VANCOUVER, British Columbia, Aug. 12, 2009 (GLOBE NEWSWIRE) -- LML Payment Systems Inc. ("LML") (Nasdaq:LMLP), a leading payments technology provider of financial payment solutions for e-commerce and traditional businesses, reports results for its first quarter ended June 30, 2009.
Revenue for the three months ended June 30, 2009 was $3,236,000, an increase of 2%, over the $3,177,000 in revenue for the three months ended June 30, 2008. GAAP net income for the quarter was $90,000, or $0.00 per share, compared to GAAP net loss of $47,000, or $0.00 per share, for the first quarter ended June 30, 2008. Cash provided by operating activities was $113,000 compared to cash used in operating activities of ($225,000) for the same period last year.
Non-GAAP net income was $556,000 or $0.02 per share compared to $610,000 or $0.02 per share for the first 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.
"We are extremely pleased with our continued progress during the last quarter. In particular, our Transaction Payment Processing segment continued to do well. Actual Canadian sales were up close to 28%, but when converted to U.S. dollars and combined with the weakening Canadian dollar, we report an 11% growth rate for the segment. We added 291 new customers this quarter and this segment produced $2.2 million in revenue or 67% of our overall revenue while producing gross margins of approximately 44%. Despite slower economic times, we believe that e-commerce, and electronic payments in general, should continue to experience significant growth and we also believe that we are positioning ourselves to take advantage of that growth through our continued partnership approach to service offerings.
Also, revenue from our intellectual property segment increased 9% as we continued to move forward with respect to our intellectual property activities. We strongly believe in the validity and enforceability of our intellectual property and we anticipate having more to report in this regard in future quarters," said Patrick H. Gaines, Chief Executive Officer.
Q1 Highlights
* Transaction Payment Processing segment revenue increases 11% * New customers: 291 * Net income of $90,000 versus net loss of $47,000 -- an improvement of $137,000 * Retired last of the Promissory Notes associated with the Beanstream acquisition leaving no long-term debt * Cash provided by operating activities increases $338,000
Conference Call
Management will host a conference call on August 12, 2009 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 800-926-9174. International callers please dial 212-231-2902.
If you are unable to join the call, a telephone replay will be available through August 24, 2009 by dialing 800-633-8284 from within the U.S. or Canada, or 402-977-9140 if calling internationally. Please reference reservation number 21434095 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 first quarter 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 AND DEFICIT
(In U.S. Dollars, except share data)
(Unaudited)
Three Months Ended
June 30
----------------------------
2009 2008
------------- -------------
REVENUE $3,235,559 $3,177,472
COST OF REVENUE (includes stock-based
compensation expense of $36,650
(June 30, 2008 - $37,813)) 1,624,426 1,513,278
------------- -------------
GROSS PROFIT (excludes amortization and
depreciation expense) 1,611,133 1,664,194
OPERATING EXPENSES
General and administrative (includes
stock-based compensation expense of
$269,824 (June 30, 2008 - $307,317)) 948,512 1,064,764
Sales and marketing (includes stock-
based compensation expense of $748
(June 30, 2008 - $756)) 99,382 82,482
Product development and enhancement
(includes stock-based compensation
expense of $11,967
(June 30, 2008 - $12,100)) 99,395 72,091
Amortization and depreciation 198,247 194,357
------------- -------------
INCOME BEFORE OTHER INCOME (EXPENSES)
AND INCOME TAXES 265,597 250,500
Foreign exchange gain (loss) 28,192 (64,836)
Other income -- 8,321
Gain on sale of property and equipment 2,174 864
Interest income 11,467 62,436
Interest expense (45,281) (105,380)
------------- -------------
INCOME BEFORE INCOME TAXES 262,149 151,905
Income taxes 172,517 198,424
------------- -------------
NET INCOME (LOSS) 89,632 (46,519)
DEFICIT, beginning of period (28,751,456) (34,206,622)
------------- -------------
DEFICIT, end of period $(28,661,824) $(34,253,141)
============= =============
EARNINGS (LOSS) PER SHARE,
basic and diluted $0.00 $(0.00)
============= =============
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 27,116,408 26,341,832
Diluted 27,116,408 26,341,832
LML PAYMENT SYSTEMS INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In U.S. Dollars)
(Unaudited)
Three months ended June 30,
----------------------------
2009 2008
------------- -------------
GAAP Net Income (Loss) $89,632 $(46,519)
Add stock-based compensation 319,189 357,986
Add amortization and depreciation 198,247 194,357
Less foreign exchange (gain) loss (48,851) 105,165
Less (gain) on sale of assets (2,174) (864)
------------- -------------
Non-GAAP Net Income $556,043 $610,125
============= =============
GAAP Net Earnings (Loss) Per Share, basic $0.00 $(0.00)
Add stock-based compensation 0.01 0.01
Add amortization and depreciation 0.01 0.01
Less foreign exchange (gain) loss (0.00) 0.00
Less (gain) on sale of assets (0.00) (0.00)
------------- -------------
Non-GAAP Net Earnings Per Share, basic $0.02 $0.02
============= =============
GAAP Net Earnings (Loss) Per Share,
diluted $0.00 $(0.00)
Add stock-based compensation 0.01 0.01
Add amortization and depreciation 0.01 0.01
Less foreign exchange (gain) loss (0.00) 0.00
Less (gain) on sale of assets (0.00) (0.00)
------------- -------------
Non-GAAP Net Earnings Per Share, diluted $0.02 $0.02
============= =============
LML PAYMENT SYSTEMS INC.
