Planet Payment Announces First Quarter 2014 Results Provides Annual Guidance for 2014 LONG BEACH, N.Y., May 12, 2014 (GLOBE NEWSWIRE) -- Planet Payment, Inc. (Nasdaq:PLPM) (LSE: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 2014. Financial Highlights for the Quarter Ended March 31, 2014 oNet revenue for the period was $11.2 million compared to $12.1 million in the first quarter of 2013. oGross 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). oNet 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. oAdjusted 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 oTotal active merchant locations increased to approximately 67,000 (2013: approximately 42,000) (See Table 3 for explanation of this metric). oSettled multi-currency dollar volume processed totaled approximately $681 million (2013: $698 million). (See Table 3 for explanation of this metric). oTotal 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). oBegan roll out of Pay in Your Currency^® service with Cielo, S.A. in Brazil oContinued 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. oLaunched integrated hospitality merchant solution with MICROS in the United States. oContinued roll out of processing solution for Visa initiative in Mexico. oLaunched Shop in Your Currency™ e-commerce solution with Cardworks Acquiring in the United States. oEntered 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 oNet revenue estimated to be in the range of $52.1 million to $55.1 million. oNet income estimated to be in the range of $4.1 million to $6.4 million. oAdjusted 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). oFully 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: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. 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 Threemonthsended 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 $ 1,995,274,708 $ 1,700,103,417 processed(2) Total active merchant locations 67,112 41,930 (at period end)(3) Total settled transactions 23,990,910 13,178,805 processed (4) Multi-currency processing services keymetrics: Active merchant locations (at 24,504 22,503 periodend)(3) 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 1.09% 1.12% settled dollar volume processed(8) Payment processing services key metrics: Active merchant locations (at 42,631 19,447 periodend)(3) Payment processing services $ 3,736,682 $ 4,255,334 revenue(9) Settled transactions processed(10) 20,819,219 10,134,835 Settled dollar volume $ 1,314,704,264 $ 1,002,236,893 processed(11) (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 AsofMarch 31, AsofDecember31, 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 5,486,137 6,016,296 andDecember31, 2013 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 1,352,181 1,432,513 deferred revenue 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 December31, 2013, $0.01 par value: 22,438 22,438 SeriesA— 2,243,750 issued and outstanding as of March 31, 2014 and December31, 2013; $8,975,000 aggregateliquidation preference Common stock—250,000,000 shares authorized as of March 31, 2014 and December31, 2013, $0.01 par value, and 54,845,113 and 548,451 550,375 55,037,488 issued and outstanding as of March 31, 2014 and December31, 2013, respectively 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) Threemonthsended 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 $ (0.01) $ 0.01 common stockholders Diluted net (loss) income per share applicable to $ (0.01) $ 0.01 common stockholders 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) Threemonthsended 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 346,274 143,279 current assets 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 Form10-K for the year ended December31, 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 December31, 2014.The December31, 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 rulesand regulation of the Securities and Exchange Commission, or SEC. CONTACT: Enquiries: Planet Payment, Inc. Robert Cox CFO and COO Tel: + 1 516 670 3200 www.planetpayment.com Canaccord Genuity Ltd (UK) (Nomad for Planet Payment) Simon Bridges / Cameron Duncan Tel: +44 20 7523 8000
Planet Payment Announces First Quarter 2014 Results
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