TIDMPPT TIDMTTM
RNS Number : 6366L
Planet Payment Inc.
14 August 2013
Planet Payment Announces Second Quarter 2013 Results
Quarterly Revenue increased 16%
Second Quarter Net Income $0.3 million and Adjusted EBITDA $1.3
million
LONG BEACH, N.Y., August 14, 2013 -- Planet Payment, Inc.
(NASDAQ:PLPM) (LSE:AIM:PPT), a leading provider of international
payment and transaction processing and multi-currency processing
services, announced today its results for the second quarter ended
June 30, 2013.
Financial Highlights for the Quarter Ended June 30, 2013
-- Net revenue for the period increased approximately 16% to
$11.8 million compared to $10.1 million in the second quarter of
2012.
-- Consolidated gross billings increased 11% to $30.4 million
compared to $27.4 million in the second quarter of 2012. (See Table
3 for explanation of this metric).
-- Gross foreign currency mark-up increased 8% to $26.1 million
compared to $24.1 million in the second quarter of 2012. (See Table
3 for explanation of this metric).
-- Processing services revenue increased 32% to $4.3 million
compared to $3.3 million in the second quarter of 2012.
-- Net income for the period was $0.3 million compared to a net
loss of $1.2 million in the second quarter of 2012.
-- Adjusted EBITDA for the period was $1.3 million compared to
$0.1 million in the second quarter of 2012. (See Table 1 for
reconciliation of net income to Adjusted EBITDA).
Operational Highlights for the Quarter Ended June 30, 2013
-- Total active merchant locations increased by 30% to
approximately 44,000 (See Table 3 for explanation of this
metric).
-- Total settled dollar volume processed increased 20% to $1.7
billion and total settled transactions processed increased 34% to
14.9 million. (See Table 3 for explanation of these metrics).
-- Total acquirer and processor customers increased to 60 based
on roll outs in U.S.A., Myanmar and Greater China.
-- Launched Pay in Your Currency(R) at Billabong locations and
additional ATMs with Vantiv and Payment Alliance International
across the United States, as well as additional hospitality
solutions for customers in Canada and Mexico.
"The second quarter showed increased revenue growth and
profitability and we are pleased with the results" said Philip
Beck, Chairman and CEO of Planet Payment, Inc. "Although we have
seen some weakness in certain areas, we have seen positive trends
this quarter in particular in the increase in payment processing
revenue, which we believe will continue to grow in the second half
of 2013 and beyond. We are focused on growing our revenue from
existing products and customers. In addition, we continue to work
with our customers on multi-currency processing implementations in
new markets such as Indonesia, Mexico, and Brazil, and we expect to
be able to report further developments in those markets as the year
progresses."
Outlook for Fiscal Year 2013
We have seen weakness in our multi-currency revenues,
particularly in the APAC region. This resulted from continued
change in international travel trends and softness in some of our
customers' portfolios in the APAC region in particular. If these
trends persist for the rest of the year, this may impact the growth
in our multi-currency revenues during 2013. Some of our customers,
particularly in the Americas, have been slower than anticipated in
completing technical implementations or roll-outs to their customer
portfolios, which may also impact 2013 results. Accordingly we are
adjusting our guidance for 2013 to reflect these uncertainties, as
follows:
-- Net revenue estimated to be in the range of $48.0 million to $50.0 million.
-- Net income estimated to be in the range of $1.0 million to $2.9 million.
-- Adjusted EBITDA estimated to be in the range of $5.4 million
to $7.4 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 $0.02 to $0.05 based upon 56.0 million fully diluted common
shares outstanding.
Based on the planned multi-currency implementations during the
second half of 2013 and the expected growth in our processing
services, we are anticipating revenue growth in excess of 20% for
2014. We expect this revenue growth will result in increasing
profitability, as we continue to demonstrate the leverage in our
model.
Conference Call
The Company will host a conference call to discuss second
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 Tuesday, August 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 and posted on the Company's
investor relations website.
