Planet Payment Announces First Quarter 2014 Results

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
 
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