Attached files
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| 8-K - FORM 8-K 110614 - LML PAYMENT SYSTEMS INC | form8_k110614.htm |
Exhbit 99.1
LML REPORTS PROFITABLE RESULTS FOR BOTH
FOURTH QUARTER AND FISCAL YEAR 2011
Overall Revenue Increases 218%
Revenue Increases and Profitability Achieved Across All Three Business Segments
VANCOUVER, BC, June 14, 2011 — LML PAYMENT SYSTEMS INC. (NASDAQ: LMLP), a leading payments technology provider of financial payment solutions for e-commerce and traditional businesses, reports results for its fourth quarter and fiscal year ended March 31, 2011.
Q4
Revenue for the three months ended March 31, 2011 was $25.2 million. Gross profit was $13.2 million or 53%. Income from operations was $11.7 million compared to a loss of ($93,000) for the previous year. Income before taxes was $11.6 million compared to a loss of ($141,000) for the previous year. Net income was $7.3 million or $0.26 per share, compared to a loss of ($185,000) or ($0.01) per share, last year. Net cash flow from operating activities for the three months was approximately $12.8 million.
Fiscal Year
Revenue for the year ended March 31, 2011 was $47.2 million compared to $14.8 million for the previous year – an increase of 218.1%. Gross profit was $24.4 million or 52%. Income from operations was $18.2 million compared to $1.2 million last year, an improvement of $17 million. Income before taxes was $18 million compared to $1.2 million last year, an improvement of $16.8 million. Net Income was $10.3 million or $0.38 per share, compared to a net loss of ($126,000) or ($0.00) per share, last year.
Fiscal Year Highlights
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·
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Revenue: $47.2 million – up 218%
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·
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Income before taxes: $18 million – up approximately $17 million from last year
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·
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Net income: $10.3 million - $0.38 per share
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·
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TPP business segment revenue increases over 30%
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·
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New customers: 1,500
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·
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IPL business segment revenue: $32 million
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“We are extremely pleased with these profitable results. Once again, all three of our business units produced positive cash flow. Revenue from our TPP segment continued to grow at just over 30%, up from an already impressive 22% last year. Our Company’s evolution advanced with the continued monetization of our intellectual property assets. During the year, we licensed 14 defendants involved in our patent litigation primarily on a fully paid-up, non-recurring basis, which resulted in just over $30 million in revenue. We believe these monetized assets will be key in supporting our efforts both organically and inorganically as a growing payments processor, particularly during this very exciting time as commerce convergence opportunities continue to advance across many different models and industries,” said Patrick H. Gaines, Chief Executive Officer of LML.
Conference Call
Management will host a conference call tomorrow at 1:30pm Pacific Time (4:30pm Eastern Time) to discuss these results. To participate in the conference call, please dial in 5-10 minutes before the start of the call and follow the operator’s instruction. If you are calling from the United States or Canada, please dial 1-800-705-1680. International callers please dial 303-223-2692.
If you are unable to join the call, an audio recording of the call will be available on our website at www.lmlpayment.com.
Cont’d…
About LML Payment Systems Inc. (www.lmlpayment.com)
LML Payment Systems Inc., through its subsidiaries Beanstream Internet Commerce Inc. in Canada and LML Payment Systems Corp. in the U.S., is a leading provider of financial payment processing solutions for e-commerce and traditional businesses. We provide credit card processing, online debit, electronic funds transfer, automated clearinghouse payment processing and authentication services, along with routing of selected transactions to third party processors and banks for authorization and settlement. Our intellectual property estate, owned by subsidiary LML Patent Corp., includes U.S. Patent No. RE40220, No. 6,354,491, No. 6,283,366, No. 6,164,528, and No. 5,484,988 all of which relate to electronic check processing methods and systems.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all passages containing verbs such as "aims," "anticipates," "estimates," "expects," "intends," "plans," "predicts," "projects" or "targets" or nouns corresponding to such verbs. Forward-looking statements also include any other passages that are primarily relevant to expected future events or that can only be evaluated by events that will occur in the future. Forward-looking statements are based on the opinions and estimates of the management at the time the statements are made and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could affect LML’s actual results include, among others, the impact, if any, of stock-based compensation charges, the potential failure to establish and maintain strategic relationships, inability to integrate recent and future acquisitions, inability to develop new products or product enhancements on a timely basis, inability to protect our proprietary rights or to operate without infringing the patents and proprietary rights of others, and quarterly and seasonal fluctuations in operating results. More information about factors that potentially could affect LML’s financial results is included in LML’s quarterly reports on Form 10-Q and our most recent annual report on Form 10-K filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance upon these forward-looking statements that speak only as to the date of this release. Except as required by law, LML undertakes no obligation to update any forward-looking or other statements in this press release, whether as a result of new information, future events or otherwise.
