LML Payment Systems Inc. (LMLP, Financial) filed Quarterly Report for the period ended 2010-06-30.
Lml Payment Systems Inc. has a market cap of $47.6 million; its shares were traded at around $1.75 with a P/E ratio of 25 and P/S ratio of 3.2. LMLP is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Costs of revenue increased from approximately $1,624,000 for the three months ended June 30, 2009, to approximately $2,610,000 for the three months ended June 30, 2010, an increase of approximately $986,000 or approximately 60.7%. The increase was primarily attributable to an increase in our TPP segment cost of revenue of approximately $489,000 or approximately 40% from approximately $1,222,000 for the three months ended June 30, 2009 to approximately $1,711,000 for the three months ended June 30, 2010 and an increase in IPL segment cost of revenue of approximately $497,000 from approximately for the three months ended June 30, 2009 to approximately $497,000 for the three months ended June 30, 2010. The increase in TPP segment cost of revenue was partially attributable to an increase in transaction costs of approximately 24.2% consistent with the increase in transaction fee revenue and partially attributable to a strengthening Canadian dollar in relation to the U.S. dollar which increased approximately 12% from the prior fiscal first quarter. Since a significant amount of our TPP segment cost of revenue originates in Canadian dollars, the conversion of these costs to U.S. dollars was at an increased exchange rate when compared to the prior fiscal third quarter conversion. TPP segment costs of revenue originating in Canadian dollars was approximately $1,760,000CAD for the three months ended June 30, 2010 compared to $1,424,000CAD for the three months ended June 30, 2009, an increase of approximately $336,000CAD or approximately 23.6%. The increase in IPL segment cost of revenue was primarily attributable to the costs incurred in entering into the License Agreement with one of the defendants in the Patent Litigation during the three months ended June 30, 2010.
General and administrative expenses increased to approximately $1,168,000 from approximately $949,000 for the three months ended June 30, 2010 and 2009, respectively, an increase of approximately $219,000 or approximately 23.1%. TPP segment expenses increased to approximately $275,000 from approximately $174,000 for the three months ended June 30, 2010 and 2009 respectively, an increase of approximately $101,000 or approximately 58%. CP/SL segment expenses increased to approximately $234,000 from approximately $113,000 for the three months ended June 30, 2010 and 2009 respectively, an increase of approximately $121,000 or approximately 107.1%. The increase in the TPP and CP/SL segments general and administrative expenses is primarily attributable to an increase of approximately $185,000 in legal fees primarily pertaining to the two patent infringement complaints filed against our subsidiaries, LML Payment Systems Corp. and Beanstream Internet Commerce Inc. in April, 2009.
Sales and marketing expenses increased to approximately $105,000 from approximately $99,000 for the three months ended June 30, 2010 and 2009, respectively, an increase of approximately $6,000 or 6%. The increase is primarily attributable to an increase in TPP segment sales and marketing expenses of approximately $6,000 or approximately 6% from approximately $93,000 for the three months ended June 30, 2009 to approximately $99,000 for the three months ended June 30, 2010. The increase in TPP segment sales and marketing expenses is primarily attributable to the foreign exchange effect of a strengthening Canadian dollar in relation to the U.S. dollar which increased approximately 12% from the prior fiscal first quarter.
Income tax expense (recovery) consists of a recovery of current income taxes of approximately $341,000 for the three months ended June 30, 2010 compared to a current income tax expense of approximately $173,000 for the three months ended June 30, 2009, a decrease of current income tax expense of approximately $514,000. The decrease is primarily attributable to the expected recovery of taxes for the current fiscal quarter resulting from the implementation of certain tax planning strategies during the three months ended September 30, 2009. These strategies are intended to permit the recovery of income taxes previously paid on behalf of our subsidiary, Beanstream. Future income tax expense was approximately $940,000 for the three months ended June 30, 2010 compared to for the three months ended June 30, 2009, an increase in future income tax expense of approximately $940,000. The increase in future income tax expense was primarily attributable to a decrease in the current portion of future income tax assets during the three months ended June 30, 2010 resulting from the utilization of prior year tax losses against current period taxable income.
