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LML Payment Systems Inc. Reports Operating Results (10-Q)

November 13, 2012 | About:
10qk

10qk

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LML Payment Systems Inc. (LMLP) filed Quarterly Report for the period ended 2012-09-30.

Lml Payment Systems, Inc. has a market cap of $96.6 million; its shares were traded at around $3.415 with a P/E ratio of 28.5 and P/S ratio of 2.8.

Highlight of Business Operations:

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 $1,150,000, or approximately 31%. Transaction fees for the three months ended September 30, 2012 increased by approximately $896,000 or approximately 30.1%; the amortized portion of one-time setup fees recognized increased approximately $9,000 or approximately 16.4%; monthly fees including gateway fees for the three months ended September 30, 2012 increased approximately $154,000 or approximately 30% while software customization fees decreased approximately $83,000 or approximately 90.2%. The increase in transaction fees, one-time set-up fees and monthly fees including gateway fees was primarily attributable to a 26.7% increase in our merchant base as at September 30, 2012 as compared to September 30, 2011.

Costs of revenue decreased for the three months ended September 30, 2012 by approximately $2,330,000 or approximately 41.5%. This decrease was primarily attributable to a decrease of approximately $2,937,000 in IPL segment cost of revenue offset by an increase in TPP segment cost of revenue of approximately $616,000. The decrease in IPL segment costs was primarily due to a decrease of approximately $2,903,000 in the costs (primarily legal costs) incurred in connection with the license agreements entered into during the three months ended September 30, 2011. The increase in TPP segment costs was primarily attributable to an increase of approximately 34.1% in our transaction costs which include interchange, assessments and other transaction fees which coincided with increased transaction processing revenue. CP segment cost of revenue decreased approximately $26,000 or approximately 7.3% which coincided with the decrease in CP segment revenue for the three months ended September 30, 2012.

Sales and marketing expenses increased to approximately $274,000 from approximately $215,000 for the three months ended September 30, 2012 and 2011, respectively, an increase of approximately $59,000 or approximately 27.4%. The increase is primarily attributable to an increase in TPP segment sales and marketing expenses of approximately $62,000 or approximately 58.5% from approximately $106,000 for the three months ended September 30, 2011 to approximately $168,000 for the three months ended September 30, 2012. The increase in TPP segment sales and marketing expenses is primarily attributable to an increase in wages and commission expense of approximately $63,000 for the three months ended September 30, 2012 as compared to the three months ended September 30, 2011. Amortization expense for partner relationships and merchant contracts were approximately $97,000 for each of the three months ended September 30, 2012 and 2011, respectively.

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 $2,092,000, or approximately 28.3%. Transaction fees for the six months ended September 30, 2012 increased by approximately $1,762,000 or approximately 29.9%; the amortized portion of one-time setup fees recognized increased approximately $19,000 or approximately 17.3%; monthly fees including gateway fees for the six months ended September 30, 2012 increased approximately $295,000 or approximately 29.4% while software customization fees decreased approximately $199,000 or approximately 88.1%. The increase in transaction fees, one-time set-up fees and monthly fees including gateway fees was primarily attributable to a 26.7% increase in our merchant base as at September 30, 2012 as compared to September 30, 2011.

Sales and marketing expenses increased to approximately $525,000 from approximately $522,000 for the six months ended September 30, 2012 and 2011, respectively, an increase of approximately $3,000 or approximately 0.6%. The increase is primarily attributable to an increase in TPP segment sales and marketing expenses of approximately $11,000 or approximately 3.6% from approximately $304,000 for the six months ended September 30, 2011 to approximately $315,000 for the six months ended September 30, 2012. The increase in TPP segment sales and marketing expenses is primarily attributable to an increase in wages and commission expense of approximately $30,000 for the six months ended September 30, 2012 compared to the six months ended September 30, 2011. Amortization expense for partner relationships and merchant contracts were approximately $194,000 for each of the six months ended September 30, 2012 and 2011, respectively.

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