Cont’d…
LML PAYMENT SYSTEMS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In U.S. Dollars, except share data)
(Unaudited)
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Years ended March 31,
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||||||||||||
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2011
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2010
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2009
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||||||||||
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REVENUE
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$ | 47,160,490 | $ | 14,825,667 | $ | 12,378,848 | ||||||
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COSTS OF REVENUE (includes stock-based compensation (“s.b.c.”) expense of $118,551 (2010 - $148,228; 2009 - $149,716))
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22,701,437 | 7,655,551 | 6,057,817 | |||||||||
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GROSS PROFIT (excludes amortization and depreciation expense)
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24,459,053 | 7,170,116 | 6,321,031 | |||||||||
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OPERATING EXPENSES
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||||||||||||
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General and administrative (includes s.b.c. expense of $897,480 (2010 - $1,038,447; 2009 - $1,139,589))
|
4,337,980 | 4,337,914 | 4,341,159 | |||||||||
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Sales and marketing (includes s.b.c. expense of $49,680 (2010 - $3,025; 2009 - $3,033))
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624,930 | 416,617 | 323,103 | |||||||||
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Product development and enhancement (includes s.b.c. expense of $60,693 (2010 - $48,401; 2009 - $48,534))
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559,041 | 467,686 | 272,499 | |||||||||
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Amortization of property and equipment
|
124,070 | 138,271 | 124,441 | |||||||||
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Amortization of patents and intangible assets
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662,576 | 662,576 | 660,893 | |||||||||
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Gain on disposal/abandonment of property and equipment
|
- | (3,830 | ) | (864 | ) | |||||||
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INCOME BEFORE OTHER INCOME (EXPENSES) AND INCOME TAXES
|
18,150,456 | 1,150,882 | 599,800 | |||||||||
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Foreign exchange (loss) gain
|
(205,472 | ) | 89,455 | 444,050 | ||||||||
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Other (expense) income, net
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(5,549 | ) | (57,044 | ) | 10,898 | |||||||
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Interest income
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48,330 | 25,036 | 226,472 | |||||||||
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Interest expense
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- | (47,771 | ) | (247,536 | ) | |||||||
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INCOME BEFORE INCOME TAXES
|
17,987,765 | 1,160,558 | 1,033,684 | |||||||||
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Income tax expense (recovery)
|
||||||||||||
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Current
|
5,203,025 | (826,246 | ) | 846,671 | ||||||||
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Future
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2,497,586 | 2,112,630 | (5,268,153 | ) | ||||||||
| 7,700,611 | 1,286,384 | (4,421,482 | ) | |||||||||
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NET INCOME (LOSS)
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$ | 10,287,154 | $ | (125,826 | ) | $ | 5,455,166 | |||||
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EARNINGS (LOSS) PER SHARE, basic
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$ | 0.38 | $ | - | $ | 0.20 | ||||||
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EARNINGS (LOSS) PER SHARE, diluted
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$ | 0.37 | $ | - | $ | 0.20 | ||||||
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WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
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||||||||||||
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Basic
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27,342,799 | 27,116,408 | 26,834,165 | |||||||||
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Diluted
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27,844,113 | 27,116,408 | 26,834,165 | |||||||||
Cont’d
LML PAYMENT SYSTEMS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In U.S. Dollars, except share data)
(Unaudited)
|
Three months ended March 31,
|
||||||||
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2011
|
2010
|
|||||||
|
REVENUE
|
$ | 25,150,290 | $ | 3,595,894 | ||||
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COSTS OF REVENUE (includes stock-based compensation (“s.b.c.”) expense of $17,091 (2010 - $36,649)
|
11,942,610 | 1,984,975 | ||||||
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GROSS PROFIT (excludes amortization and depreciation expense)
|
13,207,680 | 1,610,919 | ||||||
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OPERATING EXPENSES
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||||||||
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General and administrative (includes s.b.c. expense of $205,729 (2010 - $257,061)
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991,506 | 1,254,285 | ||||||
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Sales and marketing (includes s.b.c. expense of $17,091 (2010 - $748)
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171,753 | 120,533 | ||||||
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Product development and enhancement (includes s.b.c. expense of $14,528 (2010 - $11,967)
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148,153 | 125,101 | ||||||
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Amortization of property and equipment
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26,223 | 38,523 | ||||||
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Amortization of patents and intangible assets
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165,644 | 165,394 | ||||||
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INCOME (LOSS) BEFORE OTHER INCOME (EXPENSES) AND INCOME TAXES
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11,704,401 | (92,917 | ) | |||||
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Foreign exchange (loss) gain
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(104,174 | ) | (45,841 | ) | ||||
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Other (expense) income, net
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(85 | ) | (6,403 | ) | ||||
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Interest income
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19,160 | 4,487 | ||||||
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Interest expense
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- | (95 | ) | |||||
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INCOME (LOSS) BEFORE INCOME TAXES
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11,619,302 | (140,769 | ) | |||||
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Income tax expense (recovery)
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||||||||
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Current
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4,219,493 | (502,599 | ) | |||||
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Future
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131,232 | 547,044 | ||||||
| 4,350,725 | 44,445 | |||||||
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NET INCOME (LOSS)
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$ | 7,268,577 | $ | (185,214 | ) | |||
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EARNINGS (LOSS) PER SHARE, basic
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$ | 0.26 | $ | (0.01 | ) | |||
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EARNINGS (LOSS) PER SHARE, diluted
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$ | 0.25 | $ | (0.01 | ) | |||
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WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
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||||||||
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Basic
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27,618,345 | 27,116,408 | ||||||
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Diluted
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28,969,667 | 27,456,868 | ||||||
Cont’d
LML PAYMENT SYSTEMS INC.
