LONG BEACH, N.Y., Nov. 02, 2016 (GLOBE NEWSWIRE) -- Planet Payment, Inc. PLPM, a provider of international payment and transaction processing and multi-currency processing services, today announced its results for the third quarter ended September 30, 2016.
Financial Highlights for the Third Quarter Ended September 30, 2016
- Total revenue for the quarter grew 8% to $13.6 million, compared to $12.6 million for 2015.
- Net income for the quarter increased to $2.2 million, compared to $0.1 million for 2015.
- Adjusted EBITDA and Adjusted EBITDA margins for the quarter nearly doubled to $3.7 million and 28%, respectively, compared to $1.9 million and 15%, respectively, for 2015.
Refer to Table 1 for reconciliation of net income to Adjusted EBITDA (a non-GAAP measure).
Operational Highlights
- Announced partnership with UATP for the offering of UnionPay to UATP's global network of airlines and travel agents.
- Launched Pay in Your Currency® with Redeban Multicolor in Colombia.
- Launched Pay in Your Currency with Ahli United Bank in Bahrain.
- Announced contract extension with Mashreq Bank for Pay in Your Currency in the United Arab Emirates.
- Announced contract extension with the Bank of Communications of China, renewing Pay in Your Currency and adding DCC at ATMs.
- Launched Multi-Currency Pricing with Moneris Solutions Corporation in Canada.
Revised Revenue Outlook for Fiscal Year 2016
Planet Payment revises its revenue guidance, while reaffirming its net income, Adjusted EBITDA and fully-diluted earnings per share guidance for the full year 2016, as follows:
- Net revenue for the year is estimated to be in the range of $56.0 million and $57.0 million, a change from our prior guidance of $57.0 million and $59.2 million.
- Net income for the year is estimated to be in the range of $8.6 million and $9.6 million.
- Adjusted EBITDA for the year is estimated to be in the range of $14.1 million and $15.1 million (see Table 3 for reconciliation of prospective net income to Adjusted EBITDA).
- Fully-diluted earnings per share is estimated to be in the range of $0.15 and $0.17 based on 51.6 million fully-diluted common shares outstanding.
Stock Repurchase Program
From August 2, 2016 to September 30, 2016, the Company repurchased approximately 1.6 million shares of common stock for an aggregate price of $6.0 million. As of September 30, 2016, the total amount of common stock repurchased under the program was 6.5 million shares for an aggregate price of $17.5 million.
On November 1, 2016, the Board of Directors authorized the repurchase of up to an additional $10.0 million of the Company's outstanding shares of common stock.
"This past quarter we announced several new partnership and merchant wins across multiple industries, from the Americas and EMEA to Asia-Pacific," said Carl Williams, Chairman and Chief Executive Officer of Planet Payment. "We are continuing to expand into growing and profitable avenues, while maintaining our core existing business, creating a steady framework for success."
Conference Call
The Company will host a conference call to discuss third quarter 2016 financial results today at 5:00 pm New York time. Carl J. Williams, Chairman and Chief Executive Officer, Robert Cox, President and Chief Operating Officer, and Raymond D'Aponte, Chief Financial Officer, will host the call. The call will be webcast live from the Company's investor relations website at http://ir.planetpayment.com/. The conference call can also be accessed live over the phone by dialing (877) 407-3982, or for international callers (201) 493-6780. A replay will be available approximately two hours after the call concludes and can be accessed on our website or by dialing (844) 512-2921, or for international callers (412) 317-6671, and entering the conference ID 13646668. The replay will be available until our next earnings call on our website or via telephone until November 9, 2016.
Additional analysis of the Company's performance can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2016 to be filed at www.sec.gov and posted on the Company's investor relations website.
About Planet Payment
Planet Payment is a provider of international payment and transaction processing and multi-currency processing services. We provide our services in 23 countries and territories across the Asia Pacific region, the Americas, the Middle East, Africa and Europe, primarily through our more than 74 acquiring bank and processor customers. Our point-of-sale and e-commerce services help merchants sell more goods and services to consumers, and together with our ATM services, are integrated within the payment card transaction flow, enabling our acquiring customers, their merchants and consumers to shop, pay, transact and reconcile payment transactions in multiple currencies, geographies and channels.
