VANCOUVER, British Columbia, June 22, 2009 (GLOBE NEWSWIRE) -- 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, 2009.
Q4
Revenue for the three months ended March 31, 2009 was approximately $3.1 million. Gross profit was $1.6 million or 52%. Income from operations was approximately $112,000 compared to a loss of ($504,000) for the previous year. Income before taxes was $137,000 compared to a loss of ($1.4 million) for the previous year. Net income was $5.15 million or $0.19 per share, compared to a loss of ($1.6 million) or ($0.07) per share, last year. Net cash flow from operating activities for the three months was approximately $281,000.
Non-GAAP
Non-GAAP net income for the fourth quarter was approximately $328,000 or $0.01 per share, compared to approximately $328,000 or $0.01 per share for the fourth quarter last year. Non-GAAP net income excludes stock-based compensation, depreciation and amortization, and other non-recurring items. A reconciliation of GAAP to non-GAAP financial measures is attached.
Fiscal Year
Revenue for the year ended March 31, 2009 was approximately $12.3 million compared to $11.3 million for the previous year -- an increase of 9.3%. Gross profit was $6.3 million or 51%. Income from operations was $599,000 compared to a loss of ($451,000) last year, an improvement of $1,050,000. Income before taxes was $1,034,000 compared to a loss of ($1,606,000) last year, an improvement of $2,640,000. Net Income was $5,455,000 or $0.20 per share, compared to a net loss of ($2,221,000) or ($0.10) per share, last year.
Non-GAAP
Non-GAAP net income for fiscal year 2009 was approximately $1.9 million or $0.07 per share compared to approximately $1.2 million or $0.05 per share for fiscal 2008. Non-GAAP net income excludes stock-based compensation, depreciation and amortization, and other non-recurring items.
Fiscal Year Highlights
* Revenue: $12.3million -- up 9.3% * Income from operations: $600,000 -- up over $1,000,000 from last year * Income before taxes: $1,034,000 -- up over $2,640,000 from last year * Net income: $5,455,000 -- up over $7.6 million from a loss of ($2,221,000) last year * New customers: 1,500 * New Channel Sales Partners: 100 * All three business segments (Transaction Payment Processing, Intellectual Property Licensing and Check Processing/Software Licensing) make profitable contributions
"We are extremely pleased with these results. Despite economic uncertainty, we have continued to grow our business in terms of both revenue and profitability. We are particularly pleased to see our initiatives and overall strategy were effective as all three of our business segments were profitable. This profitability allowed us to realize a future tax asset of $5,268,000 and is reflected in our net income amounts for both Q4 and the fiscal year. Certainly, there are challenges ahead, but we view these results through the lens of providing a sound foundation for future growth. We believe growth will continue to be driven by two secular trends; both consumers' and businesses' desire to use forms of electronic payment rather than cash, and the growing use of the Internet to search for products and make purchases," said Patrick H. Gaines, Chief Executive Officer of LML.
Conference Call
Management will host a conference call today 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 800-926-5071. International callers please dial 212-231-2900.
If you are unable to join the call, a telephone replay will be available through July 4, 2009 by dialing 800-633-8284 from within the U.S. or Canada, or 402-977-9140 if calling internationally. Please reference reservation number 21429742 when prompted.
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.
GAAP versus Non-GAAP Financial Information
In addition to GAAP financial measures, the Corporation has provided supplemental non-GAAP financial measures of net income and earnings per share, which exclude certain non-cash and non-recurring items. For purposes of this news release, non-GAAP net income and earnings per share exclude stock-based compensation expense under CICA 3870 and SFAS 123R, depreciation and amortization expense, and certain non-recurring items. A reconciliation of adjustments of non-GAAP to GAAP results for the fourth quarter, fiscal year-end, and prior periods is included in the enclosed table. The Corporation believes that non-GAAP financial measures are useful in assessing operating performance as they provide an additional basis to evaluate our ability to incur and service debt and to fund capital expenditures. In addition, non-GAAP financial information may provide management and investors with an enhanced understanding of our operating results and overall financial performance. Non-GAAP financial measures are not meant to be considered in isolation and should not be considered as alternatives to financial information prepared in accordance with GAAP. Furthermore, our method of calculating the non-GAAP financial measures presented in this news release may differ from methods used by other companies, and as a result, the non-GAAP financial measures disclosed herein may not be comparable to other similarly titled measures used by other companies.
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.
