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LML Payment Systems Inc. Reports Operating Results (10-K)
Posted by: gurufocus (IP Logged)
Date: June 20, 2012 05:20PM
LML Payment Systems Inc. (LMLP) filed Annual Report for the period ended 2012-03-31. Lml Payment Sys has a market cap of $50.3 million; its shares were traded at around $1.86 with a P/E ratio of 4.3 and P/S ratio of 1.1.
Highlight of Business Operations:On February 16, 2012, the United States Department of Commerce reported that online retail sales in the United States grew by an estimated 16.1% to $194.3 billion in 2011 compared to 2010, while total retail sales increased by just 7.9% over the same period. In addition, estimates released by the Department of Commerce on May 17, 2012 for the first quarter of 2012 show online retail sales increased approximately 15.4% from the first quarter of 2011 while total retail sales increased 6.5% in the same period. It was also reported that online retail sales now comprise approximately 4.9% of total retail sales.
Revenue pertaining to our TPP segment consists of transaction fees, one-time set-up fees, monthly fees including gateway fees and software customization fees. Total revenue from our TPP segment increased by approximately $3,689,000, or approximately 28.9%. Transaction fees for fiscal year 2012 increased approximately $3,085,000 or approximately 29.8%; the amortized portion of one-time set-up fees recognized increased approximately $45,000 or approximately 22.5%; and monthly fees including gateway fees for fiscal year 2012 increased approximately $606,000 or approximately 38.1%. The increase in these components of TPP segment revenue was primarily attributable to a 28% increase in our merchant base during fiscal year 2012 as compared to fiscal year 2011.
Costs of revenue decreased for fiscal year 2012 by approximately $5,513,000 or approximately 24.2%. This decrease was primarily attributable to a decrease of approximately $7,608,000 in IPL segment costs of revenue which was primarily due to a decrease of approximately $7,355,000 in the costs (primarily legal costs) incurred in connection with the License Agreements entered into during fiscal year 2012 as compared to fiscal year 2011. TPP segment costs of revenue increased approximately $2,170,000 or approximately 28.2%, primarily due to an increase of approximately 21.9% in our transaction costs which include interchange, assessments and other transaction fees which coincided with increased transaction processing revenue. CP segment costs of revenue decreased approximately $107,000 or approximately 6.9% which coincided with the decrease in CP segment revenue for fiscal year 2012. In fiscal year 2012, costs of revenue was approximately $3,322,000, $5,611,000, $3,015,000 and $5,321,000 in each of the first, second, third and fourth quarters, respectively.
Sales and marketing expense decreased to approximately $1,080,000 from approximately $1,161,000 for fiscal year 2012 and 2011 respectively, a decrease of approximately $81,000 or approximately 7.0% which was primarily attributable to a decrease of approximately $172,000 in share-based payments offset by an increase of approximately $91,000 in our TPP segment sales and marketing expenses from approximately $557,000 for fiscal year 2011 to approximately $648,000 for fiscal year 2012. The increase in TPP segment sales and marketing expenses is primarily attributable to an increase in wages and commissions of approximately $77,000 or approximately 16.1%, resulting from an increase in staffing levels. Amortization expense for partner relationships and merchant contracts were approximately $389,000 for fiscal year 2012 and 2011 respectively.
Net income was approximately $6,728,000 for fiscal year 2012 compared to net income of approximately $9,999,000 for fiscal year 2011, a decrease of approximately $3,271,000. This decrease is primarily attributable to the decrease in licensing activity of our IPL segment during fiscal year 2012. Earnings per basic share were approximately $0.24 and per diluted share were approximately $0.23 for fiscal year 2012 as compared to earnings per basic share of approximately $0.37 and per diluted share of approximately $0.36 for fiscal year 2011, a decrease in earnings per both basic and diluted share of approximately $0.13.
Stocks Discussed: LMLP,