Tier Technologies Inc. (TIER, Financial) filed Quarterly Report for the period ended 2012-12-31.
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VSA Revenues: During the three months ended December 31, 2012, our VSA operations generated $0.1 million in revenues, down $0.4 million from the three months ended December 31, 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 two years.
Payment Solutions Direct Costs: We experienced a decrease in our Payment Solutions direct costs of $0.3 million, or 1.4%, during the three months ended December 31, 2012 compared to the same period last year. Discount fees decreased $0.4 million, or 1.8%, over the same period last year. This decrease in discount fees is attributable to the reduction in transaction volume and the related revenue. We continue to experience the benefits of the Durbin provisions of the Financial Reform Act. Although it is difficult to predict the long-term impact of Durbin on the debit and credit card markets, we anticipate realizing benefits from it throughout the remainder of our fiscal year 2013.
Payment Solutions Selling and Marketing: During the three months ended December 31, 2012, Payment Solutions incurred $2.1 million of selling and marketing expenses, a $0.6 million, or 41.9%, increase over the same period last year. We increased our advertising and co-marketing expenditures by $0.4 million during the three months ended December 31, 2012 as part of our efforts to increase penetration across our Client base and in anticipation of the 2013 IRS tax season. In addition, sales commissions and travel costs were each higher by $0.1 million during the three months ended December 31, 2012 as compared with same period last year.
Payment Solutions net revenue decreased 5.2% to $11.3 million during the three months ended December 31, 2012 from $11.9 million during the three months ended December 31, 2011. As discussed above, under "Payment Solutions Revenue," in the quarter ended December 31, 2012, we saw a shift in the mix of payment types, toward ACH payments, many of which had a lower than average transaction fee than if such payments had been made with a debit or credit card. Additionally, we offered a fixed fee debit card transaction fee to certain Clients during the quarter, which resulted in lower revenues than we have experienced with these Clients in prior periods. Therefore the increase in dollars processed did not result in a corresponding increase in revenue or net revenue during this quarter.
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Highlight of Business Operations:
Payment Solutions generated $33.3 million of revenue during the three months ended December 31, 2012, a $1.0 million, or 3.0%, decrease over the three months ended December 31, 2011. During the three months ended December 31, 2012, we processed 6% fewer transactions than we did in the same period last year, while total dollars processed increased 7%. We are continuing to see increases in the average size of the payments we process. However, during the quarter ended December 31, 2012, we also saw a shift in the mix of payment types, towards ACH payments, many of which had a lower than average transaction fee than if payments had been made with a debit or credit card. Additionally, we offered a fixed fee debit card transaction fee to certain Clients during the quarter, which resulted in lower revenues than we have experienced with these Clients in prior periods. Therefore the overall increase in dollars processed did not result in a corresponding increase in revenue during this quarter.VSA Revenues: During the three months ended December 31, 2012, our VSA operations generated $0.1 million in revenues, down $0.4 million from the three months ended December 31, 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 two years.
Payment Solutions Direct Costs: We experienced a decrease in our Payment Solutions direct costs of $0.3 million, or 1.4%, during the three months ended December 31, 2012 compared to the same period last year. Discount fees decreased $0.4 million, or 1.8%, over the same period last year. This decrease in discount fees is attributable to the reduction in transaction volume and the related revenue. We continue to experience the benefits of the Durbin provisions of the Financial Reform Act. Although it is difficult to predict the long-term impact of Durbin on the debit and credit card markets, we anticipate realizing benefits from it throughout the remainder of our fiscal year 2013.
Payment Solutions Selling and Marketing: During the three months ended December 31, 2012, Payment Solutions incurred $2.1 million of selling and marketing expenses, a $0.6 million, or 41.9%, increase over the same period last year. We increased our advertising and co-marketing expenditures by $0.4 million during the three months ended December 31, 2012 as part of our efforts to increase penetration across our Client base and in anticipation of the 2013 IRS tax season. In addition, sales commissions and travel costs were each higher by $0.1 million during the three months ended December 31, 2012 as compared with same period last year.
Payment Solutions net revenue decreased 5.2% to $11.3 million during the three months ended December 31, 2012 from $11.9 million during the three months ended December 31, 2011. As discussed above, under "Payment Solutions Revenue," in the quarter ended December 31, 2012, we saw a shift in the mix of payment types, toward ACH payments, many of which had a lower than average transaction fee than if such payments had been made with a debit or credit card. Additionally, we offered a fixed fee debit card transaction fee to certain Clients during the quarter, which resulted in lower revenues than we have experienced with these Clients in prior periods. Therefore the increase in dollars processed did not result in a corresponding increase in revenue or net revenue during this quarter.
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