Attached files
| file | filename |
|---|---|
| 8-K - FORM 8K 120210 - LML PAYMENT SYSTEMS INC | form8k120210.htm |
Exhibit 99.1
LML REPORTS PROFITABLE THIRD QUARTER AND NINE MONTH RESULTS FOR FISCAL 2012
Profitability Achieved Across All Business Units
VANCOUVER, BC, February 10, 2012 — LML PAYMENT SYSTEMS INC. (“LML”) (NASDAQ: LMLP), a leading payments technology provider of financial payment processing solutions for e-commerce and traditional businesses, reports results for the third quarter and nine month period ended December 31, 2011.
Revenue for the third quarter ended December 31, 2011 was $5,251,000, compared to revenue of $11,060,000 for the third quarter ended December 31, 2010. Gross profit for the quarter was $2,236,000 or 42.6%. Net income for the quarter was $265,000, or $0.01 per share.
Revenue for the nine month period ended December 31, 2011 was $24,233,000 compared to $22,010,000 for the nine month period ended December 31, 2010. Gross profit was $12,286,000 or 50.7%. Net income was $4,435,000, or $0.16 per share, compared to net income of $2,762,000 or $0.10 per share, for the same period last year, an improvement of $1,673,000 or $0.05 per share.
“We received profitable contributions from all three business segments led by our transaction payment processing (TPP) segment which continued its impressive growth rate of 22% for the quarter, year to year, 13% sequentially quarter to quarter and 28% for the nine month period, easily eclipsing the average industry rate of 15%. Additionally, we received profitable contributions for both the quarter and the nine month period from our check processing (CP) segment and our intellectual property licensing (IPL) segment despite the absence of non-recurring settlement transactions associated with fully paid-up licenses during the quarter. It’s a very exciting time in our industry. Each day more payments are conducted electronically as opposed to cash or paper. More and more of these payments are made or received online and more and more transactions are being made safely and securely with small handheld devices to or from a world-wide market, all of which we expect, for us, will continue to drive more and more opportunity, innovation, customer satisfaction and growth”, said Patrick H. Gaines, Chief Executive Officer.
Q3 Highlights
|
·
|
Transaction Payment Processing (TPP) segment revenue increases 22% year over year and 13% sequentially quarter over quarter
|
|
·
|
All three business segments achieve profitability
|
|
·
|
873 new customers added bringing the total customer base to just over 12,000.
|
9 Months Highlights
|
·
|
Overall revenue, including non-recurring IPL revenue, increases 10% year over year
|
|
·
|
TPP segment revenue increases 28% year over year
|
|
·
|
Settled litigation with four defendants in Eastern District of Texas cases driving IPL revenue of $10.8 million.
|
|
·
|
All three business segments (TPP, CP and IPL) achieve profitability
|
|
·
|
Net income of $4,435,000 compared to $2,762,000 last year
|
-cont’d-
~1~
Conference Call
Management will host a conference call on February 10, 2012 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 800-699-1085. International callers please dial 303-223-2680.
If you are unable to join the call, an audio recording of the call will be available on our website at www.lmlpayment.com.
About LML Payment Systems Inc. (www.lmlpayment.com)
LML Payment Systems Inc., through its Canadian subsidiary Beanstream Internet Commerce Inc., and its U.S. subsidiaries Beanstream Internet Commerce Corp. and LML Payment Systems Corp., 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. RE40,220, 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 share-based payment 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-
~2~
LML PAYMENT SYSTEMS INC.
CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME
(In U.S. Dollars)
(Unaudited)
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
December 31
|
December 31
|
|||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||
|
REVENUE
|
$ | 5,250,562 | $ | 11,060,030 | $ | 24,233,363 | $ | 22,010,201 | ||||||||
|
COST OF REVENUE
|
3,014,951 | 5,045,891 | 11,947,653 | 10,818,240 | ||||||||||||
|
GROSS PROFIT
|
2,235,611 | 6,014,139 | 12,285,710 | 11,191,961 | ||||||||||||
|
OPERATING EXPENSES
|
||||||||||||||||
|
General and administrative
|
1,291,243 | 1,218,740 | 3,119,623 | 3,463,598 | ||||||||||||
|
Sales and marketing
|
175,843 | 221,849 | 503,505 | 582,644 | ||||||||||||
|
Product development and enhancement
|
294,622 | 152,482 | 763,833 | 459,366 | ||||||||||||
|
Amortization of intangible assets
|
165,643 | 165,644 | 496,933 | 496,932 | ||||||||||||
|
INCOME BEFORE OTHER INCOME AND INCOME TAXES
|
308,260 | 4,255,424 | 7,401,816 | 6,189,421 | ||||||||||||
|
Foreign exchange gain (loss)
|
41,251 | (102,369 | ) | 38,507 | (101,298 | ) | ||||||||||
|
Other expense
|
- | (626 | ) | - | (5,464 | ) | ||||||||||
|
Interest income
|
55,755 | 16,873 | 84,640 | 29,170 | ||||||||||||
|
INCOME BEFORE INCOME TAXES
|
405,266 | 4,169,302 | 7,524,963 | 6,111,829 | ||||||||||||
|
Income tax expense (recovery)
|
||||||||||||||||
|
Current
|
181,756 | 1,281,285 | 2,633,989 | 983,532 | ||||||||||||
|
Deferred
|
(41,893 | ) | 850,875 | 456,106 | 2,366,354 | |||||||||||
| 139,863 | 2,132,160 | 3,090,095 | 3,349,886 | |||||||||||||
|
NET INCOME
|
265,403 | 2,037,142 | 4,434,868 | 2,761,943 | ||||||||||||
|
OTHER COMPREHENSIVE INCOME (LOSS)
|
||||||||||||||||
|
Unrealized foreign exchange gain (loss) on translation of foreign operations
|
153,357 | 126,872 | (230,434 | ) | 140,698 | |||||||||||
|
TOTAL COMPREHENSIVE INCOME
|
$ | 418,760 | $ | 2,164,014 | $ | 4,204,434 | $ | 2,902,641 | ||||||||
|
EARNINGS PER SHARE, basic
|
$ | 0.01 | $ | 0.07 | $ | 0.16 | $ | 0.10 | ||||||||
|
EARNINGS PER SHARE, diluted
|
$ | 0.01 | $ | 0.07 | $ | 0.15 | $ | 0.10 | ||||||||
|
WEIGHTED AVERAGE SHARES OUTSTANDING
|
||||||||||||||||
|
Basic
|
28,233,434 | 27,253,886 | 28,205,734 | 27,252,620 | ||||||||||||
|
Diluted
|
28,708,934 | 28,285,669 | 28,921,938 | 27,707,532 | ||||||||||||
-cont’d-
~3~
LML PAYMENT SYSTEMS INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In U.S. Dollars, except as noted below)
(Unaudited)
|
As at December 31,
|
As at March 31,
|
|||||||
|
2011
|
2011
|
|||||||
|
ASSETS
|
||||||||
|
Current assets
|
||||||||
|
Cash and cash equivalents
|
$ | 23,928,642 | $ | 26,917,491 | ||||
|
Funds held for merchants
|
9,873,042 | 7,164,420 | ||||||
|
Short-term investments
|
3,211,665 | - | ||||||
|
Restricted cash
|
175,000 | 175,000 | ||||||
|
Accounts receivable, less allowance of $26,894 and $28,152, respectively
|
1,921,733 | 1,103,529 | ||||||
|
Corporate taxes receivable
|
342,168 | 101,162 | ||||||
|
Prepaid expenses
|
279,214 | 266,066 | ||||||
|
Total current assets
|
39,731,464 | 35,727,668 | ||||||
|
Property and equipment, net
|
120,451 | 163,222 | ||||||
|
Patents
|
162,312 | 287,877 | ||||||
|
Restricted cash
|
255,064 | 262,644 | ||||||
|
Deferred tax assets
|
733,641 | 1,189,747 | ||||||
|
Goodwill
|
17,874,202 | 17,874,202 | ||||||
|
Other intangible assets
|
3,843,825 | 4,215,187 | ||||||
|
Other assets
|
20,633 | 21,041 | ||||||
|
Total assets
|
$ | 62,741,592 | $ | 59,741,588 | ||||
|
LIABILITIES
|
||||||||
|
Current liabilities
|
||||||||
|
Accounts payable
|
$ | 771,085 | $ | 702,820 | ||||
|
Accrued liabilities
|
1,130,530 | 1,390,847 | ||||||
|
Corporate taxes payable
|
699,089 | 4,796,157 | ||||||
|
Funds due to merchants
|
9,873,042 | 7,164,420 | ||||||
|
Current portion of obligations under finance lease
|
2,460 | 2,460 | ||||||
|
Current portion of deferred revenue
|
1,528,691 | 1,420,228 | ||||||
|
Total current liabilities
|
14,004,897 | 15,476,932 | ||||||
|
Obligations under finance lease
|
5,400 | 7,380 | ||||||
|
Deferred revenue
|
58,862 | 935,979 | ||||||
|
Total liabilities
|
14,069,159 | 16,420,291 | ||||||
