Planet Payment Reports First Quarter Results
May 11, 2012
OTC Disclosure News Service
Long Beach, NY –
Reports Results for Three Months ended
March 31, 2012
NET REVENUE INCREASES 22%
NET INCOME $0.8 MILLION; ADJUSTED EBITDA
INCREASES 75%TO $1.7 MILLION
Planet Payment, Inc. (UK: LSE: AIM: PPT and PPTR; USA: OTCQX: PLPM), a leading provider of international payment processing and multi-currency processing services, today announced its results for the three months ended March 31, 2012 (“Q1 ‘12”). During the first quarter of 2012, the Company again achieved strong operating results.
First quarter of 2012 highlights include:
– Net revenue for the period increased 22% to $11.7m (Q1 ‘11: $9.6m).
– Consolidated Gross Billings increased 37% to $30.2m (Q1 ‘11:$22.0m). (See Table 2 for explanation of this metric)
– Gross Foreign Currency Mark-up increased 40% to $26.1m (Q1 ‘11: $18.6m). (See Table 2 for explanation of this metric.)
– Net income was unchanged at $0.8m (Q1 ‘11: $0.8). Net income in Q1 ‘11 included $0.7m in other income due to the Derecognition of a Note Payable. Prior to consideration of this item, Net income increased by $0.66m.
– Adjusted EBITDA for the period increased 75% to $1.7m (Q1 ’11 $1.0m). See Table 1 for reconciliation of net income to Adjusted EBITDA.
– Settled multi-currency dollar volume processed increased 41% to $683m (Q1 ‘11: $485m).
– Total active merchant locations increased by 55% to 30,977 as of March 31, 2012 (as of March 31, 2011: 19,927). (See Table 2 for explanation of this metric.)
Net revenue for the three months ended March 31, 2011 has been restated to reflect the presentation of net revenue adopted in previously published financial statements. The correction made to net revenue for the three months ended March 31, 2011 has already been reflected in the Company’s audited financial statements for the year ended December 31, 2011, which was issued on March 30, 2012. Details of the adjustments to our previously issued unaudited statements of operations and statements of cash flows for the three months ended March 31, 2011 are set forth in Note 2 to the consolidated condensed financial statements included in this announcement and filed with OTCQX.
Commenting on the results, Philip Beck, Chairman of Planet Payment, Inc., said:
“Our revenue growth reflects the increase in transaction processing volumes primarily driven by increases in active merchant locations. Customers have continued to roll out our multi-currency processing solutions as reflected by the 27% increase in active multi-currency merchant locations over last year. The improvement in our financial results demonstrates the operating leverage inherent in our payment platform and business model.
During the first three months of 2012, the Company continued to expand its acquiring customer base in both existing and new markets, in particular announcing agreements with China UnionPay to provide processing support for China UnionPay’s credit and debit cards in both card present and card-not-present environments directly to banks and acquirers on a worldwide basis. The Company is enhancing the iPAY gateway to include support for China UnionPay’ new UnionPay Online Payment (“UPOP”) service, which is expected to launch in the second quarter of 2012. The Company also recently announced an agreement with MICROS to add support for China UnionPay to the MICROS Payment Gateway.
In addition, the Company entered into agreements with Citibank, Hong Kong and Macau, Citi, Philippines and Mashreq, UAE for our Pay in Your Currency service in each of those countries.
During the period the Company continued the process of becoming a reporting company under U.S. Securities laws and continues to work with its advisors on that process. In January 2012, the Company held a Special Meeting of Shareholders, in order to approve various matters in relation to the Company’s capital and corporate structures, in connection with the process.
Additional breakdown on the Company’s performance can be found in the Management’s Discussion and Analysis of Financial Condition and Results of Operations appended to this release. In accordance with the rules of the OTCQX market, the Company’s First Quarter Report, including its Condensed Consolidated Financial Statements (unaudited), as of December 31, 2011 and March 31, 2012 and for the three months ended March 31, 2011 and 2012 have been posted on the OTCQX website at www.otcqx.com and on the Company’s website at www.planetpayment.com.
Planet Payment, Inc.
Robert Cox (CFO) Tel: + 1 516 670 3200
Redleaf Polhill (UK PR for Planet Payment)
Emma Kane / Henry Columbine / Luis Mackness Tel: +44 20 7566 6720
Canaccord Genuity Ltd (UK) (Nomad for Planet Payment)
Simon Bridges / Andrew Chubb Tel: +44 20 7523 8000
Canaccord Genuity, Inc. (US) (DAD for Planet Payment)
Andy Viles Tel: +1 617-371-3900
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 regarding the financial position, business strategy, plans and objectives of management for future operations of both Planet Payment and its business partners, and the public offering of the Company’s shares 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. Actual results may vary materially from the results anticipated by these forward-looking statements as a result of a variety of risk factors, including, regulatory changes and changes in card association regulations and practices; general economic risk and volume of international travel and commerce and others. See the Company’s Quarterly Report for the period, filed at www.otcqx.com 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.
Management’s Discussion Analysis of Financial Condition and Results of Operations.
Three Months Ended March 31, 2012 Compared to the Three Months Ended March 31, 2011
The Company provides certain non-GAAP financial measures in this statement, in order to provide investors with additional perspective of underlying business trends and results. In addition management utilizes these measures in monitoring performance. 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 adjusted to exclude (1) interest expense, (2) interest income, (3) provision (benefit) for income taxes, (4) depreciation and amortization, (5) stock based expense from options and warrants and (6) certain other items management believes affect the comparability of operating results. Please see “—Adjusted EBITDA” below for more information and for a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.
Table 1. Reconciliation of Net Income to Adjusted EBITDA (non-GAAP)
For the three months ended March 31, 2011 and 2012
Three Months Ended
Net income $ 0.8 $ 0.8
Interest expense 0.2 0.0
Interest income 0.0 0.0
Provision for income taxes 0.0 0.1
Depreciation and amortization 0.5 0.6
Stock-based expense 0.1 0.2
Derecognition of note payable (0.6) 0.0
Adjusted EBITDA (non- GAAP) $1.0 $1.7
Table 2. Explanation of Key Metrics
Consolidated gross billings – Represents gross foreign currency mark-up plus payment processing services revenue.
Gross foreign currency mark-up – 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.
Active merchant locations – 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
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