TIDMPPT TIDMTTM
RNS Number : 9035G
Planet Payment Inc.
13 May 2014
Planet Payment Announces First Quarter 2014 Results
Provides Annual Guidance for 2014
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, 2014 and provided guidance for its annual
results for the year 2014.
Financial Highlights for the Quarter Ended March 31, 2014
-- Net revenue for the period was $11.2 million compared to
$12.1 million in the first quarter of 2013.
-- Gross foreign currency mark-up was $28.1 million compared to
$28.2 million in the first quarter of 2013. (See Table 3 for
explanation of this metric).
-- Net loss for the period was $(0.8) million or $(0.01) per
diluted share compared to net income of $0.4 million or $0.01 per
diluted share in the first quarter of 2013. The net loss for the
first quarter of 2014 includes a restructuring charge of $0.6
million.
-- Adjusted EBITDA for the period was $0.9 million compared to
$1.4 million in the first quarter of 2013. (See Table 1 for
reconciliation of net (loss) income to Adjusted EBITDA).
Operational Highlights for the Quarter Ended March 31, 2014
-- Total active merchant locations increased to approximately
67,000 (2013: approximately 42,000) (See Table 3 for explanation of
this metric).
-- Settled multi-currency dollar volume processed totaled
approximately $681 million (2013: $698 million). (See Table 3 for
explanation of this metric).
-- Total settled dollar volume processed increased to $2.0
billion (2013: $1.7 Billion) and total settled transactions
processed increased to 24.0 million (2013: 13.2 million). (See
Table 3 for explanation of these metrics).
-- Began roll out of Pay in Your Currency(R) service with Cielo, S.A. in Brazil
-- Continued roll out of Pay in Your Currency with PT Bank of
Central Asia in Indonesia and with Vantiv in the United States,
implementing a national retailer with 1,800 locations.
-- Launched integrated hospitality merchant solution with MICROS in the United States.
-- Continued roll out of processing solution for Visa initiative in Mexico.
-- Launched Shop in Your Currency(TM) e-commerce solution with
Cardworks Acquiring in the United States.
-- Entered into agreement for UnionPay processing with an
acquirer in Macau, and continued rollout of UPOP e-commerce
solution with new accounts in the United States.
Outlook for Fiscal Year 2014
-- Net revenue estimated to be in the range of $52.1 million to $55.1 million.
-- Net income estimated to be in the range of $4.1 million to $6.4 million.
-- Adjusted EBITDA estimated to be in the range of $10.0 million
to $12.3 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 $0.06 to $0.10 based upon an estimated 56.0 million fully
diluted common shares outstanding.
Commenting on the results, Carl Williams, CEO and President of
Planet Payment, Inc., said:
"We are hard at work transforming Planet Payment into an
efficient and sales-centric organization with an exciting pipeline
that we believe will generate future revenue growth and
profitability. With our commitment to the plan and the progress
that we have made over the past few months, I am optimistic about
our prospects for success as we look to the future."
Conference Call
The Company will host a conference call to discuss first quarter
2014 financial results today at 5:00 pm New York time. Carl
Williams, Chief Executive Officer and President, and Robert Cox,
Chief Financial Officer and Chief Operating 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 13580989. The replay will be available until our next
earnings call on our website or via telephone until Monday, May 19,
2014.
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 (NASDAQ:PLPM) (LSE:AIM: PPT) is a leading
provider of international payment and transaction processing and
multi-currency processing services. Planet Payment provides
services in 23 countries and territories across the Asia Pacific
region, the Americas, the Middle East, Africa and Europe, primarily
through our more than 60 acquiring bank and processor customers.
The Company's point-of-sale and e-commerce services help merchants
sell more goods and services to consumers, and together with ATM
services, are integrated within the payment card transaction flow
enabling 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.
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 2014" 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, tax rates, 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 and COO www.planetpayment.com
Canaccord Genuity Ltd (UK) (Nomad for Planet Payment)
Simon Bridges / Cameron Duncan 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 compensation expense 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 (Loss) Income to Adjusted
EBITDA
For the three months ended March 31, 2014 and 2013
Three months ended
March 31,
-------------------------
2014 2013
--------- -------------
ADJUSTED EBITDA:
Net (loss)
income.............................................................................