Notice Regarding 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 its business partners, net revenue, net income, Adjusted EBITDA, diluted earnings per share, future service launches with customers and new initiatives and customer pipeline are forward-looking statements. Such forward-looking statements are based on a number of assumptions regarding Planet Payment's present and future business strategies, and the environment in which Planet Payment expects to operate in the future, which assumptions may or may not be fulfilled in practice. Implementation of some or all of the new services referred to is subject to regulatory or other third party approvals. 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 and changes in card association regulations and practices; changes in domestic and international economic conditions; and changes in volume of international travel and commerce and others. Additional risks may arise with respect to commencing operations in new countries and regions, of which Planet Payment is not fully aware at this time. See the Company's Quarterly Report Form 10-Q for the three and nine months ended September 30, 2016 to be filed at www.sec.gov 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.
Non-GAAP Financial Information
The Company provides certain non-GAAP financial measures in this statement. Management believes that Adjusted EBITDA, when viewed with our results under GAAP and the accompanying reconciliations, provides useful information about our period-over-period results. Adjusted EBITDA is presented because management believes it provides additional information with respect to the performance of our fundamental business activities and is also frequently used by securities analysts, investors and other interested parties in the evaluation of comparable companies. We also rely on Adjusted EBITDA as a primary measure to review and assess the operating performance of our company and our management team in connection with our executive compensation. These non-GAAP key business indicators, which include Adjusted EBITDA, should not be considered replacements for and should be read in conjunction with the GAAP financial measures.
We define Adjusted EBITDA as GAAP net income adjusted to exclude: (1) interest expense, (2) interest income, (3) provision for income taxes, (4) depreciation and amortization, (5) stock-based compensation expense and (6) certain other items management believes affect the comparability of operating results. Please see "Adjusted EBITDA" below for more information and for a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.
| Table 1. Reconciliation of Net Income to Adjusted EBITDA | ||||||||||||||||||||
| For the three and nine months ended September 30, 2016 and 2015 | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||
| ADJUSTED EBITDA: | ||||||||||||||||||||
| Net income | $ | 2,225,413 | $ | 105,971 | $ | 5,268,441 | $ | 3,692,925 | ||||||||||||
| Interest expense | 88,669 | 10,372 | 186,366 | 38,815 | ||||||||||||||||
| Interest income | (428 | ) | (392 | ) | (1,250 | ) | (1,183 | ) | ||||||||||||
| Provision for income taxes | 289,543 | 92,674 | 675,951 | 308,406 | ||||||||||||||||
| Depreciation and amortization | 598,699 | 735,442 | 1,825,792 | 2,175,220 | ||||||||||||||||
| Stock-based compensation expense | 317,459 | 699,227 | 1,498,358 | 1,160,817 | ||||||||||||||||
| Restructuring charges | 229,121 | 283,726 | 354,389 | 283,726 | ||||||||||||||||
| Adjusted EBITDA (non-GAAP) | $ | 3,748,476 | $ | 1,927,020 | $ | 9,808,047 | $ | 7,658,726 | ||||||||||||
| Table 2. Explanation of Key Metrics | |||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||
| September 30, | September 30, | ||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||
| KEY METRICS: | |||||||||||||
| Total active merchant locations (at period end)(1) | $ | 196,534 | $ | 109,376 | $ | 196,534 | $ | 109,376 | |||||
| Total settled transactions processed(2) | 45,471,822 | 62,035,730 | 144,543,770 | 162,932,550 | |||||||||
| Total settled dollar volume processed(3) | 2,005,105,612 | 2,055,804,097 | 6,031,361,269 | 6,060,474,546 | |||||||||
| Adjusted EBITDA (non-GAAP)(4) | 3,748,476 | 1,927,020 | 9,808,047 | 7,658,726 | |||||||||
| Capitalized expenditures | 404,653 | 279,098 | 1,269,692 | 1,086,866 | |||||||||
| Multi-currency processing services key metrics: | |||||||||||||
| Active merchant locations (at period end)(1) | 125,598 | 37,495 | 125,598 | 37,495 | |||||||||
| Settled transactions processed(5) | 4,182,779 | 3,547,406 | 12,344,961 | 10,622,859 | |||||||||
| Settled dollar volume processed(6) | $ | 652,029,363 | $ | 687,490,018 | $ | 2,040,828,647 | $ | 1,986,796,246 | |||||
| Average net mark-up percentage on settled dollar volume processed(7) | 1.25 | % | 1.11 | % | 1.21 | % | 1.15 | % | |||||
| Payment processing services key metrics: | |||||||||||||
| Active merchant locations (at period end)(1) | 72,488 | 73,532 | 72,488 | 73,532 | |||||||||
| Payment processing services revenue(8) | $ | 5,445,764 | $ | 4,826,084 | $ | 15,640,815 | $ | 13,898,759 | |||||
| Settled transactions processed(9) | 41,520,262 | 58,592,942 | 132,751,262 | 152,632,914 | |||||||||
| Settled dollar volume processed(10) | $ | 1,392,081,077 | $ | 1,380,707,538 | $ | 4,089,927,472 | $ | 4,108,006,782 | |||||
(1) We consider a merchant location to be active as of a date if the merchant completed at least one revenue-generating transaction at the location during the 90-day period ending on such date. The total number of active merchant locations exceeds the total number of merchants, as merchants may have multiple locations. As of September 30, 2016 and 2015, there were 1,552 and 1,651 active merchant locations, respectively, included in both multi-currency and payment processing active merchant locations but are not included in total active merchant locations, in order to eliminate counting these locations twice.
