EX-99 2 exh99_1.htm EXHIBIT 99_1 exh99_1.htm
Exhibit 99.1
 
Logo
 
NEWS RELEASE
 
 
LML REPORTS PROFITABLE RESULTS FOR BOTH
FOURTH QUARTER AND FISCAL YEAR 2012


VANCOUVER, BC, June 18, 2012 — 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, 2012.

Q4

Revenue for the three months ended March 31, 2012 was $10.7 million.  Gross profit was $5.4 million or 50%.  Income before taxes was $3.5 million.  Net income was $2.3 million or $0.09 per share, and net cash flow from operating activities for the three months was approximately $2.75 million.

Fiscal Year

Revenue for the year ended March 31, 2012 was $34.9 million.  Gross profit was $17.6 million or 50%.   Income before taxes was $11 million and net income was $6.7 million or $0.24 per share.

Fiscal Year Highlights

·  
Transaction Payment Processing business segment revenue increases over 28%
 
·  
Added 3,000 customers; Total customer base increases to over 13,000
 
·  
New products developed for transaction security, multi-currency processing and mobile payment services initiatives
 
·  
All three business segments (Transaction Payment Processing, Check Processing and Intellectual Property  Licensing) made profitable contributions
 
·  
Settled litigation with all remaining defendants in both Eastern District of Texas cases, generating non-recurring  Intellectual Property Licensing revenue of $14.4 million

“An ever expanding market opportunity and quickly developing technologies are allowing for, and in fact driving, unprecedented innovation and change in the payments industry.  Our Transaction Payment Processing segment continued its impressive growth march, once again expanding revenue by close to 30%, while increasing our customer base by over 3,000 merchants.  Innovation was no stranger to us – we developed new products in transaction security with our tokenization product and with multi-currency tools created our global transaction service and, finally, we developed what we believe is the most comprehensive mobile payment service in the country.  Transaction volumes increased across the board as we processed over $8 billion in transaction volume.  Our check operations carried out their own innovation and continued to make a profitable contribution and we completed the monetization of our intellectual property positioning ourselves to create and support even more innovation and growth in the future,” said Patrick H. Gaines, Chief Executive Officer of LML.

Conference Call
Management will host a conference call tomorrow 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 1-800-269-0310.   International callers please dial 303-223-2680.

If you are unable to join the call, an audio recording of the call will be available on our website at www.lmlpayment.com.

Cont’d…

 
 

 

 
 
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.

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 share-based payment 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.

























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LML PAYMENT SYSTEMS INC.
CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME
(In U.S. Dollars, except share data)
(Unaudited)




   
Years ended March 31,
 
             
   
2012
   
2011
 
             
REVENUE
  $ 34,916,802     $ 47,160,490  
COSTS OF REVENUE
    17,268,762       22,781,971  
GROSS PROFIT
    17,648,040       24,378,519  
                 
OPERATING EXPENSES
               
General and administrative
    4,546,970       4,632,066  
Sales and marketing
    1,079,567       1,161,156  
Product development and enhancement
    1,168,973       723,030  
INCOME BEFORE OTHER INCOME (EXPENSES) AND INCOME TAXES
    10,852,530       17,862,267  
                 
Foreign exchange gain (loss)
    56,892       (205,472 )
Other expense
    -       (5,549 )
Interest income
    128,863       48,330  
INCOME BEFORE INCOME TAXES
    11,038,285       17,699,576  
                 
Income tax expense
               
Current
    4,023,193       5,203,025  
Deferred
    287,377       2,497,586  
      4,310,570       7,700,611  
                 
NET INCOME
  $ 6,727,715     $ 9,998,965  
                 
OTHER COMPREHENSIVE INCOME
               
Unrealized foreign exchange (loss) gain on translation of foreign operations
    (120,946 )     244,469  
                 
TOTAL COMPREHENSIVE INCOME
  $ 6,606,769     $ 10,243,434  
                 
EARNINGS  PER SHARE, basic
  $ 0.24     $ 0.37  
EARNINGS  PER SHARE, diluted
  $ 0.23     $ 0.36  
                 
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING,
               
Basic
    28,213,961       27,342,799  
Diluted
    29,123,877       27,844,113  

























Cont’d
 
 

 
 

 

 
 
 
LML PAYMENT SYSTEMS INC.
CONSOLIDATED STATEMETNS OF FINANCIAL POSITION
(In U.S. Dollars)
(Unaudited)




