 based upon 56.4 million fully diluted common
shares outstanding.
-- Guidance assumes an effective tax rate of between 12% and 15%.
Commenting on the results, Philip Beck, Chairman and CEO of
Planet Payment, Inc., said:
"We are pleased with our results in the first quarter in
particular with the return to profitability. While economic
uncertainty persists, our focus remains on executing our strategy.
We are building on the strong relationships we have with our
acquiring bank and processor customers around the world. Further
growth will be driven through a continued focus on existing
customers, adding new customers in existing and new markets, and by
providing our customers and their merchants with new products and
services."
"We remain excited by the opportunities in emerging markets such
as Brazil, Mexico and Indonesia and expect to be able to report
further developments in these markets, as well as those in which we
already have an established presence, as the year progresses."
Conference Call
The Company will host a conference call to discuss first quarter
2013 financial results today at 5:00 pm New York time. Philip Beck,
Chairman and Chief Executive Officer, and Robert Cox, Chief
Financial Officer will host the call. The call will be webcast live
from the Company's investor relations website at
http://ir.planetpayment.com/. The conference call can also be
accessed live over the phone by dialing (877) 705-6003, or for
international callers (201) 493-6725. A replay will be available
approximately two hours after the call concludes and can be
accessed on our website or by dialing (877) 870-5176, or for
international callers (858) 384-5517, and entering the conference
ID 413496. The replay will be available until our next earnings
call on our website or via telephone until Monday, May 20,
2013.
Additional analysis of the Company's performance can be found in
the "Management's Discussion and Analysis of Financial Condition
and Results of Operations," included in the Quarterly Report on
Form 10-Q to be filed at www.sec.gov.
About Planet Payment
Planet Payment is a leading provider of international payment
processing and multi-currency processing services. We provide our
services in more than 20 countries and territories across the Asia
Pacific region, North America, the Middle East, Africa and Europe,
primarily through our more than 50 acquiring bank and processor
customers. Our point-of-sale and e-commerce services help merchants
sell more goods and services to consumers, and together with our
ATM services are integrated within the payment card transaction
flow enabling our acquiring customers, their merchants and
consumers to shop, pay, transact and reconcile payment transactions
in multiple currencies, geographies and channels.
Planet Payment is headquartered in New York and has offices in
Atlanta, Beijing, Bermuda, Delaware, Dubai, Dublin, London, Hong
Kong, Mexico City, Shanghai and Singapore. Visit
ww.planetpayment.com for more information about the Company and its
services. For up-to-date information follow Planet Payment on
Twitter at @PlanetPayment or join Planet Payment's Facebook
page.
Notice Regarding Forward-Looking Statements.
Information contained in this announcement may include
'forward-looking statements'. All statements other than statements
of historical facts included herein, including, without limitation,
those set forth in "Outlook for Fiscal Year 2013" and those
regarding the financial position, business strategy, plans and
objectives of management for future operations of both Planet
Payment and its business partners, estimated net revenue, net
income, Adjusted EBITDA, diluted earnings per share, estimated
fully diluted common shares outstanding, future service launches
with customers and new initiatives and customer pipeline are
forward-looking statements. Such forward-looking statements are
based on a number of assumptions regarding Planet Payment's present
and future business strategies, and the environment in which Planet
Payment expects to operate in future, which assumptions may or may
not be fulfilled in practice. Implementation of some or all of the
new services referred to is subject to regulatory or other third
party approvals. Actual results may vary materially from the
results anticipated by these forward-looking statements as a result
of a variety of risk factors, including the risk that
implementation, adoption and offering of the service by processors,
acquirers, merchants and others may take longer than anticipated,
or may not occur at all, regulatory changes and changes in card
association regulations and practices, changes in domestic and
international economic conditions and changes in volume of
international travel and commerce and others. Additional risks may
arise, with respect to commencing operations in new countries and
regions, of which Planet Payment is not fully aware at this time.
See the Company's Quarterly Report on Form 10-Q, filed at
www.sec.gov for other risk factors which investors should consider.
These forward-looking statements speak only as to the date of this
announcement and cannot be relied upon as a guide to future
performance. Planet Payment expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any
forward-looking statements contained in this announcement to
reflect any changes in its expectations with regard thereto or any
change in events, conditions or circumstances on which any
statement is based.