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, trends,
and objectives of management for future operations of both Planet
Payment and its business partners, financial growth, estimated net
revenue, net income, Adjusted EBITDA, diluted earnings per share,
estimated fully diluted common shares outstanding, future service
launches with customers in existing and new markets 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.
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 60 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
www.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.
Contacts:
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 (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 and six months ended June 30, 2013 and 2012
Three months ended Six months ended
June 30, June 30,
------------------------ -----------------------
2013 2012 2013 2012
---------- ----------- ---------- ----------
ADJUSTED EBITDA:
Net income (loss) $ 304,691 $(1,158,622) $ 676,607 $ (371,475)
Interest expense 15,765 14,355 28,911 28,575
Interest income (312) (242) (524) (413)
Provision for income taxes 67,974 135,426 68,567 230,698
Depreciation and amortization 669,430 686,841 1,405,036 1,307,461
Stock-based expense 290,027 316,005 548,956 540,397
Acquisition deal costs - 121,755 - 121,755
---------- ----------- ---------- ----------
Adjusted EBITDA (non-GAAP) $1,347,575 $ 115,518 $2,727,553 $1,856,998
========= ========== ========= =========
Table 2. Reconciliation of Prospective Net Income to Adjusted
EBITDA
For the year ending December 31, 2013
Range
ADJUSTED EBITDA: Millions
------------
Net income..................................................................................... $1.0 $2.9
Interest expense............................................................................. 0.1 0.1
Interest income............................................................................... 0.0 0.0
Provision for income taxes............................................................... 0.1 0.2
Depreciation and amortization.......................................................... 3.0 3.0
Stock--based expense....................................................................... 1.2 1.2
Adjusted EBITDA (non-GAAP)...................................................... $5.4 $7.4
Table 3. Explanation of Key Metrics
Three months ended Six months ended
June 30, June 30,
------------------------------------ ------------------------------------------------
2013 2012 2013 2012
-------------- ---------------- ------------------------ ------------------
KEY METRICS:
Consolidated gross
billings(1) $ 30,406,907 $ 27,418,225 $ 62,908,833 $ 57,655,465
Total settled dollar volume
processed (2) $1,731,199,719 $ 1,439,048,428 $ 3,431,303,136 $ 2,870,031,526
Total active merchant
locations (at period end)
(3) 44,467 34,172 44,467 34,172
Total settled transactions
processed (4) 14,882,349 11,097,084 28,061,154 21,432,710
Multi-currency processing
services key metrics:
Active merchant locations
(at period end)(3) 23,509 18,076 23,509 18,076
Settled transactions
processed(5) 3,015,374 2,843,781 6,059,344 5,820,697
Gross foreign currency
mark-up(6) $ 26,089,431 $ 24,141,247 $ 54,336,023 $ 50,220,176
Settled dollar volume
processed(7) $ 637,806,403 $ 625,873,503 $ 1,335,672,927 $ 1,309,308,011
Average net mark-up
percentage on settled
dollar volume processed(8) 1.17% 1.09 % 1.14 % 1.10 %
Payment processing services
key metrics:
Active merchant
locations (at period
end)(3) 20,979 16,109 20,979 16,109
Payment processing
services revenue(9) $ 4,317,476 $ 3,276,978 $ 8,572,810 $ 7,435,289
Settled transactions
processed(10) 11,866,975 8,253,303 22,001,810 15,612,013
Settled dollar volume
processed(11) $1,093,393,316 $ 813,174,925 $ 2,095,630,209 $ 1,560,723,515
(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 June
30, 2013 and 2012, there were 21 and 13 active merchant locations,
respectively, included in both multi-currency and payment
processing active merchant locations but are not included in total
active merchant locations, in order to eliminate double
counting.
(4) Represents total settled transactions (excluding other
transaction types such as authorizations, rate look-ups and
non-financial transactions).
(5) Represents settled transactions processed using our
multi-currency processing services (excluding other transaction
types such as authorizations, rate look-ups and non-financial
transactions).
(6) 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.
(7) Represents the total settled dollar volume processed using our multi-currency processing services.