LML PAYMENT SYSTEMS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In U.S. Dollars, except share data)
(Unaudited)
Years ended March 31,
--------------------------
2009 2008
----------- -----------
REVENUE $12,378,848 $11,327,878
COSTS OF REVENUE (includes stock-based
compensation expense of $149,716 (2008
- $42,449; 2007 - $0)) 6,055,570 4,807,946
----------- -----------
GROSS PROFIT (excludes amortization
and depreciation expense) 6,323,278 6,519,932
OPERATING EXPENSES
General and administrative (includes
stock-based compensation expense of
$1,139,589 (2008 - $1,217,984; 2007 -
$877,334)) 4,343,406 5,659,694
Sales and marketing (includes
stock-based compensation expense of
$3,033 (2008 - $2,975; 2007 - $0)) 323,103 227,935
Product development and enhancement
(includes stock-based compensation
expense of $48,534 (2008 - $23,802;
2007 - $0)) 272,499 177,704
Amortization and depreciation 785,334 905,488
----------- -----------
INCOME (LOSS) BEFORE OTHER INCOME
(EXPENSES) AND INCOME TAXES 598,936 (450,889)
Foreign exchange gain (loss) 444,050 (229,661)
Other income (expense), net 10,898 (246,918)
Gain (Loss) on disposal/abandonment of
property and equipment 864 (726,325)
Interest income 226,472 406,063
Interest expense (247,536) (358,756)
Settlement expenses -- --
Due diligence expenses -- --
----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES 1,033,684 (1,606,486)
Income tax expense (recovery)
Current 846,671 614,342
Future (5,268,153) --
----------- -----------
(4,421,482) 614,342
----------- -----------
NET INCOME (LOSS) $ 5,455,166 $(2,220,828)
----------- -----------
EARNINGS (LOSS) PER SHARE, basic and
diluted $ 0.20 $ (0.10)
----------- -----------
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING,
Basic 26,834,165 21,869,404
----------- -----------
Diluted 26,834,165 21,869,404
----------- -----------
LML PAYMENT SYSTEMS INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In U.S. Dollars)
(Unaudited)
Three months ended March 31 Year Ended March 31,
--------------------------- ------------------------
2009 2008 2009 2008
----------- ----------- ----------- -----------
GAAP Net
Income (Loss) $ 5,155,038 $(1,563,391) $ 5,455,166 $(2,220,828)
Add stock-based
compensation 317,699 791,866 1,340,872 1,287,210
Add stock-based
compensation -
future income
taxes -- -- -- 11,185
Add amortization
and depreciation 195,680 261,618 785,334 905,489
Less unrealized
foreign exchange
(gain) loss (71,801) (177,271) (370,692) 177,847
Less (gain) loss
on disposal/
abandonment of
property and
equipment -- 728,025 (864) 726,325
Less future tax
recovery (5,268,153) -- (5,268,153) --
Add consolidation
of data centers
expenses -- 247,214 -- 247,214
Add non-
capitalizable
financing costs -- 39,675 -- 39,675
----------- ----------- ----------- -----------
Non-GAAP Net
Income $ 328,463 $ 327,736 $ 1,941,663 $ 1,174,117
----------- ----------- ----------- -----------
GAAP Net Earnings
(Loss) Per
Share, basic $ 0.19 $ (0.07) $ 0.20 $ (0.10)
Add stock-based
compensation 0.01 0.04 0.05 0.06
Add stock-based
compensation -
future income
taxes -- -- -- 0.00
Add amortization
and depreciation 0.01 0.01 0.03 0.04
Less unrealized
foreign exchange
(gain) loss (0.00) (0.01) (0.01) 0.01
Less (gain) loss
on disposal/
abandonment of
property and
equipment -- 0.03 (0.00) 0.03
Less future tax
recovery (0.20) -- (0.20) --
Add consolidation
of data centers
expenses -- 0.01 -- 0.01
Add non-
capitalizable
financing costs -- 0.00 -- 0.00
----------- ----------- ----------- -----------
Non-GAAP Net
Earnings Per
Share, basic $ 0.01 $ 0.01 $ 0.07 $ 0.05
----------- ----------- ----------- -----------
GAAP Net Earnings
(Loss) Per
Share, diluted $ 0.19 $ (0.07) $ 0.20 $ (0.10)
Add stock-based
compensation 0.01 0.04 0.05 0.06
Add stock-based
compensation -
future income
taxes -- -- -- 0.00
Add amortization
and depreciation 0.01 0.01 0.03 0.04
Less unrealized
foreign exchange
(gain) loss (0.00) (0.01) (0.01) 0.01
Less (gain) loss
on disposal/
abandonment of
property and
equipment -- 0.03 (0.00) 0.03
Less future tax
recovery (0.20) -- (0.20) --
Add consolidation
of data centers
expenses -- 0.01 -- 0.01
Add non-
capitalizable
financing costs -- 0.00 -- 0.00
----------- ----------- ----------- -----------
Non-GAAP Net
Earnings Per
Share, diluted $ 0.01 $ 0.01 $ 0.07 $ 0.05
----------- ----------- ----------- -----------
LML PAYMENT SYSTEMS INC.