   
March 31,
   
March 31,
   
April 1,
 
   
2012
   
2011
   
2010
 
ASSETS
                 
CURRENT ASSETS
                 
Cash and cash equivalents
  $ 26,783,754     $ 26,917,491     $ 5,804,752  
Funds held for merchants
    9,485,182       7,164,420       5,084,752  
Short-term investments
    3,290,393       -       -  
Restricted cash
    175,000       175,000       175,000  
Accounts receivable, less allowance of $27,397  (2011: $28,152; April 1, 2010: $31,463)
    1,602,485       1,103,529       799,584  
Corporate taxes receivable
    373,939       101,162       1,072,930  
Prepaid expenses
    331,361       266,066       416,507  
Total current assets
    42,042,114       35,727,668       13,338,536  
                         
Property and equipment, net
    121,496       163,222       219,580  
Patents
    120,457       287,877       455,304  
Restricted cash
    258,095       262,644       255,247  
Deferred tax assets
    809,951       1,189,747       3,687,333  
Goodwill
    17,874,202       17,874,202       17,874,202  
Other intangible assets
    3,720,037       4,215,187       4,710,337  
Other assets
    20,796       21,041       20,641  
                         
Total assets
  $ 64,967,148     $ 59,741,588     $ 40,561,180  
                         
LIABILITIES
                       
CURRENT LIABILITIES
                       
Accounts payable
  $ 720,666     $ 702,820     $ 836,274  
Accrued liabilities
    1,445,490       1,390,847       1,040,443  
Corporate taxes payable
    465,044       4,796,157       -  
Funds due to merchants
    9,485,182       7,164,420       5,804,752  
Current portion of obligations under finance lease
    2,460       2,460       11,195  
Current portion of deferred revenue
    1,371,096       1,420,228       1,325,983  
Total current liabilities
    13,489,938       15,476,932       9,018,647  
                         
Obligations under finance lease
    4,920       7,380       9,840  
                         
Deferred revenue
    -       935,979       2,155,162  
                         
Total liabilities
    13,494,858       16,420,291       11,183,649  
                         
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, 28,246,684  issued and outstanding (2011: 28,127,184; April 1, 2010: 27,241,408)
    53,918,912       53,557,276       50,152,385  
                         
Contributed surplus
    10,001,594       8,819,006       7,987,727  
Warrants
    113,662       113,662       649,500  
Deficit
    (12,835,486 )     (19,563,201 )     (29,562,166 )
Accumulated other comprehensive income
    273,608       394,554       150,085  
Total equity
    51,472,290       43,321,297       29,377,531  
                         
Total liabilities and equity
  $ 64,967,148     $ 59,741,588     $ 40,561,180  





Cont’d

 
 

 


LML PAYMENT SYSTEMS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. Dollars)
(Unaudited)

   
Years ended March 31,
 
             
   
2012
   
2011
 
OPERATING ACTIVITIES:
           
Net income
  $ 6,727,715     $ 9,998,965  
Adjustments to reconcile net income to net cash provided by operating activities
               
Depreciation of property and equipment
    104,750       124,070  
Amortization of intangible assets
    662,570       662,576  
Share-based payments
    1,317,384       1,451,685  
Deferred taxes
    287,377       2,497,586  
Foreign exchange loss (gain)
    889       (3,592 )
                 
Changes in non-cash operating working capital
               
Accounts receivable
    (526,469 )     (262,848 )
Corporate taxes receivable
    (275,606 )     1,002,041  
Prepaid expenses
    (68,083 )     154,307  
Accounts payable and accrued liabilities
    107,042       170,393  
Corporate taxes payable
    (4,236,314 )     4,796,157  
Deferred revenue
    (978,571 )     (1,133,735 )
Net cash provided by operating activities
    3,122,684       19,457,605  
                 
INVESTING ACTIVITIES:
               
Acquisition of short-term investments
    (3,294,525 )     -  
Acquisition of property and equipment
    (65,002 )     (63,473 )
Net cash used in investing activities
    (3,359,527 )     (63,473 )
                 
FINANCING ACTIVITIES:
               
Principal payments on finance leases
    (2,460 )     (11,047 )
Proceeds from exercise of stock options
    226,840       1,126,648  
Proceeds from exercise of warrants
    -       1,122,000  
Net cash provided by  financing activities
    224,380       2,237,601  
                 
Effects of foreign exchange rate changes on cash and cash equivalents
    (121,274 )     215,995  
                 
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
    (133,737 )     21,847,728  
                 
Cash and cash equivalents, beginning of year
    26,917,491       5,069,763  
                 
Cash and cash equivalents, end of year
  $ 26,783,754     $ 26,917,491  
                 
Cash and cash equivalents consist of:
               
Cash
  $ 24,908,396     $ 22,091,702  
Money market fund
    109,988       109,905  
Commercial paper
    1,765,370       4,715,884  
    $ 26,783,754     $ 26,917,491  










CONTACTS:
   
     
Patrick H. Gaines - CEO
Investor Relations
 
(640) 689-4440
(800) 888-2260
 



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