................................................... $(779,290) $ 371,916
Interest
expense............................................................................
...................................................... 16,170 13,146
Interest
income.............................................................................
....................................................... (175) (212)
(Benefit) provision for income
taxes..............................................................................
.................. (6,010) 593
Depreciation and
amortization.......................................................................
................................... 746,313 735,606
Stock-based compensation
expense............................................................................
.................... 275,991 258,929
Restructuring
charge.............................................................................
............................................. 629,215 -
--------- -------------
Adjusted EBITDA (non-GAAP) $ 882,214 $ 1,379,978
Table 2. Reconciliation of Prospective Net Income to Adjusted
EBITDA
For the year ending December 31, 2014
Range
ADJUSTED EBITDA: Millions
Net income.................................................................................... $4.1 $6.4
Interest expense............................................................................. 0.1 0.1
Interest income............................................................................... 0.0 0.0
Provision for income taxes.............................................................. 0.8 0.8
Depreciation and amortization......................................................... 3.0 3.0
Stock--based expense..................................................................... 1.3 1.3
Restructuring charge....................................................................... 0.7 0.7
Adjusted EBITDA (non-GAAP).................................................... $10.0 $12.3
Table 3. Explanation of Key Metrics
Three months ended
March 31,
2014 2013
KEY METRICS:
Consolidated gross billings(1) $ 31,832,572 $ 32,501,926
Total settled dollar volume processed(2) $ 1,995,274,708 $ 1,700,103,417
Total active merchant locations (at period end)(3) 67,112
41,930
Total settled transactions processed (4) 23,990,910
13,178,805
Multi-currency processing services key metrics:
Active merchant locations (at period end)(3) 24,504 22,503
Settled transactions processed(5) 3,171,691 3,043,970
Gross foreign currency mark-up(6) $ 28,095,890 $ 28,246,592
Settled dollar volume processed(7) $ 680,570,444 $
697,866,524
Average net mark-up percentage on settled
dollar volume processed(8) 1.09% 1.12%
Payment processing services key metrics:
Active merchant locations (at period end)(3) 42,631 19,447
Payment processing services revenue(9) $ 3,736,682 $
4,255,334
Settled transactions processed(10) 20,819,219 10,134,835
Settled dollar volume processed(11) $ 1,314,704,264 $
1,002,236,893
(1) Represents gross foreign currency mark-up (see footnote 6)
plus payment processing services revenue (see footnote 9).
(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, 2014 and 2013, there were 23 and 20 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 counting these
locations twice.
(4) Represents total settled transactions (excluding other
transaction types such as authorizations and rate look-ups).
(5) Represents settled transactions processed using our
multi-currency processing services (excluding other transaction
types such as authorizations and rate look-ups).
(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 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
$7.8 million for the three months ended March 31, 2014 and 2013,
respectively) and dividing by settled dollar volume processed. (See
footnote 7).
(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 and rate look-ups).
(11) Represents the total settled dollar volume processed using
our payment processing services.
Planet Payment, Inc.
Condensed Consolidated Balance Sheets
As of
As of March December
31, 31,
2014 2013
----------- -----------
(unaudited)
Current assets:
Cash and cash equivalents
.............................................................................................. $ 5,709,245 $ 6,572,468
Restricted cash
.................................................................................................
................. 1,974,117 3,471,023
Accounts receivable, net of allowances of $0.2 million as of March 31, 2014 and December 31,
2013
................................................................................................. 5,486,137 6,016,296
Prepaid expenses and other assets
................................................................................. 1,638,277 1,457,660
----------- -----------
Total current assets
.............................................................................................
......... 14,807,776 17,517,447
----------- -----------
Other assets:
Restricted cash
.................................................................................................