CONSOLIDATED BALANCE SHEETS
(In U.S. Dollars)
(Unaudited)
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March 31,
|
||||||||
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2011
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2010
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|||||||
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ASSETS
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CURRENT ASSETS
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Cash and cash equivalents
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$ | 26,917,491 | $ | 5,069,763 | ||||
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Funds held for merchants
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7,164,420 | 5,804,752 | ||||||
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Restricted cash
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175,000 | 175,000 | ||||||
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Accounts receivable, less allowance of $28,152 (2010: $31,463)
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1,103,529 | 799,584 | ||||||
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Corporate taxes receivable
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101,162 | 1,072,930 | ||||||
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Prepaid expenses
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266,066 | 416,507 | ||||||
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Current portion of future income tax assets
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428,240 | 1,280,860 | ||||||
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Total current assets
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36,155,908 | 14,619,396 | ||||||
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PROPERTY AND EQUIPMENT, net
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163,222 | 219,580 | ||||||
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PATENTS
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287,877 | 455,304 | ||||||
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RESTRICTED CASH
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262,644 | 255,247 | ||||||
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FUTURE INCOME TAX ASSETS
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761,507 | 2,406,473 | ||||||
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GOODWILL
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17,874,202 | 17,874,202 | ||||||
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OTHER INTANGIBLE ASSETS
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4,215,187 | 4,710,337 | ||||||
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OTHER ASSETS
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21,041 | 20,641 | ||||||
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Total assets
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$ | 59,741,588 | $ | 40,561,180 | ||||
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LIABILITIES
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CURRENT LIABILITIES
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Accounts payable
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$ | 702,820 | $ | 836,274 | ||||
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Accrued liabilities
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1,390,847 | 1,040,443 | ||||||
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Corporate taxes payable
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4,796,157 | - | ||||||
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Funds due to merchants
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7,164,420 | 5,804,752 | ||||||
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Current portion of obligations under capital lease
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2,460 | 11,195 | ||||||
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Current portion of deferred revenue
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1,420,228 | 1,325,983 | ||||||
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Total current liabilities
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15,476,932 | 9,018,647 | ||||||
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OBLIGATIONS UNDER CAPITAL LEASE
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7,380 | 9,840 | ||||||
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DEFERRED REVENUE
|
935,979 | 2,155,162 | ||||||
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Total liabilities
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16,420,291 | 11,183,649 | ||||||
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SHAREHOLDERS’ EQUITY
|
||||||||
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CAPITAL STOCK
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||||||||
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Class A, preferred stock, $1.00 CDN par value, 150,000,000 shares authorized, issuable in series, none issued or outstanding
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- | - | ||||||
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Class B, preferred stock, $1.00 CDN par value, 150,000,000 shares authorized, issuable in series, none issued or outstanding
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- | - | ||||||
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Common shares, no par value, 100,000,000 shares authorized, 28,127,184 issued and outstanding (2010: 27,241,408)
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53,557,276 | 50,152,385 | ||||||
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CONTRIBUTED SURPLUS
|
7,959,595 | 7,952,343 | ||||||
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DEFICIT
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(18,590,128 | ) | (28,877,282 | ) | ||||
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ACCUMULATED OTHER COMPREHENSIVE INCOME
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394,554 | 150,085 | ||||||
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Total shareholders’ equity
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43,321,297 | 29,377,531 | ||||||
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Total liabilities and shareholders’ equity
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$ | 59,741,588 | $ | 40,561,180 | ||||
Cont’d
LML PAYMENT SYSTEMS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. Dollars)
(Unaudited)
|
Years ended March 31,
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2011
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2010
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2009
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||||||||||
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OPERATING ACTIVITIES:
|
||||||||||||
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Net income (loss)