(2) Represents total settled transactions (excluding other transaction types such as authorizations and rate look-ups).
(3) Represents total settled dollar volume processed through both our multi-currency and payment processing services.
(4) We define Adjusted EBITDA as GAAP net income adjusted to exclude (1) interest expense, (2) interest income, (3) provision for income taxes, (4) depreciation and amortization, (5) stock-based compensation expense and (6) certain other items management believes affect the comparability of operating results. Please see "—Adjusted EBITDA" below for more information and for a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.
(5) Represents settled transactions processed using our multi-currency processing services (excluding other transaction types such as authorizations and rate look-ups).
(6) Represents the total settled dollar volume processed using our multi-currency processing services.
(7) Represents the average net foreign currency mark-up percentage earned on settled dollar volume processed using our multi-currency processing services. The average net mark-up percentage on settled dollar volume processed is calculated by taking total multi-currency processing services net revenue ($8.2 million and $7.6 million for the three months ended September 30, 2016 and 2015, respectively, and $24.7 million and $22.9 million for the nine months ended September 30, 2016 and 2015, respectively) and dividing by settled dollar volume processed (see footnote 6 above). For purposes of calculating "Average net mark-up percentage on settled dollar volume processed," multi-currency processing services revenue includes revenue related to multi-currency transactions only.
(8) Represents revenue earned and reported on payment processing services.
(9) Represents settled transactions processed using our payment processing services (excluding other transaction types such as authorizations and rate look-ups).
(10) Represents the total settled dollar volume processed using our payment processing services.
| Table 3. Reconciliation of Prospective Net Income to Adjusted EBITDA | ||||||
| For the year ending December 31, 2016 | ||||||
| Range | ||||||
| Millions | ||||||
| ADJUSTED EBITDA: | Low | High | ||||
| Net income | $ | 8.6 | $ | 9.6 | ||
| Interest expense, net | 0.2 | 0.2 | ||||
| Provision for income taxes | 0.9 | 0.9 | ||||
| Depreciation and amortization | 2.6 | 2.6 | ||||
| Stock-based compensation expense | 1.8 | 1.8 | ||||
| Adjusted EBITDA (non-GAAP) | $ | 14.1 | $ | 15.1 | ||
| Planet Payment, Inc. | ||||||||||
| Condensed Consolidated Balance Sheets | ||||||||||
| As of | As of | |||||||||
| September 30, | December 31, | |||||||||
| 2016 | 2015 | |||||||||
| (unaudited) | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 7,440,864 | $ | 14,675,515 | ||||||
| Restricted cash | 3,887,288 | 5,050,147 | ||||||||
| Accounts receivable, net of allowances of $0.1 million as of September 30, 2016 and December 31, 2015 | 6,641,993 | 6,406,496 | ||||||||
| Prepaid expenses and other assets | 1,761,184 | 1,800,566 | ||||||||
| Total current assets | 19,731,329 | 27,932,724 | ||||||||
| Other assets: | ||||||||||
| Restricted cash | 551,054 | 551,917 | ||||||||
| Property and equipment, net | 1,321,342 | 1,811,619 | ||||||||
| Software development costs, net | 4,177,879 | 3,964,454 | ||||||||
| Intangible assets, net | 981,279 | 1,378,264 | ||||||||
| Goodwill | 294,844 | 286,852 | ||||||||
| Deferred tax asset and other long-term assets | 8,270,540 | 8,581,082 | ||||||||
| Total other assets | 15,596,938 | 16,574,188 | ||||||||
| Total assets | $ | 35,328,267 | $ | 44,506,912 | ||||||
| Liabilities and stockholders' equity | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 446,946 | $ | 306,520 | ||||||