CONSOLIDATED BALANCE SHEETS
(In U.S. Dollars)
(Unaudited)
Years Ended March 31,
------------------------
2009 2008
----------- -----------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 6,138,530 $ 9,749,768
Funds held for merchants 10,746,731 5,833,617
Restricted cash 175,000 250,000
Accounts receivable, less allowance of
$31,785 (2008: $32,168) 801,087 719,301
Prepaid expenses 295,702 273,751
Current portion of future income tax
assets 838,575 --
----------- -----------
Total current assets 18,995,625 16,826,437
PROPERTY AND EQUIPMENT, net 227,324 246,828
PATENTS 622,730 788,473
RESTRICTED CASH 125,030 153,619
FUTURE INCOME TAX ASSETS 4,429,578 --
OTHER ASSETS 19,020 23,247
GOODWILL 17,874,202 15,903,077
INTANGIBLE ASSETS 5,205,487 5,700,637
----------- -----------
Total assets $47,498,996 $39,642,318
----------- -----------
LIABILITIES
CURRENT LIABILITIES
Accounts payable $ 756,845 $ 1,745,679
Accrued liabilities 814,094 648,661
Corporate taxes payable 283,794 573,240
Funds due to merchants 10,746,731 5,833,617
Current portion of obligations under
capital lease 170,243 203,366
Current portion of promissory notes 2,100,920 2,731,923
Current portion of deferred revenue 1,361,046 1,448,921
----------- -----------
Total current liabilities 16,233,673 13,185,407
OBLIGATIONS UNDER CAPITAL LEASE -- 177,573
PROMISSORY NOTES -- 2,435,460
DEFERRED REVENUE 3,330,630 4,606,379
----------- -----------
Total liabilities 19,564,303 20,404,819
----------- -----------
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, 27,116,408 issued and
outstanding (2008: 26,341,832) 50,039,568 48,071,980
CONTRIBUTED SURPLUS 6,732,059 5,391,187
DEFICIT (28,751,456) (34,206,622)
ACCUMULATED OTHER COMPREHENSIVE LOSS (85,478) (19,046)
----------- -----------
Total shareholders' equity 27,934,693 19,237,499
----------- -----------
Total liabilities and shareholders' equity $47,498,996 $39,642,318
----------- -----------
LML PAYMENT SYSTEMS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. Dollars)
(Unaudited)
Years ended March 31,
-------------------------------------
2009 2008 2007
----------- ----------- -----------
OPERATING ACTIVITIES:
Net income (loss) $ 5,455,166 $(2,220,828) $(1,072,863)
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operating activities
Provisions for losses on
accounts receivable 17,461 10,942 37,347
Amortization and depreciation 785,334 905,488 335,555
(Gain) loss on disposal/
abandonment of property and
equipment (864) 726,325 (7,000)
Stock-based compensation 1,340,872 1,287,210 877,334
Stock-based compensation -
future income taxes -- 11,185 21,646
Future income taxes (5,268,153) -- --
Unrealized foreign exchange
(gain) loss (370,692) 177,847 --
Due diligence expenses -- -- 567,562
Other -- -- (252)
Changes in non-cash operating
working capital
Restricted cash 75,000 -- --
Accounts receivable (214,903) (130,694) 69,073
Prepaid expenses (28,405) 214,414 (30,326)
Other assets -- (8,360) 14,447
Accounts payable and accrued
liabilities (536,940) 323,496 (473,773)
Corporate taxes payable (204,471) 582,538 --
Deferred revenue (1,352,311) (1,339,390) 7,119,782
----------- ----------- -----------
Net cash (used in) provided
by operating activities (302,906) 540,173 7,458,532
----------- ----------- -----------
INVESTING ACTIVITIES:
Other assets 2,785 -- (776,170)
Acquisition of Beanstream,
net of cash acquired -- (7,286,834) --
Proceeds from disposal of
capital assets 5,500 107,900 7,252
Acquisition of property and
equipment (126,076) (144,241) (185,886)
Development of patents (1,652) (10,804) (14,341)
----------- ----------- -----------
Net cash used in investing
activities (119,443) (7,333,979) (969,145)
----------- ----------- -----------
FINANCING ACTIVITIES:
Payments on capital leases (190,746) (575,234) (79,588)
Payment of promissory note (2,843,974) -- --
Payments on long-term
borrowing -- -- (2,773)
Proceeds from exercise of
stock options -- 77,438 64,350
Proceeds from private
placement of common shares -- 7,200,000 --
Share capital financing costs (3,537) (509,666) --
----------- ----------- -----------
Net cash (used in) provided
by financing activities (3,038,257) 6,192,538 (18,011)
----------- ----------- -----------
Effects of foreign exchange
rate changes on cash and cash
equivalents (150,632) 188,028 --
(DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS (3,611,238) (413,240) 6,471,376
Cash and cash equivalents,
beginning of year 9,749,768 10,163,008 3,691,632
----------- ----------- -----------
Cash and cash equivalents,
end of year $ 6,138,530 $ 9,749,768 $10,163,008
----------- ----------- -----------
Cash and cash equivalents
consist of:
Cash $ 558,571 $ 8,348,906 $ 9,041,704
Money market fund 109,524 107,233 1,121,304
Commercial paper 5,470,435 1,293,629 --
----------- ----------- -----------
$ 6,138,530 $ 9,749,768 $10,163,008
----------- ----------- -----------
Supplemental disclosure of
cash flow information:
Interest paid $ 414,603 $ 61,640 $ 12,700
Taxes paid $ 1,240,310 $ 44,120 $ 7,042
----------- ----------- -----------
Non-cash investing and
financing transactions not
included in cash flows:
Property and equipment
acquired through capital
leases $ -- $ -- $ 1,146,473
----------- ----------- -----------