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06-08-2009 13:30:00

Planet Payment Reports First Half 2009 Results

Relateret indhold

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)

    • Multi-Currency revenue grew 40% to $14.1m (H1’08: $10.0m)

    • Processing revenue increased 69% to $7.1m (H1’08: $4.2m)

  • 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

    accounts)

  • 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

      acquisition.

  • 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

    Asia-Pacific.

Commenting on the results, Philip Beck, Chairman of Planet Payment,

Inc., said:

“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

Singapore.

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

financial measures.

RESULTS OF OPERATIONS

Six Months Ended June 30, 2009 Compared to the Six Months Ended June

30, 2008

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

revenues.

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

costs.

Planet Payment, Inc.

Seth Asofsky (CFO)

Tel: + 1 516

670 3200

www.planetpayment.com

or

Redleaf

Communications (UK PR for Planet Payment)

Emma Kane /Rebecca

Sanders-Hewett / Henry Columbine

Tel: +44 20 7566 6700

planet@redleafpr.com

or

Canaccord

Adams Ltd (UK) (Nomad for Planet Payment)

Mark Williams /

Andrew Chubb

Tel: +44 20 7050 6500

or

Canaccord Adams,

Inc. (US) (DAD for Planet Payment)

Andy Viles

Tel: +1

617-371-3900

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