Enquiries:
Planet Payment, Inc. Tel: + 1 516 670 3200
Robert Cox (CFO) www.planetpayment.com
Redleaf Polhill (UK PR for Planet Payment) Tel: +44 207 382 4730
Emma Kane / Rebecca Sanders-Hewett / David planet@redleafpr.com
Ison
ICR (USA IR for Planet Payment) Tel: +1 646-277-1212
Don Duffy / Dara Dierks
Canaccord Genuity Ltd (UK) (Nomad for Planet Payment)
Simon Bridges / Andrew Chubb Tel: +44 20 7523 8000
Non-GAAP Financial Information
The Company provides certain non-GAAP financial measures in this
announcement. Management believes that Adjusted EBITDA, when viewed
with our results under GAAP and the accompanying reconciliations,
provides useful information about our period-over-period results.
Adjusted EBITDA is presented because management believes it
provides additional information with respect to the performance of
our fundamental business activities and is also frequently used by
securities analysts, investors and other interested parties in the
evaluation of comparable companies. We also rely on Adjusted EBITDA
as a primary measure to review and assess the operating performance
of our company and our management team in connection with our
executive compensation. These non-GAAP key business indicators,
which include Adjusted EBITDA, should not be considered
replacements for and should be read in conjunction with the GAAP
financial measures.
We define Adjusted EBITDA as GAAP net income (loss) adjusted to
exclude: (1) interest expense, (2) interest income, (3) provision
(benefit) for income taxes, (4) depreciation and amortization, (5)
stock--based expense from options and warrants and (6) certain
other items management believes affect the comparability of
operating results. Please see "Adjusted EBITDA" below for more
information and for a reconciliation of Adjusted EBITDA to net
income, the most directly comparable financial measure calculated
and presented in accordance with GAAP.
Table 1. Reconciliation of Net Income to Adjusted EBITDA
For the three months ended March 31, 2013
Three months ended
March 31,
2013 2012
ADJUSTED EBITDA: Millions
Net income $0.4 $0.8
Interest expense 0.0 0.0
Interest income 0.0 0.0
Provision for income taxes 0.0 0.1
Depreciation and amortization 0.7 0.6
Stock--based expense 0.3 0.2
Adjusted EBITDA (non-GAAP) $1.4 $1.7
Table 2. Reconciliation of Prospective Net Income to Adjusted
EBITDA
For the year ending December 31, 2013
Range
ADJUSTED EBITDA: Millions
Net income.................................................................................... $2.6 $4.8
Interest expense............................................................................. 0.1 0.1
Interest income............................................................................... 0.0 0.0
Provision for income taxes.............................................................. 0.5 0.7
Depreciation and amortization......................................................... 3.4 3.4
Stock--based expense..................................................................... 1.6 1.6
Adjusted EBITDA (non-GAAP).................................................... $8.3 $10.6
Table 3. Explanation of Key Metrics
Three months ended
March 31,
2013 2012
KEY METRICS:
Consolidated gross billings(1) $ 32,501,926 $ 30,237,240
Total settled dollar volume processed(2) $ 1,700,103,417 $ 1,430,983,098
Total active merchant locations
(at period end)(3) 41,930 30,997
Multi-currency processing services key metrics:
Active merchant locations (at period end)(3) 22,503 17,209
Settled transactions processed(4) 3,043,970 2,976,916
Gross foreign currency mark-up(5) $ 28,246,592 $ 26,078,929
Settled dollar volume processed(6) $ 697,866,524 $
683,434,508
Average net mark-up percentage on settled
dollar volume processed(7) 1.12% 1.10%
Payment processing services key metrics:
Active merchant locations (at period end)(3) 19,447 13,782
Payment processing services revenue(8) $ 4,255,334 $
4,158,311
Settled transactions processed(9) 10,134,835 7,358,710
Settled dollar volume processed(10) $ 1,002,236,893 $ 747,548,590
(1) Represents gross foreign currency mark-up plus payment processing services revenue.
(2) Represents total settled dollar volume processed through
both our multi-currency and payment processing services.
(3) We consider a merchant location to be active as of a date if
the merchant completed at least one revenue-generating transaction
at the location during the 90-day period ending on such date. The
total number of active merchant locations exceeds the total number
of merchants, as merchants may have multiple locations. As of March
31, 2013 and 2012, there were 20 and 14 active merchant locations,
respectively, that used both our multi-currency processing services
and our payment processing services. These amounts are included in
multi-currency and payment processing active merchant locations but
are not included in total active merchant locations.
