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RNS Number : 8445O
Planet Payment Inc.
12 August 2014
Planet Payment Announces Second Quarter 2014 Results
Second Quarter Net Income Increased to $1.5 million and
Adjusted EBITDA Increased to $2.8 million
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 three months and six months ended June 30, 2014.
Financial Highlights for the Quarter Ended June 30, 2014
-- Net revenue for the period increased to $11.9 million
compared to $11.8 million in the second quarter of 2013.
-- Net income for the period was $1.5 million compared to net
income of $0.3 million in the second quarter of 2013.
-- Adjusted EBITDA for the period was $2.8 million compared to
$1.3 million in the second quarter of 2013. (See Table 1 for
reconciliation of net income to Adjusted EBITDA).
-- Total active merchant locations increased to approximately
80,000 (2013: approximately 44,000) (See Table 3 for explanation of
this metric).
-- Total settled dollar volume processed increased to $2.1
billion (2013: $1.7 billion) and total settled transactions
processed increased to 26.3 million (2013: 14.9 million). (See
Table 3 for explanation of these metrics).
-- Settled multi-currency dollar volume processed totaled
approximately $660 million (2013: $638 million). (See Table 3 for
explanation of this metric).
Operational Highlights for the Quarter Ended June 30, 2014
-- Continued 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.
-- Continued roll out of processing solution for Visa initiative
in Mexico, adding transaction types.
-- Continued rollout of UPOP e-commerce solution with new accounts in the United States.
-- Launched MICROS Payment Gateway solution for hospitality and
lodging merchants with Axia Payments in the United States.
Commenting on the results, Carl Williams, CEO and President of
Planet Payment, Inc., said:
"We are hard at work executing a plan that we believe will
generate revenue growth and profitability. These efforts are
starting to bear fruit as can be seen by the profitability in the
quarter as compared to a year ago, and we shall ardently continue
our efforts to achieve all of our goals. The progress that we have
made over the past few months shows us that we are on the right
track and I am excited about our prospects for success as we look
to the future."
Outlook for Fiscal Year 2014
The Company reaffirmed its guidance for the year 2014, as
follows:
-- 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.
Conference Call
The Company will host a conference call to discuss second
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, August
18, 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.
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.
About Planet Payment
Planet Payment is a leading provider of international payment
processing and multi-currency processing services. We provide our
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.
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
Canaccord Genuity Ltd (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 Income to Adjusted EBITDA
For the three and six months ended June 30, 2014 and 2013
Three months ended Six months ended
June 30, June 30,
----------------------- -----------------------
2014 2013 2014 2013
---------- ---------- ---------- ----------
ADJUSTED EBITDA:
Net income $1,509,414 $ 304,691 $ 730,124 $ 676,607
Interest expense 15,816 15,765 31,986 28,911
Interest income (288) (312) (463) (524)
Provision for income taxes 199,705 67,974 193,695 68,567
Depreciation and amortization 730,984 669,430 1,477,297 1,405,036
Stock-based compensation expense 274,669 290,027 550,660 548,956
Restructuring charges 53,752 - 682,967 -
---------- ---------- ---------- ----------
Adjusted EBITDA (non-GAAP) $2,784,052 $1,347,575 $3,666,266 $2,727,553
========= ========= ========= =========
Table 2. Reconciliation of Prospective Net Income to Adjusted
EBITDA
For the year ending December 31, 2014
Range
Millions
--------------
ADJUSTED EBITDA:
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 compensation expense............................................... 1.3 1.3
Restructuring charges..................................................................... 0.7 0.7
Adjusted EBITDA (non-GAAP).................................................... $10.0 $12.3
Table 3. Explanation of Key Metrics
Three months ended Six months ended
June 30, June 30,
------------------------------------- --------------------------------------------------
2014 2013 2014 2013
-------------- ----------------- ----------------------- ---------------------
