Planet Payment, Inc. (LSE:PPT)(LSE:PPTR)(OTCQX:PLPM), a leading
international payment and data processor, today announced its results
for the three and six month periods ended June 30, 2009.
First Half 2009 Financial Highlights
Total revenue increased 49% to $21.3m (H1’08: $14.3m)
Gross profit increased 64% to $7.5m (H1’08: $4.6m)
Operating costs reduction achieved in accordance with Company’s
amended operating plan (adopted in October 2008). Cash operating
expenses decreased12.8% to $7.7m (H1 ‘08: $8.9m)
Adjusted EBITDA loss narrowed by 94% to $0.3m (H1’08 loss: $4.3m)
(Adjusted EBITDA excludes depreciation and amortization, non-cash
stock-related expense and for H1 ’08 only allowance for doubtful
Net loss was reduced by 63% to $2.3m (H1’08 loss: $6.3m)
Second Quarter 2009 Financial Highlights
Total revenue increased 20% to $10.9m (Q2’08: $9.1m)
Multi-Currency revenue grew 46% to $7.8m (Q2’08: $5.4m)
Processing revenue declined 17% to $3.1m (Q2’08: $3.8m) as a
result of expected attrition following the April 2008 iPAY
Gross profit increased 36% to $3.9m (Q2’08: $2.9m)
Attained positive EBITDA of $0.1m compared to the Q2’08 loss of $2.3m
and Q1’09 loss of $0.3m
Net loss narrowed by 72% to $0.96m (Q2’08 loss: $3.4m); and also
narrowed by 30% to $0.96m over the prior quarter (Q1’09: $1.4m).
During the first half of 2009 the Company continued to expand both
geographically and with new customers, while delivering solid results in
a challenging economic climate. While Visa reported that credit
transaction volume in the US declined 10% and cross-border volume (in
constant USD) was down 8% over the same quarter in the previous year,
Planet Payment’s total settled transaction processing volumes increased
16% to $504m over the same period in 2008 (Q2 ‘08: $435m) with
multi-currency processing volumes increasing 30% to $206m over the same
period (Q2 ‘08: $158m). This performance can be attributed to Planet
Payment’s robust new business pipeline. Approximately 44% of core
multi-currency transaction volume processed in June 2009 was attributed
to merchants activated since June 2008 and 11% of the June 2009 volume
derived from locations activated in the second quarter of 2009. These
results evidence the attractive product set and the ability of the
Company’s operations to react nimbly to changing market conditions.
Operational developments since 31 March 2009 include the following:
Implementation of the new processing services in Canada (including
Interac Support) with ICE and Peoples Trust announced in April, which
went live in July.
The May launch of services with JCB International to provide back-end
settlement and clearing processing for all merchants acquired directly
by JCB in Hong Kong.
Commencement of processing in April for Bancorp Bank’s merchants and
ISO’s following the agreement signed in April.
In Europe, the Company has been implementing a new processing solution
with a major European institution, which is expected to be launched
later this year.
1,100 further merchant locations were activated during the quarter,
bringing the Company’s total as of June 30, 2009 to 9,490 locations,
with the increase primarily attributed to new locations in
Commenting on the results, Philip Beck, Chairman of Planet Payment,
“Our revenue growth reflects the continued strength of our business
model and the demand for our solutions given the current economic
climate. We remain focused on working with our financial institution and
other business customers to roll out our innovative products in new
markets, open new sales channels and maximize revenues.”
Additional breakdown on the Company’s performance can be found in the
Management Discussion and Analysis appended to this release. In
accordance with the rules of the OTCQX market, the Company's Second
Quarter Report, including its Consolidated Condensed Financial
Statements (unaudited), as of and for the three and six months ended
June 30, 2009 and 2008 and as of December 31, 2008 have been posted on
the OTCQX website at www.otcqx.com
and on the Company’s website at www.planetpayment.com
About Planet Payment:
Planet Payment’s Common shares trade on AIM under the symbols PPT for
unrestricted Common shares and PPTR for Reg S Common shares and in the
United States on the OTCQX under the symbol PLPM.