(4) Represents settled transactions processed using our
multi-currency processing services.
(5) Represents the gross foreign currency mark-up amount on
settled dollar volume processed using our multi-currency processing
services. Gross foreign currency mark-up represents multi-currency
processing services net revenue plus amounts paid to acquiring
banks and their merchants associated with such multi-currency
processing transactions. Management believes this metric is
relevant because it provides the reader an indication of the gross
mark-up derived from multi-currency transactions processed through
our platform during a given period.
(6) Represents the total settled dollar volume processed using
our multi-currency processing services.
(7) Represents the average net mark-up percentage earned on
settled dollar volume processed using our multi-currency processing
services. The average net mark-up percentage on settled dollar
volume processed is calculated by taking the reported total
multi-currency processing services net revenue ($7.8 million and
$7.5 million for the three months ended March 31, 2013 and 2012,
respectively) and dividing by settled dollar volume processed.
(8) Represents revenue earned and reported on payment processing services.
(9) Represents settled transactions processed using our payment processing services.
(10) Represents the total settled dollar volume processed using
our payment processing services.
Planet Payment, Inc. Condensed Consolidated Balance Sheets
As of March 31, As of December 31,
---------------- -------------------
2013 2012
------------------------------------------------------------------------------- ---------------- -------------------
Current assets: (unaudited)
Cash and cash
equivalents................................................................
...........................................................................
..................................... $5,237,140 $6,002,457
Restricted
cash.......................................................................
...........................................................................
.................................................... 1,737,403 2,517,616
Accounts receivable, net of allowances of $0.1 million as of March 31, 2013
and $1.5 million
December 31, 2012............ 5,364,010 5,585,815
Prepaid expenses and other
assets.....................................................................
...........................................................................
.................. 2,180,636 2,395,137
---------------- -------------------
Total current
assets.................................................................
.......................................................................
............................................... 14,519,189 16,501,025
---------------- -------------------
Other assets:
Restricted
cash.......................................................................
...........................................................................
.................................................... 669,406 669,406
Property and equipment,
net........................................................................
...........................................................................
.......................... 1,901,938 1,396,154
Software development costs,
net........................................................................
...........................................................................
................... 4,819,969 4,776,320
Intangible assets,
net........................................................................
...........................................................................
....................................... 3,057,554 3,289,590
Goodwill...................................................................
...........................................................................
.................................................................. 337,159 347,599
Security deposits and other
assets.....................................................................
...........................................................................
.................. 460,644 338,408
---------------- -------------------
Total other
assets.................................................................
.......................................................................
.................................................. 11,246,670 10,817,477
---------------- -------------------
Total
assets.......................................................................
.............................................................................
............................................................. $25,765,859 $27,318,502
================ ===================
Liabilities and stockholders' equity
Current liabilities:
Accounts
payable....................................................................
...........................................................................
................................................. $991,880 $889,118
Accrued
expenses...................................................................
...........................................................................
................................................... 3,630,890 5,298,789
Due to
merchants..................................................................
...........................................................................
..................................................... 1,715,819 2,546,140
Current portion of capital leases
liability..................................................................
...........................................................................
........ 354,086 337,588
---------------- -------------------
Total current
liabilities............................................................
.......................................................................
............................................ 6,692,675 9,071,635
Long-term liabilities:
Long-term portion of capital leases liability and other long-term
liabilities................................................................
..................... 551,494 364,010
---------------- -------------------
Total long-term
liabilities............................................................
.......................................................................
....................................... 551,494 364,010
Total
liabilities..................................................................
.............................................................................
........................................................... 7,244,169 9,435,645
---------------- -------------------
Commitments and contingencies (Note 10)
Stockholders' equity:
Convertible preferred stock- 10,000,000 shares authorized as of March 31, 2013
and December
31, 2012, $0.01 par value: Series A- 2,243,750 issued and outstanding as of
March 31, 2013
and December 31, 2012; $8,975,000 aggregate liquidation
preference...................................................................
.............................................................................