|
COMMITMENTS AND CONTINGENCIES
|
||||||||
|
SHAREHOLDERS’ EQUITY
|
||||||||
|
Capital stock
|
||||||||
|
Class A, preferred stock, $1.00 CDN par value, 150,000,000 shares authorized, issuable in series, none issued or outstanding
|
- | - | ||||||
|
Class B, preferred stock, $1.00 CDN par value, 150,000,000 shares authorized, issuable in series, none issued or outstanding
|
- | - | ||||||
|
Common shares, no par value, 100,000,000 shares authorized, 28,233,434 and 28,127,184 issued and outstanding, respectively
|
53,883,659 | 53,557,276 | ||||||
|
Contributed surplus
|
9,639,325 | 8,819,006 | ||||||
|
Warrants
|
113,662 | 113,662 | ||||||
|
Deficit
|
(15,128,333 | ) | (19,563,201 | ) | ||||
|
Accumulated other comprehensive income
|
164,120 | 394,554 | ||||||
|
Total shareholders’ equity
|
48,672,433 | 43,321,297 | ||||||
|
Total liabilities and shareholders’ equity
|
$ | 62,741,592 | $ | 59,741,588 | ||||
-cont’d-
~4~
LML PAYMENT SYSTEMS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. Dollars)
(Unaudited)
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
December 31
|
December 31
|
|||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||
|
Operating Activities:
|
||||||||||||||||
|
Net income
|
$ | 265,403 | $ | 2,037,142 | $ | 4,434,868 | $ | 2,761,943 | ||||||||
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities
|
||||||||||||||||
|
Amortization of property and equipment
|
23,119 | 30,514 | 82,397 | 97,847 | ||||||||||||
|
Amortization of intangible assets
|
165,643 | 165,644 | 496,933 | 496,932 | ||||||||||||
|
Share-based payments
|
652,233 | 368,113 | 941,327 | 1,152,924 | ||||||||||||
|
Deferred income taxes
|
(41,893 | ) | 826,550 | 456,106 | 2,342,029 | |||||||||||
|
Foreign exchange (gain) loss
|
(110,251 | ) | (730 | ) | 81,747 | (2,226 | ) | |||||||||
|
Changes in non-cash operating working capital
|
||||||||||||||||
|
Funds held in trust
|
- | 361,684 | - | - | ||||||||||||
|
Accounts receivable
|
(746,381 | ) | (196,246 | ) | (885,175 | ) | (319,316 | ) | ||||||||
|
Corporate taxes receivable
|
(80,244 | ) | (69,898 | ) | (245,721 | ) | (496,025 | ) | ||||||||
|
Prepaid expenses
|
(51,279 | ) | 152,522 | (18,954 | ) | 142,697 | ||||||||||
|
Accounts payable and accrued liabilities
|
310,178 | 9,061 | (137,812 | ) | 252,771 | |||||||||||
|
Corporate taxes payable
|
(1,402,144 | ) | 1,076,558 | (4,084,980 | ) | 1,076,558 | ||||||||||
|
Deferred revenue
|
(116,481 | ) | (341,216 | ) | (755,081 | ) | (893,994 | ) | ||||||||
|
Net cash (used in) provided by operating activities
|
(1,132,097 | ) | 4,419,698 | 365,655 | 6,612,140 | |||||||||||
|
Investing Activities:
|
||||||||||||||||
|
Acquisition of short term investments
|
- | - | (3,294,525 | ) | - | |||||||||||
|
Acquisition of property and equipment
|
(1,573 | ) | (14,717 | ) | (43,149 | ) | (44,998 | ) | ||||||||
|
Net cash used in investing activities
|
(1,573 | ) | (14,717 | ) | (3,337,674 | ) | (44,998 | ) | ||||||||
|
Financing Activities:
|
||||||||||||||||
|
Principal payments on finance leases
|
(660 | ) | - | (1,981 | ) | (9,202 | ) | |||||||||
|
Proceeds from exercise of stock options
|
- | 68,040 | 205,375 | 68,040 | ||||||||||||
|
Net cash (used in) provided by financing activities
|
(660 | ) | 68,040 | 203,394 | 58,838 | |||||||||||
|
Effects of foreign exchange rate changes on cash and cash equivalents
|
142,688 | 84,236 | (220,224 | ) | 83,546 | |||||||||||
|
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
(991,642 | ) | 4,557,257 | (2,988,849 | ) | 6,709,526 | ||||||||||
|
Cash and cash equivalents, beginning of period
|
24,920,284 | 7,222,032 | 26,917,491 | 5,069,763 | ||||||||||||
|
Cash and cash equivalents, end of period
|
$ | 23,928,642 | $ | 11,779,289 | $ | 23,928,642 | $ | 11,779,289 | ||||||||
|
Supplemental disclosure of cash flow information
|
||||||||||||||||
|
Interest paid
|
$ | - | $ | - | $ | - | $ | - | ||||||||
|
Taxes paid
|
$ | 1,661,000 | $ | 137,000 | $ | 6,957,921 | $ | 137,000 | ||||||||
|
CONTACTS:
|
|
|
Patrick H. Gaines
|
Investor Relations
|
|
CEO
|
(800) 888-2260
|
|
(604) 689-4440
|
|
###
~5~