Planet Payment enables processors, acquiring banks and their merchants
to accept process and reconcile credit card transactions in multiple
currencies, allowing cardholders to view prices and settle transactions
in their native currency. The Pay in Your Currency™ service is
Planet Payment’s suite of multi-currency processing solutions, which
includes a multi-currency pricing e-commerce service and a Dynamic
Currency Conversion service. Planet Payment’s BuyVoice®,
a mobile payment and commerce solution, allows merchants to accept
payments and sell product to customers using any mobile or landline
phone. With the acquisition of the iPAY® business,
Planet Payment also offers comprehensive Internet processing solutions
for credit card and electronic check payments.
Planet Payment is headquartered in New York and has offices in Atlanta,
Beijing, Bermuda, New Castle Delaware, London, Hong Kong, Shanghai and
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 the business, which was the subject of the iPAY
acquisition (including development plans and objectives relating to
Planet Payment’s and such acquired business) are forward-looking
statements. Such forward-looking statements are based on a number of
assumptions regarding Planet Payment’s present and future business
strategies, the assets acquired, contracts assumed and personnel hired
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 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,
particularly in China and changes in card association regulations and
practices; general economic risk and volume of international travel and
commerce and others. Additional risks may arise with respect to the
acquired assets and assumed contracts of which Planet Payment is not
fully aware at this time. 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 AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with
the accompanying financial statements and related notes thereto. The
following discussion may contain forward-looking statements that reflect
future plans, estimates, beliefs, and expected performance. The
forward-looking statements are dependents upon events, risks, and
uncertainties that may be outside our control. Our actual results could
differ materially from those discussed in these forward-looking
statements. As such, the forward-looking events discussed may not occur.
See discussion under the headings “Forward Looking Statements”
and “Risk Factors” below.
The financial information with respect to the three and six month
periods ended June 30, 2009 and 2008 that is discussed below is
unaudited. In the opinion of management, this information contains all
adjustments, consisting of normal recurring accruals, necessary for the
fair presentation of the results for such periods. The results of
operations for the interim periods are not necessarily indicative of the
results of operations for the full fiscal year. 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. These non-GAAP key business indicators, which
include EBITDA loss, transaction volumes, annualized revenue run rates,
merchant locations and points of sale, should not be considered
replacements for and should be read in conjunction with the GAAP
RESULTS OF OPERATIONS
Six Months Ended June 30, 2009 Compared to the Six Months Ended June
Revenue: Total revenue increased 49% to $21.3m (H1’2008: $14.3m)
led by new merchant deployments with banking partners in China, Taiwan,
and India and the acquisition of the iPAY business. Revenue from
multi-currency processing services increased 40% to $14.1m (H1’08:
$10.0m). Revenue from processing services (i.e. iPAY and other non
multi-currency processing) increased 69% to $7.1m (H1’08: $4.2m)
primarily attributed to the April 2008 acquisition of the iPAY
processing business in North America.
Transaction Volume: The Company processed total settled
transaction volume of over $994m, up 72% over the same period in 2008
(H1’08: $577m). Transaction volume from multi-currency processing
services increased 32% to $381m (H1’08: $288m). Of the June 2009
multi-currency volume, 44% was attributed to merchants activated since
June 2008; approximately 18% was added in the first half of 2009,
showing the continued strength of the new merchant deployment pipeline.
Settled processing volume grew 112% to $614m (H1’08: $290m), primarily
attributed to the April 2008 acquisition of the iPAY processing business
in North America.
Gross Profit: Gross profit rose 64% to $7.5m (H1‘08: $4.6m).
Overall gross margin percentage was 34% compared to 32% in H1‘08
primarily due to improved multi-currency processing margins and certain
implementation, development and processing fees which had no associated
direct costs of sales.
Operating Expenses: Operating expenses declined 12.4%, or $1.3m,
to $9.2m (H1’08: $10.5m) with cash operating expenses correspondingly
declining 12.8% to $7.7m (H1’08: $8.9m). The Company’s operating costs
as a percentage of revenue decreased to 46.9% from 73.7% in H1’08. These
declining expenses resulted from initiatives taken by the Company in
October 2008 to align cash operating expenses with revenues. It is noted
that H1’08 expenses included only a little over two months of iPAY
expenses, as opposed to H1 ’09 which included a full six months expenses.