......................................... 22,438 22,438
Common stock-250,000,000 shares authorized as of March 31, 2013 and December
31, 2012, $0.01
par value, and 53,706,947 and 53,658,857 issued and outstanding as of March
31, 2013 and December
31, 2012, respectively............... 537,070 536,589
Additional paid-in
capital....................................................................
...........................................................................
................................. 99,577,471 99,199,149
Accumulated other comprehensive (loss)
gain.......................................................................
..................................................................... (73,961) 37,925
Accumulated
deficit....................................................................
...........................................................................
.............................................. (81,541,328) (81,913,244)
---------------- -------------------
Total stockholders'
equity.................................................................
.......................................................................
................................ 18,521,690 17,882,857
---------------- -------------------
Total liabilities and stockholders'
equity.......................................................................
.............................................................................
.... $25,765,859 $27,318,502
================ ===================
The accompanying notes are an integral part of these financial
statements
Planet Payment, Inc. Condensed Consolidated Statements of
Operations (unaudited)
Three months ended
March 31,
--------------------------
2013 2012
------------------------------------------------------------------------------------------ ------------ ------------
Revenue:
Net
revenue...............................................................................
................................ $12,086,063 $11,680,936
------------ ------------
Operating expenses:
Cost of revenue:
Payment processing services
fees........................................................................ 2,802,289 2,783,591
Processing and service
costs.............................................................................
.... 3,175,647 2,730,829
------------ ------------
Total cost of
revenue........................................................................
............... 5,977,936 5,514,420
Selling, general and administrative
expenses............................................................. 5,722,684 5,270,048
------------ ------------
Total operating
expenses.......................................................................
.......... 11,700,620 10,784,468
------------ ------------
Income from
operations............................................................................
................ 385,443 896,468
Other (expense) income:
Interest
expense...............................................................................
......................... (13,146) (14,220)
Interest
income................................................................................
.......................... 212 171
------------ ------------
Total other expense,
net...................................................................................
......... (12,934) (14,049)
------------ ------------
Income before provision for income
taxes................................................................ 372,509 882,419
Provision for income
taxes.................................................................................
....... (593) (95,272)
------------ ------------
Net
income................................................................................
................................ $371,916 $787,147
============ ============
Basic net income per share applicable to common
stockholders.............................. $0.01 $0.01
============ ============
Diluted net income per share applicable to common
stockholders........................... $0.01 $0.01
============ ============
Weighted average common stock outstanding
(basic)............................................... 52,779,130 51,782,902
============ ============
Weighted average common stock outstanding
(diluted)............................................ 54,806,026 54,259,500
============ ============
The accompanying notes are an integral part of these financial
statements
Planet Payment, Inc. Condensed Consolidated Statements of Cash
Flows (unaudited)
Three months ended
March 31,
-------------------------
2013 2012
------------------------------------------------------------------------------------------- ------------ -----------
Cash flows from operating activities:
Net
income.................................................................................
............................................................ $371,916 $787,147
Adjustments to reconcile net income to net cash (used in) provided by operating
activities:
Stock option
expense............................................................................
............................................. 258,929 224,392
Depreciation and amortization
expense............................................................................
................. 735,606 620,620
Provision for doubtful
accounts...........................................................................
............................. 160,893 26,711
Loss on disposal of equipment
.....................................................................................
.................... 2,950 -
Changes in operating assets and liabilities
Decrease (increase) in settlement
assets.............................................................................
............... 780,213 (164,716)
Decrease in accounts receivables, prepaid expenses and other current
assets................................... 143,279 414,406
Increase in security deposits and other
assets.............................................................................
...... (90,102) (4,146)
Decrease in accounts payable, accrued expenses and other long-term
liabilities............................... (1,590,373) (612,054)
(Decrease) increase in due to
merchants..........................................................................
.................. (830,321) 205,391
Other..............................................................................
.................................................................... (19,876) 13,068
------------ -----------
Net cash (used in) provided by operating
activities...................................................................... (76,886) 1,510,819
------------ -----------
Cash flows from investing activities:
Insurance
proceeds............................................................................
................................................ 100,000 -
Decrease in restricted
cash...............................................................................
.................................. - 53,311
Purchase of property and
equipment..........................................................................
...................... (405,739) (53,674)
Capitalized software
development........................................................................
............................ (375,066) (418,527)
Purchase of intangible
assets.............................................................................
