Tier Technologies Inc. has a market cap of $102.55 million; its shares were traded at around $5.65 with and P/S ratio of 0.8. TIER is in the portfolios of Mario Gabelli of GAMCO Investors, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:Our Continuing Operations consist of two reportable segments, Electronic Payment Solutions, or EPS, operations and Wind-down operations. Our Wind-down operations consist of one business area that we intend to wind down over the next two years. Revenues from our EPS operations were $127.2 million for the fiscal year ended September 30, 2010. For the fiscal year ended September 30, 2010, transaction volume increased 25.9% and total dollars processed increased 13.0% over the same period last year. Our EPS operations reported a net loss of $6.2 million for fiscal 2010. Revenues from our EPS operations make up 97.7% of our revenues from Continuing Operations. The seasonality of our business causes fluctuations from one quarter to the next within our revenues and direct costs. However, our general and administrative and selling and marketing expenses are more fixed in nature. We have successfully streamlined our costs to support our Wind-down operations, while still effectively managing our ongoing contracts.
Discontinued Operations is a reportable segment, which consists of businesses we have divested through fiscal year 2009. We incur minimal residual expense relating to our divested operations. For the fiscal year ended September 30, 2010 we reported a net loss of $0.2 million for Discontinued Operations primarily associated with legal fees and restructuring expense as well as the write-off of a receivable determined to be uncollectible. These expenses were offset by a $0.6 million earn-out we received from the company that purchased our former Government Business Process Outsourcing, or GBPO, business, pursuant to a Purchase and Sale Agreement dated June 9, 2008.
We have incurred losses in the past and may not be profitable in the future. While we reported net income of $1.1 million in fiscal year 2005, we have reported net losses of $6.2 million in fiscal 2010, $11.5 million in fiscal 2009, $27.4 million in fiscal 2008, $3.0 million in fiscal 2007, and $9.5 million in fiscal 2006.
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