| Accrued expenses | 4,459,360 | 6,438,600 | ||||||||
| Due to merchants | 4,068,506 | 5,240,427 | ||||||||
| Current portion of capital leases | 206,873 | 290,911 | ||||||||
| Total current liabilities | 9,181,685 | 12,276,458 | ||||||||
| Long-term liabilities: | ||||||||||
| Long-term debt | 9,916,000 | — | ||||||||
| Other long-term liabilities | 1,107,982 | 1,666,938 | ||||||||
| Total long-term liabilities | 11,023,982 | 1,666,938 | ||||||||
| Total liabilities | 20,205,667 | 13,943,396 | ||||||||
| Commitments and contingencies | ||||||||||
| Stockholders' equity: | ||||||||||
| Convertible preferred stock—10,000,000 shares authorized as of September 30, 2016 and December 31, 2015, $0.01 par value: Series A—2,243,750 issued and 1,535,398 outstanding as of September 30, 2016 and 2,243,750 issued and outstanding as of December 31, 2015; $6,141,592 and $8,975,000 aggregate liquidation preference as of September 30, 2016 and December 31, 2015, respectively | 15,354 | 22,438 | ||||||||
| Common stock—250,000,000 shares authorized as of September 30, 2016 and December 31, 2015, $0.01 par value, and 59,230,684 issued and 48,855,330 shares outstanding as of September 30, 2016, and 56,191,389 issued and 52,585,503 shares outstanding as of December 31, 2015 | 592,307 | 561,914 | ||||||||
| Treasury stock, at cost, 10,375,354 shares and 3,605,886 shares as of September 30, 2016 and December 31, 2015, respectively | (31,726,486 | ) | (7,883,012 | ) | ||||||
| Additional paid-in capital | 109,870,586 | 106,741,026 | ||||||||
| Accumulated other comprehensive loss | (529,197 | ) | (510,445 | ) | ||||||
| Accumulated deficit | (63,099,964 | ) | (68,368,405 | ) | ||||||
| Total stockholders' equity | 15,122,600 | 30,563,516 | ||||||||
| Total liabilities and stockholders' equity | $ | 35,328,267 | $ | 44,506,912 | ||||||
| Planet Payment, Inc. | ||||||||||||||||||||
| Condensed Consolidated Statements of Operations (unaudited) | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||
| Revenue: | ||||||||||||||||||||
| Net revenue | $ | 13,621,239 | $ | 12,618,413 | $ | 40,409,128 | $ | 37,434,542 | ||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Cost of revenue: | ||||||||||||||||||||
| Payment processing service fees | 2,781,289 | 2,692,090 | 8,207,202 | 7,871,179 | ||||||||||||||||
| Processing and service costs | 2,878,088 | 3,776,232 | 9,902,879 | 10,399,830 | ||||||||||||||||
| Total cost of revenue | 5,659,377 | 6,468,322 | 18,110,081 | 18,271,009 | ||||||||||||||||
| Selling, general and administrative expenses | 5,222,560 | 5,657,740 | 15,908,166 | 14,840,844 | ||||||||||||||||
| Restructuring charges | 229,121 | 283,726 | 354,389 | 283,726 | ||||||||||||||||
| Total operating expenses | 11,111,058 | 12,409,788 | 34,372,636 | 33,395,579 | ||||||||||||||||
| Income from operations | 2,510,181 | 208,625 | 6,036,492 | 4,038,963 | ||||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Interest expense | (88,669 | ) | (10,372 | ) | (186,366 | ) | (38,815 | ) | ||||||||||||
| Interest income | 428 | 392 | 1,250 | 1,183 | ||||||||||||||||
| Other income | 93,016 | — | 93,016 | — | ||||||||||||||||
| Total other income (expense), net | 4,775 | (9,980 | ) | (92,100 | ) | (37,632 | ) | |||||||||||||
| Income from operations before provision for income taxes | 2,514,956 | 198,645 | 5,944,392 | 4,001,331 | ||||||||||||||||
| Provision for income taxes | (289,543 | ) | (92,674 | ) | (675,951 | ) | (308,406 | ) | ||||||||||||
| Net income | $ | 2,225,413 | $ | 105,971 | $ | 5,268,441 | $ | 3,692,925 | ||||||||||||
| Basic net income per share applicable to common stockholders | $ | 0.04 | $ | 0.00 | $ | 0.10 | $ | 0.06 | ||||||||||||
| Diluted net income per share applicable to common stockholders | $ | 0.04 | $ | 0.00 | $ | 0.09 | $ | 0.06 | ||||||||||||