Cash compensation expenses totalled $4.6m, a decline of 5.9% from H1’08,
representing 59% of total cash operating expenses for 2009 (H1’08:
$4.9m, representing 56% of total cash operating expenses). Headcount
declined from 150 in June 2008 to 140 in June 2009, primarily attributed
to the Company’s cost containment efforts. Other cash operating expenses
(i.e. excluding cash compensation expense) also declined 21% over H1’08.
EBITDA: Adjusted EBITDA loss for the period improved by 94% to
$0.3m (H1‘08 loss: $4.3m). Adjusted EBITDA loss excludes depreciation
and amortization expense of $0.7m, non-cash stock-related compensation
expense arising from SFAS 123R of $0.7m and for H1 ’08 only, allowance
for doubtful accounts.
Net Loss: The Company’s growing revenues in concert with the
reduction in operating expenses, led to a 63% improvement in net loss to
$2.3m (H1‘08 loss: $6.3m).
Three Months Ended June 30, 2009 Compared to the Three Months Ended
June 30, 2008
Revenue: Total revenue increased 20% to $10.9m (Q2’08: $9.1m)
primarily as a result of the increase in multi-currency processing from
new merchant deployments in China, Taiwan, and India. Revenue from
multi-currency processing services increased 46% to $7.8m (Q2’08:
$5.4m). Revenue from processing services (i.e. iPAY and other non
multi-currency processing) declined 17% to $3.1m (Q2’08: $3.8m) as a
result of expected attrition following the April 2008 iPAY acquisition.
Transaction Volume: The Company processed total settled
transaction volume of over $504m, up 16% over the same period in 2008
(Q2’08: $435m). Transaction volume from multi-currency processing
services increased 30% to $206m (Q2’08: $158m).. Settled processing
volume grew 7% to $298m (Q2’08: $277m).
Gross Profit: Gross profit rose 36% to $3.9m (Q2’08: $2.9m).
Overall gross margin percentage of 35.3% improved over Q2’08’s gross
margin percentage of 31.3%, primarily due to improved multi-currency
processing margins and the Company’s actions to enhance the
profitability of its iPAY processing portfolio.
Operating Expenses: Operating expenses declined more than 24%, to
$4.5m, (Q2’08: $6.0m), and cash operating expenses declined 26 % to
$3.8m (Q2’08: $5.1m). The Company’s operating costs as a percentage of
revenue continued to decline to 41% from 66% in Q2’08. These declining
expenses resulted from initiatives taken by the Company in October 2008
to amend its operating plan and align cash operating expenses with
Cash compensation expenses totalled $2.2m, a decline of 14.9% over Q2’08
and represented 59% of total cash operating expenses for the quarter
(Q2’08: $2.6m, represented 51% of total cash operating expenses).
Headcount grew to 140 at the end of June 2009 from 136 at the end of
March 2009. Other cash operating expenses (i.e. excluding cash
compensation expense) declined 37% over Q2’08.
EBITDA: Achieved first positive EBITDA quarter; adjusted EBITDA
improved to $0.1m from a loss in Q2’08 of $2.3m. Adjusted EBITDA loss
excludes depreciation and amortization expense of $0.4m and non-cash
stock-related compensation expense arising from SFAS 123R of $0.3m, and
other non-cash expense of $0.1m and for Q2’08 only, allowance for
doubtful accounts. This positive adjusted EBITDA reflects the Company’s
continuing progress towards positive cash flow in the near-term.
Net Loss: The Company narrowed its net loss by 72% to $1.0m
(Q2’08 loss: $3.4m) due to higher revenues and significant reduction in
Planet Payment, Inc.
Seth Asofsky (CFO)
Tel: + 1 516
Communications (UK PR for Planet Payment)
Emma Kane /Rebecca
Sanders-Hewett / Henry Columbine
Tel: +44 20 7566 6700
Adams Ltd (UK) (Nomad for Planet Payment)
Mark Williams /
Tel: +44 20 7050 6500
Inc. (US) (DAD for Planet Payment)