Our liquidity and financial position consisted of approximately $6,080,000 in working capital as of June 30, 2010 compared to approximately $5,601,000 in working capital as of March 31, 2010. The increase in working capital was primarily attributable to cash provided by operating activities offset by a reduction in the current portion of future income tax assets. Cash provided by operating activities was approximately $1,393,000 for the three months ended June 30, 2010, as compared to cash provided by operating activities of approximately $113,000 for the three months ended June 30, 2009. The increase in cash provided by operating activities of approximately $1,280,000 was primarily attributable to an increase in future income taxes of approximately $940,000 resulting from the decrease of our current portion of future income tax assets during the three months ended June 30, 2010. Cash used in investing activities was approximately $3,000 for the three months ended June 30, 2010 as compared to approximately $10,000 for the three months ended June 30, 2009, a decrease in cash used in investing activities of approximately $7,000. The decrease in cash used in investing activities was primarily attributable to a reduction in acquisition of property and equipment of approximately $10,000 for the three months ended June 30, 2010 as compared to the three months ended June 30, 2009. Cash used in financing activities was approximately $4,000 for the three months ended June 30, 2010 as compared to approximately $2,372,000 for the three months ended June 30, 2009, a decrease in cash used in financing activities of approximately $2,368,000. The decrease in cash used in financing activities was primarily due to the difference in the payments on the promissory notes relating to the acquisition of Beanstream. During the first quarter of fiscal 2009, we made the second and final payment of approximately $2,321,000 on the promissory notes.
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Lml Payment Systems Inc. has a market cap of $47.6 million; its shares were traded at around $1.75 with a P/E ratio of 25 and P/S ratio of 3.2. LMLP is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Revenue pertaining to our TPP segment consists of one-time set-up fees, monthly gateway fees, and transaction fees. TPP segment revenue for the three months ended June 30, 2010 was approximately $2,817,000, an increase of approximately $648,000 or approximately 29.9% from TPP segment revenue of approximately $2,169,000 for the three months ended June 30, 2009. The increase in TPP segment revenue was primarily attributable to a strengthening Canadian dollar in relation to the U.S. dollar which increased approximately 12% from the prior fiscal first quarter. Since a significant amount of our TPP segment revenue originates in Canadian dollars, the conversion of this revenue to U.S. dollars was at an increased exchange rate when compared to the prior fiscal first quarter conversion. TPP segment revenue originating in Canadian dollars was approximately $2,898,000CAD for the three months ended June 30, 2010 compared to $2,528,000CAD for the three months ended June 30, 2009, an increase of approximately $370,000CAD or approximately 14.6%. Transaction fees for the three months ended June 30, 2010 were approximately $2,307,000 compared to approximately $1,781,000 for the three months ended June 30, 2009, an increase of approximately $526,000 or approximately 29.5%; the amortized portion of one-time set-up fees recognized was approximately $53,000 for the three months ended June 30, 2010 compared to approximately $43,000 for the three months ended June 30, 2009, an increase of approximately $10,000 or approximately 23.3%; and monthly gateway fees for the three months ended June 30, 2010 were approximately $365,000 compared to approximately $266,000 for the three months ended June 30, 2009, an increase of approximately $99,000 or approximately 37.2%.Costs of revenue increased from approximately $1,624,000 for the three months ended June 30, 2009, to approximately $2,610,000 for the three months ended June 30, 2010, an increase of approximately $986,000 or approximately 60.7%. The increase was primarily attributable to an increase in our TPP segment cost of revenue of approximately $489,000 or approximately 40% from approximately $1,222,000 for the three months ended June 30, 2009 to approximately $1,711,000 for the three months ended June 30, 2010 and an increase in IPL segment cost of revenue of approximately $497,000 from approximately for the three months ended June 30, 2009 to approximately $497,000 for the three months ended June 30, 2010. The increase in TPP segment cost of revenue was partially attributable to an increase in transaction costs of approximately 24.2% consistent with the increase in transaction fee revenue and partially attributable to a strengthening Canadian dollar in relation to the U.S. dollar which increased approximately 12% from the prior fiscal first quarter. Since a significant amount of our TPP segment cost of revenue originates in Canadian dollars, the conversion of these costs to U.S. dollars was at an increased exchange rate when compared to the prior fiscal third quarter conversion. TPP segment costs of revenue originating in Canadian dollars was approximately $1,760,000CAD for the three months ended June 30, 2010 compared to $1,424,000CAD for the three months ended June 30, 2009, an increase of approximately $336,000CAD or approximately 23.6%. The increase in IPL segment cost of revenue was primarily attributable to the costs incurred in entering into the License Agreement with one of the defendants in the Patent Litigation during the three months ended June 30, 2010.
