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Tier Technologies Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 9, 2012 05:27PM

Tier Technologies Inc. (TIER) filed Quarterly Report for the period ended 2012-06-30. Official Payments Holdings Inc has a market cap of $73.7 million; its shares were traded at around $0 with and P/S ratio of 0.6.



Highlight of Business Operations:

and other public sector clients. Payment Solutions' revenues reflect the number of contracts with clients, the volume of transactions processed under each contract and the rates that we charge for each transaction that we process. Payment Solutions generated $38.9 million of revenues during the three months ended June 30, 2012, a $0.8 million, or 2.1%, increase over the three months ended June 30, 2011. During the three months ended June 30, 2012, we processed 1.7% fewer transactions than we did in the same period last year; however, the average payment increased 9.5% compared to the same quarter in 2011. The increase in average payments represented 7.7% more dollars processed in the three months ended June 30, 2012 compared to the three months ended June 30, 2011. We believe the growth in dollars processed is due primarily to increased size of federal and real property tax payments.

Payment Solutions generated $105.7 million of revenues during the nine months ended June 30, 2012, a $5.2 million, or 5.2%, increase over the nine months ended June 30, 2011. During the nine months ended June 30, 2012, we processed 0.5% more transactions than we did in the same period last year, representing 10.0% more dollars. See the prior paragraph for a discussion of growth in dollars processed compared to transactions, as well as average payment size. Most of our vertical markets experienced an increase in transactions processed during the nine months ended June 30, 2012 compared to the same period last year, ranging from 0.7% to 43.4%. However, our Utilities vertical market incurred a 14.6% decrease in transactions processed for the nine months ended June 30, 2012 when compared to the same period in the prior year, again due to a decrease in transactions for large utilities.

VSA Revenues: During the three months ended June 30, 2012, our VSA operations generated $0.3 million in revenues, a $0.1 million, or 27.2%, decrease from the three months ended June 30, 2011. During the nine months ended June 30, 2012, VSA generated $1.1 million in revenues, a $0.07 million, or 5.5%, decrease from the nine months ended June 30, 2011. We expect to continue to see decreases in VSA revenues as we continue to complete and wind down existing maintenance projects over the next 12 to 15 months.

Payment Solutions Selling and Marketing: During the three months ended June 30, 2012, Payment Solutions incurred $2.6 million of selling and marketing expenses, a $0.9 million, or 55.9%, increase over the same period last year. The increase is primarily due to advertising expenses which were $0.5 million higher for the three months ended June 30, 2012 over the same period of the previous year, due to increased attention paid to income tax related verticals. Compensation related expenses including wages, commissions, and share based compensation were $0.2 million greater than the three months ended June 30, 2011. Travel related expenses were $0.1 million greater in the three months ended June 30, 2012 compared to the same period in the previous year as a result of an increase in the number of face to face customer meetings with our sales force.

During the nine months ended June 30, 2012, Payment Solutions incurred $6.3 million of selling and marketing expenses, a $1.2 million or 24.4%, increase over the nine months ended June 30, 2011. The most significant factor in the year over year increase is the addition of $0.5 million in net advertising expense. Fees paid to marketing partners increased $0.3 million for the nine months ended June 30, 2012, as compared with the same period the previous year, driven by higher net revenues for related clients. Further contributing to the increase is $0.3 million in travel related expenses associated with increased headcount and a push towards face to face sales meetings.

Read the The complete Report



Stocks Discussed: TIER,
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