CONSOLIDATED BALANCE SHEETS
(In U.S. Dollars, except as noted below)
(Unaudited)
June 30, March 31,
2009 2009
------------- -------------
ASSETS
Current Assets
Cash and cash equivalents $3,980,105 $6,138,530
Funds held for merchants 10,526,388 10,746,731
Restricted cash 175,000 175,000
Accounts receivable, less allowances of
$33,795 and $31,785, respectively 910,891 801,087
Prepaid expenses 335,771 295,702
Current portion of future income
tax assets 873,463 838,575
------------- -------------
Total current assets 16,801,618 18,995,625
Property and equipment, net 215,402 227,324
Patents, net 580,874 622,730
Restricted cash 135,598 125,030
Future income tax assets 4,621,216 4,429,578
Other assets 19,588 19,020
Goodwill 17,874,202 17,874,202
Other intangible assets, net 5,081,700 5,205,487
------------- -------------
TOTAL ASSETS $45,330,198 $47,498,996
============= =============
LIABILITIES
Current Liabilities
Accounts payable $710,499 $756,845
Accrued liabilities 725,525 814,094
Corporate taxes payable 390,460 283,794
Funds due to merchants 10,526,388 10,746,731
Obligations under capital lease 119,698 170,243
Promissory notes -- 2,100,920
Current portion of deferred revenue 1,397,756 1,361,046
------------- -------------
Total current liabilities 13,870,326 16,233,673
Deferred revenue 3,022,525 3,330,630
------------- -------------
TOTAL LIABILITIES 16,892,851 19,564,303
------------- -------------
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 and
27,116,408 issued and outstanding,
respectively 50,039,568 50,039,568
Contributed surplus 7,051,248 6,732,059
Deficit (28,661,824) (28,751,456)
Accumulated other comprehensive
income (loss) 8,355 (85,478)
------------- -------------
Total shareholders' equity 28,437,347 27,934,693
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $45,330,198 $47,498,996
============= =============
LML PAYMENT SYSTEMS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. Dollars)
(Unaudited)
Three Months Ended
June 30
----------------------------
2009 2008
------------- -------------
Operating Activities:
Net income (loss) $89,632 $(46,519)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities
Amortization and depreciation 198,247 194,357
Stock-based compensation 319,189 357,986
Gain on sale of property and equipment (2,174) (864)
Foreign exchange (gain) loss (48,851) 105,165
Changes in non-cash operating working
capital
Restricted cash -- 125,000
Accounts receivable (75,375) 82,560
Prepaid expenses (37,413) 24,515
Accounts payable and accrued liabilities (136,717) (738,927)
Corporate taxes payable 82,384 57,439
Deferred revenue (275,987) (385,562)
------------- -------------
Net cash provided by (used in) operating
activities 112,935 (224,850)
------------- -------------
Investing Activities:
Acquisition of property and equipment (12,608) (53,346)
Proceeds from disposal of property
and equipment 2,174 5,500
Development of patents -- (1,606)
------------- -------------
Net cash used in investing activities (10,434) (49,452)
------------- -------------
Financing Activities:
Payments on capital leases (50,587) (44,272)
Payment on promissory notes (2,321,460) (2,843,974)
Share capital financing costs -- (3,537)
------------- -------------
Net cash used in financing activities (2,372,047) (2,891,783)
------------- -------------
Effects of foreign exchange rate changes
on cash and cash equivalents 111,121 33,989
DECREASE IN CASH AND CASH EQUIVALENTS (2,158,425) (3,132,096)
Cash and cash equivalents, beginning
of period 6,138,530 9,749,768
------------- -------------
Cash and cash equivalents, end of period $3,980,105 $6,617,672
============= =============
Supplemental disclosure of cash flow
information
Interest paid $45,413 $105,380
Taxes paid $65,851 $145,264