................................ (22,701) (21,951)
------------ -----------
Net cash used in investing
activities......................................................................
........................ (703,506) (440,841)
------------ -----------
Cash flows from financing activities:
Proceeds from issuance of common
stock..............................................................................
........... 106,250 41,989
Principal payments on capital lease
obligations........................................................................
........ (91,175) (105,614)
Payment of IPO
costs..............................................................................
......................................... - (103,980)
------------ -----------
Net cash provided by (used in) financing
activities...................................................................... 15,075 (167,605)
------------ -----------
Effect of exchange rate changes on cash and cash
equivalents(*)............................................................... - -
------------ -----------
Net (decrease) increase in cash and cash
equivalents..............................................................................
.... (765,317) 902,373
Beginning of
period...................................................................................
.................................................. 6,002,457 7,671,963
------------ -----------
End of
period...................................................................................
........................................................... 5,237,140 8,574,336
============ ===========
Supplemental disclosure:
Cash paid for:
Interest...........................................................................
.................................................................... $14,454 $14,811
Income
taxes..............................................................................
........................................................ 103,227 110,030
Non cash investing and financing activities:
Assets acquired under capital
leases.............................................................................
..................... $115,032 $171,380
Accrued capitalized hardware, software and fixed 197,445 -
assets..................................................................
Capitalized stock-based 13,624 -
compensation........................................................................
.....................
Accrued IPO
Costs..............................................................................
.............................................. - 111,806
------------------------------------------------------------------------------------------- ------------ -----------
(*) For the three months ended March 31, 2013 and 2012, the
effect of exchange rate changes on cash and cash equivalents was
inconsequential.
The accompanying notes are an integral part of these financial
statements
Notes to Condensed Consolidated Financial Statements
(unaudited)
1. Business description and basis of presentation
Business description
Planet Payment, Inc. together with its wholly owned subsidiaries
("Planet Payment," the "Company," "we," or "our") is a provider of
international payment processing and multi-currency processing
services. The Company provides its services to approximately 42,000
active merchant locations in more than 20 countries and territories
across the Asia Pacific region, North America, the Middle East,
Africa and Europe, primarily through its acquiring bank and
processor customers, as well as through its own direct sales force.
The Company's point-of-sale and e-commerce services are integrated
within the payment card transaction flow and enable its acquiring
customers to process and reconcile payment transactions in multiple
currencies, geographies and channels. The Company is a registered
third party processor with the major card associations and operates
in accordance with industry standards, including the Payment Card
Industry, or PCI, Security Council's Data Security Standards.
Company structure
Planet Payment was incorporated in the State of Delaware on
October 12, 1999 as Planet Group Inc. and changed its name to
Planet Payment, Inc. on June 18, 2007.
Since March 20, 2006, shares of the Company's common stock have
traded on the Alternative Investment Market of the London Stock
Exchange, or AIM, under the symbols "PPT" and "PPTR." From November
19, 2008 until December 14, 2012, shares of our common stock were
traded on the OTCQX under the symbol "PLPM." On December 17, 2012
shares of our common stock began trading on NASDAQ under the symbol
"PLPM."
Basis of presentation
The condensed consolidated financial statements of the Company
have been prepared in accordance with accounting principles
generally accepted in the United States of America ("US GAAP").
The accompanying condensed consolidated financial statements
include the accounts of Planet Payment, Inc. and its wholly--owned
subsidiaries. All intercompany transactions and balances have been
eliminated.
As of March 31, 2013 the Company wrote-off a previously fully
reserved trade receivable in the amount of $1.4 million.
Unaudited consolidated interim financial information
The accompanying unaudited condensed consolidated interim
financial statements as of March 31, 2013 and for the periods ended
March 31, 2013 and 2012 have been prepared on the same basis as the
annual consolidated financial statements. In the opinion of
management, the unaudited financial information for the interim
periods presented reflects all adjustments, which are normal and
recurring, necessary for a fair presentation of the statement of
operations, financial position and cash flows. Operating results
for the interim periods ended March 31, 2013 are not necessarily
indicative of the results that may be expected for the year ending
December 31, 2013. The December 31, 2012 balance sheet information
has been derived from the audited financial statements at that
date. Certain information and disclosures normally included in
annual consolidated financial statements have been omitted pursuant
to the rules and regulation of the Securities and Exchange
Commission (SEC).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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