KEY METRICS:
Consolidated gross
billings(1) $ 31,637,314 $ 30,406,907 $ 63,469,886 $ 62,908,833
Total settled dollar volume
processed (2) $2,104,436,930 $ 1,731,199,719 $ 4,099,711,638 $ 3,431,303,136
Total active merchant
locations (at period end)
(3) 79,811 44,467 79,811 44,467
Total settled transactions
processed (4) 26,339,466 14,882,349 50,330,376 28,061,154
Multi-currency processing
services key metrics:
Active merchant locations
(at period end)(3) 34,720 23,509 34,720 23,509
Settled transactions
processed(5) 3,293,739 3,015,374 6,465,430 6,059,344
Gross foreign currency
mark-up(6) $ 27,878,255 $ 26,089,431 $ 55,974,145 $ 54,336,023
Settled dollar volume
processed(7) $ 660,128,540 $ 637,806,403 $ 1,340,698,984 $ 1,335,672,927
Average net mark-up
percentage on settled
dollar volume processed(8) 1.14% 1.17 % 1.12 % 1.14 %
Payment processing services
key metrics:
Active merchant locations
(at period end)(3) 45,113 20,979 45,113 20,979
Payment processing services
revenue(9) $ 3,759,059 $ 4,317,476 $ 7,495,741 $ 8,572,810
Settled transactions
processed(10) 23,045,727 11,866,975 43,864,946 22,001,810
Settled dollar volume
processed(11) $1,444,308,390 $ 1,093,393,316 $ 2,759,012,654 $ 2,095,630,209
(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 June
30, 2014 and 2013, there were 22 and 21 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 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 total multi-currency processing services net revenue ($7.5
million and $7.4 million for the three months ended June 30, 2014
and 2013, respectively, and $15.0 million and $15.3 million for the
six months ended June 30, 2014 and 2013, respectively) and dividing
by settled dollar volume processed (see footnote 7). For the
purposes of calculating "Average net mark-up percentage on Settled
dollar volume processed", multi-currency processing services
revenue includes revenue related to multi-currency transactions
only.
(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 June 30, As of December 31,
2014 2013
---------------- --------------------
(unaudited)
Current assets:
Cash and cash equivalents $ 7,336,577 $ 6,572,468
Restricted cash 4,293,638 3,471,023
Accounts receivable, net of allowances of $0.2 million as of June 30,
2014 and December 31,
2013 5,980,520 6,016,296
Prepaid expenses and other assets 1,486,307 1,457,660
---------------- --------------------
Total current assets 19,097,042 17,517,447
---------------- --------------------
Other assets:
Restricted cash 566,161 446,044
Property and equipment, net 2,313,899 2,198,640
Software development costs, net 4,839,704 4,904,415
Intangible assets, net 2,562,114 2,820,909
Goodwill 358,986 362,063
Security deposits and other assets 2,345,390 2,141,620
---------------- --------------------
Total other assets 12,986,254 12,873,691
---------------- --------------------
Total assets $ 32,083,296 $ 30,391,138
============ ================
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 408,523 $ 585,604
Accrued expenses 3,626,931 5,032,620
Due to merchants 3,787,708 3,018,900
Current portion of capital leases 511,779 466,010
---------------- --------------------
Total current liabilities 8,334,941 9,103,134
---------------- --------------------
Long-term liabilities:
Long-term portion of capital leases liability and deferred revenue 1,785,759 1,432,513
---------------- --------------------
Total long-term liabilities 1,785,759 1,432,513
---------------- --------------------
Total liabilities 10,120,700 10,535,647
---------------- --------------------
Commitments and contingencies
Stockholders' equity:
Convertible preferred stock- 10,000,000 shares authorized as of June 30,
2014 and December
31, 2013, $0.01 par value: Series A- 2,243,750 issued and outstanding
as of June 30, 2014
and December 31, 2013; $8,975,000 aggregate liquidation preference 22,438 22,438
Common stock-250,000,000 shares authorized as of June 30, 2014 and
December 31, 2013, $0.01
par value, and 55,355,794 and 55,037,488 issued and outstanding as of
June 30, 2014 and December
31, 2013, respectively 553,557 550,375
Additional paid-in capital 102,425,454 101,038,685
Accumulated other comprehensive income 122,261 135,231
Accumulated deficit (81,161,114) (81,891,238)
---------------- --------------------
Total stockholders' equity 21,962,596 19,855,491
---------------- --------------------
Total liabilities and stockholders' equity $ 32,083,296 $ 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 Six months ended
June 30, June 30,
------------------------- -------------------------