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$ | 10,287,154 | $ | (125,826 | ) | $ | 5,455,166 | |||||
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Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
|
||||||||||||
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Provisions for losses on accounts receivable
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- | 5,705 | 17,461 | |||||||||
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Amortization of property and equipment
|
124,070 | 138,271 | 124,441 | |||||||||
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Amortization of patents and intangible assets
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662,576 | 662,576 | 660,893 | |||||||||
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Gain on disposal/abandonment of property and equipment
|
- | (3,830 | ) | (864 | ) | |||||||
|
Stock-based compensation
|
1,126,404 | 1,238,101 | 1,340,872 | |||||||||
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Stock-based compensation – income taxes
|
37,092 | |||||||||||
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Future income taxes
|
2,497,586 | 2,112,630 | (5,268,153 | ) | ||||||||
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Foreign exchange gain
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(3,592 | ) | (353,935 | ) | (370,692 | ) | ||||||
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Changes in non-cash operating working capital
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||||||||||||
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Restricted cash
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- | (100,000 | ) | 75,000 | ||||||||
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Accounts receivable
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(262,848 | ) | 50,004 | (214,903 | ) | |||||||
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Corporate taxes receivable
|
1,002,041 | (1,072,930 | ) | - | ||||||||
|
Prepaid expenses
|
154,307 | (110,661 | ) | (28,405 | ) | |||||||
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Other assets
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- | - | - | |||||||||
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Accounts payable and accrued liabilities
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170,393 | 255,012 | (536,940 | ) | ||||||||
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Corporate taxes payable
|
4,796,157 | (334,296 | ) | (204,471 | ) | |||||||
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Deferred revenue
|
(1,133,735 | ) | (1,225,382 | ) | (1,352,311 | ) | ||||||
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Net cash provided by (used in) operating activities
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19,457,605 | 1,135,439 | (302,906 | ) | ||||||||
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INVESTING ACTIVITIES:
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||||||||||||
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Other assets
|
- | - | 2,785 | |||||||||
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Proceeds from disposal of property and equipment
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- | 3,830 | 5,500 | |||||||||
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Acquisition of property and equipment
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(63,473 | ) | (80,223 | ) | (126,076 | ) | ||||||
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Development of patents
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- | - | (1,652 | ) | ||||||||
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Net cash used in investing activities
|
(63,473 | ) | (76,393 | ) | (119,443 | ) | ||||||
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FINANCING ACTIVITIES:
|
||||||||||||
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Payments on capital leases
|
(11,047 | ) | (178,423 | ) | (190,746 | ) | ||||||
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Payment of promissory note
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- | (2,321,460 | ) | (2,843,974 | ) | |||||||
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Proceeds from exercise of stock options
|
1,126,648 | 95,000 | - | |||||||||
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Proceeds from exercise of warrants
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1,122,000 | - | - | |||||||||
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Share capital financing costs
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- | - | (3,537 | ) | ||||||||
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Net cash provided by (used in) financing activities
|
2,237,601 | (2,404,883 | ) | (3,038,257 | ) | |||||||
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Effects of foreign exchange rate changes on cash and cash equivalents
|
215,995 | 277,070 | (150,632 | ) | ||||||||
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INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
21,847,728 | (1,068,767 | ) | (3,611,238 | ) | |||||||
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Cash and cash equivalents, beginning of year
|
5,069,763 | 6,138,530 | 9,749,768 | |||||||||
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Cash and cash equivalents, end of year
|
$ | 26,917,491 | $ | 5,069,763 | $ | 6,138,530 | ||||||
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Cash and cash equivalents consist of:
|
||||||||||||
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Cash
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$ | 22,091,702 | $ | 2,655,681 | $ | 558,571 | ||||||
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Money market fund
|
109,905 | 109,787 | 109,524 | |||||||||
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Commercial paper
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4,715,884 | 2,304,295 | 5,470,435 | |||||||||
| $ | 26,917,491 | $ | 5,069,763 | $ | 6,138,530 | |||||||
|
Supplemental disclosure of cash flow information:
|
||||||||||||
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Interest paid
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$ | - | $ | 48,034 | $ | 414,603 | ||||||
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Taxes paid
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$ | 705,000 | $ | 435,138 | $ | 1,240,310 | ||||||
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Taxes received
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$ | (1,523,196 | ) | - | - | |||||||
|
Non-cash investing and financing transactions not included in cash flows:
|
||||||||||||
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Property and equipment acquired through capital leases
|
$ | - | $ | 28,574 | $ | - | ||||||
Cont’d
CONTACTS:
Patrick H. Gaines Investor Relations
Chief Executive Officer (800) 888-2260
(604) 689-4440
###