................. 676,138 446,044
Property and equipment, net
........................................................................................... 2,225,457 2,198,640
Software development costs, net
.................................................................................... 4,938,911 4,904,415
Intangible assets, net
.................................................................................................
....... 2,704,027 2,820,909
Goodwill
.................................................................................................
............................. 361,695 362,063
Security deposits and other assets
................................................................................ 2,248,669 2,141,620
----------- -----------
Total other assets
.............................................................................................
............ 13,154,897 12,873,691
----------- -----------
Total
assets..............................................................................................
............................... $27,962,673 $30,391,138
========== ==========
Liabilities and stockholders'
equity...................................................................................
Current liabilities:
Accounts payable
.................................................................................................
............ $ 748,282 $ 585,604
Accrued expenses
.................................................................................................
............ 3,887,287 5,032,620
Due to merchants
.................................................................................................
............. 1,494,676 3,018,900
Current portion of capital leases
..................................................................................... 492,911 466,010
----------- -----------
Total current liabilities
.............................................................................................
.... 6,623,156 9,103,134
----------- -----------
Long-term liabilities:
Long-term portion of capital leases and deferred revenue ......................................... 1,352,181 1,432,513
----------- -----------
Total long-term liabilities
............................................................................................. 1,352,181 1,432,513
----------- -----------
Total
liabilities.........................................................................................
.............................. 7,975,337 10,535,647
----------- -----------
Commitments and contingencies (Note
8).........................................................................
Stockholders' equity:
Convertible preferred stock- 10,000,000 shares authorized as of March 31, 2014 and December
31, 2013, $0.01 par value: Series A- 2,243,750 issued and outstanding as of March 31, 2014
and December 31, 2013; $8,975,000 aggregate liquidation preference
.................................................................................... 22,438 22,438
Common stock-250,000,000 shares authorized as of March 31, 2014 and December 31, 2013, $0.01
par value, and 54,845,113 and 55,037,488 issued and outstanding as of March 31, 2014 and December
31, 2013, respectively .................. 548,451 550,375
Additional paid-in capital
................................................................................................. 101,964,657 101,038,685
Accumulated other comprehensive income
.................................................................. 122,318 135,231
Accumulated deficit
.................................................................................................
......... (82,670,528) (81,891,238)
----------- -----------
Total stockholders' equity
.......................................................................................... 19,987,336 19,855,491
----------- -----------
Total liabilities and stockholders'
equity.......................................................................... $27,962,673 $30,391,138
========== ==========
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,
-------------------------
2014 2013
----------- -----------
Revenue:
Net revenue
............................................................................
............................................. $11,175,117 $12,086,063
---------- ----------
Operating expenses:
Cost of revenue:
Payment processing services fees
........................................................................
...... 2,518,821 2,802,289
Processing and service costs
........................................................................
.............. 3,714,593 3,175,647
----------- -----------
Total cost of revenue
.....................................................................
.......................... 6,233,414 5,977,936
Selling, general and administrative expenses
................................................................ 5,081,793 5,722,684
Restructuring charge
............................................................................
............................. 629,215 -
----------- -----------
Total operating expenses
.....................................................................
.................... 11,944,422 11,700,620
----------- -----------
(Loss) income from operations
............................................................................
............ (769,305) 385,443
Other (expense) income:
Interest expense
............................................................................
..................................... (16,170) (13,146)
Interest income
............................................................................
....................................... 175 212
----------- -----------
Total other expense, net
............................................................................
........................ (15,995) (12,934)
----------- -----------
(Loss) income before provision for income taxes
......................................................... (785,300) 372,509
Benefit (provision) for income taxes
............................................................................
... 6,010 (593)
----------- -----------
Net (loss)
income......................................................................
.......................................... $ (779,290) $ 371,916
========== ==========
Basic net (loss) income per share applicable to common stockholders
.................... $ (0.01) $ 0.01
========== ==========
Diluted net (loss) income per share applicable to common stockholders
................. $ (0.01) $ 0.01
========== ==========
Weighted average common stock outstanding (basic)
............................................... 53,437,184 52,779,130
=========== ===========
Weighted average common stock outstanding (diluted)
............................................ 53,437,184 54,806,026
=========== ===========
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,
-----------------------
2014 2013
---------- ----------
Cash flows from operating activities:
Net (loss) income
................................................................................