2014 2013 2014 2013
----------- ----------- ----------- -----------
Revenue:
Net revenue $11,884,605 $11,764,663 $23,059,722 $23,850,726
---------- ---------- ---------- ----------
Operating expenses:
Cost of revenue:
Payment processing services fees 2,374,857 2,748,935 4,893,678 5,551,224
Processing and service costs 3,245,321 3,178,655 6,959,914 6,354,302
----------- ----------- ----------- -----------
Total cost of revenue 5,620,178 5,927,590 11,853,592 11,905,526
Selling, general and administrative
expenses 4,502,977 5,448,955 9,584,770 11,171,639
Restructuring charges 53,752 - 682,967 -
----------- ----------- ----------- -----------
Total operating expenses 10,176,907 11,376,545 22,121,329 23,077,165
----------- ----------- ----------- -----------
Income from operations 1,707,698 388,118 938,393 773,561
Other income (expense):
Interest expense (15,816) (15,765) (31,986) (28,911)
Interest income 288 312 463 524
Other income 16,949 - 16,949 -
Total other income (expense), net 1,421 (15,453) (14,574) (28,387)
----------- ----------- ----------- -----------
Income before provision for income taxes 1,709,119 372,665 923,819 745,174
Provision for income taxes (199,705) (67,974) (193,695) (68,567)
----------- ----------- ----------- -----------
Net income $ 1,509,414 $ 304,691 $ 730,124 $ 676,607
========== ========== ========== ==========
Basic net income per share applicable to
common stockholders $ 0.02 $ 0.01 $ 0.01 $ 0.01
========== ========== ========== ==========
Diluted net income per share applicable to
common stockholders $ 0.02 $ 0.00 $ 0.01 $ 0.01
========== ========== ========== ==========
Weighted average common stock outstanding
(basic) 53,802,936 52,832,451 53,621,071 52,805,938
=========== =========== =========== ===========
Weighted average common stock outstanding
(diluted) 54,767,440 54,570,476 55,288,195 54,672,972
=========== =========== =========== ===========
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,
---------------------------
2014 2013
------------ ------------
Cash flows from operating activities:
Net income $ 730,124 $ 676,607
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense 585,793 548,956
Depreciation and amortization expense 1,477,297 1,405,036
Provision for doubtful accounts 3,248 230,644
Disposal of property and equipment - 4,979
Gain on insurance settlement - (301,281)
Changes in operating assets and liabilities
Decrease in settlement assets 1,291,208 465,071
Decrease (increase) in accounts receivables, prepaid expenses and other
current assets 3,881 (97,700)
Increase in security deposits and other assets (203,770) (345,503)
Decrease in accounts payable, accrued expenses and other long-term
liabilities (1,289,370) (1,563,329)
Decrease in due to merchants (1,345,015) (611,430)
Other 6,611 (39,164)
------------ ------------
Net cash provided by operating activities 1,260,007 372,886
------------ ------------
Cash flows from investing activities:
Insurance proceeds - 401,281
Increase in restricted cash (2,233,940) -
Increase in merchant reserves 2,113,823 -
Purchase of property and equipment (87,681) (684,667)
Capitalized software development (718,593) (807,027)
Purchase of intangible assets (81,453) (59,287)
Net cash used in investing activities (1,007,844) (1,149,700)
------------ ------------
Cash flows from financing activities:
Proceeds from issuance of common stock 782,598 292,202
Principal payments on capital lease obligations (270,652) (203,874)
Net cash provided by financing activities 511,946 88,328
------------ ------------
Effect of exchange rate changes on cash and cash equivalents(*) - -
------------ ------------
Net increase (decrease) in cash and cash equivalents 764,109 (688,486)
Beginning of period 6,572,468 6,002,457
------------ ------------
End of period 7,336,577 5,313,971
============ ============
Supplemental disclosure:
Cash paid for:
Interest $ 32,552 $ 31,146
Income taxes 396,692 201,946
Non-cash investing and financing activities:
Assets acquired under capital leases $ 287,275 $ 464,729
Accrued capitalized hardware, software and fixed assets 88,992 63,507
Capitalized stock-based compensation 21,560 27,669
(*) For the six months ended June 30, 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 80,000 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's 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 June 30, 2014 and for the periods ended
June 30, 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 June 30, 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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