| Weighted average common stock outstanding (basic) | 49,179,596 | 51,360,758 | 49,848,634 | 52,985,106 | ||||||||||||||||
| Weighted average common stock outstanding (diluted) | 51,254,223 | 52,384,391 | 52,002,249 | 53,611,968 | ||||||||||||||||
| Planet Payment, Inc. | ||||||||||
| Condensed Consolidated Statements of Cash Flows (unaudited) | ||||||||||
| Nine Months Ended | ||||||||||
| September 30, | ||||||||||
| 2016 | 2015 | |||||||||
| Cash flows from operating activities: | ||||||||||
| Net income | $ | 5,268,441 | $ | 3,692,925 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
| Stock-based compensation expense | 1,498,358 | 1,197,741 | ||||||||
| Depreciation and amortization expense | 2,083,655 | 2,175,220 | ||||||||
| Provision for doubtful accounts | 62,675 | 7,403 | ||||||||
| Disposal of property and equipment | 500 | — | ||||||||
| Gain on insurance settlement | — | (517,930 | ) | |||||||
| Changes in operating assets and liabilities: | ||||||||||
| Decrease (increase) in settlement assets | 1,160,869 | (322,982 | ) | |||||||
| (Increase) decrease in accounts receivables, prepaid expenses and other current assets | (258,790 | ) | 1,184,851 | |||||||
| Decrease (increase) in other long-term assets | 310,542 | (131,588 | ) | |||||||
| (Decrease) increase in accounts payable and accrued expenses | (3,062,995 | ) | 559,792 | |||||||
| (Decrease) increase in due to merchants | (1,169,931 | ) | 323,105 | |||||||
| Other | (44,740 | ) | (133,242 | ) | ||||||
| Net cash provided by operating activities | 5,848,584 | 8,035,295 | ||||||||
| Cash flows from investing activities: | ||||||||||
| Decrease (increase) in restricted cash | 2,853 | (27,651 | ) | |||||||
| Decrease in merchant reserves | (1,990 | ) | (92,169 | ) | ||||||
| Purchase of property and equipment | (156,165 | ) | (175,570 | ) | ||||||
| Capitalized software development | (999,733 | ) | (828,393 | ) | ||||||
| Purchase of intangible assets | (16,299 | ) | (16,500 | ) | ||||||
| Net cash used for investing activities | (1,171,334 | ) | (1,140,283 | ) | ||||||
| Cash flows from financing activities: | ||||||||||
| Proceeds from issuance of common stock | 2,287,990 | 1,203,750 | ||||||||
| Principal payments on capital lease obligations | (272,417 | ) | (404,884 | ) | ||||||
| Borrowings under credit facility | 13,916,000 | — | ||||||||
| Repayments under credit facility | (4,000,000 | ) | — | |||||||
| Purchase of treasury stock | (23,843,474 | ) | (4,567,501 | ) | ||||||
| Net cash used for financing activities | (11,911,901 | ) | (3,768,635 | ) | ||||||
| Effect of exchange rate changes on cash and cash equivalents(*) | — | — | ||||||||
| Net (decrease) increase in cash and cash equivalents | (7,234,651 | ) | 3,126,377 | |||||||
| Cash and cash equivalents at beginning of period | 14,675,515 | 9,837,791 | ||||||||
| Cash and cash equivalents at end of period | $ | 7,440,864 | $ | 12,964,168 | ||||||
| Supplemental disclosure: | ||||||||||
| Cash paid for: | ||||||||||
| Interest | $ | 165,252 | $ | 36,585 | ||||||
| Income taxes | 744,911 | 539,520 | ||||||||
| Non-cash investing and financing activities: | ||||||||||
| Common stock issued for preferred stock conversion | 21,629 | — | ||||||||
| Common stock issued for stock options exercised | 98 | — | ||||||||
| Assets acquired under capital leases | 122,630 | 156,129 | ||||||||
| Accrued capitalized hardware, software and fixed assets | 75,870 | 39,158 | ||||||||
| Capitalized stock-based compensation | 21,625 | 27,245 | ||||||||
(*) For the nine months ended September 30, 2016 and 2015, the effect of exchange rate changes on cash and cash equivalents was immaterial.
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