(8) Represents the average net foreign currency 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 ($7.4 million and $6.8 million for the three months ended
June 30, 2013 and 2012, respectively, and $15.3 million and $14.4
million for the six months ended June 30, 2013 and 2012,
respectively) and dividing by settled dollar volume processed.
(9) Represents revenue earned and reported on payment processing
services.
(10) Represents settled transactions processed using our payment
processing services (excluding other transaction types such as
authorizations, rate look-ups and non-financial transactions).
(11) Represents the total settled dollar volume processed using
our payment processing services.
Planet Payment, Inc. Condensed Consolidated Balance Sheets
As of June 30, As of December 31,
2013 2012
---------------- --------------------
(unaudited)
Current assets:
Cash and cash equivalents $ 5,313,971 $ 6,002,457
Restricted cash 2,052,545 2,517,616
Accounts receivable, net of allowances of $0.2 million as of June 30,
2013 and $1.5 million
December 31, 2012 5,589,554 5,585,815
Prepaid expenses and other assets 1,896,573 2,395,137
---------------- --------------------
Total current assets 14,852,643 16,501,025
---------------- --------------------
Other assets:
Restricted cash 669,406 669,406
Property and equipment, net 2,186,276 1,396,154
Software development costs, net 5,013,802 4,776,320
Intangible assets, net 2,925,065 3,289,590
Goodwill 342,208 347,599
Security deposits and other assets 945,792 338,408
---------------- --------------------
Total other assets 12,082,549 10,817,477
---------------- --------------------
Total assets $ 26,935,192 $ 27,318,502
============ ================
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 1,119,542 $ 889,118
Accrued expenses 3,019,662 5,298,789
Due to merchants 1,934,710 2,546,140
Current portion of capital leases liability 450,644 337,588
---------------- --------------------
Total current liabilities 6,524,558 9,071,635
Long-term liabilities:
Long-term portion of capital leases liability and other long-term
liabilities 1,060,681 364,010
---------------- --------------------
Total long-term liabilities 1,060,681 364,010
Total liabilities 7,585,239 9,435,645
---------------- --------------------
Commitments and contingencies
Stockholders' equity:
Convertible preferred stock- 10,000,000 shares authorized as of June 30,
2013 and December
31, 2012, $0.01 par value: Series A- 2,243,750 issued and outstanding
as of June 30, 2013
and December 31, 2012; $8,975,000 aggregate liquidation preference 22,438 22,438
Common stock-250,000,000 shares authorized as of June 30, 2013 and
December 31, 2012, $0.01
par value, and 54,483,340 and 53,658,857 issued and outstanding as of
June 30, 2013 and December
31, 2012, respectively 544,833 536,589
Additional paid-in capital 100,059,732 99,199,149
Accumulated other comprehensive (loss) gain (40,413) 37,925
Accumulated deficit (81,236,637) (81,913,244)
---------------- --------------------
Total stockholders' equity 19,349,953 17,882,857
---------------- --------------------
Total liabilities and stockholders' equity $ 26,935,192 $ 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 Six months ended
June 30, June 30,
------------------------- -------------------------
2013 2012 2013 2012
----------- ----------- ----------- -----------
Revenue:
Net revenue $11,764,663 $10,117,038 $23,850,726 $21,797,974
---------- ---------- ---------- ----------
Operating expenses:
Cost of revenue:
Payment processing services fees 2,748,935 2,434,248 5,551,224 5,217,839
Processing and service costs 3,178,655 2,642,590 6,354,302 5,373,419
----------- ----------- ----------- -----------
Total cost of revenue 5,927,590 5,076,838 11,905,526 10,591,258
Selling, general and administrative
expenses 5,448,955 6,049,283 11,171,639 11,319,331
----------- ----------- ----------- -----------
Total operating expenses 11,376,545 11,126,121 23,077,165 21,910,589
----------- ----------- ----------- -----------
Income (loss) from operations 388,118 (1,009,083) 773,561 (112,615)
Other income (expense):
Interest expense (15,765) (14,355) (28,911) (28,575)
Interest income 312 242 524 413
Total other expense, net (15,453) (14,113) (28,387) (28,162)
----------- ----------- ----------- -----------
Income (loss) before provision for income
taxes 372,665 (1,023,196) 745,174 (140,777)
Provision for income taxes (67,974) (135,426) (68,567) (230,698)