General and administrative expenses increased to approximately $1,168,000 from approximately $949,000 for the three months ended June 30, 2010 and 2009, respectively, an increase of approximately $219,000 or approximately 23.1%. TPP segment expenses increased to approximately $275,000 from approximately $174,000 for the three months ended June 30, 2010 and 2009 respectively, an increase of approximately $101,000 or approximately 58%. CP/SL segment expenses increased to approximately $234,000 from approximately $113,000 for the three months ended June 30, 2010 and 2009 respectively, an increase of approximately $121,000 or approximately 107.1%. The increase in the TPP and CP/SL segments general and administrative expenses is primarily attributable to an increase of approximately $185,000 in legal fees primarily pertaining to the two patent infringement complaints filed against our subsidiaries, LML Payment Systems Corp. and Beanstream Internet Commerce Inc. in April, 2009.
Sales and marketing expenses increased to approximately $105,000 from approximately $99,000 for the three months ended June 30, 2010 and 2009, respectively, an increase of approximately $6,000 or 6%. The increase is primarily attributable to an increase in TPP segment sales and marketing expenses of approximately $6,000 or approximately 6% from approximately $93,000 for the three months ended June 30, 2009 to approximately $99,000 for the three months ended June 30, 2010. The increase in TPP segment sales and marketing expenses is primarily attributable to the foreign exchange effect of a strengthening Canadian dollar in relation to the U.S. dollar which increased approximately 12% from the prior fiscal first quarter.
Income tax expense (recovery) consists of a recovery of current income taxes of approximately $341,000 for the three months ended June 30, 2010 compared to a current income tax expense of approximately $173,000 for the three months ended June 30, 2009, a decrease of current income tax expense of approximately $514,000. The decrease is primarily attributable to the expected recovery of taxes for the current fiscal quarter resulting from the implementation of certain tax planning strategies during the three months ended September 30, 2009. These strategies are intended to permit the recovery of income taxes previously paid on behalf of our subsidiary, Beanstream. Future income tax expense was approximately $940,000 for the three months ended June 30, 2010 compared to for the three months ended June 30, 2009, an increase in future income tax expense of approximately $940,000. The increase in future income tax expense was primarily attributable to a decrease in the current portion of future income tax assets during the three months ended June 30, 2010 resulting from the utilization of prior year tax losses against current period taxable income.
Our liquidity and financial position consisted of approximately $6,080,000 in working capital as of June 30, 2010 compared to approximately $5,601,000 in working capital as of March 31, 2010. The increase in working capital was primarily attributable to cash provided by operating activities offset by a reduction in the current portion of future income tax assets. Cash provided by operating activities was approximately $1,393,000 for the three months ended June 30, 2010, as compared to cash provided by operating activities of approximately $113,000 for the three months ended June 30, 2009. The increase in cash provided by operating activities of approximately $1,280,000 was primarily attributable to an increase in future income taxes of approximately $940,000 resulting from the decrease of our current portion of future income tax assets during the three months ended June 30, 2010. Cash used in investing activities was approximately $3,000 for the three months ended June 30, 2010 as compared to approximately $10,000 for the three months ended June 30, 2009, a decrease in cash used in investing activities of approximately $7,000. The decrease in cash used in investing activities was primarily attributable to a reduction in acquisition of property and equipment of approximately $10,000 for the three months ended June 30, 2010 as compared to the three months ended June 30, 2009. Cash used in financing activities was approximately $4,000 for the three months ended June 30, 2010 as compared to approximately $2,372,000 for the three months ended June 30, 2009, a decrease in cash used in financing activities of approximately $2,368,000. The decrease in cash used in financing activities was primarily due to the difference in the payments on the promissory notes relating to the acquisition of Beanstream. During the first quarter of fiscal 2009, we made the second and final payment of approximately $2,321,000 on the promissory notes.
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