Deferred IPO costs crater Planet Payment Q3 results
27 November 2012 | 1387 views | 0
Source: Planet Payments
Planet Payment, Inc. (PPT.L) (PPTR.L) (PLPM), a leading provider of international payment processing and multi-currency processing services, today announced its results for the three and nine months ended September 30, 2012.
Financial Highlights for the Three Months Ended September 30, 2012 ("Q3 2012")
Net revenue for the period increased approximately 3% to $9.9m [Q3 2011: $9.7m].
Consolidated Gross Billings increased 10% to $26.3m [Q3 2011: $23.9m]. (See Table 2 for explanation of this metric).
Gross Foreign Currency Mark-up increased 12% to $22.9m [Q3 2011: $20.5m]. (See Table 2 for explanation of this metric).
Net loss increased from $(0.4)m to $(4.0)m, primarily due to expensing of deferred IPO costs of $2.6m.
Adjusted EBITDA for the period decreased to $(0.4)m [Q3:2011 $0.6m]. See Table 1 for reconciliation of net (loss) income to Adjusted EBITDA.
Financial Highlights for the Nine Months Ended September 30, 2012 ("YTD" 2012)
Net revenue for the period increased approximately 7% to $31.7m [YTD 2011: $29.5m].
Consolidated Gross Billings increased 18% to $83.9m [YTD 2011: $70.9m].
Gross Foreign Currency Mark-up increased 21% to $73.1m [YTD 2011: $60.7m].
Net income (loss) decreased from $0.6m to $(4.3)m.
Adjusted EBITDA for the period decreased 53% to $1.5m [YTD 2011 $3.2m].
Operational Highlights for the YTD 2012
Total active merchant locations increased by 51% to approximately 38,000 as of September 30, 2012 [September 30, 2011: approximately 25,000]. (See Table 2 for explanation of this metric).
Settled multi-currency dollar volume processed increased 3% to $572m [Q3 2011: $555m]. YTD increase was 17% to $1.9b [YTD 2011: $1.6b].
Entered into a number of new contracts, notably multi-currency processing agreements with Taishin Bank in Taiwan and Mashreq in UAE and a processing agreement with China Unionpay.
Launched Pay in Your Currency(R) services with Global Payments Canada, Vantiv ATMs in the United States, Mashreq UAE, Citibank Philippines and Citibank Hong Kong and our MICROS Payment Gateway solution with Banorte in Mexico.
Our results reflect a 51% increase in active merchant locations over the last twelve months and groe last twelve e last twelve months and growth of 10% and 12% in Consolidated Gross Billings and Gross Foreign Currency Mark-up respectively in the third quarter of 2012 compared to the same period in 2011. The growth in our financial results, however, was muted by a number of factors. The poor economic climate, which our merchants and their customers are facing, led to a decline in sales of goods and services by merchants using our services, which negatively impacted our net revenue. The net loss in the third quarter primarily resulted from expensing previously deferred IPO costs of $2.3 m associated with our registration statement on Form S-1, as well as IPO costs incurred in the third quarter for a total amount of $2.6 m. The increase in our operating costs compared to 2011 primarily reflects additions to technology and support personnel to invest in the growth of the business and future launches into new markets including Mexico and Brazil. We believe that the growth in the key operating metrics of active merchant locations, Consolidated Gross Billings and Gross Foreign Currency Mark-up are indicative of the underlying strength of our business.
During the third quarter of 2012, we continued to expand our acquiring customer base, in particular announcing an agreement with Taishin Bank to provide our Pay in Your Currency(R) service to the bank's portfolio of merchants in Taiwan and the launch of Pay in Your Currency(R) with Mashreq Bank in the United Arab Emirates and Global Payments in Canada. We also launched services with Banorte in Mexico, initially implementing our MICROS Payment Gateway solution and plan to launch our Pay in Your Currency service shortly. Today, we announced an initiative to launch Planet Payment's Pay in Your Currencyand Shop in Your Currency(TM) services with Cielo S.A. in Brazil. We believe that these new initiatives are indicative of the strong pipeline of business that we can look forward to.
The Company expects to see continuing growth in active merchant locations during the remainder of 2012, from both existing customers and those that have recently implemented and launched services with Planet Payment. However, the Company may continue to see slower growth in Consolidated Gross Billings and [net revenue from existing customers, as a result of the macro-economic downturn affecting businesses around the world. The Company intends to continue to invest in supporting new business, implementations in new markets and growing the pipeline, although the benefit of these investments may only be realized in subsequent periods. Based on these and other factors referenced above, the Company estimates full year net revenue to be in the range of $43.0m to $43.5m, net loss for 2012 to be in the range of ($4.2)m to ($4.7)m and Adjusted EBITDA to be in the range of $2.3m to $2.8m (See Table 3 for reconciliation of estimated net loss to estimated Adjusted EBITDA).
The Company plans to file an amendment to its Form 10 in the next few weeks with a view to completing the process of becoming a NASDAQ listed company by the end of 2012.
Commenting on the results, Philip Beck, Chairman and CEO of Planet Payment said:
"Our third quarter financial results reflect the continued impact of the global economic environment during the year. We are pleased that we continue to build a strong pipeline for the future and are excited by the new opportunities that lie ahead of us, especially in the Latin American region. We are delighted to have been selected by Cielo in Brazil to deliver our innovative products to its customers.In pushing ahead with our NASDAQ listing, we believe this will mark another important milestone in the Company's development and be of significant benefit to the Company's shareholders, customers and employees."
Additional breakdown on the Company's performance can be found in the Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's Third Quarter Report. In accordance with the rules of the OTCQX market, the Company's Third Quarter Report, including its Consolidated Condensed Financial Statements (unaudited), as of and for the nine and three month periods ended September 30, 2012, have been posted on the OTCQX website at www.otcqx.com and on the Company's website.