----------- ----------- ----------- -----------
Net income (loss) $ 304,691 $(1,158,622) $ 676,607 $ (371,475)
========== ========== ========== ==========
Basic net income (loss) per share
applicable to common stockholders $ 0.01 $ (0.02) $ 0.01 $ (0.01)
========== ========== ========== ==========
Diluted net income (loss) per share
applicable to common stockholders $ 0.00 $ (0.02) $ 0.01 $ (0.01)
========== ========== ========== ==========
Weighted average common stock outstanding
(basic) 52,832,451 52,035,014 52,805,938 51,906,425
=========== =========== =========== ===========
Weighted average common stock outstanding
(diluted) 54,570,476 52,035,014 54,672,972 51,906,425
=========== =========== =========== ===========
The accompanying notes are an integral part of these financial
statements
Planet Payment, Inc. Condensed Consolidated Statements of Cash
Flows (unaudited)
Six months ended
June 30,
-------------------------
2013 2012
------------ ----------
Cash flows from operating activities:
Net income (loss) $ 676,607 $ (371,475)
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
Stock option expense 548,956 540,397
Depreciation and amortization expense 1,405,036 1,307,461
Provision for doubtful accounts 230,644 78,988
Loss on disposal of equipment 4,979 -
Gain on insurance settlement (301,281)
Changes in operating assets and liabilities, net of effects of acquisition
Decrease (increase) in settlement assets 465,071 (518,202)
(Increase) decrease in accounts receivables, prepaid expenses and other
current assets (97,700) 443,426
Increase in security deposits and other assets (345,503) (6,901)
Decrease in accounts payable, accrued expenses and other long-term
liabilities (1,563,329) (63,572)
(Decrease) increase in due to merchants (611,430) 455,132
Other (39,164) (16,007)
------------ ----------
Net cash provided by operating activities 372,886 1,849,247
------------ ----------
Cash flows from investing activities:
Insurance proceeds 401,281 -
Decrease in restricted cash - 59,984
Purchase of property and equipment (684,667) (95,782)
Capitalized software development (807,027) (744,902)
Purchase of intangible assets (59,287) (38,318)
Cash paid for business combination, net of cash acquired - (1,577,829)
Net cash used in investing activities (1,149,700) (2,396,847)
------------ ----------
Cash flows from financing activities:
Proceeds from issuance of common stock 292,202 61,680
Principal payments on capital lease obligations (203,874) (184,757)
Payment of IPO costs - (354,531)
------------ ----------
Net cash provided by (used in) financing activities 88,328 (477,608)
------------ ----------
Effect of exchange rate changes on cash and cash equivalents(*) - -
------------ ----------
Net decrease in cash and cash equivalents (688,486) (1,025,208)
Beginning of period 6,002,457 7,671,963
------------ ----------
End of period 5,313,971 6,646,755
============ ==========
Supplemental disclosure:
Cash paid for:
Interest $ 31,146 $ 27,872
Income taxes 201,946 179,027
Non cash investing and financing activities:
Assets acquired under capital leases $ 464,729 $ 180,805
Common stock issued for BPS acquisition - 1,596,862
Accrued capitalized hardware, software and fixed assets 63,507 55,643
Capitalized stock-based compensation 27,669 -
Accrued IPO Costs - 340,890
(*) For the six months ended June 30, 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 and transaction processing and multi-currency
processing services. The Company provides its services to
approximately 44,000 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, e-commerce and ATM
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". From March 2006 until
June 2013 shares of our common stock were also traded on AIM under
the symbol "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 ("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 June 30, 2013 and for the periods ended
June 30, 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. The accompanying
unaudited condensed consolidated interim financial statements
should be read in conjunction with the audited consolidated
financial statements included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2012. Operating results
for the interim periods ended June 30, 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, or SEC.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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