............................................. $ (779,290) $ 371,916
Adjustments to reconcile net (loss) income to net cash used in operating
activities:
Stock-based compensation expense
............................................................................
............ 311,124 258,929
Depreciation and amortization expense
............................................................................
....... 746,313 735,606
Provision for doubtful accounts
............................................................................
.................. 3,268 160,893
Disposal of property and equipment
............................................................................
........... 3,157 2,950
Changes in operating assets and liabilities:
Decrease in settlement assets
............................................................................
....................... 1,496,906 780,213
Decrease in accounts receivables, prepaid expenses and other current
assets
............................................................................
........................................................... 346,274 143,279
Increase in security deposits and other assets
...................................................................... (107,049) (90,102)
Decrease in accounts payable and accrued
expenses........................................................... (1,112,427) (1,590,373)
Decrease in due to merchants
............................................................................
....................... (1,524,224) (830,321)
Other
............................................................................
................................................................. (10,979) (19,876)
---------- ----------
Net cash used in operating activities
.........................................................................
......... (626,927) (76,886)
---------- ----------
Cash flows from investing activities:
Insurance proceeds
............................................................................
........................................ - 100,000
Increase in restricted cash
............................................................................
............................. (230,094) -
Purchase of property and equipment
............................................................................
.......... (19,756) (405,739)
Capitalized software development
............................................................................
............... (397,401) (375,066)
Purchase of intangible assets
............................................................................
....................... (53,695) (22,701)
Net cash used in investing activities
.........................................................................
......... (700,946) (703,506)
---------- ----------
Cash flows from financing activities:
Proceeds from the issuance of common stock
....................................................................... 602,572 106,250
Principal payments on capital lease obligations
.................................................................... (137,922) (91,175)
Net cash provided by financing activities
.........................................................................
. 464,650 15,075
---------- ----------
Effect of exchange rate changes on cash and cash equivalents(*)
............................................. - -
---------- ----------
Net decrease in cash and cash equivalents
...................................................................................
.. (863,223) (765,317)
Beginning of period
...................................................................................
.......................................... 6,572,468 6,002,457
---------- ----------
End of period
...................................................................................
..................................................... $5,709,245 $5,237,140
========= =========
Supplemental disclosure:
Cash paid for:
Interest
............................................................................
............................................................. $ 18,272 $ 14,454
Income taxes
............................................................................
.................................................... 180,835 103,227
Non-cash investing and financing activities:
Assets acquired under capital leases
............................................................................
.......... $ 163,861 $ 115,032
Accrued capitalized hardware, software and fixed assets
.................................................... 50,401 197,445
Capitalized stock-based compensation
............................................................................
....... 10,352 13,624
(*) For the three months ended March 31, 2014 and 2013, 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 67,000 active merchant locations in 23 countries and
territories across the Asia Pacific region, the Americas, 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 provides banks and their merchants with
innovative services to accept, process and reconcile electronic
payments. The Company's point-of-sale and e-commerce services are
integrated within the payment card transaction process enabling its
acquiring customers to process and reconcile payment transactions
in multiple currencies, geographies and channels. The Company's ATM
services provide its domestic and international acquirers with
additional processing capabilities to help them increase revenue
and improve customer satisfaction. The Company also offers
non-financial transaction processing services that allow merchants
to offer a range of commercial services including pre-paid mobile
phone top-up, bill payments and insurance premium payments, using
the same point-of-sale devices deployed to accept payment cards.
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.
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.
Unaudited consolidated interim financial information
The accompanying unaudited condensed consolidated interim
financial statements as of March 31, 2014 and for the periods ended
March 31, 2014 and 2013 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, 2013. Operating results
for the interim period ended March 31, 2014 are not necessarily
indicative of the results that may be expected for the year ending
December 31, 2014. The December 31, 2013 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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